Cultural resistance to change and military  service parochialism have played a significant role in impeding past  attempts to implement broad-based management reforms at DOD. For DOD we previously identified the  lack of incentives as one of the major underlying causes for the failure of  past reform efforts within the department. Conclusion

The JSLIST and purchase card case studies clearly demonstrate that DOD’s  current business operations are inefficient and ineffective. These case  studies are small examples of the broader financial and inventory  management and systems modernization challenges facing DOD that were  highlighted in our June 2, 2002 testimony before this Subcommittee. In addition, continued congressional oversight such  as the hearing today will be critical to successfully reforming DOD’s  business operations.
Why GAO Did This Study

This testimony reviews two case studies that clearly demonstrate the need for the Department of Defense (DOD) to reform its business operations.

What GAO Found

These two case studies are microcosms of the broad management challenges facing DOD that were highlighted in GAO's June 2002 testimony (See GAO-02-784T). GAO provided views on the underlying or root causes of DOD's long-standing inability to successfully reform its business operations, including a lack of sustained top-level leadership, cultural resistance to change, and military service parochialism. In addition, GAO found seven key elements necessary for successful reform, including approaching DOD's broad array of management challenges using an integrated, enterprisewide approach.