Defense Transportation
DOD Needs a Comprehensive Approach to Planning for Implementing Its New Personal Property Program Gao ID: GAO-07-671 May 31, 2007The Department of Defense (DOD) has been working to improve its personal property program since the mid-1990s to fix long-standing problems, such as excessive loss or damage to servicemembers' property and poor quality of service from moving companies. DOD plans to replace its current program with Families First, a program that promises to offer servicemembers an improved claims process and quality of service. GAO was mandated to (1) assess the steps DOD has taken to achieve the goals and benefits of the Families First program; (2) evaluate the growth in costs of the program, including the costs for a new information management system, since GAO's last assessment in 2003; and (3) assess the extent to which DOD faces management challenges--such as staffing--in implementing Families First. To address these objectives, GAO analyzed DOD's program, funding and staffing data, and interviewed personal property officials and stakeholders.
DOD has taken some initial steps to achieve the goals and benefits of Families First, but delays in developing a new information management system have put the overall goals of improving the quality of service from moving companies and streamlining the claims process at risk. The information management system, the Defense Personal Property System (DPS), is now more than 2 years behind schedule. DOD has missed DPS milestones because of software development issues and is now working to address issues identified in recent software testing. Since DPS has been delayed, DOD is in the process of implementing a backup plan to meet a statutory mandate to provide servicemembers with the full replacement value of goods lost or damaged during a move by March 1, 2008. However, there are risks and costs associated with DOD's backup plan because it relies on an increasingly unreliable legacy computer system; also, DOD's plan may not cover all moves by March 1, 2008. The Families First program could increase costs to DOD by $1.4 billion over current program costs through fiscal year 2011 for two main reasons: (1) DOD estimates the program will increase costs to the services' household goods budgets by 13 percent and (2) DOD has significantly increased the cost estimate for a new information management system since GAO's last assessment. While DOD's estimate that the Families First program will increase costs by 13 percent has not changed since 2005, all of the services have not yet fully budgeted for this cost increase, which GAO analysis shows could be about $1.2 billion. Additionally, DOD has increased its estimate for an information management system for Families First because it decided to develop DPS rather than upgrade the legacy system. DOD estimated that the upgrade would cost $4 million to $6 million, and the program office estimated that DPS will cost about $180 million through fiscal year 2011. DOD's personal property program faces many management challenges--especially staffing, in addition to program requirements and funding problems--because it has not employed comprehensive planning. Sound management practices require a comprehensive approach that includes plans to assemble a qualified, trained, and well-led team; gain stakeholders' agreement about key program elements, such as business rules to define how the moving industry will serve military members; and estimate and plan for adequate resources. DOD has developed several draft plans to address individual portions of Families First and DPS, such as the draft transition plan for moving the DPS program office as part of a base realignment and closure move from Virginia to Illinois, but there is no overall plan that addresses how DOD will (1) fill significant staffing shortfalls in the newly formed DPS program office, (2) gain agreement from stakeholders, and (3) fund the significant and growing costs associated with the program. For example, DOD has not identified sources to fully fund DPS development and operations. Without a comprehensive plan, achieving the goals of the Families First program will likely remain difficult.
RecommendationsOur 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.
Director: Team: Phone:GAO-07-671, Defense Transportation: DOD Needs a Comprehensive Approach to Planning for Implementing Its New Personal Property Program
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
May 2007:
Defense Transportation:
DOD Needs a Comprehensive Approach to Planning for Implementing Its New
Personal Property Program:
GAO-07-671:
GAO Highlights:
Highlights of GAO-07-671, a report to congressional committees
Why GAO Did This Study:
The Department of Defense (DOD) has been working to improve its
personal property program since the mid-1990s to fix long-standing
problems, such as excessive loss or damage to servicemembers‘ property
and poor quality of service from moving companies. DOD plans to replace
its current program with Families First, a program that promises to
offer servicemembers an improved claims process and quality of service.
GAO was mandated to (1) assess the steps DOD has taken to achieve the
goals and benefits of the Families First program; (2) evaluate the
growth in costs of the program, including the costs for a new
information management system, since GAO‘s last assessment in 2003; and
(3) assess the extent to which DOD faces management challenges”such as
staffing”in implementing Families First. To address these objectives,
GAO analyzed DOD‘s program, funding and staffing data, and interviewed
personal property officials and stakeholders.
What GAO Found:
DOD has taken some initial steps to achieve the goals and benefits of
Families First, but delays in developing a new information management
system have put the overall goals of improving the quality of service
from moving companies and streamlining the claims process at risk. The
information management system, the Defense Personal Property System
(DPS), is now more than 2 years behind schedule. DOD has missed DPS
milestones because of software development issues and is now working to
address issues identified in recent software testing. Since DPS has
been delayed, DOD is in the process of implementing a backup plan to
meet a statutory mandate to provide servicemembers with the full
replacement value of goods lost or damaged during a move by March 1,
2008. However, there are risks and costs associated with DOD‘s backup
plan because it relies on an increasingly unreliable legacy computer
system; also, DOD‘s plan may not cover all moves by March 1, 2008.
The Families First program could increase costs to DOD by $1.4 billion
over current program costs through fiscal year 2011 for two main
reasons: (1) DOD estimates the program will increase costs to the
services‘ household goods budgets by 13 percent and (2) DOD has
significantly increased the cost estimate for a new information
management system since GAO‘s last assessment. While DOD‘s estimate
that the Families First program will increase costs by 13 percent has
not changed since 2005, all of the services have not yet fully budgeted
for this cost increase, which GAO analysis shows could be about $1.2
billion. Additionally, DOD has increased its estimate for an
information management system for Families First because it decided to
develop DPS rather than upgrade the legacy system. DOD estimated that
the upgrade would cost $4 million to $6 million, and the program office
estimated that DPS will cost about $180 million through fiscal year
2011.
DOD‘s personal property program faces many management
challenges”especially staffing, in addition to program requirements and
funding problems”because it has not employed comprehensive planning.
Sound management practices require a comprehensive approach that
includes plans to assemble a qualified, trained, and well-led team;
gain stakeholders‘ agreement about key program elements, such as
business rules to define how the moving industry will serve military
members; and estimate and plan for adequate resources. DOD has
developed several draft plans to address individual portions of
Families First and DPS, such as the draft transition plan for moving
the DPS program office as part of a base realignment and closure move
from Virginia to Illinois, but there is no overall plan that addresses
how DOD will (1) fill significant staffing shortfalls in the newly
formed DPS program office, (2) gain agreement from stakeholders, and
(3) fund the significant and growing costs associated with the program.
For example, DOD has not identified sources to fully fund DPS
development and operations. Without a comprehensive plan, achieving the
goals of the Families First program will likely remain difficult.
What GAO Recommends:
GAO recommends that DOD expedite an evaluation of its Families First
program and employ comprehensive planning to implement Families First
that includes specific steps to address staffing problems, gain
stakeholders‘ agreement on Defense Personal Property System (DPS)
requirements, and seek adequate funding to implement the program. DOD
concurred with both of our recommendations.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-671].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact John Pendleton at (404)
679-1816 or pendletonj@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
DOD Has Taken Some Initial Steps for Families First, but DPS Delays Put
Achievement of Program Goals and Benefits at Risk:
Families First Program Could Increase DOD Costs by About $1.4 Billion
over Current Program Costs through Fiscal Year 2011:
DOD Faces Management Challenges for Families First Program and Has Not
Developed a Comprehensive Implementation Plan:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Defense:
Appendix III: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Coverage and Cost Comparisons for DOD's Current Personal
Property Program versus Families First:
Table 2: Comparison of Timelines to Implement DPS:
Table 3: Summary of Information Management System Cost Estimates:
United States Government Accountability Office:
Washington, DC 20548:
May 31, 2007:
The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate:
The Honorable Ike Skelton:
Chairman:
The Honorable Duncan Hunter:
Ranking Member:
Committee on Armed Services:
House of Representatives:
Military servicemembers and their families are typically relocated many
times during servicemembers' careers. The Department of Defense's (DOD)
personal property program provides household goods transportation and
storage services[Footnote 1] for military personnel and their families
when they relocate. DOD spent more than $1.8 billion in fiscal year
2006 to move more than 680,000 shipments. The quality of these moving
services directly affects the quality of life for servicemembers and
their families, which has become increasingly important as
servicemembers face increased demands. However, as we have previously
reported, DOD has experienced long-standing problems with its personal
property program, especially poor quality of service from moving
companies that results in excessive loss or damage to servicemembers'
property and high claims costs incurred by the government. Moreover, a
DOD analysis indicated that the program's legacy computer system for
data management does not meet DOD's information technology standards
and is costly to operate and maintain. In an effort to test alternative
approaches and address some of these problems, DOD has spent more than
11 years trying to improve the program through lessons learned from its
pilot programs.
DOD decided to replace its personal property program with a new program
known as Families First. The three goals of the Families First program
are improving the quality of service from moving companies,[Footnote 2]
streamlining the claims process for losses or damages incurred during a
move, and developing an integrated information management system. In
addition, the John Warner National Defense Authorization Act for
2007[Footnote 3] mandated that DOD provide full replacement value
coverage to servicemembers for damages or losses incurred during their
moves by March 1, 2008. With full replacement value, a servicemember
would receive enough funds to replace or repair a lost or damaged item
at its present value. DOD's current personal property program provides
servicemembers a minimum level of depreciated value coverage that does
not fully compensate them for lost or damaged goods. DOD plans to
incorporate full replacement value as an additional benefit of Families
First and provide this coverage at no additional cost to
servicemembers.
Since 1999, we have completed several assessments of DOD's personal
property program, including reviews of several aspects of DOD's
personal property pilot programs. In 2003, we evaluated the methodology
used to estimate the costs associated with Families First that the
services would incur. The Families First program was initially expected
to increase the services' costs for DOD's personal property program by
13 percent, but we questioned part of the methodology used to generate
this estimate and recommended that DOD provide the military services
and Congress additional information to quantify the risk associated
with achieving the projected 13 percent cost estimate. In 2005, DOD
reevaluated its estimated 13 percent cost increase and quantified the
risks of implementing Families First within the expected cost increase.
We reviewed the methodology DOD used to estimate the cost of
implementing the Families First program.[Footnote 4] We found at that
time that DOD used a reasonable methodology to validate the estimated
increase and quantify the risk.
In 2004, DOD began developing the Defense Personal Property System
(DPS), an integrated information management system that will be used to
support Families First. DOD's initial assumption was that DPS could be
developed quickly using commercially available software. However, our
analysis indicates that DOD has missed milestones and costs have grown
in developing and implementing DPS. DOD entered into an 11-month
strategic pause in October 2005 to assess the next steps for DPS. DOD
has a history of challenges in implementing information management
systems similar to DPS, such as the Defense Integrated Military Human
Resources System and the Defense Travel System, which are part of DOD's
business systems modernization efforts. Because of management
challenges in implementing these types of systems, we have placed DOD's
business systems modernization on our high-risk list[Footnote 5] of
programs that are at risk because of their greater vulnerabilities to
fraud, waste, abuse, and mismanagement.
The John Warner National Defense Authorization Act for Fiscal Year
2007[Footnote 6] mandated that we review the Families First program.
Specifically, we (1) assessed the steps DOD has taken to achieve the
goals and benefits of the Families First program; (2) evaluated the
growth in the cost of the program since the previous assessment,
including the costs for DPS; and (3) assessed the extent to which DOD
faces management challenges--such as with staffing, developing
capabilities, and resources within the DPS program office--in
implementing Families First.
To conduct our assessment of the Families First program, including its
costs, we reviewed prior DOD and GAO reports, documentation regarding
program development, program management staffing and resources, and
cost analyses for Families First and DPS. We also interviewed DOD
officials, private sector moving industry associations, and contractors
supporting DOD efforts. While we did not independently verify DOD's
staffing and resource needs or its cost data, we did determine that the
data were sufficiently reliable for our purposes. We performed our
audit work from September 2006 through May 2007 in accordance with
generally accepted government auditing standards. The scope and
methodology we used is described in greater detail in appendix I.
Results in Brief:
DOD has taken some initial steps to achieve the goals and benefits of
Families First, but delays in developing a new information management
system have put achieving the overall goals of improving the quality of
service from moving companies and streamlining the claims process at
risk. Families First was designed so that achieving the goals of the
program relies heavily on completion of DPS. DOD has taken steps to
implement the electronic billing and payment systems necessary to
support Families First and is collecting data from a customer
satisfaction survey. However, the Air Force is behind in participating
in this part of the program. DOD has begun developing and testing DPS
but has continued to miss milestones, and the system is now more than 2
years behind schedule. The DPS implementation schedule was delayed
again in February 2007, after stakeholders from the services and the
moving industry participated in DPS software acceptance testing and
identified numerous problems. In total, this testing generated more
than 1,400 problem reports, almost 200 of which were collectively
expected to result in significant changes to the software. For example,
DPS sent the work order for shipments awarded to one moving company to
another moving company; thus, the moving company that was awarded the
shipment did not know the shipment was awarded to it. Under the revised
DPS implementation schedule introduced in March 2007, DPS program
managers plan to use DPS in some shipping offices by fall 2007 on a
test basis, with full participation in fall 2008. Since DPS has been
delayed, DOD is in the process of implementing a backup plan to meet
the mandate to provide the Families First benefit of full replacement
value coverage for losses and damages incurred during a move, at no
cost to servicemembers, by March 1, 2008. However, it is uncertain if
all contracts will provide full replacement value by March 1, 2008, for
all types of moves. The reason Surface Deployment and Distribution
Command officials said they created a backup plan for full replacement
value is because they were required by statute to implement it by March
1, 2008, whether DPS was ready or not. DOD officials said that they did
not have a requirement to produce a plan to accomplish all goals for
Families First by March 1, 2008, and they did not invest resources to
do so. As a result, achieving the overall goals of improving the
quality of service and claims processing remains contingent upon
successful implementation of DPS.
The Families First program could increase costs to DOD by $1.4 billion
over current program costs through fiscal year 2011 for two main
reasons: (1) DOD estimates the program will increase costs to the
services by 13 percent and (2) DOD has significantly increased the cost
estimate for a new information management system since our last
assessment. We were unable to assess the actual growth in cost because
the Families First program has not been fully implemented. DOD has
incorporated a cost-control mechanism into DPS in an attempt to keep
the costs within the expected increase, but until DPS is implemented
the impact of the use of this mechanism on the Families First program
will not be known. In addition, system costs are growing. The DPS
program office has recently updated its cost estimates for fully
implementing and funding DPS through fiscal year 2011. When DOD first
estimated the cost of a new data management system at about $4 million
to $6 million in 2002, it planned to upgrade the legacy system rather
than replace it entirely. In 2004, when DOD decided to develop an
entirely new system, it initially estimated that DPS could be developed
for about $16.5 million, with an average annual cost of about $4.6
million after the initial investment. This estimate also proved to be
understated as system problems increased after DPS development began.
As of February 2007, the DPS program office estimated that the costs
for maintaining a program office, sustaining the legacy system through
retirement, developing and sustaining DPS, and implementing a future
household goods program through fiscal year 2011 would be about $180
million if all of the requirements are funded.
DOD faces many management challenges implementing Families First, and
it has not employed comprehensive planning that incorporates sound
management principles and practices and integrates the plans DOD has
for parts of Families First. Sound management practices require
developing a comprehensive plan that includes, among other things,
stakeholder agreement about key elements of a program, such as the
program's business rules and its priorities; a way to manage training
and workforce redeployment issues; and full cost information and
funding resources. Although DOD has spent more than 11 years trying to
reengineer the program, DOD's planning for Families First has not
incorporated many of these sound management practices. DOD has
developed several nonintegrated draft plans to cover individual
portions of the Families First program, such as a draft transition plan
for organizational changes and the DPS program office's plan for DPS
development, but there is no comprehensive plan for the program that
addresses the following:
* Organizational changes and staffing issues: The DPS program office
was established on October 1, 2006, and is still organizing.
Additionally, the office is affected by a base realignment and closure
move in which only 1 of 27 civilian workers plan to move with the
program office to Scott Air Force Base in Illinois. Without adequate
staff, DOD may be challenged to continue DPS development and
implementation.
* Stakeholder agreement issues: DOD does not have agreement from
stakeholders about Families First business rules and how DPS should
work. Until agreement is reached, changes to DPS may be necessary and
may lead to higher program costs.
* Costs and funding issues: All of the services have not fully budgeted
for the costs of Families First. Additionally, the DPS program office
has funding shortfalls that affect both staffing needs and software
development. Further, the services vary in how they interpret the
application of the 13 percent increase in costs to their household
goods budgets, and they have not received clear guidance from DOD on
how to calculate the estimated 13 percent cost increase to their
budgets.
Without comprehensive planning, achieving the goals of Families First
will likely remain difficult for DOD. DOD will also likely continue to
face DPS delays and rising costs, problems which limit its ability to
improve servicemembers' quality of life. We are recommending that DOD
expedite an evaluation of the program as mandated in the John Warner
National Defense Authorization Act for Fiscal Year 2007.[Footnote 7] We
are also recommending that DOD employ comprehensive planning for the
Families First program and address specific steps to hire and train
personnel for the Surface Deployment and Distribution Command personal
property division and the DPS program office, reach agreement with
stakeholders on the essential requirements for DPS and their priority,
and have an investment strategy for the full cost of Families First.
In commenting on a draft of this report, DOD concurred with both of our
recommendations. To address our first recommendation, DOD agreed to
expedite an evaluation of its program and stated that it plans to
provide Congress with such an evaluation by August 2007 to respond to
the mandate in the John Warner National Defense Authorization Act for
Fiscal Year 2007.[Footnote 8] In concurring with our second
recommendation, DOD listed several steps it has under way and planned
to take. For example, DOD said that hiring actions are in progress to
staff the DPS program office after its relocation to Scott Air Force
Base and that other actions are being implemented to staff the Surface
Deployment and Distribution Command. DOD also stated that it has
implemented a process to reach agreement with stakeholders on the
essential requirements for DPS and their priority. DOD also stated that
the U.S. Transportation Command will provide some funds and work with
the Office of the Secretary of Defense to obtain additional funding. We
believe that it is important that DOD focus sustained attention on the
program and follow through with the actions planned, especially given
the delays the program has experienced and the challenges it still
faces.
Background:
DOD's personal property program is used by personal property shipping
office staff to manage household goods moves for all military
servicemembers and DOD civilians when they relocate. The military
services pay shipment and storage-related costs from their military
personnel accounts' permanent change of station budgets and pay for
loss and damage claims and personal property shipment office expenses
from their operation and maintenance accounts. Servicemembers generally
work with DOD transportation officials at personal property processing
offices to coordinate their moves. These offices can either be service-
specific offices or joint or consolidated property offices that assist
servicemembers from more than one service. These offices provide
servicemembers with local points of contact for counseling about their
moves and processing paperwork related to shipments of their personal
property. Prior to the reengineering efforts over the last 11 years,
DOD's personal property program had remained virtually unchanged for
nearly 40 years.
DOD's personal property program involves a complex process of
qualifying carriers, soliciting rates, distributing moves, evaluating
moving companies' performance, paying invoices, and settling claims.
Among the program's many challenges is ensuring that the moving
industry provides adequate year-round capacity, especially during the
summer peak moving season when most servicemembers, as well as the
general public, schedule their moves. In an effort to test alternative
approaches and address some of its challenges, DOD previously evaluated
three pilot programs.[Footnote 9] From those three pilot programs, DOD
submitted a report to Congress in 2002 with recommendations to improve
the quality of household goods moves for servicemembers that were
originally contained in a U.S. Transportation Command report. Those
recommendations were as follows:
* Reengineer the liability and claims process by adopting commercial
practices of minimum valuation,[Footnote 10] simplifying the filing of
claims, and providing the servicemember with direct settlement for
claims with the carrier.
* Change the acquisition process to implement performance-based service
contracts[Footnote 11] (as opposed to the current practice of providing
contracts to the lowest bidder).
* Implement information technology improvements, which could integrate
functions across such areas as personnel, transportation, financial,
and claims.
To respond to these recommendations, DOD developed a new program called
Families First to improve the quality of household goods moves for
servicemembers, DOD civilian employees, and their families. Families
First is a U.S. Transportation Command program that is executed by the
Military Surface Deployment and Distribution Command, an Army service
component command.[Footnote 12]
Since 1989, DOD's personal property system has used the Transportation
Operational Personal Property Standard System, a legacy data management
system known as TOPS, which includes 25 additional legacy systems that
support it. The Surface Deployment and Distribution Command determined
that it was not feasible to upgrade TOPS to support the goals of
Families First for several reasons. TOPS is being phased out because
the software is no longer fully supportable and does not meet DOD's
technology standards, including its security requirements. TOPS also
did not support the Business Management Modernization Program, the
program that preceded the Business Transformation Agency in overseeing
DOD's business transformation efforts. In addition to these technical
considerations, TOPS also has poor reporting and data capabilities.
However, DOD expects that TOPS will need to be functional for a large
part of the Families First rollout, until DPS is fully operational.
Under the current system, servicemembers are provided with basic claims
coverage using depreciated value for losses or damages incurred during
a move that allows liability at a rate of $1.25 times the weight of the
goods being shipped.[Footnote 13] For example, if a shipment's weight
is 10,000 pounds, the maximum liability for the moving company is
$12,500. Additional coverage options are available for the
servicemember to purchase. Under the current program, a servicemember
has two options. Under option one, the servicemember can purchase
depreciated value coverage above what the government currently pays,
and under option two, the servicemember can purchase full replacement
value coverage. Under both options, the servicemember shares the cost
with the government. For moves within the United States and overseas or
stored shipments, servicemembers can obtain additional coverage from a
commercial insurance company. Some private insurance companies and
moving companies sell insurance to cover certain items of personal
property during moves. Additionally, some homeowner policies may cover
some items in shipment. See table 1 for coverage and cost comparisons
for the current DOD personal property program versus what is planned
under Families First.
Table 1: Coverage and Cost Comparisons for DOD's Current Personal
Property Program versus Families First:
Current program.
Basic coverage;
Coverage: Depreciated value coverage up to $1.25 x shipment weight; For
example, for a move with 10,000 pounds, the maximum coverage would be
$12,500.[A];
Servicemember costs: None;
Government costs: Full cost of coverage.[B].
Option 1 of current program;
Coverage: Above basic coverage, servicemember can place additional
value on a shipment by purchasing depreciated value coverage;
Servicemember costs: For example, for a move with 10,000 pounds:
Servicemember pays $0.64/$100 of valuation above $12,500; Increasing
the value of the shipment to $30,000 would cost servicemember $112;
Government costs: For example, for a move with 10,000 pounds: The
government pays $0.64/$100 on first $12,500 of valuation.
Option 2 of current program;
Coverage: Full replacement value coverage up to $3.50 x shipment weight
($21,000 minimum); Charge is $0.85/$100 of the stated valuation. For
example, the total cost to purchase this option for a 10,000 pound
shipment is $297.50.[C];
Servicemember costs: Servicemember pays approximately three-quarters of
cost, based on the weight; For example, a move with 10,000 pounds would
cost servicemember $217.50;
Government costs: The government pays approximately one-quarter of the
cost, based on the weight; For example, a move with 10,000 pounds would
cost the government $80.
Families First.
Coverage:
Coverage: Generally, full replacement value up to $4.00 x shipment
weight.[D];
Servicemember costs: Servicemember costs: None;
Government costs: Government costs: Full cost of the coverage.[E].
Source: GAO analysis of DOD data.
[A] $1.25 x 10,000 pounds = $12,500.
[B] According to DOD, there is a maximum allowable loss or damage
payment for certain items.
[C] (($3.50 x 10,000 pounds)/100) x $0.85 = $297.50.
[D] The moving company's maximum liability on all shipments will be the
greater of (1) $5,000 per shipment and (2) $4.00 times either the net
weight of the household goods shipment or the gross weight of the
unaccompanied baggage shipment, in pounds, not to exceed $50,000. On
all other loss and damage claims asserted against the moving company,
the company's maximum liability will be limited to $1.25 times the net
weight of the shipment, in pounds.
[E] Full replacement value coverage applies if a claim is filed with
the moving company within 9 months of delivery. After 9 months, the
moving company is liable for the depreciated value of the items only up
to a maximum of $1.25 times the net weight of the shipment.
[End of table]
We have completed several assessments that evaluated DOD's pilot
programs and plans for implementing Families First.[Footnote 14] For
example, in 2000, we reported that the U.S. Transportation Command
needed to complete an evaluation plan for its pilot programs and take
necessary actions to resolve outstanding cost issues. In 2003, we
evaluated the methodology used to estimate the costs associated with
Families First that the services would incur. The Families First
program was initially expected to increase the services' costs for
DOD's personal property program by 13 percent, but we questioned part
of the methodology used to generate this estimate. Specifically, we
recommended that DOD quantify the risks of implementing the Families
First program within the 13 percent estimate. As part of this
evaluation, we also assessed a separate estimate for the cost of
upgrading the information technology system used for managing the
shipment of household goods. We questioned DOD's ability to implement
the upgrades to the information technology system within its cost
estimate. We found that the estimate to implement the information
technology recommendation was slightly higher than the $4 million to $6
million estimate DOD reported to Congress. In 2005, DOD reevaluated its
estimated 13 percent cost increase and quantified the risks of
implementing Families First within the expected cost increase. We found
at that time that DOD used a reasonable methodology to validate the
estimated increase and quantify the risk.
Congress has been concerned about problems in this program, especially
that servicemembers may receive less than what it would cost them to
replace or repair their household goods that are lost or damaged during
shipment. On November 24, 2003, the fiscal year 2004 National Defense
Authorization Act[Footnote 15] amended the U.S. Code[Footnote 16] to
allow the Secretary of Defense to include a clause for full replacement
value in DOD's contracts with moving companies. The John Warner
National Defense Authorization Act for Fiscal Year 2007[Footnote 17]
mandated that DOD provide full replacement value coverage by March 1,
2008, for servicemembers and DOD civilian employees. With full
replacement value, a servicemember would receive enough funds to
replace or repair a lost or damaged item at its present value.[Footnote
18]
Additionally, the John Warner National Defense Authorization Act for
Fiscal Year 2007[Footnote 19] mandated that the Secretary of Defense
shall submit to the congressional defense committees a report
containing the certifications of the Secretary on the following matters
with respect to the program of the Department of Defense known as
Families First: (1) whether there is an alternative to the system under
the program that would provide equal or greater capability at a lower
cost; (2) whether the estimates on costs, and the anticipated schedule
and performance parameters, for the program and system are reasonable;
and (3) whether the management structure for the program is adequate to
manage and control program costs. The mandate did not specify a date
for DOD to provide this information.
DOD Has Taken Some Initial Steps for Families First, but DPS Delays Put
Achievement of Program Goals and Benefits at Risk:
DOD has taken some initial steps to achieve the goals and benefits of
the Families First program, but delays in developing a new information
management system have put achieving the program's goals and benefits
at risk. DOD continues to experience delays and missed milestones in
developing and implementing DPS, and the original estimated release
date for DPS has now been pushed back for more than 2 years. To meet
the statutory mandate, DOD has taken steps to provide servicemembers
with the full replacement value coverage benefit because of the delays
in implementing DPS. However, some servicemembers may not be covered by
March 1, 2008, and there are other risks associated with this backup
plan. Despite these challenges, Surface Deployment and Distribution
Command officials told us that they expect all types of moves will have
full replacement value by March 1, 2008. DOD continues to rely on the
implementation of DPS to achieve other program goals such as improving
the quality of service and claims processing.
DOD Has Taken Some Initial Steps to Achieve the Goals and Benefits of
Families First:
DOD has taken some initial steps to help achieve the goals and benefits
of the Families First program. To improve the personal property
program, DOD has established three goals for Families First: (1)
improving the quality of service from moving companies by using a best-
value approach that incorporates performance-based service contracts;
(2) streamlining the claims process used for claiming losses or damages
incurred during a move; and (3) developing an integrated information
management system, known as DPS. DOD designed Families First so that
achieving the first two goals of the program relies heavily on
completion of the third goal of the program, DPS. DOD identified
numerous benefits of the Families First program, including reduced
storage costs and greater operational flexibility for moving companies.
Two of the program benefits identified by DOD--full replacement value
coverage and expanded counseling support through a Web-based
information system--are intended to directly benefit servicemembers and
promote quality service when moving their personal belongings.
DOD developed a phased approach to implement Families First and has
taken some steps to accomplish the first and second phases. The first
phase, which began in March 2004, has two main parts: (1) electronic
billing and payment systems and (2) a customer satisfaction survey. The
electronic billing system, known as the Central Web Application, is a
government Web-based system for reviewing and approving services
online, as well as for pricing shipments. The electronic payment
system, U.S. Bank's PowerTrack, is an online payment and transaction
tracking system. This system is expected to reduce the payment cycle
for DOD's personal property moves. While DOD and all services other
than the Air Force have made some progress in implementing the
electronic billing and payment systems, the Air Force is not processing
its own bills and payments using these systems because it is
reengineering its payment process and cannot currently support these
systems. DOD is working to fully interface and integrate electronic
billing and payment systems, respectively, with DPS but continues to
experience operational problems, such as invoices being delayed or lost
when being processed.
In addition, as part of the first phase, DOD began data collection for
a customer satisfaction survey, which is intended to support the
Families First goal of improving moving company performance through
evaluation of past performance. Under Families First, servicemembers
are expected to fill out a customer satisfaction survey about their
moves, the results of which will be combined with other data[Footnote
20] to generate an overall moving company quality score. The moving
companies with the best scores will be awarded more shipments. This
process contributes to the best-value distribution of
shipments.[Footnote 21] Under DOD's current household goods program,
DOD awards shipments to the company that bids the lowest price for a
move. To generate data for ranking moving companies when Families First
is implemented, DOD has instituted an interim customer satisfaction
survey under the current program. However, interim customer
satisfaction survey response rates have been about 16 percent within
the past year, which has resulted in less than one-third of moving
companies' scores being usable. To compensate for the low response
rate, DOD has developed a methodology upon program implementation to
make moving companies' scores statistically valid so the scores can be
used when allocating shipments.[Footnote 22] However, the moving
companies are concerned about how the low survey response rate will
affect how DOD awards business to them. In addition to developing the
methodology to ensure that moving companies' scores are statistically
valid, DOD has taken several steps it says will increase the customer
satisfaction survey response rate. For example, it has released a
commercial to increase awareness about the survey and added information
in its It's Your Move pamphlet.[Footnote 23] It also included the
customer satisfaction survey requirement in the Defense Transportation
Regulation. DOD also expects that the survey response rate will improve
once DOD implements DPS and servicemembers can file their surveys
electronically within DPS. Both of these components--the electronic
billing and payment systems and the customer satisfaction survey--are
necessary to support Families First.
The second phase of Families First includes the development and
implementation of DPS, which DOD has been working on for more than 2
years. DOD plans to use DPS to implement many key improvements for the
Families First program. For example, Families First implementation
documents state that with DPS, DOD will be able to:
* use best-value distribution when awarding performance-based service
contracts,
* provide Web-based counseling to help servicemembers with their moves,
* use a commercial-based tariff for domestic moves rather than the
antiquated government tariff currently being used,[Footnote 24]
* provide direct claims settlement with the transportation service
provider, and:
* use a "rate reasonableness"[Footnote 25] strategy that will help DOD
manage the costs of the moving program.
DOD also plans to use DPS to provide the electronic customer
satisfaction survey to servicemembers and to help DOD monitor the rates
moving companies charge it for moving services.
The third, and final, phase of the Families First program includes
adding functionality to DPS so that it can handle more types of moves,
including nontemporary storage (about 16 percent of all moves) and
direct procurement moves (about 8 percent of all moves).[Footnote 26]
DPS Development and Implementation Has Experienced Delays:
DOD continues to face delays and missed milestones in developing and
implementing DPS. DPS development and implementation has been pushed
back for more than 2 years from the original estimated release date.
DOD began DPS development in May 2004 and DPS was originally scheduled
to be available by October 2005. In October 2005, the Surface
Deployment and Distribution Command initiated a review of the program.
DOD then entered into an 11-month strategic pause for further program
review and software testing after it encountered significant software
validation and systems problems, which resulted in the system not
working. DOD subsequently developed two more implementation timelines,
the first in October 2006 and the second in March 2007. See table 2 for
a comparison of DPS implementation timelines.
Table 2: Comparison of Timelines to Implement DPS:
Software acceptance testing for DPS[A];
Original plan as of 2004: September through October 2005;
Plan as of October 2006: January through February 2007;
Revised plan as of March 2007: January through summer 2007.
Site testing of DPS[B];
Original plan as of 2004: No testing planned;
Plan as of October 2006: May 2007 through November 2007;
Revised plan as of March 2007: Starts October 2007.
DPS operational; does not include nontemporary storage and direct
procurement method moves;
Original plan as of 2004: October 2005;
Plan as of October 2006: November 2007 through January 2008;
Revised plan as of March 2007: Spring 2008.
DPS fully operational to include moves with nontemporary storage and
direct procurement method;
Original plan as of 2004: October 2006;
Plan as of October 2006: March 2008;
Revised plan as of March 2007: Fall 2008.
Source: GAO analysis of DOD data.
[A] Prior to software acceptance testing for DPS, the program underwent
independent testing, commonly known as independent validation and
verification testing. The original time frame for independent testing
was for the third and fourth quarters of fiscal year 2005. The test was
rescheduled and occurred in July through October 2005. This testing led
to the program's strategic pause. Additional independent testing
occurred July through September 2006.
[B] According to DOD, DPS will be tested and operational at 21 test
sites.
[End of table]
During the October 2005 internal review of DPS, DOD's review group
recommended improvements in areas such as management, the type of
contract used for DPS, and the DPS development process. The strategic
pause following this review ended in September 2006, but the next
schedule for DPS implementation was not developed until after a new DPS
program office was created in October 2006. This schedule incorporated
a phased rollout approach for DPS.[Footnote 27] Under this schedule,
DPS software acceptance testing was to occur in winter 2007, followed
by increasing use of DPS through summer and fall 2007. DOD expected DPS
to be fully operational in spring 2008.
DPS program managers developed what they described as an aggressive
implementation schedule for two reasons. First, they planned to use DPS
to meet the mandate to provide full replacement value by March 1, 2008.
Second, DPS implementation was needed because the legacy system used
with the current personal property system is not fully supportable and
does not meet DOD information technology security standards. Program
and service officials said that the legacy system has problems
interfacing with DOD's networks. In addition, the legacy system's
hardware has been breaking down. Surface Deployment and Distribution
Command officials said that the number of sites not functioning at any
one time varies. To keep the legacy system working, the Surface
Deployment and Distribution Command provided the services with legacy
system "survival kits." These kits included motherboards and other
hardware components that are difficult to find and are no longer
supported commercially. DOD estimates that these survival kits will
keep the legacy systems viable for 4 to 5 years, but some service
personal property officials have expressed concerns that the legacy
systems might not last that long.
DOD delayed the DPS implementation schedule again in February 2007,
after stakeholders from the services and the moving industry
participated in DPS software acceptance testing and found a significant
number of problems with the software. This testing generated more than
1,400 problem reports, almost 200 of which were collectively expected
to result in significant changes to the software. For example, for a
shipment awarded to one moving company, DPS sent the work order for the
shipment to a different moving company. Thus, the moving company that
was awarded the shipment did not know the shipment was awarded to
it.[Footnote 28] In addition, according to a U.S. Transportation
Command official, some test reports indicated that business rules still
needed to be clarified, such as whether moving companies will have one
or two opportunities per year to file the rates they will charge DOD to
move servicemembers' household goods.[Footnote 29]
In March 2007, because of the number of test problem reports and
overall concern about DPS functionality, DPS program management
officials significantly altered the timeline for rolling out DPS to
address concerns expressed by military service and moving industry
stakeholders regarding DPS functionality and its implementation
schedule. Stakeholders were also concerned that the implementation
schedule called for switching to DPS during the peak summer season,
when both the services and industry would have to learn a new system
while also moving shipments using the current system. The revised DPS
implementation schedule calls for fixing the issues identified in the
test problem reports, continued testing of DPS through the summer, and
adding high-priority changes requested by the services. Program
managers said that DPS should be available for some shipping offices to
use by fall 2007 on a test basis, with all offices using DPS beginning
in spring 2008 for all moves except those using nontemporary storage
and the direct procurement method. Once DPS is functional for domestic
and international household goods moves, program managers will begin
developing the functionality for the third phase of Families First,
which includes moves using nontemporary storage and the direct
procurement method.
DOD Has a Plan to Provide Full Replacement Value without DPS, but Does
Not Have a Plan to Implement the Other Goals and Benefit of Families
First without DPS:
Because of the delays implementing DPS, DOD has developed a backup plan
to provide servicemembers with the full replacement value coverage
benefit, but its plan to implement the other goals and benefit of
Families First still relies on DPS. When the backup plan was published
in December 2006, it called for the next version of the current
program's domestic tariff and international rate solicitation to
include language that made it mandatory for moving companies to include
full replacement value coverage in the rates submitted to DOD.[Footnote
30] Using this backup plan in the current program, the majority of
shipments will receive full replacement value protection by March 1,
2008. The schedule for implementing the backup plan follows the current
program's winter 2007 rate filing schedules for the domestic intra-and
interstate programs and the international programs. The Surface
Deployment and Distribution Command plans to begin accepting rates
under the backup plan beginning in May 2007, and the rates will be
effective from October 1, 2007, through April 1, 2008.
Risk factors associated with DOD's backup plan challenge DOD's ability
to implement the plan. First, the backup plan relies on a legacy system
that is no longer fully supportable. For example, the system still does
not meet security standards. DOD estimates that the survival kits it
has sent to the services can keep the legacy system running for 4 to 5
years. However, some service officials had concerns that the system
would not last this long. Without the legacy system, staff at the
personal property offices have to work manually to accomplish
administrative tasks. Furthermore, some service officials expressed
concern that providing full replacement value without DPS would give
the moving industry an opportunity to increase prices with no control
to limit the cost and may create some increase in workloads for the
claims offices because of the lack of automation for claims filing.
Moreover, most services expressed concern about the lack of guidance
for implementing full replacement value under the current system
instead of within DPS. Some service and Surface Deployment and
Distribution Command officials expressed concerns about possible
increases in their workload because of the magnitude of the procedural
changes as they work to implement full replacement value without DPS.
Another risk is that thousands of moves may not be covered before the
March 1, 2008, deadline. DOD's contracts for moves within a theater of
operation, those using nontemporary storage, and those using the direct
procurement method do not include full replacement value and may expire
after the March 2008 mandate. DOD stated that it is initiating various
levels of action to ensure full replacement value is implemented by
March 2008. According to DOD, as these contracts expire, the new
contract will include full replacement value. The Surface Deployment
and Distribution Command directed that all eligible contracts be
modified not later than March 2008. However, it is still uncertain
whether all contracts in place on March 1, 2008, will cover full
replacement value. According to DOD estimates, in fiscal year 2006,
moves that included servicemembers transferring within a theater of
operation accounted for about 7,800 personal property moves, or about 1
percent of the more than 680,000 shipments that occurred. DOD officials
also stated that in fiscal year 2006 direct procurement method moves
represented almost 8 percent of all moves. About 16 percent of moves
included nontemporary storage.
In a broader sense, DOD's backup plan does not address the other goals
or counseling benefit of Families First; it is designed only to allow
DOD to meet its mandate to provide full replacement value coverage. DOD
officials said that they did not have a requirement to produce a backup
plan for the other goals or counseling benefit and they did not invest
resources to do so. Instead, DOD continues to rely on DPS to achieve
the goals and counseling benefit of Families First. The reason Surface
Deployment and Distribution Command officials said they created a
backup plan for full replacement value is because they were required by
statute to implement it by March 1, 2008, whether DPS was ready or not.
For example, the backup plan does not address how to provide
streamlined claims or improved quality of service from moving companies
without DPS, nor does it include a way to provide the other
servicemember benefit of expanded Web counseling services to help
servicemembers with their moves without DPS. Until DPS is operational,
some service officials have said that DOD has at least one other option
for providing expanded counseling services because the Navy has a
program, known as SmartWebMove, which can be used by members from other
services. However, this program is connected to the legacy system, and
deterioration of the legacy system may limit the feasibility of this
option.
Despite these challenges, Surface Deployment and Distribution Command
officials told us that they expect all types of moves will have full
replacement value by March 1, 2008. According to these officials, this
will include nontemporary storage and direct procurement method moves.
DOD continues to rely on the implementation of DPS to achieve other
program goals such as improving the quality of service and claims
processing.
Families First Program Could Increase DOD Costs by About $1.4 Billion
over Current Program Costs through Fiscal Year 2011:
The Families First program could increase costs to DOD by about $1.4
billion over current program costs through fiscal year 2011 for two
main reasons: (1) DOD estimates the program will increase costs to the
services by 13 percent and (2) DOD has significantly increased the cost
estimate for a new information management system since our last
assessment. DOD's Families First program has not yet been implemented,
so we could not assess the actual growth in costs of the program,
although DOD continues to estimate that the Families First program will
increase the cost to the services for their household goods budgets by
an estimated 13 percent, or as much as $1.2 billion through fiscal year
2011. In addition, the DPS program office has significantly increased
the estimated cost of DPS and maintaining the DPS program office, which
it now expects to cost $180 million through fiscal year 2011.
Actual Growth in Costs of Families First Program Cannot Be Assessed,
Although DOD Continues to Estimate a 13 Percent Increase in Services'
Costs to Implement Families First:
We could not assess the actual growth in costs of Families First
because the program has not been implemented; however, DOD continues to
estimate that the costs to the services of the Families First program
will be 13 percent higher than costs under the current program. In
fiscal year 2006, the services' total household goods budget was about
$1.8 billion, which would mean the services would have an increase of
$240 million annually above the existing budget in order to move
servicemembers' household goods under Families First in 2007, if the
program were fully implemented.[Footnote 31] DOD will incorporate a
cost-control mechanism into DPS, similar to the one employed in the
current program, in an attempt to keep the costs within the expected
increase. However, until DPS is implemented the impact of the use of
this mechanism on the Families First program will not be known. Based
on DOD's total household goods budget, Families First could cost DOD
about $1.2 billion more than the current program over the next 5 years.
DOD continues to inform the services that the Families First program,
when fully implemented, will cost them an additional 13 percent over
their existing household goods budgets, which is a subset of the
services' permanent change of station budgets. According to U.S.
Transportation Command and some personal property officials, this cost
increase is in part because of an expectation by DOD that moving
companies will increase the rates they charge as a result of their
additional responsibilities under the Families First business rules,
such as providing full replacement value. The actual cost of Families
First will not be known until moving companies file the rates they will
charge DOD to move servicemembers, which is expected to take place in
March 2008. DOD is relying on features built into DPS to ensure that
the costs remain at or below the expected cost increase of 13 percent.
DPS will incorporate a cost-control mechanism known as rate
reasonableness, which will establish an acceptable range of rates for
each combination of pickup and destination locations.[Footnote 32]
The program delays in implementing Families First decrease the
certainty of the cost estimate because the methodology is based on
certain assumptions and data that may change with time. For example,
the cost methodology used to estimate the 13 percent increase was
adjusted to account for fewer small businesses participating DOD-wide
than participated in the pilot programs. However, according to DOD
officials, the percentage of small business participation in Families
First will be similar to the current DOD participation rate of 70
percent, which is significantly larger than the 30 percent assumed in
the 2002 cost estimate. DOD's evaluation of the pilot programs
demonstrated that small businesses were 14 to 74 percent more expensive
per shipment compared to the current program. As a result, DOD may have
underestimated the cost of having small businesses participate in
Families First.
Estimated Costs for the Integrated Information Management System Have
Significantly Increased since Our Last Assessment:
DOD's estimated costs for an integrated information management system,
known as DPS, have significantly increased since our last assessment in
2003. The estimates for developing an information management system to
support Families First have increased from $4 million to $6 million to
$86.0 million, and the total cost is expected to be about $180 million
through fiscal year 2011 once annual operating costs are added.
In a 2002 report,[Footnote 33] DOD estimated that implementing the
information technology improvements to enhance its data management
capabilities for Families First would cost $4 million to $6 million.
This estimate was based on expanding the use of an upgraded, Web-based
version of the existing legacy system that was implemented on a small
scale during one of DOD's pilot programs. In our April 2003 review of
that estimate, we questioned whether DOD would be able to implement its
new personal property program, including the technology improvements,
within the estimated range.[Footnote 34] In addition, we noted that
although DOD had developed a plan of action for designing the new
system, the plan did not include monitoring the costs and benefits
during its implementation or the extent to which system changes were
being achieved within an acceptable cost range, such as the $4 million
to $6 million estimate.
According to DOD officials and documents, in January 2004, DOD decided
to implement the technology improvements to support Families First by
developing an entirely new information management system, which came to
be known as DPS. In a January 2004 report, the Surface Deployment and
Distribution Command said that the legacy system evaluated under the
previous cost estimate was expensive to operate and maintain and could
not be modified to become compliant with DOD technology standards or to
support the objectives of the Families First program.[Footnote 35] At
that time, DOD estimated that DPS could be developed for about $16.5
million, with an average annual cost of about $4.6 million after the
initial investment. This estimate assumed that DPS could be developed
using commercial-off-the-shelf or government-off-the-shelf software to
account for about 75 percent of the new system. The use of existing
commercial and government software was expected to keep the cost of the
system low, because using ready-made software reduces the need to
develop original software. For example, the Navy developed a counseling
program, known as SmartWebMove, which was originally planned to be
incorporated into DPS as its counseling module so that DOD would not
need to develop original software as part of DPS to provide this
Families First benefit. However, the Navy's counseling module was not
incorporated into DPS.[Footnote 36] The Navy, however, is still using
SmartWebMove while DPS is being developed.
Since the 2004 estimate, the cost of DPS has continued to increase. As
of February 2007, DOD reports that it spent $51.5 million developing
DPS, which is significantly higher than any previous DOD estimate. This
cost includes about $8.2 million for capital hardware, $24.9 million
for capital software, and $18.5 million in operating costs. According
to DOD Families First officials, after the DPS contract was awarded,
software developers determined that DPS would require a much larger
percentage of new software development than expected because of the
unique needs of the DOD personal property stakeholders, which has
caused the cost to rise significantly. In addition, the costs for
developing, testing, and making DPS available for use now include the
cost of the Joint Program Management Office for Household Goods
Systems, which was established on October 1, 2006. The original
estimates did not account for a separate program office to manage the
development and operation of DPS, sustain the legacy system, or
evaluate future options for DOD's household goods program. Based on our
analysis of program office budget planning documents from February
2007, the DPS program office estimated that the costs for maintaining a
program office, sustaining the legacy system through retirement,
developing and sustaining DPS, and implementing a future household
goods program through fiscal year 2011will be $180 million if all of
the requirements are funded. Additional delays in the schedule are
likely to further increase the costs associated with the program.
However, when the legacy system is no longer needed, DOD expects that
it will not have to budget for this additional cost, which is about $21
million annually. Summary information on DPS cost estimates appears in
table 3.
Table 3: Summary of Information Management System Cost Estimates:
Dollars in millions.
What is included;
Original estimate: Upgrades to the legacy system;
Initial DPS estimate (2004): Incorporating available software;
Estimate as of February 2007: A separate program office, sustaining the
legacy system, and evaluating future options for DOD's household goods
program.
System development;
Original estimate: 4 to 6;
Initial DPS estimate (2004): 16.5;
Estimate as of February 2007: 86.0[A].
Average annual operating cost (fiscal years 2007-2011)[B];
Original estimate: Not estimated;
Initial DPS estimate (2004): 4.6;
Estimate as of February 2007: 15.2.
Total estimated costs through fiscal year 2011[B];
Original estimate: Not applicable;
Initial DPS estimate (2004): 47.0;
Estimate as of February 2007: 180.0[C].
Source: GAO analysis of DOD data.
[A] The $86.0 million in system development costs for DPS includes
actual and projected capital hardware and capital software costs from
fiscal year 2004 through fiscal year 2011.
[B] According to DOD, the estimates for fiscal year 2009 and beyond are
initial estimates that have not been approved through the U.S.
Transportation Command Chief Information Officer Program Review
Process, and may change significantly as potential requirements for a
future household goods program become better defined.
[C] To calculate the total estimated costs for DPS from fiscal year
2007 through fiscal year 2011, we added the capital software, capital
hardware, and operating costs of DPS for those years using budget
documents provided by the DPS program managers. These costs include DPS
program office cost estimates for fiscal years 2008 through 2011 and
the $51.5 million spent developing DPS from fiscal year 2004 through
fiscal year 2007. Calculations are based on fiscal year 2007 data.
[End of table]
DOD Faces Management Challenges for Families First Program and Has Not
Developed a Comprehensive Implementation Plan:
DOD faces management challenges for the Families First program, and it
has not employed comprehensive planning that incorporates many sound
management principles and practices. Families First offices, including
the DPS program office, continue to experience organizational
challenges and staffing shortfalls. Moreover, Families First does not
have stakeholders' agreement on some elements of the program, such as
business rules and essential DPS functions. Additionally, the Families
First program faces uncertain funding.
DOD Planning for Families First Did Not Incorporate Some Sound
Management Principles and Practices:
Sound management practices require employing comprehensive planning to
manage program implementation.[Footnote 37] Comprehensive planning
should include many things, such as integrated approaches to manage
training and workforce redeployment issues; a qualified, trained, and
well-led team to reengineer the program; stakeholder agreement about
key elements of a program, including the program's business rules and
its priorities; and full cost information and funding resources.
However, DOD's planning for Families First has not incorporated some of
these sound management practices. Instead, DOD has developed several
nonintegrated plans to cover individual portions of the Families First
program. For example, DOD has a draft transition plan for
organizational changes and the DPS program office has a plan for DPS
development. However, DOD does not have a comprehensive plan with
timelines for implementing Families First that manages all of its
efforts simultaneously. Without an integrated, comprehensive plan, the
program's implementation is at risk.
Families First Faces Significant Organizational Changes and Staffing
Shortfalls:
The offices supporting Families First, including the program office now
overseeing the development and implementation of DPS, are undergoing
organizational changes and experiencing staffing shortfalls that affect
DOD's ability to support Families First at a critical time in its
implementation. When the first phase of Families First implementation
and DPS development began in 2004, the Surface Deployment and
Distribution Command, which is under the U.S. Transportation Command,
managed all elements of the program. In December 2005, almost 2 years
after DPS development started, the Surface Deployment and Distribution
Command established a DPS program management office based on a
recommendation made by a DOD review group. The review group suggested
that the Surface Deployment and Distribution Command establish a clear
management structure for DPS because there was no single point of
authority and there was no acquisition-certified program manager. On
October 1, 2006, the U.S. Transportation Command transferred this
office from the Surface Deployment and Distribution Command to the U.S.
Transportation Command. The new office, named the Joint Program
Management Office for Household Goods Systems, is under the leadership
of the U.S. Transportation Command's Program Executive Office for
Distribution Services. The DPS program office and the program executive
office are now led by officials with acquisition experience.
The DPS program office has several tasks:
* mature the program office structure and processes;
* sustain the legacy system currently being used through the
development of its replacement, DPS;
* quickly implement DPS in phases; and:
* evaluate alternatives for the future of DOD household goods services,
including options for outsourcing.
Although DOD's establishment of the DPS program office addresses some
of the concerns about DPS program management raised in DOD's review,
the Joint Program Management Office for Household Goods Systems was not
established until a few months prior to a critical phase of DPS
development and continues to organize while also facing staffing
challenges. The DPS program office had a draft organization chart as of
March 2007, but filling staff positions has been complicated by a base
realignment and closure move to Scott Air Force Base in Illinois from
the office's current location in Alexandria, Virginia. This move is
scheduled to take place in the fourth quarter of fiscal year 2007. The
program office's draft transition plan transfers several positions from
the Surface Deployment and Distribution Command to the DPS program
office. However, this has created human capital challenges, as many of
the staff are choosing to retire or leave rather than move. These
workforce planning issues are significantly affecting the DPS program
office. According to DPS program management officials, as of April
2007, only 1 of 27 civilians in the program office planned to transfer
to Scott Air Force Base. Thus, while Families First and DPS are at a
critical stage of development, both the Surface Deployment and
Distribution Command and the DPS program office are losing many of
their senior leaders who possess technical and program knowledge.
The DPS program office is working to mitigate these human capital
planning challenges by seeking authority to hire over current staffing
limits, seeking temporary functional support from other Surface
Deployment and Distribution Command and U.S. Transportation Command
offices, and continuing to seek support from the services and industry
as software testers. As of April 2007, hiring actions had been
accelerated and some job announcements had been made. The program
office is also using contractor support but is facing challenges with
this as well. For example, in March 2007 several contractors were not
able to complete tasks for the program office because of paperwork
processing issues. In addition, in March 2007, the DPS program office
asked each of the services to provide two or three full-time
servicemembers to continue conducting DPS software testing at the
Surface Deployment and Distribution Command headquarters in Alexandria,
Virginia. While the services plan to provide some human capital
support, current service plans indicate that they cannot provide the
servicemember support DPS management officials originally sought
because each service will need its staff during the busy, peak moving
season that coincides with DPS testing. For example, the Navy is
planning to provide five part-time testers at Navy bases. The Army is
planning to provide five part-time testers at Army bases. The Marine
Corps plans to provide one full-time person to test at program
headquarters as well as one support staff member at its testing site at
Camp Lejeune in North Carolina. The Air Force is also providing full-
time support from its joint personal property shipping office in
Colorado Springs, Colorado. Overall, it is not clear how successful
these temporary mitigation efforts will be in providing staff with the
skills these offices need to implement both DPS and Families First.
However, DOD stated that its joint stakeholder advisory team of testers
will be sufficient to fulfill the mission required by the DPS program
office.
Surface Deployment and Distribution Command officials, who will manage
and provide oversight of the current DOD personal property program and
implementation of the Families First program, said that they are also
facing additional workload and workforce challenges as they administer
the electronic billing and payment systems as well as the customer
satisfaction survey. These officials are administering these processes
without the automation they expect DPS will provide while also
experiencing staff reductions and changes as a result of a base
realignment and closure move.
As of April 2007, the U.S. Transportation Command has made some
progress to staff the DPS program office, but it is not clear how
successful its measures will be. Until the U.S. Transportation Command
is able to ensure that the DPS program office has adequate and capable
human capital resources, it may be unable to successfully implement
DPS.
The John Warner National Defense Authorization Act for Fiscal Year
2007[Footnote 38] mandated that the Secretary of Defense submit to the
congressional defense committees a report containing the certifications
of the Secretary on the following matters with respect to the program
of the Department of Defense known as Families First: (1) whether there
is an alternative to the system under the program that would provide
equal or greater capability at a lower cost; (2) whether the estimates
on costs, and the anticipated schedule and performance parameters, for
the program and system are reasonable; and (3) whether the management
structure for the program is adequate to manage and control program
costs. When the U.S. Transportation Command established the DPS program
office, it included an evaluation of materiel alternatives for the
future of household goods services as part of the office's mission. The
mandate did not specify a date for DOD to provide this information to
the congressional defense committees. The U.S. Transportation Command
is responsible for leading, with the assistance of the DPS program
office, the evaluation of alternatives. The DPS program office is
responsible for evaluating how to implement the chosen alternative. It
is unclear when the DPS program office will be able to evaluate
materiel alternatives for the program because (1) U.S. Transportation
Command officials told us they were focusing on developing and
implementing DPS and (2) the DPS program office has not yet been
resourced to evaluate the materiel alternatives.
DOD Does Not Have Stakeholders' Agreement on Key Elements of Families
First:
DOD does not have stakeholders' agreement on some elements of Families
First, which puts the implementation of the program at risk. DOD does
not have stakeholders' agreement in two interrelated areas: (1)
business rules issues, including whether existing and proposed rules
will actually enable accomplishment of a key program goal, and (2) the
essential functions needed for DPS.
Uncertainties Surround Families First Business Rules:
Stakeholders, including the military services, have not all agreed to
some elements of Families First business rules and have not taken
action to implement all of the business rules because it is unclear to
them if the rules are final. At the end of our audit work, the U.S.
Transportation Command was still evaluating whether the business rules
would have to be published again for comment by stakeholders. However,
in commenting on a draft of this report in May 2007, DOD stated that
the business rules are now considered final.[Footnote 39] Business
rules help define how policies are to be implemented. DPS requirements
and functions are derived from these business rules. For example, in
late March 2007, several months into DPS testing, DOD was still
evaluating a business rule as to whether moving companies should have
the opportunity to file the rates they charge DOD to move
servicemembers' household goods once or twice per year. In the current
program, rates are filed twice per year. Under Families First business
rules, moving companies would file rates only once per year. In April
2007, DOD decided to continue with its Families First business rule
where moving companies only file rates once per year.[Footnote 40]
Within DOD, debate continues about whether Families First business
rules will allow DOD to accomplish its goal of improving the quality of
service from moving companies by using a best-value approach that
incorporates performance-based service contracts. Some DOD officials
(and industry representatives) question DOD's proposed practice of
allocating business to moving companies using a system where companies
that receive less than the best performance score are still allocated
business. For example, under Families First rules, moving companies
will be ranked into four groups based on their performance scores.
Those companies with the best scores will be placed into the first
group and receive the most DOD business. However, DOD officials said
that even those companies that are in the fourth group, with the lowest
performance scores, are expected to receive some business from DOD.
According to DOD officials and industry representatives, one reason DOD
will do this is to keep providing business to those companies that may
not otherwise be able to stay open during the nonpeak moving season.
These stakeholders said that this helps ensure that there will be
enough capacity during peak moving season. However, some
servicemembers' household goods may be moved by companies that did not
receive high performance scores, and therefore they may not receive
quality moves.[Footnote 41] If this is not resolved, DOD may be
challenged to meet the program's goal of improving the quality of
service from moving companies.
Additionally, during the course of our work, stakeholders indicated
that they did not consider the business rules final. However, DOD, in
commenting on a draft of this report, stated that the business rules
are now considered final. Stakeholders indicated that they do not yet
know what will be expected of them under Families First or what DPS
must include to fully support the program. Stakeholders said that the
business rules are not considered final until they have been published
in the Defense Transportation Regulation. The U.S. Transportation
Command published business rules for phase one of the program in the
Defense Transportation Regulation on February 20, 2007. However, it has
not published business rules for the second and third phases of
Families First in the Defense Transportation Regulation. The business
rules have only been published on the Surface Deployment and
Distribution Command's Web site and once in the Federal Register so
that stakeholders could comment on them. During our review, U.S.
Transportation Command officials indicated that DOD planned to publish
the business rules again in the Federal Register in June 2007 so that
stakeholders could comment on them again and said that DOD would
finalize the business rules in July 2007. It is unclear whether DOD
still plans to publish the rules again in the Federal Register. Along
with the uncertainty surrounding the business rules, stakeholders do
not have procedural guidance and do not yet know what is expected of
them under Families First. For example, an Air Force personal property
official told us the Air Force needs the finalized Families First
business rules so that it can train its staff on these new rules, which
the personal property official described as being vastly different from
the current program's business rules. However, the Air Force personal
property official said the Air Force is hesitant to develop a training
curriculum on business rules that are not finalized. Additionally,
without final business rules, the services cannot set up internal
regulations to support the business rules. Moreover, representatives
from the services and the moving industry are concerned that without a
formal set of business rules on which to develop DPS, they cannot
evaluate whether the computer system fully supports the Families First
business rules. Service officials and industry representatives continue
to have questions about Families First business rules and DPS
implementation.
Finally, the moving companies have concerns about the Families First
business rules that define how DOD generates the performance scores
used to rank them in the first, second, third, or fourth groups. The
majority of a moving company's performance score comes from a customer
satisfaction survey. However, servicemember response rates for the
survey have been low (about 16 percent within the past year) and,
because of this, most moving companies' scores are not statistically
valid for generating a performance score. Although DOD has, as part of
its business rules, devised a methodology to make moving company
performance scores valid until survey response rates improve,[Footnote
42] industry representatives are still concerned that moving companies
will be negatively affected by low response rates. In commenting on a
draft of this report, DOD stated that while it values the opinion of
the moving industry, its personal property program does not require
consensus by industry. DOD stated that the main focus of the department
is to provide a quality personal property program for servicemembers
while being good stewards of taxpayer dollars.
Stakeholders Have Not Agreed to All Essential Functions for DPS:
Another fundamental challenge facing DOD in implementing DPS is that
stakeholders, such as the military services and the moving industry,
have not agreed to all of the essential functions of DPS and how they
should operate when DPS is made available to servicemembers to use.
Service officials told us that prior to the development of the DPS
program office, the Surface Deployment and Distribution Command held
many meetings to understand what the services wanted DPS to provide
servicemembers and personal property officials. However, service
officials said that officials overseeing DPS development at that time
did not include all of those requirements when first developing DPS. A
Surface Deployment and Distribution Command official said that the
contract for DPS was written from a requirements list generated by
military service and moving industry stakeholder participation. For
example, there was a General Officer Steering Committee, Council of
Colonels and Captains, and moving industry stakeholder groups, which
met to discuss DPS requirements. In early 2007, after the U.S.
Transportation Command took over DPS, stakeholders had their first
opportunity to test DPS. During these tests, stakeholders identified
functions that they expected within DPS but that did not work the way
they expected. This resulted in DPS not providing the functionality
service officials expected, and this, in turn, could affect the
services' workloads. A U.S. Transportation Command official said that
it is possible that there was miscommunication during earlier meetings
to define requirements and that it was not until stakeholders were able
to test DPS functionality that these issues were identified. For
example, DPS users wanted to obtain the status of a moved shipment.
When DPS was programmed, it only displayed whether the shipment was in
the system. However, users wanted more detail in terms of where the
shipment was at a certain point in time. DPS program management is
still in the process of identifying and prioritizing the requirements
for DPS, but currently lacks stakeholders' agreement about all of those
requirements and their priority. For example, some stakeholders
disagree with the categories assigned to some of the test problem
reports, because none of the reports were placed in categories 1 or 2,
which are used for the most severe types of problems. Further, the
moving industry expected that DPS would interface with their computer
systems, but this is not yet part of DPS.
DPS program officials said that earlier phases of DPS development
lacked a mechanism for systematically reviewing DPS problems and
requirements and identifying how to fix them. The U.S. Transportation
Command and the Surface Deployment and Distribution Command formed a
Functional Requirements Board to review and prioritize the problems
identified during testing that must be fixed and to address other
proposed changes to DPS. The Functional Requirements Board is composed
of representatives from the services, the Surface Deployment and
Distribution Command, and the U.S. Transportation Command and meets
monthly to discuss which testing problems should be the highest
priority for correcting. The prioritized list of test problems is then
reviewed by a Configuration Control Board, which is composed of DPS
program managers, service representatives, DPS development contractors,
and software engineers who decide which of the DPS problems can be
corrected after considering the resources available. As of March 2007,
according to DOD, the Functional Requirements Board had developed
initial DPS functional requirements, reviewed many proposed system
enhancements, and prioritized the services' top five needs in each DPS
module. In addition to stakeholders' requirements, additional
priorities for DPS may also come from the business rules. This, too,
could affect the DPS implementation timeline, as well as implementation
of Families First.
Another challenge is that without stakeholders' agreement, DPS
requirements continue to change. DPS development is being administered
using a firm-fixed-price contract.[Footnote 43] With a firm-fixed-price
contract all major modifications to DPS require negotiation with the
contractor, which may lead to additional administrative costs.
Families First Is Not Fully Funded:
Even though Families First is projected to cost the services about $1.2
billion over the next 5 years, and DPS is expected to cost about $180
million through fiscal year 2011, the department has not set aside
funding to fully cover these costs. The services have taken different
approaches in budgeting for the increased costs expected to implement
the Families First program, ranging from the Army requesting the entire
estimated 13 percent increase to the Navy not requesting any increase
at all, in part because they have not received clear guidance from DOD
about how to calculate the estimated increase to their budgets.
Moreover, the growing cost of DPS has led to funding shortfalls in the
DPS program office that are affecting both staffing needs and software
development.
Services Vary in the Extent to Which They Have Budgeted for Families
First:
The services vary in the extent to which they have budgeted for the
increased costs expected to implement the Families First program. As
previously discussed, DOD estimates that the Families First program
will increase the services' moving budgets by 13 percent above the
current budgets needed to move household goods, and DOD has informed
the services to budget based on this estimate. However, some personal
property officials expressed concerns about DOD's ability to implement
the Families First program within the expected increase of 13 percent;
these officials expect that the cost increase will be significantly
more. As a result, the services vary in the degree to which they have
budgeted for Families First. According to service officials, the
services have taken the following actions to budget for Families First:
* The Army has submitted a budget request for the entire 13 percent
increase to the household goods portion of its budget in fiscal years
2008 and 2009.
* The Coast Guard requested the 13 percent increase based on its entire
permanent change of station budget, of which household goods is just a
portion.
* The Air Force submitted a budget that included the 13 percent cost
increase for Families First in fiscal year 2008, but the Office of the
Secretary of Defense did not agree with the Air Force's budget
submission and reduced its funding for permanent change of station
moves.
* The Marine Corps has requested funding in fiscal years 2007, 2008,
and 2009 only for its estimated full replacement value cost.
* The Navy has not requested any of the expected 13 percent cost
increase.
In addition, some personal property officials stated that they are
having difficulty budgeting because they have not received clear
guidance about how to calculate the increase. As a result, the services
also vary in how they interpret the effect of the 13 percent cost
estimate on their household goods budgets. For example, the Air Force
estimated its typical annual expected increase in the current household
goods program and then added 13 percent. Army officials told us they
were unclear whether the household goods program would be increasing by
13 percent every year or just the first year of Families First. A Coast
Guard budget official interpreted the 13 percent increase as an
increase to just those portions of the budget that apply to the rates
charged by moving companies. Neither the Surface Deployment and
Distribution Command nor the Office of the Secretary of Defense
Comptroller have provided clear guidance on how the services are
supposed to apply the 13 percent estimate to their household goods
budgets. As a result, the services may continue to apply the 13 percent
in different ways, which could result in the program not being fully
funded.
According to some service officials, if the expected increase in
Families First cost is not included in their budgets and program costs
begin to rise as Families First is implemented, then the services may
have to consider measures to reduce their household goods budgets. This
could affect the number of moves the services can make and could
ultimately impact the services' flexibility in meeting force management
needs. Surface Deployment and Distribution Command officials said they
plan to monitor the cost of Families First in two ways. First, these
officials will use the rate reasonableness methodology to keep the cost
at the estimated 13 percent increase. Further, they plan to use
reporting functions in DPS to monitor program costs. However, it is
unclear how officials will monitor the costs of the program without a
fully functioning DPS. Additionally, although the services plan to
monitor the actual cost of the program as part of their normal budget
processes, there is no plan to provide updated estimates to the
services about the cost of the program prior to the services actually
incurring the cost. Further, without clear guidance to the services
about how to apply the 13 percent cost increase to their permanent
change of station budgets, it is unclear whether the services will
budget appropriately for the projected Families First cost increase.
Without updated information about whether the estimated increase
remains accurate as Families First is implemented, the services may not
budget for Families First or may budget inaccurately for the program.
Growing DPS Costs Are Creating Funding Shortfalls:
As a result of the growing costs of DPS, the DPS program office is
experiencing funding shortfalls that are affecting both staffing needs
and software development. As of April 2007, the U.S. Transportation
Command had not identified how it would fully fund its projected costs
of DPS, which it estimated in February 2007 to be about $180 million
through fiscal year 2011.[Footnote 44] Without these funds, the U.S.
Transportation Command will be challenged to staff the DPS program
office and complete DPS software development. The U.S. Transportation
Command has been trying to fund DPS and the DPS program office from its
transportation working capital fund.
In fiscal year 2007, the U.S. Transportation Command reallocated about
$7.5 million from its transportation working capital fund to support
DPS. According to a U.S. Transportation Command budget planning
document, this resulted in other U.S. Transportation Command
information technology program delays or affected their ability to
provide some services. Even with the reallocation, the U.S.
Transportation Command had to defer about $9.7 million needed for high-
priority software changes and development essential for DPS to fiscal
year 2008. The DPS program office has an anticipated shortfall for
fiscal year 2008 of $21 million, which includes staff training,
contractor support, and funds for staff travel. Travel funds are
important since the DPS contractor will be in Virginia and the program
staff will be located at Scott Air Force Base in Illinois.
However, the U.S. Transportation Command has not yet developed a
detailed budget plan to resource DPS or the DPS program office. The
information technology portion of the U.S. Transportation Command's
transportation working capital fund has an annual budget of about $400
million. The DPS program office estimates that it will cost from $28
million to $43 million annually to support DPS and the program office
for fiscal years 2008 through 2012. This is from 7 to about 11 percent
of the U.S. Transportation Command's information technology portion of
the transportation working capital budget. The U.S. Transportation
Command has asked the Office of the Secretary of Defense for $5 million
during fiscal year 2008, but the request has not yet been approved.
Additionally, U.S. Transportation Command officials said that they have
informed the services that they expect them to provide funds for some
additional DPS requirements.
DPS program office officials based their current cost estimates for DPS
and the program office on the aggressive timeline for implementing DPS
before it changed in February 2007. Additional delays in the schedule
because of problems developing the software will likely increase the
costs associated with the program. At the time of our review, it was
too early in the DPS implementation process to determine if the
oversight provided by the program office will be effective in keeping
DPS costs under control given the ongoing changes to the DPS
implementation schedule and the significant number of software changes
identified during software testing.
Conclusions:
Despite DOD's recent focus on its personal property program, long-
standing problems persist. The department has invested millions of
dollars trying to improve the program since the mid-1990s with little
real progress. DOD's Families First program is intended to address many
of these long-standing problems but has faced a myriad of management
problems and is now at a critical juncture in its implementation. The
underlying problem is that DOD has not developed a comprehensive plan
to organize, staff, and fund Families First. Until DOD develops a
detailed plan to adequately recruit and retain qualified personnel,
gain stakeholder agreement about essential requirements for DPS, and
set aside resources such as funding and staff, it will be unable to
effectively address the challenges to the program. Relying on DPS to
achieve program goals--without analyzing alternatives as required by
Congress--puts Families First at risk. Moreover, at a time when our
nation faces increasing financial constraints and it is increasingly
important for DOD to maximize the return on its investment in new
systems, DPS costs are continuing to increase while DOD has little to
show for its 11 years of reengineering efforts and millions of dollars
of investment. Without a reexamination of the program as required by
the mandate and urgent attention commensurate with the program's
importance to millions of servicemembers and their families, these
problems are likely to continue to negatively affect servicemembers'
quality of life when they are required to move.
Recommendations for Executive Action:
We are making the following two recommendations to the Secretary of
Defense. To address long-standing problems in DOD's personal property
program we recommend that the Secretary of Defense direct the
Commander, U.S. Transportation Command, to expedite the evaluation of
the Families First program the John Warner National Defense
Authorization Act for Fiscal Year 2007 mandated the department
conduct.[Footnote 45] This act mandates that the report contain the
certifications of the Secretary of Defense on the following matters
with respect to the Families First program: (1) whether there is an
alternative to the system under the program that would provide equal or
greater capability at a lower cost; (2) whether the estimates on costs,
and the anticipated schedule and performance parameters, for the
program and system are reasonable; and (3) whether the management
structure for the program is adequate to manage and control program
costs.
We also recommend that DOD employ comprehensive planning to implement
the Families First program and its associated system. At a minimum,
this planning should address specific steps to:
* hire and train personnel so that the Surface Deployment and
Distribution Command personal property division and the DPS program
office have the human capital needed to develop and implement DPS and:
* reach agreement with stakeholders on the essential requirements for
DPS and their priority to facilitate the development of DPS.
In addition, this comprehensive plan should include an investment
strategy that reflects the full cost of accomplishing the goals of
Families First and milestones for implementation.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, DOD concurred with both
of our recommendations and cited specific actions it has taken and will
take for each recommendation. We believe DOD's planned actions, if
implemented, have the potential to improve the outcome of the Families
First program. However, we also believe it is critical that DOD sustain
focus on the program, especially given the delays the program has
experienced and the challenges it still faces.
DOD concurred with our recommendation to expedite the evaluation of the
Families First program that the John Warner National Defense
Authorization Act for Fiscal Year 2007[Footnote 46] mandated the
department conduct. In its comments, DOD said that it plans to provide
this evaluation of its household goods program to Congress in August
2007. We modified our recommendation to include the details of what the
act requires.
DOD also concurred with our recommendation that it should employ
comprehensive planning to implement the Families First program. In
addition, DOD provided technical comments suggesting that we include
the Surface Deployment and Distribution Command personal property
division as part of this recommendation. We agree, and have modified
this recommendation accordingly. Our recommendation now indicates that
at a minimum, this planning should include specific steps to hire and
train personnel for the Surface Deployment and Distribution Command
personal property division and the DPS program office, address specific
steps to reach agreement with stakeholders on the essential
requirements for DPS and their priority, and include an investment
strategy that reflects the full cost of accomplishing the goals of
Families First and milestones for implementation.
DOD cited specific actions it has taken or will take to implement this
recommendation. For example, DOD said that hiring actions are in
progress to staff the DPS program office after its relocation to Scott
Air Force Base and that other actions are being implemented to staff
the Surface Deployment and Distribution Command. In addition, DOD
stated that it has implemented a process to reach agreement with
stakeholders on the essential requirements for DPS and their priority
by establishing the Functional Requirements Board[Footnote 47] and the
Configuration Control Board. DOD stated that this structure has helped
to stabilize the functional requirements for DPS. Finally, DOD stated
that the U.S. Transportation Command will provide almost $91 million
for DPS development, testing, fielding, and maintenance and that there
is a DPS line item in the U.S. Transportation Command's transportation
working capital fund budget. The U.S. Transportation Command is also
working with the Office of the Secretary of Defense to provide almost
$2.8 million of operating/maintenance dollars from transformation
funding. DOD's comments also state that the U.S. Transportation Command
will provide funds internally, if required, to fund DPS and the DPS
program office. However, DOD's comments did not address how the
department intends to develop an investment strategy to cover the over
$1 billion in increased costs associated with implementing Families
First. Developing such a plan for Families First will be critical for
the program's future success.
DOD also provided technical and editorial comments, which we have
incorporated as appropriate. DOD's comments are reprinted in appendix
II.
We are sending copies of this report to interested congressional
committees; the Secretary of Defense; the Secretaries of the Army,
Navy, and Air Force; the Commander, U.S. Transportation Command; the
Office of the Assistant Deputy Under Secretary of Defense
(Transportation Policy); and the Director, Office of Management and
Budget. We will make copies available to others upon request. In
addition, the report will be available at no charge on the GAO Web site
at http://www.gao.gov.
If you or your staff have any questions about this report, please
contact me at (404) 679-1816 or pendletonj@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made major contributions
to this report are listed in appendix III.
Signed by:
John Pendleton:
Acting Director, Defense Capabilities and Management:
[End of section]
Appendix I: Scope and Methodology:
To evaluate the Department of Defense's (DOD) Families First program,
we obtained documentation from and met with DOD officials and
stakeholders in the Washington, D.C., area from:
* the Military Surface Deployment and Distribution Command;
* the Joint Program Management Office for Household Goods Systems;
* Transportation and personal property offices of the Army, Navy, Air
Force, Marine Corps, and Coast Guard;
* three moving industry associations, including the American Moving and
Storage Association, the Household Goods Forwarders Association of
America, and the Military Mobility Coalition; and:
* the Offices of the Secretary of Defense, including Transportation
Policy and the Comptroller.
We also met with DOD officials at Scott Air Force Base, Illinois, from
the:
* U.S. Transportation Command's Program Executive Office for
Distribution Services;
* U.S. Transportation Command's Strategy, Policy, Programs and
Logistics Directorate; and:
* U.S. Transportation Command's Program Analysis and Financial
Management Directorate.
To assess the steps DOD has taken to achieve the goals and benefits of
the Families First program with or without a new information management
system, we identified the goals and benefits of the Families First
program by analyzing Families First planning documents and related
studies, such as briefings to the U.S. Transportation Command, and
verified these goals with personal property officials from the Surface
Deployment and Distribution Command. We compared the status of the
Families First program to its stated goals by examining Families First
implementation timelines provided by program officials and by
interviewing officials and stakeholders from the offices listed. We
limited our evaluation of the benefits of the Families First program to
those benefits that pertain to the servicemembers, specifically full
replacement value coverage and expanded counseling services.
We determined DOD's ability to achieve the goals and benefits of
Families First with or without a new information management system by
monitoring the status of the Defense Personal Property System (DPS)
throughout the course of our review. This included observing
demonstrations of DPS as it was presented to representatives from the
services and moving industry, reviewing test problem reports generated
during DPS software acceptance testing, and examining briefings in
which DPS program management and stakeholders reevaluated the DPS
implementation schedule. We also reviewed a Federal Register notice
provided by Surface Deployment and Distribution Command officials,
which described its plans for implementing the full replacement value
benefit of Families First without DPS. We analyzed the current program
business rules and requirements and compared them to the goals and
benefits of Families First to determine if alternatives existed in the
current program to implement them without DPS. We also interviewed the
officials and stakeholders listed. We asked these officials and
stakeholders to provide alternatives for achieving the Families First
goals and benefits without DPS. When an alternative was identified, we
questioned officials and stakeholders about the feasibility and
possible challenges of implementing Families First goals and benefits
without DPS.
To evaluate the growth in the cost of the program since our previous
assessment, we determined that we could not evaluate the actual growth
in costs because data were unavailable as the program has not yet been
implemented. However, we determined that DOD was still advising the
services to budget for the previously estimated 13 percent cost
increase for Families First. To understand this estimated increase, we
reviewed the estimated cost of the Families First program from our two
previous reports related to the cost of the Families First
program.[Footnote 48] We analyzed the size of the services' current
permanent change of station budgets and assessed how the cost of the
Families First program would increase those budgets using information
provided by the Office of the Secretary of Defense Comptroller.
Families First program management officials stated that DOD would use a
cost-control mechanism known as rate reasonableness to ensure that
program costs do not exceed the estimated increase. We analyzed
Families First business rules and planning documents, such as its
concept of operations, to determine the feasibility and limitations of
the rate reasonableness approach. We interviewed officials from the
Military Surface Deployment and Distribution Command and the U.S.
Transportation Command Office for Transportation Policy to determine
whether their estimate of the cost of Families First has changed since
our previous assessment and what their plans were to keep the cost of
the Families First program within the estimate. We also asked officials
from the Military Surface Deployment and Distribution Command if they
had plans to monitor the costs during implementation of the program.
Although we did not independently test the reliability of data DOD
extracted from its data system to develop costs or independently verify
the analysis used to generate cost estimates, we determined the data
were sufficiently reliable for the purposes of our report because they
are the same data DOD decision makers use to manage the program.
To assess the growth in the estimated cost of DPS, we reviewed our
previous report, which contained DOD's estimate of the cost of
improving its information technology system.[Footnote 49] We compared
this estimate to estimates contained in the U.S. Transportation Command
budget planning documents and the DPS economic analysis completed in
2003,[Footnote 50] which also documented how DOD's concept for
information technology system improvements changed since our last
review. To obtain updated information about the current costs of
developing and fielding DPS, we analyzed budget documents provided by
the Joint Program Management Office for Household Goods Systems as of
February 2007. To understand the U.S. Transportation Command's
transportation working capital fund Chief Information Officer Program
Review Process, we reviewed related documents, such as the Chief
Information Office Program Review Process business flow and interviewed
budget officials at the U.S. Transportation Command's Program Analysis
and Financial Management directorate. Although we did not independently
test the reliability of data DOD extracted from its data system to
develop costs or the analysis used to generate cost estimates, we
determined that the data were sufficiently reliable for the purposes of
our report because they are the same data DOD decision makers use to
manage the program.
To assess the extent to which DOD faces management challenges in
implementing the Families First program, we analyzed documents, such as
Families First program meeting minutes and management briefings to the
General Officer Steering Committee, the Council of Colonels and
Captains, and the U.S. Transportation Command, which identified
difficulties in implementing the Families First program. We also
identified best practices for business reengineering and
transformation, which we used to compare the process by which DOD is
implementing the Families First program. These best practices were
found in prior GAO reports.[Footnote 51] We also reviewed documents
pertaining to the Joint Program Management Office for Household Goods
Systems, including the draft organization chart, the draft transition
plan for the office's move to Scott Air Force Base as part of a base
realignment and closure move, and draft budget documents for developing
and implementing DPS. We also interviewed officials and stakeholders.
We did not evaluate DOD's decision to implement the Families First
program or develop DPS, nor did we evaluate the solicitation process
for awarding the DPS contract.
We conducted this performance audit from September 2006 through May
2007 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Comments from the Department of Defense:
Deputy Under Secretary Of Defense For Logistics And Materiel Readiness:
3500 Defense Pentagon:
Washington, DC 20301-3500:
May 18, 2007:
Mr. John H. Pendleton:
Acting Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Pendleton:
This is the Department of Defense (DoD) response to the GAO draft
report, GAO-07-671, "Defense Transportation: DoD Needs a Comprehensive
Approach to Planning for Implementing Its New Personal Property
Program," dated April 19, 2007 (GAO Code 350929).
The Department concurs with the GAO recommendations and provides the
enclosed comments.
Sincerely,
Signed by:
Jack Bell:
Enclosure:
As stated:
GAO Draft Report - Dated April 19, 2007 GAO Code 350929/GAO-07-671:
"Defense Transportation: DoD Needs a Comprehensive Approach to Planning
for Implementing Its New Personal Property Program"
Department Of Defense Comments To The Recommendations:
Recommendation 1: The GAO recommended that the Secretary of Defense
direct the Commander, U.S. Transportation Command, to expedite the
evaluation of the program that the John Warner National Defense
Authorization Act for FY 2007 mandated the Department to conduct.
DoD Response: The Department concurs with this recommendation. We are
currently staffing the Congressional report that requires DoD to
evaluate its household goods program. We plan to provide the report to
Congress in August 2007.
Recommendation 2: The GAO recommended that the Department of Defense
employ comprehensive planning to implement the Families First Program
and its associated system. At a minimum, this planning should:
* address specific steps to hire and train personnel so that the
Defense Personal Property System (DPS) Program Office has the human
capital needed to develop and implement the DPS;
* address specific steps to reach agreement with stakeholders on the
essential requirements for the DPS and their priority to facilitate the
development of the DPS; and:
* include an investment strategy that reflects the full cost of
accomplishing the goals of the Families First Program and milestones
for implementation.
DoD Response: The Department concurs with this recommendation.
USTRANSCOM is currently either developing or has already employed plans
to implement this recommendation:
The Defense Personal Property System (DPS) Program Office, (Joint
Program Management Office (JPMO) for Household Goods (HHGS)), in
Alexandria, VA, is staffed with an acquisition certified program
manager and a multi-functional support staff with expertise in
information technology, functional transportation system analysis,
acquisition and business management, engineering and testing. Hiring
actions are in progress to staff the JPMO after relocation in FY 2007
to Scott Air Force Base (SAFB), IL, due to Base Realignment and Closure
(BRAC). As of April, 2007, 22 of 27 government civilian hiring actions
have been initiated, seven job announcements have been posted, and
three candidate lists have been received for review. The new hires will
join the JPMO in the next few months, and be provided "on-the-job"
training. In order to support the implementation of the Families First
Program, the Surface Deployment and Distribution Command (SDDC), in
Alexandria, VA, is currently re- competing the Families First Program
support contract which expires July 31, 2007.
USTRANSCOM implemented a process to "address specific steps to reach
agreement with stakeholders on the essential requirements for the DPS
and their priority to facilitate the development of DPS." This includes
establishing a Functional Review Board (FRB) and a Configuration
Control Board (CCB). This structure has helped stabilize the DPS
baseline functional requirements. The FRB and the CCB provide an
orderly, controlled method for introducing new user requirements into
the system configuration.
* The FRB is co-chaired by USTRANSCOM and the SDDC, and is composed of
representatives from the military Services and the Coast Guard. FRB
members have the following responsibilities:
- Draft new functional requirements using a system change request form:
- Coordinate requirements with Service or Combatant Command user
community prior to FRB:
- Advocate organizational issues/recommendations at the FRB:
- Prioritize functional requirements:
- Chair/participate in FRB working groups as required:
* The DPS FRB process provides specific steps to reach agreement with
stakeholders on essential requirements of DPS and their priority. In
January 2007, USTRANSCOM created the FRB to review and prioritize
proposed system enhancements identified by functional stakeholders. The
FRB began with 618 initial system enhancement requirements from 2006.
In addition, approximately 200 valid change requests were identified
during Systems Acceptance Testing (SAT).
* The DPS Program Office (JPMO HHGS) maintains the DPS requirements
database. This includes all requirements identified by the military
Services and Transportation Service Providers (TSPs), previous FRB
prioritizations, developmental cost, funding status, and status of
requirements development in DPS. The DPS Program Office serves as FRB
advisor on funding, technical, and software issues.
* The prioritized list of system enhancements developed by the FRB is
reviewed by the DPS CCB, which is chaired by the DPS program manager
with representatives from the military Services, Coast Guard,
USTRANSCOM, and SDDC. The CCB evaluates the change requests against
programmatic constraints, and is responsible for costing, funding, and
implementation. Industry representatives are invited in an advisory
capacity to the CCB/FRB as required.
* USTRANSCOM will source $90.766M for DPS continued development,
testing, fielding and maintenance. There is a DPS line item in the
USTRANSCOM Transportation Working Capital Fund budget. In addition,
USTRANSCOM is working with OSD to source an additional $2.755M of
Operating/ Maintenance dollars from transformation funding. USTRANSCOM
will source funds internally, if required.
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
John Pendleton (404) 679-1816 or pendletonj@gao.gov:
Acknowledgments:
In addition to the contact named above, Lawson Gist, Jr., Assistant
Director; Krislin Bolling; Renee S. Brown; Michelle Cooper; Arthur L.
James, Jr; Tina M. Kirschbaum; Lonnie McAllister; Maewanda Michael-
Jackson; Charles W. Perdue; and Bethann Ritter made key contributions
to this report.
[End of section]
Related GAO Products:
Defense Transportation: DOD Has Adequately Addressed Congressional
Concerns Regarding the Cost of Implementing the New Personal Property
Program Initiatives. GAO-05-715R. Washington, D.C.: June 9, 2005.
Defense Transportation: Monitoring Costs and Benefits Needed While
Implementing a New Program for Moving Household Goods. GAO-03-367.
Washington, D.C.: April 18, 2003.
Defense Transportation: Final Evaluation Plan Is Needed to Assess
Alternatives to the Current Personal Property Program. GAO/NSIAD-00-
217R. Washington, D.C.: September 27, 2000.
Defense Transportation: The Army's Hunter Pilot Project Is Inconclusive
but Provides Lessons Learned. GAO/NSIAD-99-129. Washington, D.C.: June
23, 1999.
Defense Transportation: Plan Needed for Evaluating the Navy Personal
Property Pilot. GAO/NSIAD-99-138. Washington, D.C.: June 23, 1999.
Defense Transportation: Efforts to Improve DOD's Personal Property
Program. GAO/T-NSIAD-99-106. Washington, D.C.: March 18, 1999.
Defense Transportation: The Army's Hunter Pilot Project to Outsource
Relocation Services. GAO/NSIAD-98-149. Washington, D.C.: June 10, 1998.
Defense Transportation: Reengineering the DOD Personal Property
Program. GAO/NSIAD-97-49. Washington, D.C.: November 27, 1996.
FOOTNOTES
[1] Household goods transportation includes moving privately owned
vehicles.
[2] Moving companies include household transportation and service
providers commonly referred to as transportation service providers.
[3] Pub. L. No. 109-364, § 363 (2006).
[4] GAO, Defense Transportation: Preliminary Personal Property Pilot
Results Are Inconclusive, GAO/NSIAD-00-52R (Washington, D.C.: Dec. 21,
1999); Defense Transportation: Final Evaluation Plan Is Needed to
Assess Alternatives to the Current Personal Property Program, GAO/
NSIAD-00-217R (Washington, D.C.: Sept. 27, 2000); Defense
Transportation: Monitoring Costs and Benefits Needed While Implementing
a New Program for Moving Household Goods, GAO-03-367 (Washington, D.C.:
Apr. 18, 2003); and Defense Transportation: DOD Has Adequately
Addressed Congressional Concerns Regarding the Cost of Implementing the
New Personal Property Program Initiatives, GAO-05-715R (Washington,
D.C.: June 9, 2005).
[5] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.:
January 2005).
[6] Pub. L. No. 109-364, § 363 (2006).
[7] Pub. L. No. 109-364, § 363 (2006).
[8] Pub. L. No. 109-364, § 363 (2006).
[9] The Army Hunter Pilot Program became part of the Full Service Move
Project pilot program. The other pilot programs were the Military
Traffic Management Command's Reengineered Personal Property Program and
the Navy's Servicemember Arranged Move Pilot.
[10] Minimum valuation means the minimum degree of "worth" of the
shipment.
[11] Performance-based contracting means structuring all aspects of an
acquisition around the purpose of the work to be performed as opposed
to either the manner by which the work is to be performed or broad and
imprecise statements of work. 48 C.F.R. § 37.101 (2007) (Hereinafter
FAR).
[12] This command is commonly referred to as the Surface Deployment and
Distribution Command.
[13] The government statutory maximum amount for a claim is $40,000 and
$100,000 under extraordinary circumstances. 31 U.S.C. § 3721(b)(1)
(2007).
[14] GAO/NSIAD-00-52R, GAO/NSIAD-00-217R, GAO-03-367, and GAO-05-715R.
[15] Pub. L. No. 108-136, § 634 (2003).
[16] 10 U.S.C. § 2636a.
[17] Pub. L. No. 109-364, § 363 (2006).
[18] According to DOD, when a claim is filed directly with the moving
company or contractor within 9 months of delivery, their maximum
liability on all shipments will be the greater of (1) $5,000 per
shipment and (2) $4.00 times either the net weight of the household
goods shipment or the gross weight of the unaccompanied baggage
shipment, in pounds, not to exceed $50,000. On all other loss and
damage claims asserted against the moving company, the company's
maximum liability will be limited to $1.25 times the net weight of the
shipment, in pounds.
[19] Pub. L. No. 109-364, § 363 (2006).
[20] The moving company's overall score is generated from three things:
performance, claims, and rates.
[21] Best-value distribution is the method that will be used to award
shipments to moving companies in Families First. This new traffic
distribution program will award shipments based on best value, not
lowest cost as in the current program. The best-value methodology
combines performance, claims settlement, and rates to identify quality
moving companies.
[22] We did not evaluate this methodology.
[23] Department of Defense, Military Surface Deployment and
Distribution Command, It's Your Move (Alexandria, Va.: Oct. 1, 2006).
[24] According to DOD, the new tariff marks a departure from previous
tariffs and changes the way that transportation rates apply for
interstate and intrastate movers. This tariff incorporates many of the
commonly applied individual additional service charges into a single
origin/destination service fee that applies along with the
transportation charges in order to simplify the application of the
tariff. The other major change is the use of zip codes to rate
shipments. The former point-to-point distance application has been
replaced with a zip code-to-zip code rating system for determining the
transportation charges and additional services.
[25] The Surface Deployment and Distribution Command has developed a
rate reasonableness methodology that will limit the growth in cost of
Families First. According to DOD, this methodology will apply
limitations on rates filed by moving companies in the Families First
program to achieve the goal of keeping cost increases under Families
First at 13 percent or less. Rate reasonableness will be implemented
for both the domestic and international programs. Rates for each
combination of pickup and destination location will have an acceptable
high and low rate per combination.
[26] Nontemporary storage is used when a servicemember needs to store
goods for long periods of time. Nontemporary storage includes necessary
packing, crate unpacking, uncrating, transportation to and from place
of storage, storage, and other directly related necessary services.
Under the direct procurement method, the government manages the
shipment throughout. Packing, containerization, delivery, unpacking,
storage, and related services are obtained from commercial firms under
a contractual arrangement or by the use of government facilities and
employees.
[27] DOD decided to implement DPS using a phased approach to manage
risks given the difficulties during development.
[28] In commenting on a draft of this report, DOD stated that this
software problem has been fixed.
[29] According to U.S. Transportation Command officials, this issue was
later resolved, and moving companies will have one opportunity per year
to file the rates they charge DOD to move servicemembers.
[30] The international rate solicitation was released in April 2007.
[31] The 2006 household goods portion of the permanent change of
station budget is about $1.8 billion, which, when adjusted for
inflation in 2007 using the Gross Domestic Product Price Index
inflation rate of 2.0 percent, is about $1.84 billion. Thirteen percent
of $1.84 billion is $2.07 billion, which is about $240 million more
than the current program would have cost for 2007. Over 5 years, this
results in a $1.2 billion increase over the current program's costs.
[32] Moving companies submit rates for each combination, and DPS will
automatically reject rates that are outside the established ranges.
Moving companies then have one opportunity to resubmit new rates to
replace the rejected rates. If resubmitted rates are still outside the
rate reasonableness range, the moving companies will be prevented from
being awarded shipments for that combination of pickup and drop-off
destinations for 1 year.
[33] Department of Defense, U.S. Transportation Command Personal
Property Pilot Programs Evaluation Report, June 2002.
[34] GAO-03-367.
[35] Department of Defense, U.S. Transportation Command, Defense
Personal Property System: Economic Analysis, January 8, 2004.
[36] We asked current program officials if they knew why previous
program officials had not used SmartWebMove, and they said they did not
know why it was not used. In commenting on a draft of this report, DOD
stated that it sought various software options and did not prescribe a
specific software solution such as SmartWebMove in order to contract
for a best-value solution.
[37] The Business Process Reengineering Assessment Guide found in GAO,
Defense Systems Modernization: Management of Integrated Military Human
Capital Program Needs Additional Improvements, GAO-05-189 (Washington,
D.C.: Feb. 11, 2005); Best Practices Relevant to Any IT Business
Systems Acquisition and Complementary Best Practices Relevant to
Commercial Component-Based IT Business Systems Acquisitions found in
Information Technology: DOD's Acquisition Policies and Guidance Need to
Incorporate Additional Best Practices and Controls, GAO-04-722
(Washington, D.C.: July 30, 2004); and Results-Oriented Cultures:
Implementation Steps to Assist Mergers and Organizational
Transformations, GAO-03-669 (Washington, D.C.: July 2, 2003).
[38] Pub. L. No. 109-364, § 363 (2006).
[39] In commenting on a draft of our report, DOD stated that it had
representatives from the military services, the household goods
industry and experts from the Surface Deployment and Distribution
Command teamed together to create the Families First business rules. It
also stated that these rules were provided to the services and industry
for their comment and that the services have not indicated that they
could not use the business rules developed by the Surface Deployment
and Distribution Command. While we understand that several years ago
when DPS was first being developed, these groups came together to
discuss DPS requirements, our evidence indicates that (1) DOD may not
have had the level of agreement with stakeholders it originally thought
when it compiled the requirements for DPS and (2) DPS testing in
January and February 2007 illustrated that some requirements were
either ill-defined when requirements were generated or that it was not
until stakeholders were able to test the functionality of the
requirements that it was discovered there was a disconnect in how the
requirement was defined and the functionality that was actually needed.
[40] According to DOD, although moving companies file rates once per
year, the annual filing includes two sets of rates, one set covering
the summer cycle and one covering the winter cycle.
[41] Although DOD plans to have a minimum performance score, DOD
personal property officials called the current minimum score generous
and noted that it could change over time. In responding to a draft of
this report, DOD said that it believes that the mandatory requirement
for moving companies to provide full replacement value coverage on all
DOD household goods moves will drive companies to reduce the occurrence
of damages and therefore improve the quality of moves.
[42] The Surface Deployment and Distribution Command plans to use a
hybrid performance score that will give moving companies credit for all
surveys earned and supplement each moving company with just enough
neutral surveys to achieve statistical validity, when applicable. The
neutral surveys are each equal to the median performance score in each
market.
[43] A firm-fixed-price contract provides for a price that is not
subject to any adjustment on the basis of the contractor's cost
experience in performing the contract. FAR section 16.202-1.
[44] As of February 2007, the DPS program office estimated that the
costs for maintaining a program office, sustaining the legacy system
through retirement, developing and sustaining DPS, and implementing a
future household goods program through fiscal year 2011 would be about
$180 million if all of the requirements are funded.
[45] Pub. L. No. 109-364, § 363 (2006).
[46] Pub. L. No. 109-364, § 363 (2006).
[47] In DOD's comments, it refers to this board as the Functional
Review Board.
[48] GAO, Defense Transportation: Monitoring Costs and Benefits Needed
While Implementing a New Program for Moving Household Goods, GAO-03-367
(Washington, D.C.: Apr. 18, 2003), and Defense Transportation: DOD Has
Adequately Addressed Congressional Concerns Regarding the Cost of
Implementing the New Personal Property Program Initiatives, GAO-05-715R
(Washington, D.C.: June 9, 2005).
[49] GAO-03-367.
[50] Department of Defense, U.S. Transportation Command, Economic
Analysis: Defense Personal Property System, January 8, 2004.
[51] The Business Process Reengineering Assessment Guide found in GAO,
Defense Systems Modernization: Management of Integrated Military Human
Capital Program Needs Additional Improvements, GAO-05-189 (Washington,
D.C.: Feb. 11, 2005); Best Practices Relevant to Any IT Business
Systems Acquisition and Complementary Best Practices Relevant to
Commercial Component-Based IT Business Systems Acquisitions found in
Information Technology: DOD's Acquisition Policies and Guidance Need to
Incorporate Additional Best Practices and Controls, GAO-04-722
(Washington, D.C.: July 30, 2004); Results-Oriented Cultures:
Implementation Steps to Assist Mergers and Organizational
Transformations, GAO-03-669 (Washington, D.C.: July 2, 2003); and
Agencies' Annual Performance Plans Under the Results Act: An Assessment
Guide to Facilitate Congressional Decisionmaking, GAO/GGD/AIMD-10.1.18
(Washington, D.C.: February 1998).
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