Defense Logistics Agency

Process for Selecting Defense Distribution Center Site Contained Weaknesses Gao ID: NSIAD-98-96 April 9, 1998

In September 1997, the Defense Logistics Agency (DLA) announced its decision to consolidate its eastern and western regional distribution headquarters into a new center to be located in New Cumberland, Pennsylvania, the site of the eastern regional headquarters. At that time, DLA officials expected the consolidation to take place during a two-year period beginning in October 1997. Through the consolidation, DLA expects to cut its regional headquarters and co-located support personnel by about 673, for a savings of more than $28 million annually. This report reviews the process that DLA used to select the site for its new center. GAO discusses whether (1) the process was sound and (2) any evidence exists that the site selection had been predetermined.

GAO noted that: (1) DLA officials believed that the consolidation of its eastern and western regional distribution headquarters would produce savings; (2) DLA's establishment of a steering group and decisionmaking criteria indicate that DLA recognized the need for a credible process to guide its decisionmaking in selecting a site for its consolidated distribution headquarters; (3) however, the process used by DLA to support the site selection decision contained a number of weaknesses; (4) among the weaknesses in the process were the absence of sufficient information concerning personnel facilities requirements for the new center, unrealistic cost comparisons between the competing sites, and the use of subjective data for two noncost criteria; (5) subsequent changes to the process, made at the request of the selecting official, did not correct these weaknesses and created concerns about the perception of bias; (6) the cumulative effect of these weaknesses raised questions about the soundness of the site selection process and the ultimate decision; (7) although various persons from the western location raised concerns about whether the decision had been predetermined, GAO found no evidence to validate these concerns; and (8) likewise, GAO found no evidence that prior studies examining the consolidation issue influenced the current site selection process or outcome.

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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