Navy Acts on Supply Issue : Orders Immediate Steps to Correct Problems

The chief of naval operations ordered immediate steps throughout the service on Monday to correct “critical deficiencies” in Navy supply operations, which he said had resulted from “systematic disregard” of regulations.

Adm. James D. Watkins, in a memo issued the day before a House subcommittee hearing on Navy supply problems, also disclosed that administrative action is being taken against the commander and two supply officers on the aircraft carrier Kitty Hawk for “deviations from accepted standards in supply and financial management.”

Watkins said the widely publicized problems on the San Diego-berthed carrier are only part of “longstanding and systemic” deficiencies in the Navy’s supply and procurement operations.

The problems, he said, “in large measure . . . stemmed from a system that was not responsive and from an attitude that short-term readiness was the key goal and, in order to achieve it, violations of regulations and sound business practices were acceptable.

“This flawed approach was responsible for systematic disregard of procurement regulations and contributed to a mind-set” that allowed procedures to be skirted in accounting for supplies and equipment on ships and in warehouses, according to the memo, which was made public by the House Armed Services sea power subcommittee.

The four-page memo was attached to a 2,500-page Navy report on an investigation ordered after a former auditor on the Kitty Hawk, Robert Jackson, reported accounting and management irregularities.

Subsequently, The Times disclosed that the problems reached far beyond the Kitty Hawk and involved the disappearance of millions of dollars in equipment and supplies from the Navy’s huge supply system, including sophisticated aircraft and missile parts stolen and diverted by agents for the Iranian government of Ayatollah Ruhollah Khomeini.

Although improvements have been made in the supply system in recent years, Watkins wrote, “what is clear from this report is that we have not made sufficient progress.

“More must be done quickly,” he said. “Attitudes must be changed. Plans of action must be designed to correct critical deficiencies in minimum time.”

Review of Plans

He ordered the chief of the Navy supply corps to immediately “re-emphasize throughout his corps the necessity for accountability and just stewardship” and to report within 15 days on a review of plans “for improving longstanding deficiencies to ensure they achieve rapid and lasting change.”

Along with commanders throughout the Navy, Watkins vowed, “We will attack the notion that readiness, without due regard for accountability, can be used as an excuse to continue improper supply practices.”

His memo disclosed that “non-punitive letters of caution” were issued to the Kitty Hawk’s skipper, Capt. Phillip R. Wood, and its supply officer, Cmdr. John Matthews, on Sept. 21 “for their deviations from accepted standards in supply and financial management.” At the Pentagon, a Navy spokesman said the letters are a form of administrative action intended not as punishment but as a way to improve efficiency.

Signing of Name

In addition, Lt. Michael Anderson, a division supply officer on the Kitty Hawk, has been ordered taken “to mast, on a charge of wrongfully signing another officer’s name on the inventory supply documents.” The spokesman said this action is a “non-judicial punishment” that Navy regulations allow a commanding officer to take without such proceedings as court-martial.

Watkins called the Navy’s antiquated computer system “the principal cause of the inaccuracy in our inventory control system” and ordered a speedup in plans to update it. He also ordered a review of staffing levels and instructed that a code of ethics be drafted by Nov. 30 for Navy materiel managers.