Defense Management

In September 1990 testimony before Congress (see GAO/T-NSIAD-91-54) on DOD's plans to consolidate the printing and duplicating functions of the Army, Air Force, Marine Corps, and the Defense Logistics Agency, GAO indicated that (1) the comparability of costs used to develop a savings estimate could not be validated, (2) some of the assumptions used to determine the savings estimate were questionable, and (3) specific plans or decisions as to how and where the savings would be achieved had not been made. Since then, DOD has delayed the consolidation and has provided GAO with more data on its consolidation plans and savings estimate. After reviewing this additional data, GAO concludes that DOD's estimate still has many of the same problems GAO reported in its testimony.

GAO found that: (1) although DOD adjusted its $28.8-million annual savings estimate to reflect cost information based on NPPS actual experience, DOD has not tested the overall cost comparison methodology on any NPPS activities; (2) DOD based its savings estimate on three assumptions involving reduced costs, unchanged annual demand for in-house printing, and centralized management of commercial printing requirements; (3) although NPPS intends to reduce the services' and DLA costs by identifying equipment, personnel, and plant changes that it can make after the consolidation, NPPS has not identified how much it expects to save from each of those reduction actions; (4) NPPS stated that the bulk of its savings will come from personnel reductions and changes; (5) although a Senate report directed the services to deal directly with the Government Printing Office for commercial printing services, NPPS stated that, without commercial printing, its savings estimate is invalid; and (6) a congressional conference report supported the Senate report's direction and gave DOD additional directions providing for congressional oversight of the printing consolidation.