Is the Department of Defense Stockpiling Enough Critical Materials?

September 12, 2024

The Department of Defense (DoD) maintains the National Defense Stockpile to store materials that are strategic and critical to defense and essential civilian needs in times of national emergency. DoD has processes for identifying material requirements and managing the stockpile, but some aspects are not fully defined. For example, DoD does not require relevant entities, such as program offices, to provide the necessary data to model requirements for over 40 percent of its strategic and critical materials.

According to a new 42-page report  published by the U.S. Government Accountability Office (GAO), without data to model more requirements, DoD risks not having stock of its highest priority materials.

DoD's biennial stockpile reports to Congress included details on stockpile inventory and material shortfalls, but did not include information on all risks and prior actions taken to address them. DoD's reports indicate that from fiscal years 2019 to 2023, DoD primarily stockpiled the same 50 types of materials, but the number of materials in shortfall increased by 167 percent, from 37 to 99.

The reports included some information about risks, such as the type of products affected, and recommended actions to address the shortfall. However, in the fiscal year 2023 report, DoD either did not have or chose not to include all information needed for congressional and DoD decision-making, such as

• a list of all materials in shortfall, rather than just those deemed priorities,
• the risk associated with materials it could not model, such as affected weapon systems, or
• the status of DoD efforts to implement recommendations from its prior reports.

Over 90 percent of the materials DoD identified in shortfall in fiscal year 2023 had either zero or one domestic supplier. In addition to stockpiling, DoD is mitigating some of the risks of relying on foreign or a single domestic source of supply by recycling materials from no-longer-used equipment, qualifying new domestic sources, and funding research and development projects to identify new ways to process critical materials. Even with these efforts, DoD estimates it will need $18.5 billion to address all shortfalls identified in fiscal year 2023.

The Strategic and Critical Materials Stock Piling Act established the National Defense Stockpile to hold materials essential to defense and civilian needs. One such material is titanium, which is a strong, light-weight metal that helps prevent corrosion in weapon systems.

A House report includes a provision for GAO to assess DoD efforts to stockpile strategic and critical materials. This report examines the extent to which DoD (1) established processes for identifying requirements and managing the stockpile, (2) reported to Congress on changes and risks to the stockpile, and (3) is reliant on foreign and single domestic sources of supply.

GAO analyzed DoD's process for developing stockpile requirements, its three most recent biennial stockpile reports (fiscal years 2019 through 2023), and other related documents. GAO also interviewed officials from several entities such as the Defense Logistics Agency, as well as the Institute for Defense Analyses.

GAO issued the following six recommendations to DoD in an effort to improve the way the agency is managing the National Defense Stockpile:

• The Secretary of Defense should ensure the Under Secretary of Defense for Acquisition and Sustainment identifies roles and defines responsibilities for relevant DOD entities to provide the necessary supply and demand information on the materials they consider strategic or critical to support DOD's biennial stockpile requirement reports.
• The Secretary of Defense should ensure the Defense Logistics Agency documents the process for determining actions to address a material shortfall, such as in guidance or job aids.
• The Secretary of Defense should ensure the Under Secretary of Defense for Acquisition and Sustainment finalizes criteria to release stockpiled materials for use under Executive Order 14051.
• The Secretary of Defense should ensure the Defense Logistics Agency reports the complete list of material shortfalls to Congress while continuing to highlight priority materials.
• The Secretary of Defense should ensure the Defense Logistics Agency reports information on the risks of unmodeled critical materials to Congress.
• The Secretary of Defense should ensure the Defense Logistics Agency reports progress on prior recommendations made to address material shortfalls to Congress.

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