Defense Infrastructure

Last year, the Defense Department (DOD) announced its decision to centralize and, ultimately, consolidate its cataloging operations in Battle Creek, Michigan. A DOD steering committee and working group selected Battle Creek after assessing five possible sites. DOD estimates that, by centralizing and consolidating operations, it will be able to reduce the number of its full-time employees doing cataloging work from 907 to 753 and save $7.l million annually. This report discusses the (1) likelihood that DOD's decision will result in the estimated personnel reductions and savings, (2) challenges DOD may face when implementing the consolidation effort, and (3) proposals made by two employee groups that state that DOD could achieve even greater personnel reductions and savings by centralizing and consolidating cataloging operations in locations other than Battle Creek.

GAO noted that: (1) it is uncertain that the estimated personnel reductions and savings will occur; (2) DOD's estimates are based on several assumptions that either will not necessarily occur or have changed since DOD made the estimates; (3) DOD based the estimates, for example, on an assumption of what a standardized cataloging process may look like but has not settled on an actual design of the centralized and consolidated system; (4) detailed studies to document existing cataloging processes are still ongoing and will be important for determining how cataloging processes can be separated from other materiel management functions; (5) DOD also assumed that an ongoing system development project to develop a standardized cataloging system would be successful and thus did not consider any system development costs in estimating savings; (6) however, DOD has since halted work on that system, and costs to develop a new one are uncertain; (7) DOD faces significant challenges in implementing the consolidation; (8) prior DOD cataloging consolidation efforts incurred problems that will need to be taken into consideration in developing detailed implementation plans for consolidation; (9) separating cataloging from other service provisioning and materiel management functions may be difficult and could negatively affect cataloging operations during the transition; (10) DOD may lose much of its cataloging experience because of the reluctance of experienced catalogers to relocate; (11) a Defense Logistics Agency (DLA) official stated that DLA has begun developing plans that address these risks and that no cataloging functions will be transferred to Battle Creek until these plans are complete; (12) planning for the new standardized cataloging process and the necessary standardized cataloging system will not be completed until after catalogers are moved to Battle Creek; (13) DOD also plans, in conjunction with the move, to reduce the number of catalogers to levels envisioned only after process reengineering and consolidation of cataloging have occurred; (14) DOD officials believe the move will increase the likelihood of catalogers adapting to the as yet unplanned new processes and systems; (15) however, senior officials responsible for service cataloging operations have expressed concerns about the risks inherent in proceeding without detailed plans to guide the consolidation; and (16) until a standardized cataloging process is developed, it is not possible to determine the reasonableness of the employee groups' proposals concerning further staff reductions.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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