PHILADELPHIA – In January 2026, Naval Supply Systems Command Weapon Systems Support (NAVSUP WSS) stood up a war room to address a critical financial issue: unliquidated obligations (ULOs).
Unliquidated obligations are funds that have been obligated contractually, but not yet expended or otherwise drawn down.
The focus of the ULO team has been to validate existing requirements and reduce or resolve balances on aging orders. The goal is to review items on contract and determine if they are still needed or if funding can be reclaimed.
Across the NAVSUP enterprise, there are approximately $17 billion worth of ULOs. Most of these are tied to valid requirements that have future delivery dates. It is important to identify and understand the financial risks associated.
Once a ULO has passed its delivery date, the item is carefully reviewed by the ULO team to verify whether the Fleet still requires it, and whether the contract should be recommended for modification or cancellation.
“Right now, there are approximately $1.3 billion worth of ULOs we are reviewing to either confirm as valid or refer for cancelation,” said Bob Shepherd, deputy comptroller for aviation. “At every level, our goal is to ensure that we are being effective stewards of taxpayer resources and getting the Fleet what they need.”
The team assembled a wide representation of experts across multiple codes from WSS, NAVSUP HQ, and Defense Logistics Agency. To ensure alignment, the group meets weekly to assess their progress and to make recommendations for contract cancellations.
Although NAVSUP WSS regularly conducts contract audits, this specific war room was stood up to align reviews across the relevant business areas.
“Based on these reviews, we’ve identified $218 million of vendor items that we recommend for termination,” said Shepherd. “Our goal is to see a 25 percent reduction in aged ULOs and irregular demand ULOs by the end of summer.”
According to Shepherd, reducing ULOs provides many benefits to the command. It reduces financial risk by sending clearer signals of what truly represents a future expenditure, while also improving auditability by reducing the amount of open purchase orders. These reviews help validate existing requirements and reduce unnecessary financial investments in wholesale material.
NAVSUP WSS provides the U.S. Navy, Marine Corps, and allied forces the program and supply support for the weapon systems that keep naval forces mission ready. With locations in Norfolk, Philadelphia, Mechanicsburg, and Tucson, NAVSUP WSS manages operational readiness for almost 300 deployable ships, 92 submarines, and 3,700 aircraft worldwide.
| Date Taken: |
03.24.2026 |
| Date Posted: |
03.24.2026 14:00 |
| Story ID: |
561214 |
| Location: |
PHILADELPHIA, PENNSYLVANIA, US |
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