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. 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. In addition, the legacy system’s hardware has been  breaking down. 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. 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. 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 a 2002 report, DOD estimated that implementing the information  technology improvements to enhance its data management capabilities for  Families First would cost $4 million to $6 million. 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. 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. 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. For example, DOD  has a draft transition plan for organizational changes and the DPS program  office has a plan for DPS development. If this is not resolved, DOD may be challenged to  meet the program’s goal of improving the quality of service from moving  companies. Further, the moving industry expected that DPS would interface with their  computer systems, but this is not yet part of DPS. Additional delays in the schedule  because of problems developing the software will likely increase the costs  associated with the program. Conclusions

Despite DOD’s recent focus on its personal property program, long- standing problems persist. 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. 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 also interviewed officials and  stakeholders. Defense Transportation: Efforts to Improve DOD’s Personal Property  Program.
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.