Since our report of July 2001, DOD has revised its plans. Together, they  provide for  (1) economically justifying proposed projects on the basis of reliable  analyses of expected life-cycle costs, benefits, and risks; and  (2) using these analyses throughout a project’s life-cycle as the basis for  investment selection, control, and evaluation decisionmaking, and  doing so for large projects (to the maximum extent practical) by  dividing them into a series of smaller, incremental subprojects or  releases and individually justifying investment in each separate  increment on the basis of costs, benefits, and risks. (See  table 2 for a summary of the department’s progress against commitments.) Rather, the objective was simply to acquire and deploy the system. For programs such as SPS, DOD required this  cost, schedule, and performance information to be reported quarterly to  ensure that programs did not deviate significantly from expectations. Third, not all  defense components have agreed to adopt SPS.
Why GAO Did This Study

The Department of Defense (DOD) lacks management control of the Standard Procurement System (SPS). DOD has not (1) ensured that accountability and responsibility for measuring progress against commitments are clearly understood, performed, and reported; (2) demonstrated, on the basis of reliable data and credible analysis, that the proposed system solution will produce economic benefits commensurate with costs; (3) used data on progress against project cost, schedule, and performance commitments throughout a project's life cycle to make investment decisions; and (4) divided this large project into a series of incremental investment decisions to spread the risks over smaller, more manageable components.

What GAO Found

GAO found that DOD lacks the basic information needed to make informed decisions on how to proceed with the project. Nevertheless, DOD continues to push forward in acquiring and deploying additional versions of SPS. This testimony summarizes a July report (GAO-01-682).