However, because of  problems experienced during the deployment, the Army decided to delay  implementation until the problems were resolved. Prior to transitioning to LMP, the Army is directed to certify that each  Army depot is prepared to transition. The Army Has Improved Its Implementation of LMP but May Not Fully Achieve the Intended LMP Functionality at Its Third Deployment Locations

The Army has improved its LMP implementation strategy from the  previous two deployments, but continues to face several problems that  may prevent LMP from fully providing its intended functionality at each of  the third deployment locations. Although  the Army has mitigation plans in place if the software capabilities are not  delivered on time or as intended, these mitigation plans will increase  costs. Long-Standing Data Inaccuracies Remain in the LMP System

The Army does not have reasonable assurance that the data used by LMP  are of sufficient quality to enable the commands, depots, and arsenals to  perform their day-to-day missions using LMP as intended. The Army  initiated a testing strategy to determine data accuracy, but it has not  provided reasonable assurance that the data used by LMP can support the  LMP processes. Although the Army implemented new testing  activities to support the third deployment of LMP, these activities were  designed to assess whether the sites could use the software but did not  evaluate whether the data loaded into LMP are of sufficient quality to  support the LMP processes. Army Testing Activities Do Not Assess Data Quality

Based on our observations during the second deployment of LMP, we  previously recommended that the Army direct the Army Materiel  Command to improve its testing activities to obtain reasonable assurance  that the data are of a quality that can be used by LMP to support the LMP  processes. Data Problems Persist at Second Deployment Locations

Persistent data issues have prevented Corpus Christi Army Depot and  Letterkenny Army Depot—the two depots that deployed LMP in May  2009—from achieving the intended benefits from LMP. The Army Has Yet to Fully Develop Software to Achieve Intended LMP Benefits but Has Mitigations Plans That May Be Costly

The Army’s software development schedule and subsequent testing of  capabilities needed by several locations was not expected to be delivered  until after September 2010. Unlike operations under the previous  deployments of LMP, the operations at some of the third deployment  locations are unique and therefore require additional capabilities. For  example, the Army Sustainment Command and the Joint Munitions and  Lethality Life Cycle Management Command require LMP to interface with  existing systems in order to perform their day-to-day missions. Functionality for the Joint Munitions and Lethality Life Cycle Management Command Still Being Developed

The Army is continuing to develop the software functionality that the Joint  Munitions and Lethality Life Cycle Management Command needs to  perform its mission using LMP, but Army officials said that full  functionality will not be available until after LMP has been deployed. For example, in the  event that this functionality is not delivered or does not operate as  expected, the Joint Munitions and Lethality Life Cycle Management  Command expects to hire 172 additional personnel to perform manual  data entry until the software can provide the required and agreed-upon  functionality. According to Tank-automotive and Armaments Command  officials, the arsenals will lose this capability once LMP is deployed until a  replacement system is fielded. Recommendation for Executive Action

Given the long-standing challenges associated with the Army’s  implementation of LMP and the need for mitigation strategies that may  result in increased costs until LMP is fully functional, we are  recommending that the Secretary of Defense direct the Under Secretary of  the Army as the Army’s Chief Management Officer to report to Congress  within 90 days of the beginning of the LMP third deployment on the  progress of LMP implementation at the Army depots, arsenals, and life  cycle commands, and provide periodic updates to Congress until such  time as the mitigation strategies are no longer necessary. This report  should identify the extent to which the third deployment sites are able to  use LMP as intended, the benefits that LMP is providing, an assessment of  the Army’s progress in ensuring that data used in LMP can support the  LMP processes, timelines for the delivery of software and additional  capabilities necessary to achieve the full benefits of LMP, and the costs  and time frames of the mitigation strategies.
Why GAO Did This Study

The Logistics Modernization Program (LMP) is an Army business system that is intended to replace the aging Army systems that manage inventory and depot repair operations. From 1999 through 2009, the Army expended more than $1 billion for LMP. LMP was originally scheduled to be completed by 2005, but after the first deployment in July 2003, the Army delayed fielding because of significant problems. The Army later decided to field the system in two additional deployments: the second in May 2009 and the third in October 2010. GAO was asked to evaluate the extent to which the Army will achieve the intended functionality (e.g., supply chain management and materiel maintenance) from LMP for the commands, depots, and arsenals participating in the third deployment. To do this, GAO reviewed Army plans and policies related to LMP and met with Army officials at three Army commands and several third deployment sites.

What GAO Found

The Army has made improvements to its LMP implementation strategy, but it may not fully achieve the intended LMP functionality in its third deployment, which began in October 2010, because it has not corrected long-standing data inaccuracies and has not fully developed the software and systems needed to support critical functionality. Specifically: (1) GAO previously recommended that the Army improve testing activities to obtain reasonable assurance that the data used by LMP can support the LMP processes. The Army implemented data audits and new testing activities to improve data accuracy, but data issues persist, which could impede LMP functionality. According to Army officials, these new testing activities were designed to assess how well the LMP software functions but not how well the data work in LMP. Third deployment locations were also able to perform individual tests on the data, but these activities were not coordinated or managed by the Army. As a result, the audits and new testing activities did not provide the Army reasonable assurance that the data in LMP are of sufficient quality to achieve the intended LMP functionality once the system has been deployed. Without this assurance, the Army may experience the same data-related problems during the third deployment that were experienced during the second deployment, which prevented Corpus Christi and Letterkenny Army Depots from using LMP functionality as intended. (2) The Army's software development schedule and subsequent testing of capabilities needed by several locations are not expected to be delivered until after September 2010, but costly mitigations may be required if delivery is delayed. Unlike the previous deployments of LMP, the operations at some of the third deployment locations require additional capabilities. For example, the Army Sustainment Command and the Joint Munitions and Lethality Life Cycle Management Command perform missions that require LMP to interface with existing systems in order to perform day-to-day missions. If the software capabilities are not operating as intended, several sites will not have the necessary LMP functionality to perform their missions. The Army has mitigation plans to address this functionality gap. For example, the Joint Munitions and Lethality Life Cycle Management Command plans to hire 172 additional personnel, and the Tank-automotive and Armaments Command expects to hire 95 additional personnel to perform manual data entry until the capability is delivered. The Army expects that these mitigation plans will increase costs. Prior to transitioning to LMP, the Army is directed to certify that it is prepared to make the transition, but it is not required to regularly report to Congress specifically on LMP implementation. Congress therefore lacks complete and ongoing information to aid in its oversight of this program characterized by implementation delays and long-standing problems that have precluded LMP functionality at the sites included in the first two LMP deployments. GAO previously recommended that the Army address issues related to its implementation of LMP.

What GAO Recommends

GAO recommends further that the Army periodically report to Congress on the progress of LMP, including its progress in ensuring that the data used in LMP can support the system, timelines for the delivery of software necessary to achieve full benefits, and the costs and time frames of its mitigation strategies. DOD agreed with GAO's findings and recommendation.