DOD Has Taken Some Steps to Implement the CMO Position, but Key Issues Related to Authorities and Responsibilities Remain Unresolved DOD Has Begun to Implement Its CMO Position and Restructure the OCMO, with a Focus on Data Responsibilities

In February 2018, DOD formally established the position of the CMO and  an office in support of the CMO (OCMO). DOD Has Not Resolved Three Key Issues Related to the CMO’s Authorities and Responsibilities

Despite its efforts to establish and restructure the OCMO, DOD has not  fully addressed three key issues related to the CMO’s statutory authorities  and responsibilities, including: (1) how the CMO will exercise the authority  to direct the military departments; (2) how the CMO will exercise oversight  of the DAFAs; and (3) which responsibilities, if any, will transfer from the  CIO to the CMO. Unresolved Issue #1: The CMO’s Authority to Direct the Military Departments on Business Reform Issues

The Secretary of Defense has charged the CMO with leading DOD’s  enterprise business operations and with unifying business management  efforts across the department and other responsibilities as set forth in  section 132a of title 10, United States Code. Congress addressed the issue of the CMO’s relationship to the military  departments in section 132a, which authorizes the CMO, subject to the  authority, direction, and control of the Secretary of Defense and Deputy  Secretary of Defense, to direct the secretaries of the military departments  and the heads of all other elements of DOD on matters for which the  CMO has responsibility under the statute. However, DOD leadership has not determined how the CMO will exercise  this authority in instances where the military departments have concerns  or disagree with decisions that the CMO makes. Unresolved Issue #2: The CMO’s Oversight Responsibilities for the Defense Agencies and DOD Field Activities (DAFA)

DOD’s 19 defense agencies and eight DOD field activities are intended to  perform many of DOD’s business operations, including consolidated  supply and service functions such as human resources services, on a  department-wide basis. Unresolved Issue #3: The Transfer of Responsibilities from the Chief Information Officer to the CMO

As described in table 1 of this report, section 910 of the NDAA for Fiscal  Year 2018 provided that, effective January 1, 2019, the CMO would  assume certain responsibilities for business systems and management  that were formerly performed by the CIO. DOD Lacks Guidance That Institutionalizes All of the CMO’s Authorities and Responsibilities

In part because the issues identified above have not been resolved, DOD  agreed that it does not have department-wide guidance, such as a  chartering directive, that fully and clearly institutionalizes the CMO  position by articulating how all of the CMO’s authorities and  responsibilities are to be operationalized. Further, the lack of guidance  could affect the ability of the department to make progress in conducting  necessary business reforms—one of three key priorities identified in the  2018 National Defense Strategy. However, DOD has not  resolved several key issues that limit its ability to implement all statutory  authorities and responsibilities. (Recommendation  1)
The Secretary of Defense should ensure that the Deputy Secretary of  Defense makes a determination regarding the CMO’s relationship with  the DAFAs, including whether additional DAFAs should be identified as  providing shared business services and which DAFAs will be required to  submit their proposed budgets for enterprise business operations to the  CMO for review. Appendix I: Scope and Methodology

To examine the extent to which DOD has implemented the authorities  and responsibilities of its Chief Management Officer (CMO) position and  issued guidance communicating within the department the authorities and  responsibilities of the position, we reviewed related laws and key  documents such as memorandums issued by the Secretary of Defense  that outline some of the CMO’s authorities and responsibilities.
Why GAO Did This Study

DOD spends billions of dollars each year to maintain key enterprise business operations intended to support the warfighter, including systems and processes related to the management of contracts, finances, the supply chain, and support infrastructure. The 2018 National Defense Strategy identified reform of DOD's business practices as one of DOD's three strategic goals. GAO has previously reported that weaknesses in these business operations have resulted in inefficiencies and billions of dollars wasted. GAO has also identified the need for a CMO with significant authority and experience to focus concerted attention on DOD's long-term business transformation efforts. Congress initially established such a position in the National Defense Authorization Act for Fiscal Year 2017.
This report evaluates the extent to which DOD has implemented its CMO position and issued guidance to communicate within the department the authorities and responsibilities of the position. GAO analyzed the statutory authorities and responsibilities assigned to the CMO position and evaluated DOD's actions to implement them.

What GAO Found

The Department of Defense (DOD) has taken steps to implement its Chief Management Officer (CMO) position which has been given the responsibility for managing DOD's business operations; however, unresolved issues remain for DOD to fully institutionalize the CMO's authorities and responsibilities. DOD has restructured the Office of the CMO (OCMO) to more closely align with the CMO's statutory authorities and responsibilities. Further, the OCMO is working to strengthen its data capabilities and has hired a Chief Data Officer and formed a Data Management and Analytics Steering Committee. Additionally, OCMO officials told us they are establishing cost baselines for each of DOD's major business functions.
However, DOD has not fully addressed three key issues related to the CMO's authorities and responsibilities:
The CMO's authority to direct the military departments on business reform issues . The law gave the CMO authority to direct the secretaries of the military departments on matters over which the CMO has responsibility. However, DOD has not determined how the CMO will exercise this authority, particularly when there is disagreement between the departments and the CMO.
The CMO's oversight responsibilities of the Defense Agencies and DOD Field Activities (DAFAs) . The CMO is responsible for exercising authority, direction, and control over the designated DAFAs that provide shared business services—those business functions, such as supply chain and logistics and human resources operations, that are provided across more than one DOD organization. However, DOD has not determined how the CMO will exercise this authority, such as which DAFAs will submit their proposed budgets for CMO review.
Transfer of responsibilities from the Chief Information Officer to the CMO. Under the law, the CMO will exercise responsibilities relating to business systems and management that previously belonged to the Chief Information Officer. However, DOD has not determined which, if any, responsibilities will transition from the Chief Information Officer to the CMO or assessed the impact of such a transition on associated resources.
In part because these issues remain unresolved, DOD agreed that it does not have department-wide guidance that fully and clearly articulates how the CMO's authorities and responsibilities should be operationalized. Making determinations on the three unresolved issues and issuing guidance would help ensure a shared understanding throughout the department of the CMO's role in leading DOD's enterprise-wide business reform efforts.

What GAO Recommends

GAO is making four recommendations, including that DOD should address each of the three unresolved issues that impede its progress in institutionalizing statutory authorities and responsibilities, and issue guidance, such as a chartering directive that addresses how the CMO's authorities should be operationalized. DOD concurred with GAO's recommendations.