Defense Surplus Equipment Disposal:
Background Information
Valerie Bailey Grasso
Specialist in Defense Acquisition
April 29, 2014
Congressional Research Service
7-5700
www.crs.gov
RS20549
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
DLA Disposition Services ............................................................................................................... 3
Past Legislative Activity .................................................................................................................. 3
Major Recipients .............................................................................................................................. 4
State and Local Governments .................................................................................................... 4
Law Enforcement Support Office (LESO) ................................................................................ 4
Firefighting Support Program .................................................................................................... 4
Humanitarian Assistance Program ............................................................................................. 5
Public Sales ............................................................................................................................... 5
Veteran Groups .......................................................................................................................... 5
Other Programs ................................................................................................................................ 6
For Additional Information .............................................................................................................. 6
Contacts
Author Contact Information............................................................................................................. 6
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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 provided 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.
The Reutilization/Transfer/Donation Program establishes a process for inventory considered no
longer needed by DOD to be redistributed among various groups.2 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.3 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 federal 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.
Property considered surplus 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.4 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.5
1 From the DLA Disposition Services website at http://www.drms.dla.mil/about.shtml.
2 https://www.dispositionservices.dla.mil/rtd03/faq.shtml.
3 See the Acquisition Community Connection at the Defense Acquisition University, at https://acc.dau.mil.
4 From the DLA Disposition Services website at http://www.drms.dla.mil/about.shtml.
5 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 Paul K. Kerr; 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.
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Defense Surplus Equipment Disposal: Background Information
On July 31, 2008, DLA awarded Liquidity Services, Inc. a contract to be the primary manager for
the receipt, storage, marketing, and disposition of virtually all usable defense surplus property
approved by DOD for sale to the public. The contract had a base term of three years with two
one-year renewal options.6 The contract was later extended through February 15, 2013.7 On
September 13, 2012, Liquidity Services announced that DLA had exercised the second of
(potentially) two, 12-month extension periods, under its “Surplus Useable Property Sales
Contract” to sell DOD surplus property. The surplus contract’s performance period was extended
through February 13, 2014.8
Major New Developments
P.L. 112-239 (H.R. 4310, 112th Congress) contains at least three provisions that impact the policy
governing the distribution of DOD surplus or excess property.9 Section 1051 expands 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;10 Section 1053 grants 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,11 and Section 1091
grants DOD the authority to transfer certain aircraft, with exceptions, to the Secretary of
Agriculture and the Secretary of Homeland Security for use by the Forest Service and the U.S.
Coast Guard.12
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 Department of Defense (DOD) Directive 4140.1, Supply Chain Materiel
Management Policy; DOD 4160.21-M Defense Materiel Disposition Manual, and DOD 4160.21-
M-1 Defense Demilitarization Manual.13
6 http://www.liquidityservicesinc.com/company/news/press-releases/1183101/.
7 Clabaugh, Jeff. Liquidity Services Get DOD Extension. Washington Business Journal, August 22, 2011. Accessed
online at http://www.bizjournals.com/washington/news/2011/08/22/liquidity-services-gets-dod-extension.html; also
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/.
8 Press Release. Liquidity Services, Inc. Receives Contract Extension for Surplus Used Property Sales, September 12,
2012. Accessed online at http://www.liquidityservicesinc.com/company/news/press-releases/1735034/. Property is
offered for sale through Liquidity Services’ online auction marketplace, http://www.govliquidation.com/.
9 H.R. 4310 became P.L. 112-239 on January 2, 2013.
10 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.
11 Section 1075. Authority to Transfer Surplus Mine-Resistant Ambush-Protected Vehicles and Spare Parts. H.R. 4310,
Subtitle G., Miscellaneous Authorities and Limitations.
12 H.R. 4310, Section 1091. Transfer Excess Aircraft to Other Departments of the Federal Government.
13 http://www.acq.osd.mil/log/sci/mat_disposition.htm.
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DLA Disposition Services
DLA Disposition Services manages the reutilization, transfer, donation and sale of surplus
military property. The Reutilization/Transfer/Donation Program through DLA Disposition
Services establishes a process for property, considered no longer needed by DOD, to be
redistributed among various groups. Property considered surplus 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, veteran’s organizations, and the public.
Finally, DLA Disposition Services manages the DOD surplus property sales program. Property
that is no longer needed by the government may be acquired through public sales, if the property
is appropriate and safe for sale to the general public.
Past Legislative Activity
P.L. 112-81 (H.R. 1540, 112th Congress) 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
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.14
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
14 Subtitle G – Other Matters. H.Rept. 112-329, H.R. 1540.
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Defense Surplus Equipment Disposal: Background Information
equipment to include state and local law enforcement, firefighting, homeland security, and
emergency management agencies.15 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 have
prohibited 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.16 DLA estimates that since 1990,
more than $4.2 billion worth of property has been transferred; in FY2011 alone, a record $502
million worth of property was transferred.17
In addition, the 1122 Program (FY1994 National Defense Authorization Act) authorizes state and
local governments to purchase law enforcement equipment for counter-drug activities.18 Each
state appoints a “Point of Contact (POC)” for this program. The POC may purchase items from
any of the four inventory control 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
15 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.
16 https://www.dispositionservices.dla.mil/rtd03/leso/.
17 See LESO website at https://www.dispositionservices.dla.mil/rtd03/leso/.
18 http://www.dla.mil/logisticsoperations/DHS/Pages/DLA1122.aspx.
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Property (FEPP) Program, administered through the Forest Service, provides equipment to state
and territorial forestry programs for wild land and rural firefighting.19
Humanitarian Assistance Program
Title 10 U.S.C. 2557 authorizes DOD to provide excess property for humanitarian relief,
domestic emergency assistance, and homeless veterans’ assistance, as coordinated through the
Defense Security Cooperation Agency, Office of Humanitarian and Refugee Affairs.20
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.
Veteran Groups
There are at least two ways that veteran groups can qualify for eligibility for DOD surplus
property.
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 veteran’s groups and Native American organizations. Groups that qualify as a “service
education activity” may have a slight priority in the screening process.21
Property can also be acquired in accordance with Public Law 80-421, which authorizes the
Secretaries of the Military Departments to donate or loan certain types of surplus military
equipment to recognized, selected recipients.22 The DLA Disposition Services website lists the
following organizations as authorized to acquire, through donation or loan, obsolete or
condemned combat material, books, manuscripts, works of art, drawings, plans and models for
historical, ceremonial and display purposes:
• Veteran organizations;
• Soldiers Monument Associations;
• State Museums;
19 http://www.fs.fed.us/fire/partners/fepp/.
20 See https://www.dispositionservices.dla.mil/rtd03/miscprograms.shtml; also, http://www.state.gov/t/pm/iso/
c21542.htm.
21 https://www.dispositionservices.dla.mil/rtd03/index.shtml.
22 See 10 U.S.C. 2572, Documents, Historical Artifacts, and Condemned or Obsolete Combat Materiel: Loan, Gift or
Exchange. Accessed online at http://www.law.cornell.edu/uscode/text/10/2572.
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• Incorporated Museums;
• Municipal Museums, and
• Sons of Veterans Reserves.23
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.24
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.
Author Contact Information
Valerie Bailey Grasso
Specialist in Defense Acquisition
vgrasso@crs.loc.gov, 7-7617
23 https://www.dispositionservices.dla.mil/rtd03/veterans.shtml.
24 For further information, see https://www.dispositionservices.dla.mil/rtd03/index.shtml.
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