Defense IRM

Although the Defense Department (DOD) is striving to cut costs at its computer centers, millions of dollars may be wasted because DOD has yet to develop an effective framework for deciding how to consolidate, modernize, and contract out computer center operations. DOD and the military services have consolidated several computer centers in recent years and contracted with the private sector for information processing services that had been done in-house. DOD recognizes that opportunities exist for further consolidations because, according to DOD reports, about 40 percent of its computer centers still fall well below governmentwide minimum processing capacity targets. Unless DOD better manages its computer center strategies, at best it will achieve optimization only at the component level and forgo optimization for the department as a whole.

GAO noted that: (1) DOD has recognized the need to continue reductions in the cost of its computer centers' operations through consolidation, modernization, and outsourcing, but it has not yet established an effective framework for making these decisions; (2) this framework would include departmentwide policies and procedures critical to the success of its efforts to improve computer centers; (3) these policies and procedures would establish targets for how many computer centers DOD actually needs, define how mainframes and mid-tier computer operations should be consolidated, and identify the numbers and skill mix of staff that are required to operate the centers, and what constitutes an optimum computer center; (4) DOD also has no mechanism for ensuring that the best money-saving opportunities have been considered by the individual services and components or that consolidation efforts will conform to federal requirements or even meet the needs of DOD as a whole; (5) as a result, DOD services and components have developed individual strategies for consolidating and modernizing their computer centers that are inconsistent and contradictory to DOD as a whole and may well cause DOD to waste millions of dollars in computer center expenditures; (6) in addition, the consolidation strategies of the military services and DOD components did not always fully address critical planning elements required by the Office of Management and Budget (OMB) requirements that could help reduce the risk of waste, including alternative analyses, high-level implementation plans, and funding plans; (7) further, GAO found that the OMB and departmental guidance, particularly addressing mid-tier computer centers, was unclear; (8) this resulted in inconsistent interpretation and reporting for these centers; (9) therefore, OMB and DOD do not have assurance that the computer consolidation strategies are sound; (10) without better management over the implementation of its computer center strategies, DOD at best will only achieve optimization at the component level and forgo optimization for DOD as a whole; and (11) moreover, DOD's chief information officer (CIO) is now required by the Paperwork Reduction Act of 1995, Clinger-Cohen Act of 1996, and the Fiscal Year 1997 DOD Authorization Act to develop and implement a plan for a management framework with policies and procedures as well as effective oversight mechanisms for ensuring that major technology related efforts, such as the computer center consolidations, conform to departmentwide goals.

Recommendations

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

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