As stated earlier, in October 2010, we reported that although the Air  Force met best practices in developing a cost estimate, it did not meet  best practices in developing the schedule estimate for implementing  DEAMS. In particular, the Air Force had not developed a fully integrated  master schedule that reflected all government and contractor activities. DOD  concurred with our recommendation, and we discuss later in this report  the status of DOD’s efforts to address this recommendation. DEAMS Program Schedule Did Not Meet Best Practices, but the Cost Estimate Did Meet Best Practices

We found that the schedule for the DEAMS program did not meet best  practices. The cost estimate did meet best practices, but the issues  associated with the schedule could negatively affect the cost estimate. Specifically, the DEAMS schedule supporting the February 2012  Milestone B decision partially or minimally met the four characteristics for  developing a high-quality and reliable schedule—it was not  comprehensive, well-constructed, credible, or controlled. In addition, our  assessment of the October 2012 updated schedule found that it was not  comprehensive, well-constructed, and credible and thus was also not  reliable. In contrast, the DEAMS cost estimate fully or substantially met  the four characteristics of a high-quality and reliable cost estimate—it was  comprehensive, well-documented, accurate, and credible. Resources were identified in the schedule; however, the resources 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 deliveries if they  slip. A schedule risk analysis should  also be performed using statistical techniques to predict the level of  confidence in meeting a program’s completion date. Similar to the previous schedule, the updated schedule presented  unreasonable float throughout and did not include a schedule risk  analysis. In May 2013, program management officials provided another updated  DEAMS schedule that they stated included some improvements, but they  acknowledged that it contained issues that prevented the schedule from  meeting best practices. However, because the cost estimate relies  on dates derived from the schedule and we are questioning the reliability  of the forecasted program dates, the credibility of the cost estimate can  be affected. 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—as  outlined in the roadmap prepared by program officials. We found that the cost estimate for DEAMS was accurate. We found that the cost estimate was credible. Recommendation for Executive Action

To help provide for the successful implementation of DEAMS, we  recommend that the Secretary of the Air Force direct the Under Secretary  of the Air Force, in his capacity as the Chief Management Officer, to  consider and make any necessary adjustments to the DEAMS cost  estimate after addressing our prior recommendation to adopt scheduling  best practices. Appendix II: Assessment of the Defense Enterprise Accounting and Management System Program’s Cost Estimate

This appendix provides the results of our analysis of the extent to which  the Defense Enterprise Accounting and Management System (DEAMS)  cost estimate supporting the February 2012 Milestone B decision met the  characteristics of a high-quality cost estimate.
Why GAO Did This Study

The Department of Defense (DOD) has stated that the development and implementation of DEAMS is critical to the department's goal of producing auditable financial statements by September 2017. In October 2010, GAO reported that although the Air Force had developed a cost estimate that met best practices, it had not developed a schedule that met best practices for implementing DEAMS. GAO has published guides that identify the characteristics and associated best practices for developing reliable schedule and cost estimates. GAO was asked to review the schedule and cost estimates for selected DOD systems. This report addresses the extent to which the current schedule and cost estimates for DEAMS were prepared in accordance with GAO's Schedule and Cost Guides.
Specifically, GAO's review focused on the schedule and cost estimates that supported DOD's February 2012 Milestone B decision, which determined that investment in DEAMS was justified. GAO assessed the schedule and cost estimates and supporting documentation. GAO also assessed an updated schedule dated October 2012. GAO interviewed DEAMS program officials, lead schedulers, and cost estimators.

What GAO Found

The Air Force's schedule that supported the February 2012 Milestone B decision for the Defense Enterprise Accounting and Management System (DEAMS) did not meet best practices. The cost estimate did meet best practices, but the issues associated with the schedule could negatively affect the cost estimate. GAO found that the schedule supporting the Air Force's decision to invest in DEAMS partially or minimally met the four characteristics for developing a high-quality and reliable schedule. For example, the schedule did not reflect all government and contractor activities, and resources were not assigned to specific activities. The schedule also lacked a valid critical path, preventing management from focusing on the activities most likely to cause critical program delays if they are not completed as planned. In addition, a schedule risk analysis was not conducted to predict a level of confidence in meeting the program's completion date.
GAO found that the October 2012 updated schedule estimate was not comprehensive, well-constructed, and credible, and contained weaknesses similar to those found in the previous schedule. In May 2013, program officials provided a third schedule that they said contained some improvements but acknowledged that issues remained that prevented the schedule from meeting best practices.
GAO found that the DEAMS cost estimate fully or substantially met the four 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 and provided for an independent assessment and reconciliation. Because the cost estimate relies on dates derived from the schedule and GAO is questioning the reliability of the schedule, the credibility of the cost estimate could be affected.

What GAO Recommends

GAO recommends that the Secretary of the Air Force update the cost estimate as necessary after implementing GAO's prior recommendation to adopt scheduling best practices. DOD concurred with the recommendation.