To help the laboratories and test centers with these problems, the  Congress enacted legislation in fiscal years 1999 and 2000 establishing  pilot programs for laboratories and test centers to propose innovative  partnerships, business-like practices, and human capital initiatives. In fiscal year 2003, the Congress authorized another 3-year pilot program  and extended the 1999 and 2000 pilot programs until 2005. Many Initiatives Were Proposed but Few Were Implemented under Pilot Programs

Since the inception of the pilot programs in 1999, 178 initiatives have  been proposed, but only 4—or 2 percent—have been implemented  under the pilot programs. Participating laboratories and test centers  proposed initiatives covering a variety of areas, including business-like  practices, partnerships with industry and academia, and human capital  innovations. First, DOD did not develop an effective process for  implementing the pilot programs. Second, DOD determined that proposed  human capital initiatives—for example, requests for the authority to hire  directly or offer voluntary retirement incentives—were in conflict with  statutory provisions. Lack of an Effective Implementation Process

DOD did not provide standardized guidance on proposal requirements  or feedback for improving proposals; coordinate or prioritize proposals;  or clarify decision-making authority for proposal review and approval. The lack of a strong focal point exacerbated other  process gaps. Unclear Decision-Making Authority

DOD did not clarify decision-making authority for proposal review and  approval. No Strong Focal Point

DOD did not designate a strong focal point to coordinate the pilot  programs, advocate process improvements, and provide assistance and  advice to participants. The 2003 Pilot Program Faces Implementation Challenges

The 2003 pilot program faces several implementation challenges. First,  as of May 2003, DOD had not addressed implementation problems. Finally, laboratories and test centers may be reluctant to participate in the  new pilot program. Many participants in the earlier pilots told us they were  discouraged by their experience and consequently unwilling to repeat it.
Why GAO Did This Study

In fiscal years 1999, 2000, and 2003, the Congress authorized pilot programs to help the Department of Defense (DOD) laboratories and test centers explore innovative business partnerships and human capital strategies. Congressional concerns about DOD's implementation of the pilot programs have been growing. The Congress mandated that GAO review pilot program implementation. GAO (1) identified the pilot initiatives proposed and their current status, (2) examined factors that affected implementation, and (3) assessed implementation challenges the 2003 pilot program faces.

What GAO Found

The 1999 and 2000 pilot programs have not worked as intended. Since their inception, 178 initiatives have been proposed by the participating laboratories and test centers but only 4--or 2 percent--were implemented under the pilot programs. Participants proposed initiatives covering a variety of areas, including business-like practices, partnerships, and human capital innovations. The pilot programs were not effective because DOD lacked an effective implementation process and proposed human capital initiatives were not consistent with statutory provisions. First, DOD did not provide standardized guidance on proposal requirements, coordinate proposals, or clarify decision-making authority for proposal review and approval. Furthermore, DOD did not designate a strong focal point to provide assistance and advice to participants and advocate process improvements. The lack of a strong focal point exacerbated other process gaps. Second, DOD attorneys advised that the pilot programs did not provide authority to make most of the proposed human capital changes. Implementation of the new 2003 pilot program faces several challenges. First, DOD has not addressed implementation problems. For example, clear guidance is still lacking and decision-making authority is still unclear. Second, the 2003 pilot program provides no change in authority concerning human capital initiatives. Finally, laboratories and test centers may be reluctant to participate. Many participants in the earlier pilots told us they were discouraged by their experience and consequently unwilling to repeat it.