Conclusions

DOD’s management of SPS is a lesson in how not to justify, make, and monitor the implementation of IT investment decisions. Specifically, 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 before investing in it, (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. Currently, DOD is not effectively performing any of these basic tenets of effective investment management on SPS, and, as a result, DOD lacks the basic information needed to make informed decisions about how to proceed with the project. Nevertheless, DOD continues to push forward in acquiring and deploying additional versions of SPS. Continuing with this approach to investment management introduces considerable risk. 3. Initial Implementation of the Standard Procurement System, Office of the Inspector General, Department of Defense (Report No.
Why GAO Did This Study

This report reviews the Department of Defense's (DOD) ability to contract for goods and services by acquiring and implementing a standard procurement system (SPS).

What GAO Found

DOD's management of SPS is a lesson in how not to justify, make, and monitor the implementation of information technology investment decisions. Specifically, 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. Because it has yet to effectively apply any of these basic tenets of effective investment management to SPS, 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. Continuing this approach involves considerable risk. GAO summarized this report in testimony before Congress; see DOD's Standard Procurement System: Continued Investment Has Yet to Be Justified, by Joel C. Willemssen, Managing Director for Information Technology Issues, before the Subcommittee on National Security, Veterans Affairs, and International Relations, House Committee on Government Reform. GAO-02-392T , Feb. 3 (13 pages).