GCSS-Army Program Schedule and Cost Estimates Did Not Fully Meet Best Practices

We found that the program schedule and cost estimates for the GCSS- Army did not fully meet best practices. Specifically, the GCSS-Army  schedule supporting the December 2012 full deployment decision partially  met the comprehensiveness and construction characteristics and  substantially met the credibility and control characteristics for developing  a high-quality and reliable schedule. In addition, the cost estimate fully  met the comprehensiveness characteristic, substantially met the  documentation and accuracy characteristics, and partially met the  credibility characteristic for developing a high-quality and reliable cost  estimate. However, resources were not loaded into the  schedule software and were not assigned to specific activities in the  schedule. Without a valid critical path, management cannot focus on activities  that will have detrimental effects on the key project milestones and  deliverables if they slip. The  schedule was substantially horizontally integrated, which means that  outcomes were aligned with sequenced activities. The cost estimate included both government and  contractor costs of the program over its life cycle—from the inception of  the program through design, development, deployment, and operation  and maintenance. We found that the cost estimate for GCSS-Army was substantially well- documented. The cost estimate captured such things as the calculations  performed to derive each element’s cost and the results of the  calculations. The  program management officials’ cost estimate mentioned results of a risk  analysis; however the risk and uncertainty analysis was not documented. Conclusions

While the Army made some improvements to the schedule and cost  estimates that supported the full deployment decision, the Army did not  fully meet best practices in developing schedule and cost estimates for  the GCSS-Army program. By incorporating best practices for  developing reliable schedule and cost estimates, DOD would increase the  probability of GCSS-Army successfully achieving full deployment by the  fourth quarter of fiscal year 2017 to provide needed functionality for  financial improvement and audit readiness. Recommendations for Executive Action

To help improve the implementation of GCSS-Army, we recommend that  the Secretary of the Army take the following two actions:
Ensure that the Under Secretary of the Army, in his capacity as the  Chief Management Officer, directs the GCSS-Army Program  Management Office to develop an updated schedule that fully  incorporates best practices, including assigning resources to all activities, establishing durations of all activities, confirming that the critical path is valid, and ensuring reasonable total float. DOD described  completed actions that the department has taken to address the  recommendation. As stated in our report, we focused on the extent to  which GCSS-Army’s schedule and cost estimates were prepared  consistent with GAO’s Schedule and Cost Guides. As stated in our report, incorporating best practices for a  reliable cost estimate would help ensure that DOD has a reliable cost  estimate that provides the basis for effective resource allocation,  proactive course correction when warranted, and accountability for  results. Appendix II: Assessment of the Global Combat Support System-Army Program’s Cost Estimate

This appendix provides the results of our analysis of the extent to which  the Global Combat Support System-Army cost estimate supporting the  December 2012 full deployment decision met the characteristics of a  high-quality cost estimate.
Why GAO Did This Study

DOD officials have stated that the implementation of enterprise resource planning systems, such as GCSS-Army, is critical to the department's goal of correcting financial management deficiencies and ensuring that its financial statements are validated as audit ready by September 30, 2017, as called for by the National Defense Authorization Act for Fiscal Year 2010.
GAO was asked to review the schedule and cost estimates for selected DOD systems. This report addresses the extent to which the schedule and cost estimates for GCSS-Army were prepared consistent with GAO's Schedule and Cost Guides. The schedule and cost estimates are designed to cover GCSS-Army implementation through 2017.
GAO assessed the schedule and cost estimates that supported DOD's December 2012 full deployment decision, which granted approval for GCSS-Army to be deployed for operational use to all remaining locations. GAO also met with GCSS-Army program officials, including lead schedulers and cost estimators.

What GAO Found

The Army made some improvements to its schedule and cost estimates that supported the December 2012 full deployment decision for the Global Combat Support System-Army (GCSS-Army); however, the schedule and cost estimates did not fully meet best practices. GAO found that the schedule substantially met the credibility and control characteristics for developing a high-quality and reliable schedule. For example, the schedule was horizontally integrated, which means that it links products and outcomes with other associated sequenced activities. In addition, the GCSS-Army program management officials followed general guidelines for updating the schedule on a regular basis. GAO found that the schedule partially met the comprehensiveness and construction characteristics for a reliable schedule. Specifically, resources were not assigned to specific activities, and the schedule lacked a valid critical path, preventing management from focusing on the activities most likely to have detrimental effects on key program milestones if not completed as planned. By incorporating best practices for developing a reliable schedule, the Department of Defense (DOD) would increase the probability of completing the GCSS-Army program by the projected date.
GAO found that the GCSS-Army cost estimate fully or substantially met the comprehensiveness, documentation, and accuracy characteristics of a high-quality and reliable cost estimate. For example, the cost estimate included both government and contractor costs for the program over its life cycle, provided documentation that substantially described detailed calculations used to derive each element's cost, and was adjusted for inflation. In addition, GAO found that the cost estimate partially met the credibility characteristic of a reliable cost estimate. Although program management officials provided a cost model that discussed a limited risk analysis, the results of the risk and uncertainty analysis were not documented. Incorporating best practices would help ensure that DOD has a reliable cost estimate that provides the basis for effective resource allocation, proactive course correction when warranted, and accountability for results.

What GAO Recommends

GAO is making two recommendations aimed at improving the Army's implementation of schedule and cost best practices for GCSS-Army. DOD concurred, but the completed actions it described related to the cost estimate were not fully responsive to GAO's recommendation. GAO continues to believe that fully incorporating best practices in the cost estimate would help improve its reliability.