Overview of DOD’s BEA

DOD’s BEA is intended to serve as a blueprint for the department’s  business transformation efforts. However, the department still faces  challenges in complying with key parts of the act and managing its  business systems. Without continued progress in improving its investment management  approach, DOD will be challenged in its ability to manage the billions of  dollars invested annually in modernizing its business system investments. While officials from the  Office of the DCMO stated that different systems are reviewed with  different levels of scrutiny based on various factors, those factors are not  documented in existing guidance. Until DOD ensures that investments  are reviewed at an appropriate level based on defined criteria, the DBC is  at an increased risk of failing to identify and address important issues  associated with large-scale and costly systems. For fiscal year  2014, the department certified and approved most of its business systems  investments. In addition, it has made significant improvements to the data  used to manage information about these investments. They also stated  that extensive manual cleanup efforts had been ongoing since the  beginning of the investment review process. Enterprise Transition Plan Content Has Been Improved and Is Consistent with Portfolio- Based Investment Management Approach

The act calls for the development of an ETP that implements the BEA and  covers all defense business systems and includes a listing of the  (1) new systems that are expected to be needed to complete the target  defense business systems computing environment, along with each  system’s performance measures, financial resource needs, and  risks or challenges to integration into the BEA;  (2) legacy systems that will be phased out of the defense business  systems computing environment within 3 years, together with the  schedule for terminating those legacy systems; and  (3) existing systems that are part of the target defense business systems  computing environment, as well as a strategy for making the  modifications to those systems that will be needed to ensure that such  systems comply with the defense BEA, including time-phased milestones,  performance measures, and financial resource needs. Recommendations for Executive Action

We are recommending that the Secretary of Defense direct the  appropriate DOD management entity to take the following three actions to  help ensure that the department’s business systems modernization  program is fully compliant with the act and is more effectively  implemented:
Define by when and how the department plans to align its business  system certification and approval process with its Planning,  Programming, Budgeting, and Execution process. In its comments, the department concurred with  two recommendations and partially concurred with one recommendation. The department partially concurred with our second recommendation, to  define criteria for reviewing defense business systems at an appropriate  level in the department, in support of the certification and approval  process. Appendix I: Objective, Scope, and Methodology

Our objective was to assess the actions taken by the Department of  Defense (DOD) to comply with section 332 of the National Defense  Authorization Act for Fiscal Year 2005 as amended.
Why GAO Did This Study

GAO designated DOD's multibillion-dollar business systems modernization program as high risk in 1995, and since then has provided a series of recommendations aimed at strengthening DOD's institutional approach to modernizing its business systems investments. Section 332 of the Fiscal Year 2005 NDAA requires the department to take specific actions relative to its modernization efforts and GAO to assess actions taken by DOD to comply with section 332 of the act. In evaluating DOD's compliance, GAO analyzed, among other things, investment management policies and procedures, certification actions for business system investments, and the latest versions of the department's business enterprise architecture and enterprise transition plan.

What GAO Found

The Department of Defense (DOD) has developed a portfolio-based investment management process for its defense business systems, certified and approved a majority of its defense business systems, made key improvements to the data used to manage its business investments, and updated its transition plan to assist its efforts in complying with key provisions of section 332 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (NDAA or “the act”), as amended (10 U.S.C. § 2222). However, the department continues to face challenges in fully complying with the act's requirements, modernizing its business systems environment, and addressing GAO's prior recommendations (see table).
Department officials cited various reasons for the shortfalls noted above. For example, they stated that aligning the investment review process with the budgeting process takes time to coordinate. They also noted that different systems are reviewed with different levels of scrutiny based on various factors, but those factors are not documented in existing guidance. Continued progress in improving its investment management approach will allow DOD to more effectively manage the billions of dollars the department invests annually in modernizing its business systems.

What GAO Recommends

GAO is making three recommendations to help improve the department's business system investment management process and business enterprise architecture. DOD concurred with two recommendations and partially concurred with the third—to define criteria for reviewing business systems at appropriate levels in the department. In particular, DOD noted that systems are reviewed within components before being reviewed by the executive-level investment review board. However, until DOD ensures that investments are reviewed at an appropriate level based on defined criteria such as cost, scope, complexity, and risk, the department is at an increased risk of failing to identify and address important issues associated with large-scale and costly systems.