We did not validate the accuracy of the information provided by DOD on the numbers and costs of computer centers, the alternatives analyses, funding plans, and processing capacities. Further, the National Defense Authorization Act for Fiscal Year 1997 requires the Secretary of Defense to report the Department’s plan for establishing an integrated framework for management of information resources within the Department by March 1, 1997. Consolidation Strategies Do Not Meet OMB Requirements

Most of the consolidation strategies submitted by the military services and components to OMB failed to fully address all of the planning elements addressed in the Bulletin. Therefore, DOD and OMB do not have assurance that the services and components are addressing these critical planning elements in carrying out their strategies or that the approaches they have chosen are sound. First, it has not set targets or established policy for basic things, such as how many computer centers the Department actually needs, the numbers and skill mix of staff that are required to operate the centers, and what constitutes an optimum computer center. It also has no mechanism for ensuring that the best money-saving opportunities have been considered by the individual services and components or that consolidation efforts will conform to federal requirements or even the needs of the Department as a whole. Under the Paperwork Reduction Act of 1995 and the Clinger-Cohen Act, passed in 1996, the Assistant Secretary of Defense for Command, Control, Communications and Intelligence, as DOD’s Chief Information Officer (CIO), is supposed to develop and implement management policy and procedures to ensure that major information technology related efforts conform to departmentwide goals. Conclusions

Without better coordination and oversight of computer center consolidation efforts, the best Defense can hope to achieve from its computer center consolidations is optimization at or below the component level. Moreover, millions of dollars in computer center investments and operating expenses may well end up being wasted since individual components and services are planning without departmentwide information processing needs in mind and without the benefit of clearly defined organizationwide policies and procedures for the consolidation efforts and effective oversight mechanisms. They should be for Defense as well. We also recommend that as a basis for this plan and for future decisions concerning consolidation, modernization, and outsourcing of computer centers, Defense’s Chief Information Officer develop policies and related procedures that address the following: (1) what constitutes an optimum computer center in terms of processing capacity and staff numbers and skills; (2) how many computer centers are needed; (3) which of its computer center operations are inherently governmental and/or require component-unique centers solutions and thus cannot be consolidated or outsourced; (4) how DOD should compare its computer center services with those of other public-sector and private-sector services in terms of cost, speed, productivity, and quality of outputs and outcomes; and (5) which cost and performance goals are relevant for comparing departmentwide alternatives. A high-level implementation approach was submitted to OMB.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed: (1) the Department of Defense's (DOD) plans to consolidate, outsource, and modernize its computer center operations; and (2) whether DOD has an effective framework in place for making and executing these decisions. GAO did not validate the accuracy of the information provided by DOD on the numbers and costs of computer centers, the alternative analyses, funding plans, and processing capacities.

What GAO Found

GAO noted that: (1) DOD has recognized the need to continue reductions in the cost of its computer centers' operations through consolidation, modernization, and outsourcing, but it has not yet established an effective framework for making these decisions; (2) this framework would include departmentwide policies and procedures critical to the success of its efforts to improve computer centers; (3) these policies and procedures would establish targets for how many computer centers DOD actually needs, define how mainframes and mid-tier computer operations should be consolidated, and identify the numbers and skill mix of staff that are required to operate the centers, and what constitutes an optimum computer center; (4) DOD also has no mechanism for ensuring that the best money-saving opportunities have been considered by the individual services and components or that consolidation efforts will conform to federal requirements or even meet the needs of DOD as a whole; (5) as a result, DOD services and components have developed individual strategies for consolidating and modernizing their computer centers that are inconsistent and contradictory to DOD as a whole and may well cause DOD to waste millions of dollars in computer center expenditures; (6) in addition, the consolidation strategies of the military services and DOD components did not always fully address critical planning elements required by the Office of Management and Budget (OMB) requirements that could help reduce the risk of waste, including alternative analyses, high-level implementation plans, and funding plans; (7) further, GAO found that the OMB and departmental guidance, particularly addressing mid-tier computer centers, was unclear; (8) this resulted in inconsistent interpretation and reporting for these centers; (9) therefore, OMB and DOD do not have assurance that the computer consolidation strategies are sound; (10) without better management over the implementation of its computer center strategies, DOD at best will only achieve optimization at the component level and forgo optimization for DOD as a whole; and (11) moreover, DOD's chief information officer (CIO) is now required by the Paperwork Reduction Act of 1995, Clinger-Cohen Act of 1996, and the Fiscal Year 1997 DOD Authorization Act to develop and implement a plan for a management framework with policies and procedures as well as effective oversight mechanisms for ensuring that major technology related efforts, such as the computer center consolidations, conform to departmentwide goals.