Defense Surplus Equipment Disposal:
Background Information
Valerie Bailey Grasso
Specialist in Defense Acquisition
July 22, 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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Contents
Background ...................................................................................................................................... 1
Major New Developments ............................................................................................................... 2
Background................................................................................................................................ 3
Controlling Legal Authority............................................................................................................. 3
DLA Disposition Services ............................................................................................................... 3
Past Legislative Activity .................................................................................................................. 4
Major Recipients .............................................................................................................................. 5
State and Local Governments .................................................................................................... 5
Law Enforcement Support Office (LESO) ................................................................................ 5
Firefighting Support Program .................................................................................................... 5
Humanitarian Assistance Program ............................................................................................. 6
Public Sales ............................................................................................................................... 6
Veteran Groups .......................................................................................................................... 6
Other Programs ................................................................................................................................ 7
For Additional Information .............................................................................................................. 7
Contacts
Author Contact Information............................................................................................................. 7
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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 the Department of Defense (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
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
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
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 Developments9
On June 30, 2014, DLA notified the Law Enforcement Support Office (LESO) State Coordinators
and the U.S. Forestry Service of a decision to temporarily suspend release of all vehicles and
equipment with diesel engines, pending resolution of issues with the Environmental Protection
Agency (EPA). According to several press reports, DOD announced that DLA would end the sale,
donation, and/or transfer of surplus military vehicles to state and local agencies.10 These vehicles
were historically used for law enforcement support and rural firefighting programs.
However, on July 9, 2014, DLA Disposition Services announced that it would continue to make
these military vehicles available to authorized law enforcement and fire-fighting program
recipients. DLA Disposition Services posted the following notice on its website:
Following discussions with the EPA, DLA will immediately resume issuing military
vehicles and equipment with an associated national security exemption (NSE) to
authorized law enforcement agencies and to DOD Fire Fighter Program recipients. EPA
has confirmed that equipment transferred to law enforcement and fire-fighting agencies
through these programs will continue to be covered by any National Security Exemption
(NSE) previously issued by EPA, with the understanding that DLA retains title to the
vehicles and appropriate inventory and other management controls remain in effect. We
are amending our Memoranda of Understanding to reflect this agreement.11
6 http://www.liquidityservicesinc.com/company/news/press-releases/1183101/; http://newsok.com/inhofe-secures-
equipment-deal-for-rural-firefighters/article/4987107
7 Clabaugh, Jeff. Liquidity Services Get DOD Extension. Washington Business Journal, August 22, 2011,
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, 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, http://www.liquidityservicesinc.com/company/news/press-releases/1735034/. Property is offered for sale through
Liquidity Services’ online auction marketplace, at http://www.govliquidation.com/. As of July 10, 2014, neither
Liquidity Services nor DLA have announced a contract extension.
9 This information was provided to CRS via email from DLA Legislative Affairs and the EPA, July 2014.
10 EPA Forces Loss of Surplus Trucks for Fire Departments. Citycode Financial, July 10, 2014,
http://www.citycode.com/2014/07/09/epa-forces-loss-of-surplus-trucks-for-fire-departments/; Glas, Brittany. EPA
Reaches Agreement with Rural Fire Departments. KSN-TV, July 8, 2014, http://ksn.com/2014/07/08/rural-kansas-fire-
departments-concerned-over-epa-ruling; Morgan, Rhett. Feds Reach Pact to Restore Surplus Military Equipment to Aid
Rural Firefighters, Tulsa World, July 10, 2014, http://newsok.com/inhofe-secures-equipment-deal-for-rural-firefighters/
article/4987107; and Liquidity Services, Inc. Announces Cessation in Sales for Selected Defense Logistics Agency
Surplus Property Items and Preliminary Third-Quarter Fiscal Year 2014 Results, July 10, 2014, Liquidity Services, Inc.,
http://www.liquidityservicesinc.com/company/news/press-releases/1946354.
11 http://www.dispositionservices.dla.mil/Pages/default.aspx.
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Background
In May 2014, DLA reportedly began investigating the potential transfer and/or sale of soft
skinned Humvees. In the process of researching any potential challenges or restrictions, the U.S.
Army informed DLA that the engines in these vehicles were not allowed to be “entered into
commerce” as they were not specifically approved as meeting Environmental Protection Agency
(EPA) Clear Air Act standards. These vehicles were instead granted a National Security
Exemption (NSE) by EPA for military tactical use only dating back to 1988. The NSE is founded
in both statute and regulation.
DLA Disposition Services was unaware of this arrangement between the Army and the EPA. At
the time, DLA was made aware that other vehicles/engines that DLA had previously donated,
transferred or entered into law-enforcement and fire-fighter support programs (1033 programs)
were also not necessarily Clean Air Act compliant, but had received the NSE. Transfer, donation,
and sale could all possibly trigger the statutory prohibition on “entry into commerce” of the NSE
vehicles and engines.
On June 30, 2014, DLA notified the Law Enforcement Support Office (LESO) State Coordinators
and the U.S. Forestry Service of the decision to temporarily suspend release of all vehicles and
equipment with diesel engines pending resolution with EPA. Consequently, release of all vehicles
and equipment with diesel engines was temporarily suspended by DLA Disposition based on the
statutory and regulatory language. Requisitions for other property and equipment continued to be
released.
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 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.12
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.
12 http://www.acq.osd.mil/log/sci/mat_disposition.htm.
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Past Legislative Activity
P.L. 112-239 (H.R. 4310, 112th Congress) contained at least three provisions that my impact the
policy governing the distribution of DOD surplus or excess property.13 Section 1051 expanded 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;14 Section 1053 granted 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,15 and Section 1091
granted 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.16
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.17
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
13 P.L. 112-239 (H.R. 4310) was enacted into law on January 2, 2013.
14 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.
15 Section 1075. Authority to Transfer Surplus Mine-Resistant Ambush-Protected Vehicles and Spare Parts. H.R. 4310,
Subtitle G., Miscellaneous Authorities and Limitations.
16 H.R. 4310, Section 1091. Transfer Excess Aircraft to Other Departments of the Federal Government.
17 Subtitle G–Other Matters. H.Rept. 112-329, H.R. 1540.
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emergency management agencies.18 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.19 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.20
In addition, the 1122 Program (FY1994 National Defense Authorization Act) authorizes state and
local governments to purchase law enforcement equipment for counter-drug activities.21 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
Property (FEPP) Program, administered through the Forest Service, provides equipment to state
and territorial forestry programs for wild land and rural firefighting.22
18 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.
19 https://www.dispositionservices.dla.mil/rtd03/leso/.
20 See LESO website at https://www.dispositionservices.dla.mil/rtd03/leso/.
21 http://www.dla.mil/logisticsoperations/DHS/Pages/DLA1122.aspx.
22 http://www.fs.fed.us/fire/partners/fepp/.
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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.23
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.24
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.25 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;
• Incorporated Museums;
• Municipal Museums, and
• Sons of Veterans Reserves.26
23 See https://www.dispositionservices.dla.mil/rtd03/miscprograms.shtml; also, http://www.state.gov/t/pm/iso/
c21542.htm.
24 https://www.dispositionservices.dla.mil/rtd03/index.shtml.
25 See 10 U.S.C. 2572, Documents, Historical Artifacts, and Condemned or Obsolete Combat Materiel: Loan, Gift or
Exchange, at http://www.law.cornell.edu/uscode/text/10/2572.
26 https://www.dispositionservices.dla.mil/rtd03/veterans.shtml.
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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.27
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
27 For further information, see https://www.dispositionservices.dla.mil/rtd03/index.shtml.
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