Information Technology

This report examines the acquisition of the Composite Health Care System (CHCS) II. It is one in a series of reports reviewing the Department of Defense's use of best practices in acquiring information technology systems. CHCS II is expected to cost about $1 billion to deliver full capability to almost 1,100 health facilities worldwide by 2008. GAO's objectives were to determine (1) what progress has been made against project commitments, (2) whether the system has been economically justified, and (3) whether effective technical and management controls are in place.

CHCS II is envisioned as a state-of-the-art automated medical information system allowing improved health-care decisions and lower medical and system costs. An expected highlight is computer-based patient records that doctors and other health service providers will be able to access from any military treatment facility, irrespective of location. While early CHCS II progress was limited, clear improvement has been evident over the past 2 years, as Defense has begun to embrace industry best practices. The first incremental release of the system, with a deployment decision scheduled for September 2002, is set to contain more capability than was originally planned. The current schedule is nevertheless 3 years beyond the initial estimate, due in part to major program changes and a system redesign; benefits are in question since measurement has not yet begun; and costs to date are about 2= times the 1998 estimate for deploying the first increment to one region. Until recently, Defense's basis for investing in this system has been an outdated cost/benefit analysis that did not reflect important changes in assumptions and, further, justified all system increments beyond the first solely on an economic analysis of the entire system. Officials now, however, are finalizing an updated analysis and have stated they plan to adopt an incremental approach to justifying investment in CHCS II, a best practice that successful organizations have been following for years. The department is moving forward in ensuring that effective acquisition controls are in place, but further progress can be made. Technical and management controls are largely in effect in several areas, including testing and risk management. But performance-based contracting is not being followed, resulting in the risk that CHCS II will take longer to acquire and cost more than necessary.

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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