ADP Acquisition

In response to a congressional request, GAO reviewed the Navy's procurement of the Naval Aviation Logistics Command Management Information System (NALCOMIS) and provided information on: (1) the Navy's acquisition approach; (2) the program's current status; (3) cost growth and a comparison of current cost estimates and budget estimates; (4) the reasons for cost increases; and (5) the Office of the Secretary of Defense's (OSD) and the Navy's actions to control costs.

GAO found that: (1) the Navy used a three-phase procurement to ensure compatibility with other Navy non-tactical automated systems; (2) in phase I, the Navy converted an automated shipboard aircraft repair recordkeeping system, extended it to 33 intermediate maintenance activities, and limited it to recordkeeping functions; (3) phase II, which was to fully automate aviation maintenance functions at 32 of the 33 phase I sites and 71 additional intermediate maintenance activities and supply support centers, was operational at three Marine aircraft groups and was undergoing testing at a naval air station; (4) although phase III was to extend automation to 400 organizational maintenance activities, the Navy indefinitely suspended the activity until after development of 90 percent of the software, and shifted funds to correct phase II functional deficiencies; (5) the initial costs to design, develop, and implement NALCOMIS totaled $233 million; (6) although OSD reported NALCOMIS cost increases from $525 million in 1987 to $614 million in 1988, Navy officials stated that the 1987 figure did not include phase III, which would increase the cost to $936 million and thus show a decrease from 1987 to 1988; (7) despite recent reductions, NALCOMIS life-cycle costs have increased to $1.4 billion; (8) OSD revoked the Navy's oversight authority after a 1988 review showed a 24-month schedule slippage; and (9) OSD scheduled another review in the second quarter of fiscal year 1989, in which the Navy planned to request approval for full deployment of phase II and to present a plan to complete development and implement phase III.