Sourcing and Acquisition
Challenges Facing the Department of Defense Gao ID: GAO-03-574T March 19, 2003The Department of Defense (DOD) is on the brink of operations in Iraq while seeking to respond to changes in security threats and still meeting the challenges transforming the military. DOD spends an average of $150 billion annually on acquisitions that support these and other missions. Moreover, this investment is expected to grow considerably in the future as DOD works to keep legacy systems while investing in future capabilities such as unmanned aircraft, satellite networks, and information and communications systems. Such demands clearly require DOD to be as efficient and effective as possible in obtaining the systems, services, and equipment it needs to carry out its mission. But GAO's reviews continue to show that DOD is not carrying out acquisitions cost-effectively and that the acquisitions themselves are not always achieving DOD's objectives. Pervasive problems persist regarding high-risk acquisition strategies and unrealistic cost, schedule, and performance estimates. This testimony focuses on two aspects fundamental to successful acquisitions in DOD: (1) the implementation of sound policies for making sourcing decisions, and (2) the adoption of best practices.
Government agencies increasingly are relying on services to accomplish their missions. The Department of Defense now spends more than half its contracting dollars acquiring services, about $77 billion in fiscal year 2001, the latest year for which complete data are available. In addition, the Department reports that it has over 400,000 employees performing commercial-type services. Determining whether to obtain required services using federal employees or through contracts with the private sector is an important economic and strategic decision. In fact, competitive sourcing is a key component of the President's Management Agenda. But historically, the process for determining whether the public or the private sector should perform services needed by federal agencies--set forth in Office of Management and Budget (OMB) Circular A-76--has been difficult to implement. The impact such decisions have on the federal workforce has been profound, and there have been concerns in both the public and private sectors concerning the fairness of the process and the extent to which there is a "level playing field" for conducting public-private competitions. DOD could significantly improve its performance in a number of areas by adopting some of the best practices we have identified. Specifically, DOD could improve its performance in the areas of information technology outsourcing, acquiring information technology systems, acquiring services, major weapon system acquisitions, and acquisition workforce challenges.
GAO-03-574T, Sourcing and Acquisition: Challenges Facing the Department of Defense
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Testimony:
Before the Subcommittee on Readiness and Management Support, Committee
on Armed Services, United States Senate:
United States General Accounting Office:
GAO:
For Release on Delivery Expected at 9:30 a.m. EST:
Wednesday, March 19, 2003:
SOURCING AND ACQUISITION:
Challenges Facing the Department of Defense:
Statement of David M. Walker
Comptroller General of the United States:
GAO-03-574T:
Chairman Ensign, Ranking Member Akaka, and Members of the Subcommittee:
I am pleased to be here today to participate in the Subcommittee‘s
hearing on the acquisition and sourcing practices of the Department of
Defense (DOD). Today‘s hearing occurs at a critical time--with DOD on
the brink of operations in Iraq while seeking to respond to changes in
security threats and still meeting the challenge of transforming the
military.
DOD spends an average of $150 billion annually on acquisitions that
support these and other missions. Moreover, this investment is expected
to grow considerably in the future as DOD works to keep legacy systems
while investing in future capabilities such as unmanned aircraft,
satellite networks, and information and communications systems.
Such demands clearly require DOD to be as efficient and effective as
possible in obtaining the systems, services, and equipment it needs to
carry out its mission. But our reviews continue to show that DOD is not
carrying out acquisitions cost-effectively and that the acquisitions
themselves are not always achieving DOD‘s objectives. Pervasive
problems persist regarding high-risk acquisition strategies and
unrealistic cost, schedule, and performance estimates.
My testimony today will focus on two aspects fundamental to successful
acquisitions in DOD.
* The first is the implementation of sound policies for making sourcing
decisions. Last April, the congressionally chartered Commercial
Activities Panel, which I chaired, and on which I was privileged to
serve along with my fellow panelists here today, Angela Styles and Pete
Aldridge, made a number of recommendations for improving the policies
and procedures governing the competitive sourcing of commercial
activities. I welcome this opportunity to discuss the work of the Panel
and the progress to date in implementing its recommendations. These
recommendations should lay a good foundation for improving sourcing
decisions within DOD.
* The second is the adoption of best practices. DOD itself recognizes
the need to ensure that it can match its needs to its resources and to
follow a knowledge-based acquisition process. It is seeking to adopt
practices that have proven successful in the commercial sector in the
procurement of both systems and services. It also recognizes the need
to reshape its acquisition workforce to meet growing demands. Yet it
still faces a considerable challenge in putting these practices to work
and instituting the cultural changes needed for their success. I would
like to recognize the Subcommittee‘s leadership in sponsoring the work
on the best practices used by leading commercial firms in acquiring
services, information technology, and major systems, and in working to
get them accepted within DOD.
Before I begin my testimony, I would like to note that the environment
in which these changes must be made is a challenging one--not just for
DOD, but for other agencies as well. It consists of new and changing
security threats, the public‘s growing expectations for demonstrable
results, demographic changes, rapidly evolving science and technology,
and serious and growing fiscal constraints. All of these challenges
demand that the federal government engage in a fundamental review of
its mission and priorities and to consider the long-term impact of the
decisions it makes today. The recommendations and practices I will be
discussing today, however, should position DOD to meet these broader
challenges since they focus on taking a more knowledge-based, and
longer-term approach to acquisitions. And they have proved successful
in reducing costs.
Improving Sourcing Decisions:
Government agencies increasingly are relying on services to accomplish
their missions. The Department of Defense now spends more than half its
contracting dollars acquiring services, about $77 billion in fiscal
year 2001, the latest year for which complete data are available. In
addition, the Department reports that it has over 400,000 employees
performing commercial-type services. Determining whether to obtain
required services using federal employees or through contracts with the
private sector is an important economic and strategic decision. In
fact, competitive sourcing is a key component of the President‘s
Management Agenda. But historically, the process for determining
whether the public or the private sector should perform services needed
by federal agencies - set forth in Office of Management and Budget
(OMB) Circular A-76 --has been difficult to implement. The impact such
decisions have on the federal workforce has been profound, and there
have been concerns in both the public and private sectors concerning
the fairness of the process and the extent to which there is a ’level
playing field“ for conducting public-private competitions.
Recommendations of the Commercial Activities Panel:
It was against this backdrop that the Congress enacted Section 832 of
the Defense Authorization Act for fiscal year 2001, which mandated that
I establish a panel of experts to study the process used by the
government to make sourcing decisions. Given the importance of this
issue, I elected to chair this Panel myself and ensured that it was
comprised of highly qualified and empowered representatives from the
groups specified in the Act and other knowledgeable individuals.
The Commercial Activities Panel conducted a yearlong study, and heard
repeatedly about the importance of competition and its central role in
fostering economy, efficiency, and continuous performance improvement.
The Panel held eleven meetings, including three public hearings in
Washington, D.C.; Indianapolis, Indiana; and San Antonio, Texas. In
these hearings, Panelists heard first-hand both about the current
process, primarily the cost comparison process conducted under Circular
A-76, as well as alternatives to that process. Panel staff conducted an
extensive amount of additional research, review, and analysis in order
to supplement and evaluate the public testimony. Recognizing that our
mission was a challenging, complex, and controversial one, the Panel
agreed that a supermajority of two-thirds of the Panel members would
have to vote for any finding or proposal in order for it to be adopted
by the Panel. Importantly, the Panel unanimously agreed upon a set of
principles to guide all sourcing decisions:
The Panel believes that federal sourcing policy should:
1. Support agency missions, goals, and objectives.
2. Be consistent with human capital practices designed to attract,
motivate, retain, and reward a high-performing federal workforce.
3. Recognize that inherently governmental and certain other functions
should be performed by federal workers.
4. Create incentives and processes to foster high-performing,
efficient,
and effective organizations throughout the federal government.
5. Be based on a clear, transparent, and consistently applied process.
6. Avoid arbitrary full-time equivalent or other arbitrary numerical
goals.
7 .Establish a process that, for activities that may be performed by
either the public or the private sector, would permit public and
private sources to participate in competitions for work currently
performed in-house, work currently contracted to the private sector,
and new work, consistent with these guiding principles.
8. Ensure that, when competitions are held, they are conducted as
fairly,
effectively, and efficiently as possible.
9. Ensure that competitions involve a process that considers both
quality
and cost factors.
10. Provide for accountability in connection with all sourcing
decisions.
In addition, a supermajority of the Panel agreed on a package of
additional recommendations. Chief among these was a recommendation that
public-private competitions be conducted using the framework of the
Federal Acquisition Regulation (FAR). Although a minority of the Panel
did not support the package of additional recommendations, some of
these Panelists indicated that they supported one or more elements of
the package, such as the recommendation to encourage high-performing
organizations throughout the government. Importantly, there was a good
faith effort to maximize agreement and minimize differences among
Panelists. In fact, changes were made even when it was clear that some
Panelists seeking changes were highly unlikely to vote for the
supplemental package of recommendations. As a result, on the basis of
Panel meetings and my personal discussions with Panel members at the
end of our deliberative process, the major differences among Panelists
were few in number and philosophical in nature. Specifically,
disagreement centered primarily on (1) the recommendation related to
the role of cost in the new FAR-type process and (2) the number of
times the Congress should be required to act on the new integrated
process, including whether the Congress should specifically authorize a
pilot program that tests that process for a specific time period.
The Administration‘s Proposed Changes:
As part of the administration‘s efforts to implement the
recommendations of the Commercial Activities Panel, OMB published
proposed changes to Circular A-76 for public comment in November 2002.
The administration is now considering the comments received as it
finalizes the revisions to the Circular.
I provided comments on the proposal to the Director of OMB this past
January. My assessment of the proposed revision concluded that in many
ways it is consistent with the sourcing principles and recommendations
adopted by the Commercial Activities Panel. In particular, the proposal
stresses the use of competition in making sourcing decisions and,
through reliance on procedures contained in the FAR, should result in a
more transparent, expeditious, and consistently applied competitive
process. The proposal should promote sourcing decisions that reflect
the best overall value to the agencies, rather than just the lowest
cost. Importantly, the proposed revision also should result in greater
accountability for performance, regardless of the service provider
selected. Of course, successful implementation will require that
adequate resources and technical support be made available to federal
employees.
There are several areas, however, where the proposed revisions to the
Circular are not consistent with the principles or recommendations of
the Commercial Activities Panel. Specifically, these include the
absence of a link between sourcing policy and agency missions,
unnecessarily complicated source selection procedures, certain
unrealistic time frames, and insufficient guidance on calculating
savings. I am confident that the administration is carefully
considering these and other comments on the proposal, and look forward
to reviewing the final product.
One area of particular importance for all affected parties is how the
government‘s sourcing policies are implemented. In this regard, one of
the Panel‘s sourcing principles was that the government should avoid
arbitrary numerical or full-time equivalent (FTE) goals. This principle
is based on the concept that the success of government programs should
be measured by the results achieved in terms of providing value to the
taxpayer, not the size of the in-house or contractor workforce.
Although the proposed revision of the Circular contains no numerical
targets or goals for competitive sourcing, this has been a
controversial area in the past. It has been our view that the
administration needs to avoid arbitrary targets or quotas, or any goal
that is not based on considered research and analysis. Congress
recently put this principle into legislation; a provision in the recent
consolidated appropriations legislation requires sourcing goals and
targets to be ’based on considered research and sound analysis of past
activities“. [Footnote 1]
DOD‘s Competitive Sourcing Agenda:
DOD has been at the forefront of federal agencies in using the A-76
process in recent years. After several years of limited use of Circular
A-76, the deputy secretary of defense gave renewed emphasis to the A-76
program in August 1995 when he directed the services to make
outsourcing of support activities a priority in an effort to reduce
operating costs and free up funds to meet other priority needs. This
effort was subsequently incorporated as a major component of the
Defense Reform Initiative, and the program became known as competitive
sourcing--in recognition of the fact that either the public or the
private sector could win the competitions.
Recently, DOD‘s A-76 study goals have increased because of the
President‘s Management Agenda, which includes competitive sourcing as
one of its five key government-wide initiatives.[Footnote 2] Under that
program, OMB directed agencies to directly convert or complete A-76
competitions on 15 percent of their 2000 Federal Activities Inventory
Reform (FAIR) Act inventories by the end of fiscal year 2003, with the
ultimate goal of competing 50 percent of the FAIR Act positions.
However, we understand that this broader goal may be subject to
negotiations between DOD and OMB. DOD‘s ongoing A-76 efforts should
permit it to meet OMB‘s goal for 2003. However, a greater challenge
remains for DOD to complete studies on an additional 158,000 positions
in the out-years (FY 2004 through FY 2009). This is double what DOD has
been able to accomplish in the past over a similar timeframe. For
example, DOD completed studies on 71,000 positions between fiscal years
1997 and 2002, and found it increasingly difficult to identify study
candidates over time. DOD hopes to be able to meet this larger goal
through a combination of A-76 competitions and other alternatives.
DOD‘s experience with competitive sourcing since 1996 contains
important lessons for civilian agencies as they implement their own
sourcing initiatives. As we have tracked DOD‘s progress in implementing
its A-76 program since the mid to late 1990s, we have identified a
number of challenges and concerns with the program. They include (1)
the time required to complete the studies, (2) the resources required
to conduct and implement the studies, (3) selecting and grouping
positions to compete, and (4) developing and maintaining reliable
estimates of projected savings expected from the competitions.
The Department Can Benefit From Adopting Best Practices:
At the request of this Subcommittee, GAO has conducted a number of
engagements to identify best practices in the commercial sector for
addressing the sourcing and acquisition challenges facing the
Department. We believe the Department could significantly improve its
performance in a number of areas by adopting some of the best practices
we have identified.
Information Technology Outsourcing:
For example, we reviewed the practices used by leading companies
involved in outsourcing certain information technology (IT) functions.
In November 2001, we issued a guide on outsourcing IT services that
provides a generic framework of practices from leading commercial
organizations that can improve purchasing decisions and manage the
resulting government/provider relationship.[Footnote 3]
At the further request of this Subcommittee, we have been reviewing the
extent to which selected DOD projects are using leading commercial
practices laid out in our November 2001 guide. We have shared our draft
report with this Subcommittee, which is currently with DOD for comment.
In brief, we found that the five projects in our review were generally
implementing these practices. This is a positive sign because although
implementing these practices does not guarantee the success of an
outsourcing project, our November 2001 study reflected a consensus view
that these practices were the most critical to success.[Footnote 4]
Accordingly, application of these practices increases the probability
of a successful outsourcing project.
Acquiring Information Technology Systems:
Since the 1990‘s, DOD has spent billions of dollars each year
attempting to leverage the vast power of modern technology to replace
outdated ways of doing business. However, the Department has had
limited success in modernizing its information technology environment,
and we have designated DOD‘s systems modernization as high risk since
1995.[Footnote 5] A major reason for this designation is DOD‘s
inconsistent use of best practices for acquiring IT systems.
We have categorized IT system acquisition practices into three groups
and apply leading practices, as appropriate, in our evaluations of
systems acquisitions within DOD. A brief description of the three
categories and what we have found at DOD follows:
Acquisition of systems in accordance with mature processes. Our work
shows that DOD‘s implementation of mature acquisition management
processes is uneven, as are its proactive efforts to improve these
processes. For example, our review of the Defense Logistics Agency‘s
system acquisition processes showed that one major system was following
mature processes, while another was not.[Footnote 6] We made
recommendations to correct these weaknesses, and DOD has generally
concurred.
There are also published best practices for acquiring systems that are
built from commercial components. Generally, these practices advocate
an acquisition approach that is not driven primarily by system
requirements, but rather an approach that proactively manages the
tradeoff among various acquisition issues, such as the organization‘s
system requirements and the commercially available system components.
Accordingly, we have ongoing and planned work at a number of federal
agencies, including DOD, which includes determining whether these
practices are being employed.
Use of an enterprise architecture to guide and constrain system
acquisitions. Effectively managing a large and complex endeavor
requires, among other things, a well-defined and enforced blueprint for
operational and other technological change, commonly referred to as an
enterprise architecture. In May 2001, we reported that DOD had neither
an enterprise architecture for its financial and financial-related
business operations, nor the management structure, processes, and
controls in place to effectively develop and implement one.[Footnote 7]
In addition, the National Defense Authorization Act for Fiscal Year
2003 required DOD to develop such an architecture by May 1, 2003, along
with a transition plan for its implementation. At the request of this
Subcommittee, we reported last month that DOD had taken a number of
steps to address this issue, such as establishing a program office
responsible for managing the enterprise architecture effort.[Footnote
8] However, the Department had yet to implement some of the
recommendations from our May 2001 report and commercial leading
practices for developing and implementing architectures. Accordingly,
we made additional recommendations related to DOD‘s architecture
effort, with which DOD concurred.
Acquiring systems in a series of economically justified incremental
builds. Both federal law and guidance advocate the use of incremental
investment management[Footnote 9] when acquiring or developing large
systems.[Footnote 10] Using these system investment practices helps to
prevent discovering too late that a given acquisition/development
effort is not cost beneficial. We have previously reported that certain
DOD system acquisitions were not utilizing incremental management best
practices or were just beginning to do so. For example, in July 2001 we
reported that although DOD had divided its multi-year, billion-dollar
Standard Procurement System into a series of incremental releases, it
had not treated each of these increments as a separate investment
decision.[Footnote 11]
Acquiring Services:
With respect to services acquisitions generally, we found that the
experiences of leading private-sector companies to reengineer their
approach to acquiring services offer DOD both valuable insights and a
general framework that could serve to guide DOD‘s efforts. In January
2002, we reported that our work at six leading companies found that
each had reengineered its approach to acquiring services to stay
competitive, reduce costs, and improve service levels. These changes
generally began with a corporate decision to pursue a strategic
approach to acquiring services. Taking a strategic approach involve a
range of activities from developing a better picture of what a company
was spending on services to taking an enterprise-wide approach to
procuring services and developing new ways of doing business. Pursuing
such an approach clearly paid off, as the companies found that they
could save millions of dollars and improve the quality of services
received.
DOD already has in place certain elements critical to taking a
strategic approach, such as the commitment by senior DOD leadership to
improve practices for acquiring services and to adopt best commercial
practices. Moreover, the fiscal year 2002 national defense
authorization legislation directs DOD to improve its management and
oversight of services acquisitions. To implement these requirements,
DOD issued new policy in May 2002 that was intended to elevate major
purchases of services to the same level of importance as purchases of
major defense systems. The Department still faces a long journey,
however, as it begins to take on the more difficult tasks of developing
a reliable and accurate picture of service spending across DOD.
Major Weapon Systems Acquisitions:
DOD relies heavily on its major weapons acquisitions to modernize its
forces and expects to spend on average about $150 billion annually over
the next 5 years for the research, development and procurement of
weapon systems. However, its history of acquiring major weapon systems
all too frequently has been characterized by poor cost, schedule, and
performance outcomes that have delayed delivery of new capabilities to
the warfighter and created significant opportunity costs that have
slowed the Department‘s overall modernization efforts.
Because of the pressures in DOD‘s acquisition environment to get new
acquisition programs approved and funded, many programs are initiated
with requirements that make a proposed weapon system stand out from
others. The systems engineering necessary to identify gaps between
requirements and resources is often not accomplished until after the
program is started. In these cases, performance requirements can
outstrip the resources--technologies, funding, time, and expertise--
available to meet them. This creates a need for immature, fledgling
technologies that are difficult to develop and usually results in
unstable and incomplete a product design for which there is
insufficient time to mature before starting production. Sufficient time
or effort may not be available during product development to understand
the product‘s critical characteristics or to bring key manufacturing
processes in control to meet cost, schedule, and quality targets. In
addition, there is not enough emphasis on building in reliability and
reducing total ownership cost.
Typically, the results of this process are weapons that have superior
performance, but that create longer-term collateral consequences such
as:
* Higher acquisition costs that reduce buying power and force tradeoffs
in other acquisitions,
* Increased costs to operate and support weapon systems at required
readiness rates,
* Significant delays in getting weapon systems to warfighters,
* Reduced quantities,
* Early obsolescence, and:
* A diminishing supply base for critical parts and components.
DOD understands that it must get better outcomes from its acquisition
process if it is to modernize its forces quickly within projected
resources. To that end, it is currently revising acquisition policies
to emphasize an evolutionary, knowledge-based process that incorporates
best practices proven by successful companies in developing complex new
products. We believe the policy changes, while not yet finalized,
promise to be a good first step in changing DOD‘s acquisition outcomes.
If implemented properly, programs would face less pressure to deliver
all of the ultimate capabilities of a weapon system in one ’big bang.“
The new policy has many positive features. For example, it:
* Separates technology development, which is unpredictable by nature,
from product development, which requires major investments and is
delivery-oriented;
* Articulates the concept of a knowledge-based approach, providing
guidelines for achieving knowledge of technologies prior to beginning
product development, stability of the system‘s design by about midway
through product development, and control over critical manufacturing
processes for building a weapon system prior to a production decision;
* Places a greater emphasis on evolutionary product development, which
provides a more manageable environment for achieving knowledge; and:
* Recognizes the benefits of best practices for product development
from leading companies in capturing knowledge at critical junctures
during product development.
While these policy changes represent tangible leadership action for
getting better weapon system acquisition outcomes, unless the policies
are implemented through decisions on individual programs, outcomes are
not likely to change. Both form and substance are essential to getting
desired outcomes. At a tactical level, we believe the policies could be
made more explicit in several areas to facilitate such decisions.
First, the regulations provide little or no controls at key decision
points of an acquisition program that force a program manager to report
progress against knowledge-based metrics. Second, the new regulations,
once approved, may be too general and may no longer provide mandatory
procedures. Third, the new regulations may not provide adequate
accountability because they may not require knowledge-based
deliverables containing evidence of knowledge at key decision points.
At a strategic level, some cultural changes will be necessary to
translate policy into action. At the very top level, this means DOD
leadership will have to take control of the investment dollars and to
say ’no“ in some circumstances, if programs are inappropriately
deviating from sound acquisition policy. In my opinion, programs should
follow a knowledge-based acquisition policy--one that embraces best
practices--unless there is a clear and compelling national security
reason not to. Other cultural changes instrumental to implementing
change include:
* Keeping key people in place long enough that they can affect
decisions and be held accountable;
* Providing program offices with the skilled people needed to craft
acquisition approaches that implement policy and to effectively oversee
the execution of programs by contractors;
* Realigning responsibilities and funding between science and
technology organizations and acquisition organizations to enable the
separation of technology development from product development;
* Bringing discipline to the requirements-setting process by demanding
a match between requirements and resources;
* Requiring readiness and operating cost as key performance parameters
prior to beginning an acquisition; and:
* Demanding reliability testing early in design.
Ultimately, the success of the new acquisition policy will be seen in
individual program and resource decisions. Programs that are
implementing knowledge-based policies in their acquisition approaches
should be supported and resourced, assuming they are still critical to
national needs. Conversely, if programs that repeat the approaches of
the past are approved and funded, past policies--and their outcomes--
will be reinforced.
Acquisition Workforce Challenges:
To effectively implement best practices and properly manage the goods
and services it purchases each year requires that DOD have the right
skills and capabilities in its acquisition workforce. This is a
challenge given decreased staffing levels, increased workloads, and the
need for new skill sets. Procurement reforms and the ongoing
technological revolution have placed unprecedented demands on the
workforce, and contracting personnel are now expected to have a much
greater knowledge of market conditions, industry trends, and technical
details of the commodities and services they procure.
In response to these challenges, DOD has made progress in laying a
foundation for reshaping its acquisition workforce. The agency has
initiated a substantial long-term strategic planning effort to identify
the competencies needed for the future and to address what reshaping of
the workforce will be needed to achieve the desired mix. DOD is
continuing with an effort to test various human capital innovations and
has begun making significant changes to its acquisition workforce-
training program. Part of this long-term effort will involve making a
cultural shift as well as developing better data to manage risk by
spotlighting areas for attention before crises develop and to identify
opportunities for improving results.
Conclusion:
The continuing war on terrorism, regional instability, demographic and
technological changes, as well as the federal government‘s short-and
long-term budget pressures have created a challenging environment for
the Department of Defense. It faces a number of difficult missions that
will put its strategies, personnel, and resources under enormous
strains. Consequently, it is important for the Department to adopt
business practices that will enable it to acquire the systems and
services to allow it to operate effectively in this environment. Doing
so will help ensure that its resources are used in the most efficient
manner possible. I am confident that the leadership of the Department
is committed to that objective. Success over the long term will depend
on the leadership sustaining its commitment to improving business
practices through a strategic, integrated, and DOD-wide approach to
ensure that these efforts achieve their intended results.
Mr. Chairman, this concludes my statement. I will be pleased to respond
to questions from the Subcommittee.
FOOTNOTES
[1] Consolidated Appropriations Resolution, 2003, P.L. 108-7.
[2] In addition to competitive sourcing, the other initiatives are
strategic management of human capital, improved financial performance,
expanded electronic government, and budget and performance integration.
[3] U.S. General Accounting Office, Information Technology: Leading
Commercial Practices for Outsourcing of Services, GAO-02-214
(Washington, D.C.: Nov. 30, 2001).
[4] This consensus view was based on interviews with managers in
leading commercial organizations, discussions with academic and
professional authorities, and extensive research on IT acquisition
practices.
[5] See U.S. General Accounting Office, High-Risk Series: An Update
GAO-03-119 (Washington, D.C.: January 2003) for our most recent high-
risk report.
[6] U.S. General Accounting Office, Information Technology:
Inconsistent Software Acquisition Processes at the Defense Logistics
Agency Increase Project Risks (GAO-02-9, Jan. 10, 2002).
[7] U.S. General Accounting Office, Information Technology:
Architecture Needed to Guide Modernization of DOD‘s Financial
Operations, GAO-01-525 (Washington, D.C.: May 17, 2001).
[8] U.S. General Accounting Office, DOD Business Systems Modernization:
Improvements to Enterprise Architecture Development and Implementation
Efforts Needed, GAO-03-458 (Washington, D.C.: Feb. 28, 2003).
[9] Incremental management involves three fundamental components: (1)
acquiring a large system in a series of smaller increments; (2)
individually justifying investment in each separate increment on the
basis of cost, benefits, and risks; and (3) monitoring actual benefits
achieved and costs incurred on ongoing increments and applying lessons
learned to future increments.
[10] Clinger-Cohen Act of 1996, P.L. 104-106, and Office of Management
and Budget Circular A-130 (Nov. 30, 2000).
[11] U.S. General Accounting Office, DOD Systems Modernization:
Continued Investment in Standard Procurement System Has Not Been
Justified, GAO-01-682 (Washington, D.C.: July 31, 2001).
