Materiel Management Systems Intended to Improve Various Business Processes

Defense wants to develop and deploy materiel management systems to improve business operations and processes nationally for DOD materiel management and reduce the costs associated with inventory, personnel, and inefficient systems. Rather, it now plans to individually deploy each of the nine system applications as they are developed at selected sites from fiscal year 1996 through fiscal year 1999. Additionally, by not analyzing and anticipating costs and risks associated with the new strategy, JLSC officials told us that they do not know how much it will cost to maintain the legacy systems that will remain under the new strategy and what it will cost to interface the new applications with the legacy systems. In November 1995, JLSC reported that the identification and development of more than 3,000 interfaces to existing legacy systems in support of multiple deployments is the prime technical risk facing the program. Agency Comments and Our Evaluation

The Department of Defense provided written comments on a draft of this report. The original objectives of our review were to determine (1) the mission and the economic and technical basis for selecting MMSS as the migrating system and (2) the extent to which this strategy has or will improve DOD’s materiel management operations. We believe that before these systems are deployed to the services and the agencies, Defense needs to ensure that testing is sufficient. 3. 4. 5. 6. 7. 8. Since the system’s deployment, users have experienced problems that should have been detected during the system’s testing.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) Joint Logistics Systems Center's (JLSC) development and deployment of standard materiel management systems.

What GAO Found

GAO found that: (1) DOD development of nine integrated materiel management systems will cost more than the $5.3 billion originally estimated; (2) DOD plans to deploy each system individually at a selected site; (3) DOD is embarking on a new materiel management strategy to ensure that the additional funds spent on the systems are well invested; (4) DOD has not conducted economic or risk assessments of the new systems, or incorporated efforts to improve, consolidate, and privatize logistics operations; (5) DOD has failed to define the objectives, costs, and risks of its new materiel management strategy, thus denying DOD decisionmakers the opportunity to review the systems before deployment; (6) DOD is proceeding with its scheduled deployments without allocating necessary time for systems testing; (7) this action will increase the likelihood of DOD experiencing problems during systems testing; and (8) DOD will incur significant costs in operating and maintaining the legacy system due to existing deficiencies within the system.