Section B Military Construction in Progress

The cost of work in place, as reported by the military departments, on construction projects which had been started but not completed and transferred to the inventory, is shown by major geographical area in Table 30. The cost reported represents the cost of labor and materials incorporated on the construction projects. The Federal Government has a property interest in these projects--most of them are being built on

Government-owned land.

Upon satisfactory completion of the project and acceptance by the military department, the total cost of the completed project is added to the real property inventory account of the respective department On inclusion in inventory the amount is no longer shown as construction work in progress; thus, the amounts in Table 30 may vary considerably from year to year.

PART II - MILITARY PERSONAL PROPERTY

Inventory of Military Equipment and Supplies in the
Consolidated Supply Systems and in Stock Funds

1. General

This section of the report deals with the inventories in the supply systems of the Department of Defense. For each of the four military services, and for the Defense Supply Agency, dollar data are presented in terms of the major purposes for which the supplies and equipment are held.

Secretary of Defense logistics guidance establishes an objective for acquisition of materiel related to the Approved Forces specified in the Five Year Defense Program. This objective is the quantity of an item authorized for peacetime acquisition to equip and sustain these U.S. forces in peacetime and in wartime, from D-Day through the period and at the levels prescribed by such guidance. Assets in excess of this level may also be retained, within prescribed limits, to support these forces and Specified Allied Forces, and for other retention objectives.

The inventories in the following tables are, therefore, stratified into those held for the Approved Force of the component, as well as economic retention stock, contingency retention stock, Allied Force retention stock, and potential DOD excess stock for which disposal action has not yet been initiated. Those stocks that have been earmarked for Military Assistance Programs although not, as of the date of reporting, delivered, are also shown. The inventories are also subclassified into broad commodity categories representing families of similar kinds of items.

Inventories are accounted for in the supply systems of the military

services and the Defense Supply Agency from time of acceptance until they have been issued to a using unit. The supply system inventories are those being held in the storage or warehousing facilities of these services for issue to the user. They constitute that segment of the overall materiel supply system which is defined in the Joint Chiefs of Staff dictionary as the "phase of military supply which extends from receipt of finished supplies by the military services through issue for use or consumption".

The stocks are physically located at depots, posts, camps, stations, and bases in the United States and possessions, and in foreign countries. They are stored in warehouses, open storage spaces, ammunition dumps,

fuel tanks, etc.

Supply items which have been issued to the consuming military units, such as divisions, air-wings, and most ships, are not considered as assets of the supply system. These items are in the hands of the ultimate user and as such are carried in unit records until consumed, destroyed, captured, lost, or otherwise disposed of.

In this category, throughout the Department of Defense for the purpose of this report, are ships, complete aircraft, complete ICBM and IRBM missiles, and space vehicles which are generally considered to be operational weapons systems and not supply system items. The Navy and Air Force do not accept aircraft and these types of missiles into the supply system nor are they returned to the supply system for overhaul or modification, control being retained in operational commands. The Army follows a different practice for aircraft and maintains supply system inventories which are issued upon requisition the same as supply

items. To be consistent in this report, however, Army inventories of aircraft have been excluded from the supply system tables and are carried

as "in-use"

Part II, Section B, of this report includes data on major items which have been issued from the supply system to the ultimate users and are . still in the hands of the user. If such en item in a military unit becomes unserviceable, it is normally replaced by a serviceable item from the supply system. The unserviceable item (if of a repairable type) is returned to the supply system where it may be repaired and put back in supply channels or declared excess and disposed of.

Also not included in the supply inventory totals is the value of excess stocks for which disposal action has been initiated.

Table 45

consists of the value of such stocks as well as excess and surplus stocks

from other sources such as using units.

Stock Funds

Stock funds do not constitute a separate supply system. They are operational and financial systems employed by the military services and the Defense Supply Agency principally to facilitate financial control over consumption-type supply items for which there is recurring demand. The stock fund mechanism permits the Services to handle inventories of such continuous demand items on a replacement basis much as private business firms do when they replace stocks depleted by sales with new stocks purchased with the proceeds from such sales. Stock fund inventories for each military service and the Defense Supply Agency are shown separately in this section; however, they are also included, as a one-line entry, in the overall totals for the entire supply system of each military