Defense Surplus Equipment Disposal:
Background Information
Valerie Bailey Grasso
Specialist in Defense Acquisition
July 18, 2012
Congressional Research Service
7-5700
www.crs.gov
RS20549
CRS Report for Congress
Pr
epared for Members and Committees of Congress
Defense Surplus Equipment Disposal: Background Information
Summary
The Department of Defense (DOD) through a Defense Logistics Agency (DLA) component
called DLA Disposition Services [formerly the Defense Utilization and Marketing Service
(DRMS)] has a policy for disposing of government equipment and supplies considered surplus or
deemed unnecessary, or excess to the agency’s currently designated mission. DLA Disposition
Services is responsible for property reuse (including resale), precious metal recovery, recycling,
hazardous property disposal, and the demilitarization of military equipment. The effort to dispose
of surplus military equipment dates back to the end of World War II when the federal government
sought to reduce a massive inventory of surplus military equipment by making such equipment
available to civilians. (The disposal of surplus real property, including land, buildings,
commercial facilities, and equipment situated thereon, is assigned to the General Services
Administration, Office of Property Disposal.)
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Defense Surplus Equipment Disposal: Background Information
Contents
Background...................................................................................................................................... 1
Major New Developments............................................................................................................... 2
Controlling Legal Authority............................................................................................................. 2
Past Legislative Activity .................................................................................................................. 2
Major Recipients.............................................................................................................................. 3
State and Local Governments.................................................................................................... 3
Law Enforcement Support Office (LESO) ................................................................................ 3
Firefighting Support Program.................................................................................................... 4
Humanitarian Assistance Program............................................................................................. 4
Public Sales ............................................................................................................................... 4
Other Programs................................................................................................................................ 4
For Additional Information.............................................................................................................. 4
Contacts
Author Contact Information............................................................................................................. 5
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Defense Surplus Equipment Disposal: Background Information
Background
On September 12, 1972, the Defense Property Disposal Service (the forerunner to DRMS) was
established under the Defense Supply Agency (now DLA). Defense property disposal offices
were established worldwide on or near major military installations. DLA Disposition Services is
responsible for property reuse (including the disposal and sale of surplus and excess defense
equipment and supplies), precious metal recovery, recycling, hazardous property disposal, and the
demilitarization of military equipment. During FY2008 over $2.2 billion of property was
reutilized.1
DLA Disposition Services provides support at major U.S. military installations worldwide.
Headquartered in Battle Creek, MI, the DLA Disposition Services personnel serve in 16 foreign
countries (including the Middle East and Southwestern Asia), 2 U.S. territories (Guam and Puerto
Rico), and 41 states. DLA Disposition Services are located in field offices in Afghanistan, Iraq,
and Kuwait with teams deploying out to forward operating bases to assist combat units. With over
90 field offices, DLA Disposition Services employs about 1,500 people.
Property disposal means redistributing, transferring, donating, selling, demilitarizing, destroying,
or other “end of life cycle” activities. Disposal is the final stage before the property leaves DOD’s
control.2 In some cases, the act of demilitarization—destroying the item’s military offensive and
defensive capability—accomplishes the intent of disposal.
Property is considered excess when one particular agency determines it is not needed for its
particular use, while property is considered surplus when it is no longer needed by the federal
government. Most property turned in to DLA Disposition Services by the military services is
offered for use in other DOD activities and to other Federal agencies and is declared surplus after
about 21 days. Surplus property can be reused, transferred, donated, or sold; potential recipients
may include law enforcement agencies, school systems, medical institutions, civic and
community organizations, libraries, homeless assistance providers, state and local government
agencies, and the public. During FY2008, about 56,000 military organizations and components
turned in over 3.5 million items to DLA Disposition Services.3 About half of all surplus items are
designated for the foreign military sales program, and about half are made available to other
government agencies, eligible donees, or sold to the public.4
DLA awarded Liquidity Services, Inc. a contract to manage the receipt, storage, marketing, and
disposition of defense surplus property approved by DOD for sale to the public. The contract has
been extended through February 15, 2013.5 Property is offered for sale through Liquidity
Services’ online auction marketplace, at http://www.govliquidation.com/.
1 From the DLA Disposition Services website, at http://www.drms.dla.mil/about.shtml.
2 See the Acquisition Community Connection at the Defense Acquisition University, at https://acc.dau.mil.
3 From the DLA Disposition Services website, at http://www.drms.dla.mil/about.shtml.
4 For further discussion of excess defense property, and the demilitarization and disposal of surplus military equipment,
see CRS Report RL31675, Arms Sales: Congressional Review Process, by Richard F. Grimmett, CRS Report
RS20428, Excess Defense Articles: Grants and Sales to Allies and Friendly Countries, by Richard F. Grimmett, and
CRS Report RL31686, Demilitarization of Significant Military Equipment, by Valerie Bailey Grasso. Another source
for information is the Demilitarization and Disposal section of the Acquisition Community Connection at the Defense
Acquisition University.
5 Clabaugh, Jeff. Liquidity Services Get DOD Extension. Washington Business Journal, August 22, 2011. Accessed
(continued...)
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Major New Developments
H.R. 4310 (the proposed National Defense Authorization Act for FY2013) contains two
provisions that could, if enacted, affect the policy governing defense surplus equipment.6Section
1072 would expand the Secretary of the Army’s authority to loan or donate small firearms,
determined to be excess, for use during funerals and other ceremonial purposes,7 while Section
1075 would grant the Secretary of Defense the authority to transfer mine-resistant, ambush-
protected vehicles and spare parts, to nonprofit U.S. humanitarian, demining organizations for
training purposes.8
Controlling Legal Authority
Authority for the disposal of surplus defense property can be found in P.L. 94-519, 10 U.S.C. 381,
which amends the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 484),
P.L. 107-117, and in DOD Manual 4160.21. The document can be accessed online at
http://www.dla.mil/dlaps/dod/416021m/guide.asp.
Past Legislative Activity
H.R. 1540 (the National Defense Authorization Act for FY2012) contained a provision (Section
361) that clarified a previously enacted provision (Section 346 of the Ike Skelton National
Defense Authorization Act for FY2011, P.L. 111-383) which made available for sale any small
arms ammunition and small ammunition components which were in excess of military
requirements. Section 361 amended the conditions that would govern the commercial sale of
small arms ammunition components and fired cartridge cases. H.Rept. 112-329, the conference
report that accompanied H.R. 1540, offered the following clarification.
The conferees note that the intent of section 346 of P.L. 111-383, as amended, is to clarify
that the only fired cartridge cases (referred to as expended small arms cartridge cases)
subject to the provision are intact expended small arms cartridge cases and that the provision
does not apply outside the continental United States or overrides established Department of
Defense (DOD) trade security controls or explosives safety controls. The conferees note that
the DOD would be permitted to demilitarize and recycle expended small arms cartridge cases
covered by the provision so long as there is not a significant decrease in intact expended
small arms cartridge cases being made available for sale and there is no evidence that
commercial demands are not generally being met. The conferees note that based on its
(...continued)
online at http://www.bizjournals.com/washington/news/2011/08/22/liquidity-services-gets-dod-extension.html; and
Jamil, Aisha. DOD Extends Liquidity Services Contract for Surplus Usable Property Sales. Washington Exec, August
30, 2011. Accessed online at http://www.washingtonexec.com/2011/08/dod-extends-liquidity-services-inc-contract-for-
surplus-useable-property-sales/.
6 H.R. 4310 was introduced on March 29, 2012.
7 Section 1072. Expansion of Authority of the Secretary of the Army to loan or donate excess small arms for funeral
and other ceremonial purposes. H.R. 4310, Subtitle G. Miscellaneous Authorities and Limitations.
8 Section 1075. Authority to Transfer Surplus Mine-Resistant Ambush-Protected Vehicles and Spare Parts. H.R. 4310,
Subtitle G. Miscellaneous Authorities and Limitations.
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current force structure and training requirements, the DOD currently makes approximately 6-
8 million pounds of intact (non-demilitarized) expended small arms cartridge cases available
each year for commercial sales. The conferees recognize that the amount made available may
change as the DOD's force structure or training requirements change. The conferees note that
the DOD would be responsible for assessing commercial demands for the purpose of
implementing this requirement; the conferees understand that the DOD may choose to
conduct market surveys or studies to assess commercial demands for this purpose. 9
In the 111th Congress, the Ike Skelton National Defense Authorization Act for FY2011 (P.L. 111-
383, H.R. 6523) contained a provision (Section 1072) that amended Title 10 Section 2576 to
broaden the categories of state and local organizations that would be eligible for surplus military
equipment to include state and local law enforcement, firefighting, homeland security, and
emergency management agencies.10 Also, the Affordable Reloaded Munitions Supply (ARMS)
Act of 2009 (H.R. 2193) was introduced in the House on April 30, 2009. The bill would prohibit
the Secretary of Defense from implementing any policy that prevents or places undue restriction
on the sale of “intact spent military small arms ammunition casings” to certain domestic
suppliers. The bill had 41 co-sponsors, and was referred to the House Armed Services Committee.
Major Recipients
State and Local Governments
If property cannot be reused or transferred to other federal agencies, it may be donated to state
and local government programs. Each state has designated a “State Agency for Surplus Property
Program,” a local governing authority to receive and distribute all federal surplus property. The
program authorizes “screeners” to handle the logistics, and the state agency may charge a fee for
handling the transaction. Eligible recipients include, but are not limited to, organizations that
promote public health, safety, education, recreation, conservation, and other public needs,
including veterans groups and Native American organizations. Groups that qualify as a “service
education activity” may have a slight priority in the screening process.
Law Enforcement Support Office (LESO)
LESO administers 10 U.S.C. Section 2576a, which transfers excess DOD equipment to federal
and state law enforcement agencies through the 1033 Program.11 DLA estimates the LESO budget
for FY2008 and FY2009 to be $1.3 million for each year.12 In addition, the 1122 Program
(FY1994 National Defense Authorization Act) authorizes state and local governments to purchase
law enforcement equipment for counter-drug activities.13Each state appoints a “Point of Contact
(POC)” for this program. The POC may purchase items from any of the four inventory control
9 Subtitle G – Other Matters. H.Rept. 112-329, the conference report that accompanies H.R. 1540.
10 Title 10 U.S.C. 2576, Surplus Military Equipment: Sale to State and Local Law Enforcement, Firefighting,
Homeland Security, and Emergency Management Agencies,. and Firefighter Agencies.
11 https://www.dispositionservices.dla.mil/rtd03/leso/index.shtml.
12 Defense Logistics Agency, Operation and Maintenance, Defense-Wide, FY2008/FY2009 Budget Estimates.
13 http://www.dla.mil/logisticsoperations/DHS/Pages/DLA1122.aspx.
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Defense Surplus Equipment Disposal: Background Information
points managed by DLA. To order items, applicants are to contact their State Agency for Surplus
Property Program.
Firefighting Support Program
Title 10 U.S.C. 2576b authorizes the U.S. Department of Agriculture’s Forest Service to manage
the DOD firefighting property transfers. An interagency agreement between DOD and the Forest
Service is under the authority of the Economy Act, 31 U.S.C. 1535. The Federal Excess Personal
Property (FEPP) Program, administered though the Forest Service, provides equipment to state
and territorial forestry programs for wild land and rural firefighting.14
Humanitarian Assistance Program
Title 10 U.S.C. 2547 authorizes DOD to provide excess property as coordinated through the
Defense Security Cooperation Agency, Office of Humanitarian and Refugee Affairs.15
Public Sales
Property not reused, transferred, or donated can be sold to the general public through public
auctions and sealed bidding. Munitions, explosives, and strategic items are not sold.
Other Programs
There are other programs which may assist organizations which may fail to qualify for DLA
Disposition Services property as a DOD, federal, or donation customer. Such programs include
(but are not limited to) museums, educational institutions, National Guard and Senior Reserve
Officer Training Corps units, and the Civil Air Patrol.16
For Additional Information
The DLA Customer Contact Center is open 24 hours a day, 7 days a week, at (877) 352-2255, or
at DLAContactCenter@dla.mil .For more information about DLA Disposition Services, see
http://www.dispositionservices.dla.mil/index.shtml.
14 http://www.fs.fed.us/fire/partners/fepp/.
15 https://www.dispositionservices.dla.mil/rtd03/miscprograms.shtml.
16 For further information, see https://www.dispositionservices.dla.mil/rtd03/index.shtml.
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Author Contact Information
Valerie Bailey Grasso
Specialist in Defense Acquisition
vgrasso@crs.loc.gov, 7-7617
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