
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC2458]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle A--General Military Law
 
                PART IV--SERVICE, SUPPLY, AND PROCUREMENT
 
               CHAPTER 145--CATALOGING AND STANDARDIZATION
 
Sec. 2458. Inventory management policies

    (a) Policy Required.--The Secretary of Defense shall issue a single, 
uniform policy on the management of inventory items of the Department of 
Defense. Such policy shall--
        (1) establish maximum levels for inventory items sufficient to 
    achieve and maintain only those levels for inventory items necessary 
    for the national defense;
        (2) provide guidance to item managers and other appropriate 
    officials on how effectively to eliminate wasteful practices in the 
    acquisition and management of inventory items; and
        (3) set forth a uniform system for the valuation of inventory 
    items by the military departments and Defense Agencies.

    (b) Personnel Evaluations.--The Secretary of Defense shall establish 
procedures to ensure that, with regard to item managers and other 
personnel responsible for the acquisition and management of inventory 
items of the Department of Defense, personnel appraisal systems for such 
personnel give appropriate consideration to efforts made by such 
personnel to eliminate wasteful practices and achieve cost savings in 
the acquisition and management of inventory items.

(Added Pub. L. 101-510, div. A, title III, Sec. 323(a)(1), Nov. 5, 1990, 
104 Stat. 1530; amended Pub. L. 102-190, div. A, title III, Sec. 347(a), 
Dec. 5, 1991, 105 Stat. 1347.)


                               Amendments

    1991--Subsec. (a)(3). Pub. L. 102-190 added par. (3).


                    Implementation of 1991 Amendment

    Secretary of Defense to establish uniform system of valuation 
described in subsec. (a)(3) of this section not later than 180 days 
after Dec. 5, 1991, see section 347(c) of Pub. L. 102-190, set out as a 
note under section 2721 of this title.


          Report on Inventory and Control of Military Equipment

    Pub. L. 106-65, div. A, title III, Sec. 363, Oct. 5, 1999, 113 Stat. 
576, provided that:
    ``(a) Report Required.--Not later than August 31, 2000, the 
Secretary of Defense shall submit to the Committees on Armed Services of 
the Senate and the House of Representatives a report on the inventory 
and control of the military equipment of the Department of Defense as of 
the end of fiscal year 1999. The report shall address the inventories of 
each of the Army, Navy, Air Force, and Marine Corps separately.
    ``(b) Content.--The report shall include the following:
        ``(1) For each item of military equipment in the inventory, 
    stated by item nomenclature--
            ``(A) the quantity of the item in the inventory as of the 
        beginning of the fiscal year;
            ``(B) the quantity of acquisitions of the item during the 
        fiscal year;
            ``(C) the quantity of disposals of the item during the 
        fiscal year;
            ``(D) the quantity of losses of the item during the 
        performance of military missions during the fiscal year; and
            ``(E) the quantity of the item in the inventory as of the 
        end of the fiscal year.
        ``(2) A reconciliation of the quantity of each item in the 
    inventory as of the beginning of the fiscal year with the quantity 
    of the item in the inventory as of the end of the fiscal year.
        ``(3) For each item of military equipment that cannot be 
    reconciled--
            ``(A) an explanation of why the quantities cannot be 
        reconciled; and
            ``(B) a discussion of the remedial actions planned to be 
        taken, including target dates for accomplishing the remedial 
        actions.
        ``(4) Supporting schedules identifying the location of each item 
    that are available to Congress or auditors of the Comptroller 
    General upon request.
    ``(c) Military Equipment Defined.--For the purposes of this section, 
the term `military equipment' means all equipment that is used in 
support of military missions and is maintained on the visibility systems 
of the Army, Navy, Air Force, or Marine Corps.
    ``(d) Inspector General Review.--Not later than November 30, 2000, 
the Inspector General of the Department of Defense shall review the 
report submitted to the committees under subsection (a) and shall submit 
to the committees any comments that the Inspector General considers 
appropriate.''


 Best Commercial Inventory Practices for Management of Secondary Supply 
                                  Items

    Pub. L. 105-261, div. A, title III, Sec. 347, Oct. 17, 1998, 112 
Stat. 1980, provided that:
    ``(a) Development and Submission of Schedule.--Not later than 180 
days after the date of the enactment of this Act [Oct. 17, 1998], the 
Secretary of each military department shall submit to Congress a 
schedule for implementing within the military department, for secondary 
supply items managed by that military department, inventory practices 
identified by the Secretary as being the best commercial inventory 
practices for the acquisition and distribution of such supply items 
consistent with military requirements. The schedule shall provide for 
the implementation of such practices to be completed not later than five 
years after the date of the enactment of this Act.
    ``(b) Definition.--For purposes of this section, the term `best 
commercial inventory practice' includes cellular repair processes, use 
of third-party logistics providers, and any other practice that the 
Secretary of the military department determines will enable the military 
department to reduce inventory levels while improving the responsiveness 
of the supply system to user needs.
    ``(c) GAO Reports on Military Department and Defense Logistics 
Agency Schedules.--(1) Not later than 240 days after the date of the 
enactment of this Act, the Comptroller General shall submit to Congress 
a report evaluating the extent to which the Secretary of each military 
department has complied with the requirements of this section.
    ``(2) Not later than 18 months after the date on which the Director 
of the Defense Logistics Agency submits to Congress a schedule for 
implementing best commercial inventory practices under section 395 of 
the National Defense Authorization Act for Fiscal Year 1998 (Public Law 
105-85; 111 Stat. 1718; 10 U.S.C. 2458 note), the Comptroller General 
shall submit to Congress an evaluation of the extent to which best 
commercial inventory practices are being implemented in the Defense 
Logistics Agency in accordance with that schedule.''


                Inventory Management of In-Transit Items

    Pub. L. 105-261, div. A, title III, Sec. 349, Oct. 17, 1998, 112 
Stat. 1981, as amended by Pub. L. 106-398, Sec. 1 [[div. A], title III, 
Sec. 386], Oct. 30, 2000, 114 Stat. 1654, 1654A-88, provided that:
    ``(a) Requirement for Plan.--The Secretary of Defense shall 
prescribe and carry out a comprehensive plan to ensure visibility over 
all in-transit end items and secondary items.
    ``(b) End Items.--The plan required by subsection (a) shall address 
the specific mechanisms to be used to enable the Department of Defense 
to identify at any time the quantity and location of all end items.
    ``(c) Secondary Items.--The plan required by subsection (a) shall 
address the following problems with Department of Defense management of 
inventories of in-transit secondary items:
        ``(1) The vulnerability of in-transit secondary items to loss 
    through fraud, waste, and abuse.
        ``(2) Loss of oversight of in-transit secondary items, including 
    any loss of oversight when items are being transported by commercial 
    carriers.
        ``(3) Loss of accountability for in-transit secondary items due 
    to either a delay of delivery of the items or a lack of notification 
    of a delivery of the items.
    ``(d) Content of Plan.--The plan shall include for subsection (b) 
and for each of the problems described in subsection (c) the following 
information:
        ``(1) The actions to be taken by the Department, including 
    specific actions to address underlying weaknesses in the controls 
    over items being shipped.
        ``(2) Statements of objectives.
        ``(3) Performance measures and schedules.
        ``(4) An identification of any resources necessary for 
    implementing the required actions, together with an estimate of the 
    annual costs.
        ``(5) The key management elements for monitoring, and for 
    measuring the progress achieved in, the implementation of the plan, 
    including--
            ``(A) the assignment of oversight responsibility for each 
        action identified pursuant to paragraph (1);
            ``(B) a description of the resources required for oversight; 
        and
            ``(C) an estimate of the annual cost of oversight.
    ``(e) GAO Reviews.--(1) Not later than 60 days after the date on 
which the Secretary of Defense submits the initial plan to Congress, the 
Comptroller General shall review the plan and submit to Congress any 
comments that the Comptroller General considers appropriate regarding 
the plan.
    ``(2) The Comptroller General shall monitor any implementation of 
the plan and, not later than 1 year after the date referred to in 
paragraph (1), submit to Congress an assessment of the extent to which 
the plan has been implemented.
    ``(f) Submissions to Congress.--The Secretary shall submit to 
Congress any revisions made to the plan that are required by any law 
enacted after October 17, 1998. The revisions so made shall be submitted 
not later than 180 days after the date of the enactment of the law 
requiring the revisions.''


                          Inventory Management

    Pub. L. 105-85, div. A, title III, Sec. 395, Nov. 18, 1997, 111 
Stat. 1718, provided that:
    ``(a) Development and Submission of Schedule.--Not later than 180 
days after the date of the enactment of this Act [Nov. 18, 1997], the 
Director of the Defense Logistics Agency shall develop and submit to 
Congress a schedule for implementing within the agency, for the supplies 
and equipment described in subsection (b), inventory practices 
identified by the Director as being the best commercial inventory 
practices for the acquisition and distribution of such supplies and 
equipment consistent with military requirements. The schedule shall 
provide for the implementation of such practices to be completed not 
later than three years after the date of the enactment of this Act.
    ``(b) Covered Supplies and Equipment.--Subsection (a) shall apply to 
the following types of supplies and equipment for the Department of 
Defense:
        ``(1) Medical and pharmaceutical.
        ``(2) Subsistence.
        ``(3) Clothing and textiles.
        ``(4) Commercially available electronics.
        ``(5) Construction.
        ``(6) Industrial.
        ``(7) Automotive.
        ``(8) Fuel.
        ``(9) Facilities maintenance.
    ``(c) Definition.--For purposes of this section, the term `best 
commercial inventory practice' includes a so-called prime vendor 
arrangement and any other practice that the Director determines will 
enable the Defense Logistics Agency to reduce inventory levels and 
holding costs while improving the responsiveness of the supply system to 
user needs.
    ``(d) Report on Expansion of Covered Supplies and Equipment.--Not 
later than March 1, 1998, the Comptroller General shall submit to 
Congress a report evaluating the feasibility of expanding the list of 
covered supplies and equipment under subsection (b) to include 
repairable items.''


    Direct Vendor Delivery System for Consumable Inventory Items of 
                          Department of Defense

    Pub. L. 104-106, div. A, title III, Sec. 352, Feb. 10, 1996, 110 
Stat. 266, provided that:
    ``(a) Implementation of Direct Vendor Delivery System.--Not later 
than September 30, 1997, the Secretary of Defense shall, to the maximum 
extent practicable, implement a system under which consumable inventory 
items referred to in subsection (b) are delivered to military 
installations throughout the United States directly by the vendors of 
those items. The purpose for implementing the system is to reduce the 
expense and necessity of maintaining extensive warehouses for those 
items within the Department of Defense.
    ``(b) Covered Items.--The items referred to in subsection (a) are 
the following:
        ``(1) Food and clothing.
        ``(2) Medical and pharmaceutical supplies.
        ``(3) Automotive, electrical, fuel, and construction supplies.
        ``(4) Other consumable inventory items the Secretary considers 
    appropriate.''


                       Date of Issuance of Policy

    Section 323(b) of Pub. L. 101-510 provided that: ``The policy 
required by section 2458(a) of title 10, United States Code (as added by 
subsection (a)), shall be issued not later than 180 days after the date 
of the enactment of this Act [Nov. 5, 1990].''
