DUSD(L) Did Not Use Sufficient Analyses in Selecting DMSS

In selecting DMSS as DOD’s initial step toward improving defense maintenance depot operations, the Deputy Under Secretary of Defense for Logistics (DUSD(L)) did not base its decision on sufficient analyses of expected system development and deployment costs or detailed assessments of DMSS’s economic and technical risks. Further, DUSD(L) did not obtain independent milestone reviews and approvals which are designed to ensure (1) decisions are consistent with sound business principles and (2) risks inherent in large information systems projects are adequately managed. Reengineering Not Considered for Improving Depot Maintenance

Instead of first considering opportunities to reengineer business processes, DUSD(L) chose a strategy that focuses on the development and deployment of a DOD standard depot maintenance information system. Government and private industry have learned that initial focus on information system deployment may make future reengineering efforts more difficult by entrenching inefficient and ineffective work processes. Defense asserts that by following this strategy, it has achieved substantial depot maintenance improvements yielding significant cost reductions. To identify expected DMSS costs and benefits, we analyzed available functional economic analyses (FEA). GAO Comments

1. 3. It is clear from Defense’s own benefit projections that DMSS will not result in dramatic improvements possible from consideration of reengineering-based solutions. 4.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) justification for developing and deploying its Depot Maintenance Standard System (DMSS), focusing on whether DOD has: (1) based its DMSS selection on costs and benefit analyses as well as economic and technical risks; and (2) selected a strategy that would dramatically improve depot maintenance operations.

What GAO Found

GAO found that: (1) DOD has not based its DMSS decisions on sufficient cost and benefit analyses or detailed assessments of economic and technical risks; (2) DOD may not achieve the marginal improvements envisioned, since it has failed to obtain project milestone reviews or approvals for DMSS that would ensure that system development and implementation decisions are consistent with sound business practices; (3) DMSS will not dramatically improve DOD depot maintenance or produce significant cost savings, since DOD has not reengineered its business practices; and (4) DOD may have made future reengineering efforts more difficult by entrenching inefficient and ineffective work processes.