GAO calls for improved oversight of DoD business modernization efforts

////GAO calls for improved oversight of DoD business modernization efforts

GAO calls for improved oversight of DoD business modernization efforts

Two weeks ago, Highlights reported on GAO Director of Financial Management and Assurance Asif A. Khan’s testimony on DoD’s business systems modernization efforts.  Khan was critical of DoD's slow progress on implementing the modernization plan due to ineffective management controls and inadequate testing.  He called for sustained focus and oversight by DoD leadership to improve implementation and increase the chance of long-term success.  In his testimony, Khan referenced portions of a GAO study that analyzed the progress of the 10 Enterprise Resource Planning (ERP) systems that are to replace 500 legacy systems.  Last week GAO issued the full report on its study.  The report identifies program data for each of ERP as of December 31, 2009, including latest cost estimates.  The appendix to the report includes detailed analyses of the program schedules for the Air Force’s Defense Enterprise Accounting and Management System (DEAMS) program and Expeditionary Combat Support System (ECSS) Solutions Development Project, and the Army’s General Fund Enterprise Business System (GFEBS) and Global Combat Support System (GCSS) programs.  GAO charged that these systems experienced implementation problems due to the lack of full integration of program schedules with contractor activities or of detailed schedules with major program milestones.  The report’s appendix also assesses the costs estimates for these four programs based on what GAO calls four characteristics of “high-quality” cost estimates:  1) well-documented; 2) comprehensive; 3) accurate; and 4) credible.  GAO gave DEAMS the highest marks judging, three of the four characteristics fully met and one substantially met.  Having credible estimates is the main problem for the Air Force’s ECSS, and the Army’s GFEBS and CGSS programs, according to GAO, because of the lack of sensitivity or risk analyses.  The report listed eight recommended actions that DoD should take to improve management oversight and accountability.  GAO recommended that the Secretary of Defense should direct the Secretaries of the Army and Air Force to develop Integrated Master Schedules (IMS) that fully incorporate best practices and update cost estimates by using sensitivity analyses.  The report also  proposed that the department’s Chief Management Officer (CMO) should set performance measures based on “quantitative data.”

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