Defense Communications: Management Problems Jeopardize DISN
Implementation (Letter Report, 07/13/95, GAO/AIMD-95-136).

The Department of Defense initiated the Defense Information System
Network (DISN) program in 1991 and a two-phase effort to improve its
long-distance telecommunications services and reduce costs. In the near
term, Defense envisioned that DISN would achieve these goals by
consolidating and integrating about 100 existing communications networks
into one network.  For the long term, DISN would replace older
telecommunications systems, such as the Defense Commercial
Telecommunications Network (DCTN), and use new technology and improved
acquisition strategies to provide a more cost-effective system.  Asked
to review implementation of DISN, GAO found that Defense has not
effectively planned and managed its DISN program.  Specifically, Defense
has spent more than $100 million over the past 3-1/2 years on DISN's
planning, implementation, operation, and management.  In spite of this
expenditure, DISN still lacks validated operational requirements,
approved plans for network implementation, and guidelines needed to
ensure efficient and effective end-to-end management of this important
communications network.  As a result, Defense's near-term DISN
implementation is over 2 years behind schedule and DISN's objectives of
improving Defense's communications services and reducing costs are at
risk.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-95-136
     TITLE:  Defense Communications: Management Problems Jeopardize DISN 
             Implementation
      DATE:  07/13/95
   SUBJECT:  Military communication
             Computer networks
             Defense cost control
             Defense procurement
             Requirements definition
             Strategic information systems planning
             Data transmission
             Telecommunication
IDENTIFIER:  Defense Commercial Telecommunications Network
             Defense Information System Network
             Federal Telecommunications System
             Federal Telecommunications System 2000
             FTS 2000
             
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Cover
================================================================ COVER


Report to the Ranking Minority Member, Committee on Governmental
Affairs, U.S.  Senate

July 1995

DEFENSE COMMUNICATIONS -
MANAGEMENT PROBLEMS JEOPARDIZE
DISN IMPLEMENTATION

GAO/AIMD-95-136

Defense Information System Network


Abbreviations
=============================================================== ABBREV

  ASD/C\3 I - Assistant Secretary of Defense for Command, Control,
     Communications, and Intelligence
  DCTN - Defense Commercial Telecommunications Network
  DISA - Defense Information Systems Agency
  DISN - Defense Information System Network
  DISN-FT - DISN Far-Term
  DISN-NT - DISN Near-Term
  DOD - Department of Defense
  FTS - Federal Telecommunications System
  GSA - General Services Administration
  IMC - Interagency Management Council
  JCRC - Joint Concept Review Committee
  OASD/C\3 I - Office of the Assistant Secretary of Defense for
     Command, Control, Communications, and Intelligence

Letter
=============================================================== LETTER


B-259834

July 13, 1995

The Honorable John Glenn
Ranking Minority Member
Committee on Governmental Affairs
United States Senate

Dear Senator Glenn: 

The Department of Defense (DOD) initiated the Defense Information
System Network (DISN) program in 1991 as a two-phase effort to
improve its long-distance telecommunications services and reduce
costs.  In the near term, Defense envisioned that DISN would achieve
these goals by consolidating and integrating about 100 existing
communications networks into one network, operated by the Defense
Information Systems Agency (DISA).  For the far term, DISN would
replace older telecommunications systems, such as the Defense
Commercial Telecommunications Network (DCTN), and use new technology
and improved acquisition strategies to provide a more cost-effective
system. 

While Defense was planning its far-term DISN initiative, the General
Services Administration (GSA) and the Interagency Management Council
(IMC) in 1993 began planning a replacement for the Federal
Telecommunications System (FTS) 2000 program, which provides the
federal government's long-distance service.  The existing FTS 2000
contracts expire in 1998.  Although Defense is currently one of the
largest customers of FTS 2000 services, less than 20 percent of
Defense's long-distance telecommunications traffic is handled by FTS
2000.  Defense has been determining how to use the Post-FTS 2000
program to help meet its DISN objectives. 

This report responds to your request that we review Defense's efforts
to implement DISN.  Specifically, you asked that we (1) assess DISN's
objectives, requirements, management plans, and implementation
status, and (2) determine whether Defense has positioned itself to
participate effectively in the governmentwide Post-FTS 2000 program. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Defense has not effectively planned and managed its DISN program. 
Specifically, Defense has spent more than $100 million over the past
3-1/2 years on DISN's planning, implementation, operation, and
management.  In spite of this expenditure, DISN still lacks (1)
validated operational requirements, (2) approved plans for network
implementation, and (3) guidelines needed to ensure efficient and
effective end-to-end management of this important communications
network.  As a result, Defense's near-term DISN implementation is
over 2 years behind schedule and DISN's objectives of improving
Defense's communications services and reducing costs are at risk. 

Recognizing the need to identify and document the Department's
requirements for DISN, the Office of the Joint Chiefs of Staff
developed a statement outlining Defense's communications service
needs in broad terms.  Validation of DISN's joint operational
requirements is expected by August 1995. 

Defense has recently revised its far-term DISN program strategy. 
Rather than buy services from commercial providers through
initiatives such as the Post-FTS 2000 program, Defense currently
intends to use Post-FTS 2000 primarily to buy the communications
bandwidth it needs to build its own private DISN network.\1 Defense
has not justified this strategy, however.  Without first defining its
valid requirements, identifying and evaluating alternatives for
meeting those requirements, and presenting a convincing cost/benefit
analysis supporting its selected alternative, Defense cannot
determine whether a private network is the best solution to meet its
needs.  By limiting its use of Post-FTS 2000 services, Defense risks
spending hundreds of millions of dollars to establish, operate, and
maintain redundant communications facilities and services that do not
efficiently or effectively respond to its requirements. 


--------------------
\1 Bandwidth is a measure of the capacity of communications lines. 


   BACKGROUND
------------------------------------------------------------ Letter :2

The Department of Defense estimates that it spends about $1 billion
annually for its long-distance communications systems and services. 
The Office of the Assistant Secretary of Defense for Command,
Control, Communications and Intelligence (OASD/C\3 I) has overall
responsibility for communications policy, planning, and budgeting. 
DISA, which reports to OASD/C\3 I, is responsible for Defense-wide,
long-distance communications service.  Military services and other
Defense agencies independently procure, operate, and manage their own
long-distance communications systems.  Defense has long had problems
efficiently and effectively managing this fragmented and redundant
communications environment.  In fact, Defense does not even know how
many long-distance communications networks it has.  Estimates range
from about 100 to more than 200. 

Numerous GAO, Defense Inspector General, and Defense internal studies
have criticized Defense's communications management practices over
the years.  Senior Defense managers recognize that this costly,
duplicative environment precludes providing the efficient and
interoperable end-to-end communications services essential for
successful joint military operations.  Defense Management Report
Decisions 968 and 918 were issued during the past 4-1/2 years to
address these long-standing problems.\2 They called for more
accurately identifying, tracking, and accounting for communications
resources throughout the Department, and improving the management and
oversight of Defense's communications networks and programs. 

The DISN program was established in 1991 as a two-phase effort to
solve many of these problems by unifying and modernizing
communications throughout Defense.  DISN Near-Term (DISN-NT) focused
on integrating select military service and agency data communications
systems and services, and automating and consolidating their network
management capabilities.  By achieving this integration in a timely
and cost-effective manner, Defense estimated that it could reduce the
costs of operating these networks by almost 21 percent, or $100
million, over 6 years. 

Defense's DISN Far-Term (DISN-FT) was to emphasize replacement of
older communications systems, such as DCTN, using emerging
technologies and more effective acquisition strategies to provide
more efficient and cost-effective global voice, data, video, and
imagery communications.\3 The DCTN contract expires in February 1996. 
As we reported to you in April 1993, Defense's planning for far-term
DISN acquisition to permit timely replacement of this large contract
has been very optimistic.\4

Concurrent with Defense's planning of its far-term DISN, the IMC, in
cooperation with GSA, began planning the acquisition of
governmentwide, long-distance telecommunications in the Post-FTS 2000
environment.  In December 1994, GSA approved and released the
Post-FTS 2000 Program Strategy recommended by the IMC.  This strategy
calls for a more diverse approach to acquire commercial
telecommunications services than the current FTS 2000 program offers. 
Specifically, this strategy calls for award of contracts for (1) two
or more comprehensive providers of voice, data, video, and other
services, (2) one or more data service and value-added service
providers, (3) two or more technical service providers to help user
agencies apply telecommunications services and technologies to their
missions, and (4) a possible wireless communications services
provider.  This approach is intended to allow agencies to select from
multiple contracts for different services. 


--------------------
\2 Beginning in July 1989, Defense Management Review reports were
issued that outlined actions needed to improve DOD management. 

\3 The DCTN contract with AT&T primarily provides switched voice,
video teleconferencing, and leased transmission services to Defense
users. 

\4 Defense:  Telecommunications Management (GAO/IMTEC-93-26R, April
28, 1993). 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
------------------------------------------------------------ Letter :3

To obtain information about Defense's DISN Far-Term acquisition
strategy and progress in implementing its DISN Near-Term initiative,
we interviewed officials from OASD/C\3 I, the Office of the Joint
Chiefs of Staff, and DISA, and reviewed program documentation.  We
also interviewed DISA officials and reviewed documentation on DISN
network management at DISA headquarters in Arlington, Virginia, as
well as DISA's network control centers at Columbus, Ohio, and Scott
Air Force Base, Illinois. 

To obtain information about Defense's participation in the current
FTS 2000 program and the planned Post-FTS 2000 acquisition effort, we
interviewed officials and reviewed documentation from OASD/C\3 I,
DISA, and GSA.  In addition, we reviewed documentation, prepared by
the Joint Concept Review Committee (JCRC), that examined the
feasibility of consolidating Defense and civil agency
telecommunications acquisition initiatives. 

To obtain broader knowledge of the issues and challenges associated
with planning, acquiring, implementing, and managing corporate
telecommunications programs, we interviewed officials from several
private sector firms that rely on large communications networks,
including Frito-Lay Inc., Plano, Texas; Boeing Computer Services,
Inc., Seattle, Washington; Electronic Data Systems Inc., Herndon,
Virginia, and Plano, Texas; JC Penney Co., Inc., Dallas and Plano,
Texas; and Texas Instruments, Plano, Texas. 

Also, we reviewed documentation prepared for Defense describing the
lessons that Electronic Data Systems personnel learned as they
implemented corporate telecommunications for General Motors.  We also
reviewed other studies prepared for Defense, including
telecommunications management benchmarking studies and best practices
reports prepared by Booz Allen & Hamilton, Inc.; COMPASS America,
Inc.; Real Decisions Corporation; and Nolan, Norton & Co. 

Our work was performed between June 1994 and May 1995 in accordance
with generally accepted government auditing standards. 

The Assistant Secretary of Defense, Command, Control, Communications
and Intelligence (ASD/C\3 I), provided written comments on a draft of
this report.  These comments are discussed in the "Agency Comments
and Our Evaluation" section and are reprinted in appendix I. 


   INEFFECTIVE TELECOMMUNICATIONS
   MANAGEMENT PLACES DISN AT
   INCREASED RISK
------------------------------------------------------------ Letter :4

Organizations that successfully implement corporate
telecommunications strategies identify critical elements for success,
including: 

  a valid description of the organization's communications
     requirements,

  a coherent plan for implementing a system that meets those
     requirements, and

  a clear definition of the roles and responsibilities for managing
     that system. 

At present, DISN lacks these three key elements.  Over 3 years into
the program, Defense has yet to validate its operational requirements
for DISN.  Inadequate program planning and lack of effective
management oversight have contributed to program slippage.  In
addition, Defense has yet to define the end-to-end network management
roles and responsibilities essential to effective operation of
near-term DISN. 


      DEFENSE HAS NOT VALIDATED
      DISN OPERATIONAL
      REQUIREMENTS
---------------------------------------------------------- Letter :4.1

Defining and validating operational requirements is an essential
first step in the telecommunications acquisition and process.  These
requirements form the basis for properly identifying and evaluating
alternative approaches, and selecting an appropriate solution. 
However, more than 3 years after it began planning and implementing
DISN, Defense has yet to define and validate DISN's operational
requirements.  Personnel in the Office of the Joint Chiefs of Staff
observed in March 1994 that all DISN implementation efforts,
near-term and far-term, had proceeded without an overarching
requirements document. 

Senior Defense managers have recently taken some steps to address
this shortcoming.  For example, the Joint Requirements Oversight
Council has approved a statement outlining DISN's required
capabilities in broad terms.  Further, DISA and the Office of the
Joint Chiefs of Staff are directing efforts to specifically define
and document the Department's operational requirements for DISN;
validated operational requirements are expected by August 1995. 
Nevertheless, until Defense completes this critical first step, it
cannot ensure that any actions it takes to plan, design, or implement
its DISN communications capabilities will efficiently, effectively,
or economically meet its needs. 


      PLANNING AND MANAGEMENT OF
      DISN ARE INADEQUATE
---------------------------------------------------------- Letter :4.2

A second problem facing Defense is that inadequate program planning
and management have impaired its near-term efforts to integrate
existing networks into DISN.  Electronic Data Systems Corporation
personnel found, while building General Motors' global corporate
communications network, that thorough planning--based on resources,
costs, and time--was the key to success.  Although Defense initially
followed a similar approach with DISN planning, it did not sustain
this effort.  Defense's May 1992 Defense Information System Network
Near-Term Transition Plan clearly outlined an implementation
strategy, identified resources, presented a detailed schedule, and
estimated DISN costs over a 6-year life cycle.  In addition, the
Deputy ASD/C\3 I for Defense Communications chaired three
telecommunications program reviews to oversee DISN planning and
implementation. 

Since that time, DISN's strategy and schedule have changed
significantly.  For example, although the initial near-term strategy
called for completing the integration of eight large independent
networks by the second quarter of fiscal year 1993, these efforts are
still under way.  Efforts to integrate the Navy's transmission
network are still in process, while integration of the Defense
Logistics Agency's Corporate Network has just begun.  The integration
of Navy and Air Force router networks are now planned to be completed
by October 1995 and October 1996, respectively.  Despite these
changes, the transition plan, schedule, and resource estimates
initially developed to justify and guide DISN implementation have
never been updated.  Further, Defense's near-term DISN efforts have
not undergone a program review in over 2 years.  In the absence of
adequate planning and management, Defense's efforts to achieve DISN's
objectives will not be timely or cost-effective. 


      DEFENSE HAS NOT DEFINED DISN
      MANAGEMENT ROLES,
      RESPONSIBILITIES, AND
      PROCEDURES
---------------------------------------------------------- Letter :4.3

The third problem in implementing DISN is a lack of clearly defined
roles, responsibilities, and procedures for effective management of
Defense's operational DISN networks.  Benchmarking studies of best
private sector practices have found that having clearly defined
roles, responsibilities, and procedures that are well-documented and
understood by staff at all levels are essential to effective network
management.  Senior Defense officials, DISA managers, and DISN
program documentation all recognize that effective network management
is the key to lowering costs and assuring the interoperability of
their global communications systems. 

However, despite their recognized importance, the roles,
responsibilities, and procedures for effective end-to-end DISN
network management have not been defined and documented.  A Joint
Chiefs of Staff Instruction published in 1993 made DISA responsible
for managing DISN in accordance with validated operational
requirements; as we previously stated, however, those requirements
still do not exist.  Further, although they have been under
development for over 3 years, DISA has not finalized and approved the
comprehensive policies and procedures for DISN management.  According
to DISN regional network managers, the different versions of DISA's
draft guidelines that have been circulating have created confusion
because they provide different and sometimes conflicting direction. 
In addition, there is little direction of any kind regarding
responsibilities of the base-level managers at Defense installations
where most DISN equipment is actually located.  Without clear
guidelines outlining the roles, responsibilities, and procedures for
end-to-end network management based on joint operational
requirements, Defense cannot operate and manage its operational
near-term DISN in a way that efficiently and effectively meets its
needs. 


   DEFENSE'S REVISED DISN STRATEGY
   LIMITS USE OF POST-FTS 2000
------------------------------------------------------------ Letter :5

Defense has stated publicly that it intends a large degree of
participation in Post-FTS 2000.  Nevertheless, the Department
continues its plans to acquire and provide its own services through
the DISN initiative.  This decision limits Defense's ability to
contribute to and benefit from commercial services offered under the
consolidated Post-FTS 2000 initiative.  As yet, Defense has not
justified this course of action. 

Spurred by congressional interest in the potential duplication of
their acquisition efforts, Defense, GSA, and the IMC established the
Joint Concept Review Committee in February 1994 to determine the
extent to which the government's telecommunications acquisitions
could be consolidated.\5 After assessing technical, economic, and
managerial issues, the JCRC could find no insurmountable obstacles to
consolidating these acquisitions.  Rather, the JCRC found that
combining government agencies' buying power would actually promote
establishment of the Government Services Information Infrastructure
advocated by the National Performance Review, while offering
significant cost savings to all users of data services. 

In his endorsement of the JCRC findings, the ASD/C\3 I testified in
May 1994 before the Senate Committee on Governmental Affairs that a
joint Defense/GSA acquisition strategy was the most cost-efficient
way to proceed, and stated his commitment to increased cooperation
with GSA.  In addition, the former DISA director testified that
Defense's Cold War strategy to acquire and operate dedicated private
networks was driven by its need for unique features that were not
commercially available.  The director testified further that since
that time technology providing security, assured access, and other
critical features had matured, and most equivalent services are now
readily available commercially.\6

Defense's increased use of commercial telecommunications services is
also supported by an October 1994 report on battlefield information
architecture.  In this report, the Defense Science Board recommended
that Defense increase its use of federal government communications
systems and commercial communications services.\7 In making this
recommendation, the Board noted that over 80 percent of Defense's
communications satellite use during Desert Shield/Desert Storm was
provided through commercial communications assets.  Furthermore, in
March 1995 testimony before the House Committee on Government Reform
and Oversight, the ASD/C\3 I stated that perhaps as much as 70
percent of Defense's telecommunications service needs within the
continental United States could be met through the Post-FTS 2000
initiative. 

Despite these public statements, however, Defense's program strategy
for DISN indicates that it intends only limited use of Post-FTS 2000
to meet DISN requirements.  For example, in December 1994, the
ASD/C\3 I, the Office of the Joint Chiefs of Staff, and the military
services agreed on a revised DISN approach that will use the
follow-on Post-FTS 2000 program primarily to acquire the
communications bandwidth it needs to build a private DISN network. 
That is, rather than acquire its communications services within the
continental United States directly from a communications services
provider, Defense is buying its own communications equipment, and
plans to operate its own network by leasing bandwidth from Post-FTS
2000. 

Defense has approved this revised DISN approach without first
documenting that development, operation, and management of its own
network infrastructure is the sole or most cost-effective way to meet
its requirements.  For example, Defense's documentation supporting
this revised approach exists in draft form; there is no validated
economic analysis or approved program plan supporting this decision. 
A draft cost/benefit analysis developed by DISA in November 1994 was
based on requirements that had not been validated.\8

Nevertheless, the ASD/C\3 I has authorized DISA to invest over $100
million over the next 2 years to implement its DISN concept within
the continental United States despite this lack of plans and
agreement regarding requirements.  As a result, Defense's intent to
build its own, redundant communications infrastructure risks hundreds
of millions of dollars to establish and operate a telecommunications
capability that might not cost-effectively meet its needs.  Further,
Defense's actions jeopardize the benefits of a consolidated
telecommunications acquisition program as envisioned by the JCRC. 


--------------------
\5 The JCRC's membership included representatives from the Defense
Information System Agency; the General Services Administration; the
Interagency Management Council; the Office of the Director, National
Communications System; the Department of Veterans Affairs; the
Department of the Treasury; and the Department of Agriculture. 
Acquisition programs specifically considered by the JCRC included
Post-FTS 2000, DISN, and the Government Emergency Telecommunications
Service. 

\6 A study of Defense telecommunications conducted by Booz Allen
Hamilton in 1994 for DISA found that, in analyzing 24 military-unique
features, 20 of these features had commercial equivalents that
matched or exceeded the required capabilities. 

\7 Report of the Defense Science Board Summer Study Task Force on
Information Architecture for the Battlefield, October 1994. 

\8 The revised far-term DISN approach recently underwent a review by
Defense's Major Automated Information System Review Council.  In
providing Milestone 0 approval, the Assistant Secretary of Defense
(C\3 I) directed the DISA Director to provide a total proposed
program strategy for DISN, including implementation strategy,
schedule, and plans for developing supporting cost and economic
analyses, to the OASD/C\3 I by April 28, 1995.  DISA has missed this
deadline; a program strategy is still being developed. 


   CONCLUSIONS
------------------------------------------------------------ Letter :6

Defense managers recognize that improving the efficiency and
cost-effectiveness of the Department's communications services is
essential to all operations, including its warfighting mission. 
Despite this recognition, Defense has not taken the basic steps to
efficiently and effectively plan, acquire, and manage its own major
communications initiative, DISN. 

Defense has revised its DISN strategy without a clear understanding
of its operational and management requirements, without fully
considering all alternatives for meeting those requirements, and
without first documenting that the development, operation, and
maintenance of its own network infrastructure would be the most
cost-effective way to meet these needs.  As a result, there is no
assurance that Defense's approach to DISN will meet its long-standing
telecommunications needs.  What is assured is that this approach will
limit Defense's ability to contribute to and benefit from a
consolidated governmentwide Post-FTS 2000 initiative, and will
perpetuate its practice of acquiring and managing its own redundant
networks. 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :7

We recommend that the Secretary of Defense direct the Assistant
Secretary of Defense for Command, Control, Communications, and
Intelligence to develop a strategy and plans that establish and
document the roles, responsibilities, and procedures essential to
ensuring the efficient and effective end-to-end management of its
operational near-term DISN services. 

We recommend further that the Secretary of Defense direct the
Assistant Secretary of Defense for Command, Control, Communications,
and Intelligence to: 

  reassess DISA's proposed far-term DISN approach, reconsider
     decisions on Post-FTS 2000 participation, and ensure that the
     approach is based on valid operational requirements and approved
     plans, and

  fully justify any decision to procure communications circuits
     rather than services from the Post-FTS 2000 program.  This
     should include identifying the additional life-cycle
     acquisition, operations, maintenance, and support costs that
     will be incurred in developing and operating DISN, as well as
     the effects on Defense's warfighting and administrative support
     missions. 


   AGENCY COMMENTS AND OUR
   EVALUATION
------------------------------------------------------------ Letter :8

We obtained written comments on a draft of this report and have
incorporated those comments where appropriate.  These comments are
presented in appendix I. 

In commenting on the draft report, the Department of Defense
concurred with our findings and recommendations.  In its concurrence
with our recommendation that Defense fully justify any decisions to
procure circuits rather than services from the Post-FTS 2000 program,
Defense stated that any strategic decision to procure circuits rather
than services would be fully documented and justified.  We want to
emphasize that our recommendation is that Defense fully justify any
actions or decisions to procure circuits in lieu of services from the
Post-FTS 2000 program. 


---------------------------------------------------------- Letter :8.1

As agreed with your office, unless you publicly announce the contents
of this report earlier, we will not distribute it until 30 days from
its date.  We will then send copies to the Chairman of your
Committee, the House Committee on Government Reform and Oversight,
the House and Senate Appropriations Committees, the House National
Security Committee, the Senate Armed Services Committee, and other
interested congressional committees, the Secretary of Defense, and
the Director of the Office of Management and Budget.  Copies will
also be sent to others upon request.  Please contact me at (202)
512-6240 if you or your staff have any questions.  Major contributors
to this report are listed in appendix II. 

Sincerely yours,

Jack L.  Brock, Jr.
Director, Information Resources Management/
National Security and International Affairs




(See figure in printed edition.)Appendix I
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
============================================================== Letter 



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II

ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON,
D.C. 

Franklin W.  Deffer, Assistant Director
Kevin E.  Conway, Evaluator-in-Charge
Mary T.  Marshall, Staff Evaluator
Linda A.  Johnson, Reports Analyst


*** End of document. ***