Defense Management: New Management Reform Program Still Evolving 
(12-DEC-02, GAO-03-58). 					 
                                                                 
The Secretary of Defense announced a new business transformation 
program in 2001 with the intent of improving the effectiveness	 
and efficiency of Department of Defense business operations.	 
Concerned that the previous administration's Defense Reform	 
Initiatives (DRI) could not be successful without many years of  
sustained effort, the Senate Committee on Armed Services issued a
September 2001 report directing GAO to assess which DRI 	 
initiatives have been carried forward. In completing this	 
assessment, GAO also examined the management structure and types 
of initiatives contained in the new business transformation	 
program. Also at the request of the Committee, more detailed	 
information on the status of the logistics reform and electronic 
business/electronic commerce initiatives is provided in the GAO  
report. GAO interviewed officials involved with the former DRI	 
initiatives, as well as officials operating at all levels of the 
new business transformation program. In commenting on a draft of 
this report, DOD concurred with GAO's findings. 		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-58						        
    ACCNO:   A05715						        
  TITLE:     Defense Management: New Management Reform Program Still  
Evolving							 
     DATE:   12/12/2002 
  SUBJECT:   Budget administration				 
	     Defense operations 				 
	     Federal agency reorganization			 
	     Financial management				 
	     Performance measures				 
	     Program evaluation 				 
	     DOD Defense Reform Initiative			 

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GAO-03-58

Report to the Committee on Armed Services, U. S. Senate

United States General Accounting Office

GAO

December 2002 DEFENSE MANAGEMENT New Management Reform Program Still
Evolving

GAO- 03- 58

Most former DRI initiatives are continuing, although not always under the
direct oversight of the new business transformation structure. According
to DOD, 5 initiatives have been completed and 35 are still ongoing in some
form. In general, the ongoing initiatives are being managed under the
applicable functional area of responsibility, without specific oversight
and tracking by a central management reform office. Nonetheless, the new
management structure* led by the Senior Executive Council and the Business
Initiative Council* does oversee some former DRI initiatives, such as
financial management reform and public- private competitions under the
Office of Management and Budget*s Circular A- 76.

While similar in some respects, DOD officials have stressed that the new
business transformation management structure is not considered to be a
replacement for the previous DRI management structure. Important
differences exist between the management approaches of the former and
current reform programs. For example, the new management structure has
higher senior- level management involvement and focus on decision making,
but less emphasis on specific savings targets.

To date, most new reform program initiatives have been intentionally small
in scope in order to produce benefits in fiscal year 2003. The new program
has begun to consider some larger efforts, such as alternatives to A- 76.
GAO believes the new business transformation program has the potential to
be an effective mechanism for reform given the high- level management
membership and emphasis on interservice participation. However, DOD*s
efforts are still evolving, and it is too soon to tell how effective the
new reforms will be. Moreover, like the DRI, the new management program
does not yet have an overarching plan tying key reform efforts together in
an integrated fashion.

Status of Former Defense Reform Initiatives under the New Management
Reform Program According to DOD Definitions Used to Categorize the
Initiatives

Completed a Ongoing

(as is) b Ongoing with

revision c Subsumed d

Number of Defense Reform Initiatives 5 8 20 7

a The initiative is considered to have met the goal( s) established. b The
initiative remains active, without change, and there are efforts to meet
the established goal( s) or

objective( s). c The initiative remains active, although the target goal(
s) or objective( s) has been changed.

d The initiative has been made the part of another management initiative
but remains viable. Source: DOD*s February 28, 2002, report. DEFENSE
MANAGEMENT

New Management Reform Program Still Evolving

http:// www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 58 To view the full
report, including the scope and methodology, click on the link above. For
more information, contact Barry W. Holman, Director, Defense Capabilities
and Management, at (202) 512- 8412 or holmanb@ gao. gov. Highlights of
GAO- 03- 58, a report to the

Committee on Armed Services, United States Senate

December 2002

The Secretary of Defense announced a new business transformation program
in 2001 with the intent of improving the effectiveness and efficiency of
Department of Defense business operations. Concerned that the previous
administration*s Defense Reform Initiatives (DRI) could not be successful
without many years of sustained effort, the Senate Committee on Armed
Services issued a September 2001 report directing GAO to assess which DRI
initiatives have been carried forward. In completing this assessment, GAO
also examined the management structure and types of initiatives contained
in the new business transformation program. Also at the request of the
Committee, more detailed information on the status of the logistics reform
and electronic business/ electronic commerce initiatives is provided in
the GAO report.

GAO interviewed officials involved with the former DRI initiatives, as
well as officials operating at all levels of the new business
transformation program. In commenting on a draft of this report, DOD
concurred with GAO*s findings.

Page i GAO- 03- 58 Defense Management Letter 1

Results in Brief 2 Background 3 Scope and Methodology 4 Agency Comments 5

Briefing Section I Status of Defense Reform Initiatives 8

Briefing Section II Management Structures 14

Briefing Section III Types of Initiatives 28

Briefing Section IV Conclusions 30

Appendix I Status of Defense Logistics Reform Efforts 32

Appendix II Status of Defense Electronic Business/ Electronic Commerce
Reform Initiatives 44

Appendix III Summary Table of Defense Reform Initiatives 53

Appendix IV Status Report of the Defense Reform Initiatives 55

Appendix V Summary Table of Business Initiative Council Initiatives 62
Contents

Page ii GAO- 03- 58 Defense Management Appendix VI Defense Business
Practice

Implementation Board Members 65

Appendix VII Comments from the Department of Defense 66

Appendix VIII Staff Acknowledgments 67

Related GAO Products 68

Tables

Table 1: Status of DRI Logistics Initiatives 33 Table 2: Status of Future
Logistics Enterprise Initiatives 37 Table 3: Status of DRI Electronic
Business Initiatives 47

Abbreviations

AT& L Acquisition, Technology and Logistics BIC Business Initiative
Council DMC Defense Management Council DOD Department of Defense DRI
Defense Reform Initiative IT information technology OSD Office of the
Secretary of Defense PKI public key infrastructure QDR Quadrennial Defense
Review SEC Senior Executive Council

Page 1 GAO- 03- 58 Defense Management

December 12, 2002 The Honorable Carl Levin Chairman The Honorable John W.
Warner Ranking Minority Member Committee on Armed Services United States
Senate

The Defense Reform Initiative, announced by the Secretary of Defense in
November 1997, represented an important set of actions aimed at improving
the effectiveness and efficiency of Department of Defense (DOD) business
operations. The current Secretary of Defense announced his own management
reform program in 2001, referred to as the DOD Business Transformation
program, also with the intent of improving the effectiveness and
efficiency of the department*s business operations.

The Senate Committee on Armed Services*s September 12, 2001, report
accompanying the legislation to authorize the department*s fiscal year
2002 appropriations expressed the view that reform of the department*s
business practices will not be successful without many years of sustained
effort continuing through several administrations. The report cited the
desire to ensure that valuable initiatives had not been dropped in the
transition from one administration to the next, and it sought to determine
to what extent those initiatives were being continued under the new
management reform program. Accordingly, the report tasked the department
with making a determination concerning which of the previous Defense
Reform Initiatives should be continued and incorporated into the new
management reform program. The department provided us with its February
28, 2002, status report of its determination on the status of the former
Defense Reform Initiatives.

The Senate report also directed us to review the department*s
determinations and report on our findings. Accordingly, this report
discusses (1) what Defense Reform Initiative efforts have been carried
forward and how their progress is being tracked, (2) how the management
structure of the DOD Business Transformation program compares with that of
the Defense Reform Initiative, and (3) what types of initiatives are
contained in the DOD Business Transformation program. Additionally, at the
request of your offices, we provide more detailed information on the
status of the logistics reform and electronic business/ electronic
commerce initiatives in appendixes I and II.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 03- 58 Defense Management

The Department of Defense indicates that most Defense Reform Initiatives
are being incorporated into the new management reform program. In its
February 2002 status report, the department indicated that 5 initiatives
had been completed and that 35 were still ongoing in some form (see apps.
III and IV). In general, the ongoing initiatives are being managed under
the applicable functional area of responsibility, without specific
oversight and tracking by a central management reform office as was
previously done. For example, logistics reform efforts that were included
in the Defense Reform Initiative program have been subsumed into related
initiatives under the Deputy Under Secretary of Defense for Logistics and
Materiel Readiness. DOD*s Business Transformation program*s management
structure is not specifically tracking these initiatives. However, the new
management structure is overseeing some former Defense Reform Initiatives,
such as financial management reform and public- private competitions under
the Office of Management and Budget*s Circular A- 76.

Both the Defense Reform Initiative and DOD*s Business Transformation
programs were created to improve the effectiveness and efficiency of the
department*s business operations. In this regard, both programs
established management structures to implement and support their reform
efforts. While similar in some respects, department officials have
stressed that the new management structure is not considered to be a
replacement for the previous Defense Reform Initiative management
structure, including its Defense Management Council and the Defense Reform
Initiative program office. Important differences exist between the
management approaches of the former and current management reform
programs, such as the level of decision- making authority and emphasis on
savings. For example, the new program*s Business Initiative Council has
the authority to approve Department of Defense- wide initiatives to
improve the department*s business operations compared to the former
Defense Management Council, which acted primarily as an oversight body.
Also, the focus of the new business transformation program is on
effectiveness of actions, with the belief that efficiencies and savings
will ultimately result, whereas the former Defense Reform Initiative
sometimes established specific financial savings targets.

Additionally, thus far, most of the DOD Business Transformation program*s
initiatives have been smaller in scope than those included under Defense
Reform Initiative efforts. (See app. V for a listing of initiatives
approved by the Business Initiative Council.) According to department
officials, many of the initial efforts were intentionally small and
selected to produce benefits in fiscal year 2003. However, the new
business transformation program has begun to consider some larger efforts,
such as alternatives to Circular A- 76. Given the high- level membership
and Results in Brief

Page 3 GAO- 03- 58 Defense Management

significant amount of interservice participation, we believe the new
management program has the potential to be an effective mechanism for
reform. However, because the department*s efforts are still evolving, it
is too soon to tell how effective this approach will be in transforming
the business operations of the department. Moreover, like the Defense
Reform Initiative, DOD*s Business Transformation program has not yet
developed an overarching plan tying key reform efforts together in an
integrated fashion. This could become more important as the department
initiates broader, interrelated efforts.

The department concurred with our findings in its written comments on a
draft of this report.

In November 1997, the then Secretary of Defense issued his Defense Reform
Initiative (DRI) report outlining a plan for reforming the department*s
business operations. The report included a variety of initiatives to
reengineer business practices, consolidate organization, eliminate
unneeded infrastructure through additional base closures, and conduct
public- private competitive sourcing studies for commercial activities.
These initiatives were expected to help achieve infrastructure reductions
and business process improvements. After the DRI was announced, the
Department of Defense expanded the scope of the DRI effort to include
several additional initiatives such as acquisition, financial management,
and logistics reform.

DOD established a management oversight structure to help sustain the
direction and emphasis of the DRI effort. This structure included (1) a
Defense Management Council* chaired by the Deputy Secretary and consisting
of key civilian and military leaders* to oversee the DRI efforts and
advise the Secretary on new reform efforts, (2) a Coordinating Group to
provide assistance and advice to the Management Council, and (3) a Defense
Reform Office to track implementation of the initiatives and identify
areas where management*s attention was needed. The services and Defense
agencies, which are ultimately responsible for implementing the
initiatives, also established small offices or points of contact to
receive and collect information about DRI. However, the department did not
develop an integrated reform strategy and action plan to guide the
program*s implementation, a limitation we have found in prior reform
efforts.

The current Secretary of Defense, in 2001, announced his management reform
program, referred to as the DOD Business Transformation program. This
resulted in the creation of two top- level committees, the Background

Page 4 GAO- 03- 58 Defense Management

Senior Executive Council and the Business Initiative Council, to help
improve business practices and transform the military and to oversee the
implementation of the new reform program. The Secretary also created an
advisory group of outside experts known as the Defense Business Practice
Implementation Board.

The Senior Executive Council was established to help guide efforts across
the department to improve business practices. It is chaired by the
Secretary of Defense and is comprised of the Deputy Secretary of Defense,
the service secretaries, and the Under Secretary of Defense for
Acquisition, Technology and Logistics. The Senior Executive Council was
established to function as a board of directors for the department.

The Business Initiative Council, headed by the Under Secretary of Defense
for Acquisition, Technology and Logistics, includes among its membership
the service secretaries and the Vice Chairman of the Joint Chiefs of
Staff. Recently, membership was expanded to include the Under Secretary of
Defense (Comptroller) and the Under Secretary of Defense for Personnel and
Readiness. The Business Initiative Council was established to encourage
the military services to explore new money- saving business practices to
help offset funding requirements for transformation and other high
priority efforts.

The Defense Business Practice Implementation Board consists of business
leaders from the private sector to help advise the department on its
efforts to improve business practices. A list of these business leaders is
provided in appendix VI. 1

To determine the status of the DRI initiatives, we reviewed and analyzed
DOD*s February 2002 status report, using it as our basis for determining
the current status of the former DRI initiatives. While we did not conduct
an in- depth review of each initiative, we did confirm the accuracy of a
number of the initiatives contained in DOD*s report. We also met with
representatives from the Offices of Logistics and Materiel Readiness and
the Chief Information Officer to discuss the logistics and electronic
business/ electronic commerce reform efforts.

1 The Comptroller General of the United States, David M. Walker, serves as
an observer on this panel. Scope and

Methodology

Page 5 GAO- 03- 58 Defense Management

To compare the new business transformation program management structure
with the DRI management structure, we relied heavily on our prior work in
this area (see Related GAO Products at the end of this report). We also
met with officials responsible for the new business transformation program
to discuss the management structure and obtain relevant documentation. We
reviewed documents applicable to the intent, purpose, and structure of the
DOD Business Transformation program.

During our work, we interviewed officials who had been heavily involved in
the former DRI, as well as officials operating at all levels of the new
business transformation program. These included the former director of the
DRI Office, the points of contact for several former DRI initiatives, the
Executive Secretary of the Senior Executive Council, the current and past
leaders of the Business Initiative Council Executive Steering Committee,
leaders for several of the Process/ Functional Boards, and champions for a
few of the current business transformation initiatives.

We conducted our review from February 2002 through September 2002 in
accordance with generally accepted government standards.

The Director of the Office of the Under Secretary of Defense*s Defense
Procurement and Acquisition Policy provided written comments on a draft of
this report, which are reprinted in their entirety in appendix VII. In its
comments, DOD concurred with our findings in the draft report.

We are providing copies of this report to the Chairmen and Ranking
Minority Members of the Committee on Armed Services, House of
Representatives; Subcommittee on Defense, Committee on Appropriations, U.
S. Senate; Subcommittee on Defense, Committee on Appropriations, House of
Representatives; Subcommittee on Oversight of Government Management,
Restructuring, and the District of Columbia, Committee on Governmental
Affairs, U. S. Senate; and Subcommittee on National Security, Veterans*
Affairs and International Relations, Committee on Government Reform, House
of Representatives. We are also sending copies of this report to the
Secretary of Defense; the Secretaries of the Army, Navy, and Air Force;
the Commandant of the Marine Corps; and the Director, Office of Management
and Budget.

We will make copies available to others upon request. In addition, the
report will be available at no charge on the GAO Web site at http:// www.
gao. gov. Agency Comments

Page 6 GAO- 03- 58 Defense Management

If you or your staff have questions regarding this report, please contact
me on (202) 512- 8412 or holmanb@ gao. gov. Other major contributors to
this report are listed in appendix VIII.

Barry W. Holman Director, Defense Capabilities and Management

Page 7 GAO- 03- 58 Defense Management

Briefing Section I: Status of Defense Reform Initiatives

Page 8 GAO- 03- 58 Defense Management

Briefing Section I: Status of Defense Reform Initiatives

Briefing Section I: Status of Defense Reform Initiatives

Page 9 GAO- 03- 58 Defense Management

The Department of Defense (DOD) indicates that most Defense Reform
Initiative (DRI) efforts are being carried forward* that is, incorporated
into the new management reform program. According to a DOD official in the
Office of the Under Secretary of Defense for Acquisition, Technology and
Logistics, those initiatives not included in the department*s February
2002 report were generally no longer ongoing or no longer being tracked by
the former DRI Office at the time of the transition to the new
administration. Of the 40 initiatives identified in its February report, 5
were categorized as completed and 35 were categorized as ongoing in some
form. (See app. III for a summary table of Defense Reform Initiatives.
App. IV contains DOD*s February 2002 status report in its entirety.)

Our analysis shows that most of the ongoing initiatives are not managed
with specific oversight and tracking under the umbrella of a central
management reform program/ office. Rather, they continue to be managed
under the applicable functional area of responsibility. For example, some
of the logistics reform efforts included in the DRI program have been
subsumed into related initiatives under the Deputy Under Secretary of
Defense for Logistics and Materiel Readiness, but their progress is not
being specifically tracked by the new business transformation program.
However, there are some initiatives that are being monitored under the new
management structure. Two key examples are financial management reform and
public- private competitions under the Office of Management and Budget
Circular A- 76. Responsibility and accountability for financial management
reform are vested with the DOD Comptroller, but the effort is being
overseen by the Senior Executive Council (SEC) and, as such, is receiving
high- level visibility under the DOD Business Transformation program. The
department*s A- 76 program has been subsumed into a larger effort, which
is seeking to identify a range of alternatives to A- 76 centered on
noncore functions that DOD and the services do not necessarily need to
perform in- house. Both SEC and the Business Initiative Council (BIC) are
involved in this effort to identify noncore functions.

Our analysis also shows that the DRI initiatives are continuing to exhibit
varying degrees of change under the new business transformation program.
For example, while the objectives of the DRI logistics initiatives
generally continue under the new business transformation program, the
framework for achieving these objectives has changed completely.
Conversely, the framework that was put in place under DRI to achieve the
goals of the electronic business/ electronic commerce program remains
relatively unchanged.

Briefing Section I: Status of Defense Reform Initiatives

Page 10 GAO- 03- 58 Defense Management

Briefing Section I: Status of Defense Reform Initiatives

Page 11 GAO- 03- 58 Defense Management

DRI identified three broad logistics initiatives aimed at improving the
effectiveness and efficiency of business operations, reducing overall
logistics costs, and improving customer service. These initiatives
directed the department to develop a logistics strategic plan, implement
the logistics strategic plan using component transformation plans, and
improve the logistics value to the warfighter.

The department developed several versions of a logistics plan, and each of
the service and agency components produced implementation plans. While we
identified weaknesses in these efforts, we recognized they were a positive
and necessary step toward achieving the goals set by the DRI program.

In September 2001, the current DOD leadership announced a new logistics
initiative program, designated the Future Logistics Enterprise, which
refocused top- level logistics reform on six issues. They are (1) pursue
depot maintenance public- private partnership, (2) use condition based
maintenance, (3) adopt total life- cycle system management, (4) pursue
end- to- end distribution, (5) establish new executive agents, and (6)
enhance enterprise integration.

Many of the objectives identified in the DRI program are continued in
varying degrees under the current Future Logistics Enterprise, though not
specifically under the auspices of SEC or BIC. A key difference under the
new business transformation program is the departure from previous efforts
to develop a comprehensive, integrated logistics strategic plan, with the
military components developing complementary implementation plans.
Nonetheless, several of the objectives of the strategic planning
initiative, such as minimizing logistics costs and modernizing logistics
processes, do continue, even though the approach may have changed. DOD has
carried forward the DRI goal of implementing customer wait time as a
departmentwide logistics metric, and it now uses customer wait time as the
sole measure of logistics performance. However, the capability to capture
and report customer wait time is still under development. The DOD
definition of customer wait time* the elapsed time from order to receipt
when a customer orders an item* is broader than what the department is
currently able to measure.

See appendix I for more detail on the logistics reform efforts.

Briefing Section I: Status of Defense Reform Initiatives

Page 12 GAO- 03- 58 Defense Management

The department identified and began implementing a number of specific
electronic business/ electronic commerce initiatives that it believed
would help modernize selected business practices. These include an
architecture, a strategic plan, an implementation plan, an electronic mall
to provide personnel with one- stop shopping via the Internet, and methods
for safeguarding electronic data.

Most DRI Efforts Are Continuing * DRI identified several initiatives
regarding electronic

business/ electronic commerce.  Electronic business is currently
receiving much attention.

 Architecture is under development.  Strategic plan update is due in
fiscal year 2003.  No implementation plan is anticipated, but oversight
is

being provided by the DOD Electronic Business Board of Directors.

 Recent BIC initiative supports an information technology marketplace.

 President*s Management Agenda directs work on a public key
infrastructure.

Briefing Section I: Status of Defense Reform Initiatives

Page 13 GAO- 03- 58 Defense Management

However, in July 2000, we reported that DOD had made little progress in
the area of electronic commerce. 1 Specifically, we found that although a
strategic plan was in place, other key implementation issues had not been
addressed. Efforts to develop a departmentwide implementation plan had
ceased, and work on an electronic commerce systems architecture was
lagging. While the electronic mall was available to DOD shoppers, it was
incomplete with several pieces under development. Although DOD launched
many initiatives to improve security over its information, the public key
infrastructure program was seen as crucial to providing the necessary
safeguards and was not expected to be implemented for several years. 2

Currently, these electronic business efforts are not formal initiatives
under the new management structure, but they are receiving high- level
attention within the department under the direction of the Chief
Information Officer. The electronic business architecture is under
development, but the future direction is uncertain pending development of
a financial management enterprise architecture. The strategic plan is
being updated, and a new version is expected sometime in fiscal year 2003.
There is currently no effort underway for a departmentwide implementation
plan, but the services continue to operate their separate programs with
oversight provided by the DOD Electronic Business Board of Directors.
Additionally, in February 2002, the BIC approved an effort to implement a
virtual information technology marketplace for hardware, software, and
selected services, which complements the DRI electronic mall initiative.
Moreover, the electronic business area is receiving attention as one of
the five governmentwide initiatives in the President*s Management Agenda
for fiscal year 2002. The initiative, referred to as Expanded Electronic
Government, specifically includes a public key infrastructure element as
part of an effort to safeguard data.

See appendix II for more detail on the electronic business/ electronic
commerce reform efforts.

1 U. S. General Accounting Office, Defense Management: Electronic Commerce
Implementation Strategy Can Be Improved, GAO/ NSIAD- 00- 108 (Washington,
D. C.: July 18, 2000).

2 A public key infrastructure is a system of hardware, software, policies,
and people that, when fully and properly implemented, can provide a suite
of information security assurances that are important in protecting
sensitive communications and transactions.

Briefing Section II: Management Structures Page 14 GAO- 03- 58 Defense
Management

Briefing Section II: Management Structures

Former Defense Reform Initiative Management Structure

Coordinating Group

Army Focal Points

Navy Focal Points

Air Force Focal Points

Marine Corps Focal Points

Defense Agencies

Focal Points Defense

Management Council

DRI Office Deputy Secretary of Defense

Secretary of Defense

Source: GAO analysis of DOD documents.

Briefing Section II: Management Structures Page 15 GAO- 03- 58 Defense
Management

The DRI program was established with an organizational framework to give
structure and guidance to the reform effort. The framework consisted of
the Defense Management Council (DMC), a coordinating group to support DMC,
and a DRI Office to track implementation and identify issues that needed
management attention. Points of contact called focal points were
established in the services and Defense agencies.

DMC was expected to act as an internal board of directors. Membership
included the Deputy Secretary of Defense (chair), the four Under
Secretaries of Defense, the Vice Chairman of the Joint Chiefs of Staff,
three military service Under Secretaries, four military service Vice
Chiefs, the General Counsel, and the Director of the DRI Office.

A coordinating group, comprised of senior level representatives from the
military services and the Office of the Secretary of Defense, was
established to support DMC. The Director for Program Analysis and
Evaluation, located in the Office of the Secretary of Defense, acted as
executive director and served as the primary interface with DMC, helping
to decide which issues to bring to it. The coordinating group met weekly
to provide advice and assistance to DMC, draft policy statements, and
provide a forum for the services and Defense agencies to discuss concerns,
deal with ongoing DRI activities, and resolve problems.

The DRI Office was created to monitor progress and identify areas where
management attention was needed. Intentionally kept small* up to eight
people* it was tasked to track implementation of initiatives, obtain
information on progress and potential problems, develop status reports,
and look beyond DRI to identify other reform opportunities and marshal
support.

Focal points were either small offices or points of contact established by
the services and Defense agencies to receive and collect information about
the DRI initiatives. The focal points did not manage initiatives, but they
had a role in expediting actions and seeing that specific initiatives were
addressed in their organizations.

Briefing Section II: Management Structures Page 16 GAO- 03- 58 Defense
Management

Former Defense Reform Initiative Management Structure

 DRI provided a centralized focus for major initiatives.  Created a
centralized DRI Office to facilitate reform and

track results.  Used Defense Reform Initiative Directives to describe an

initiative and provide direction.  Developed performance contracts for
Defense agencies

to improve oversight of the agencies.  Linked Quadrennial Defense Review
(QDR) and DRI

goals throughout the organization.  Issued budget guidance directing the
services and

Defense agencies to support QDR and DRI goals.

Briefing Section II: Management Structures Page 17 GAO- 03- 58 Defense
Management

The high- level management attention and oversight structure established
by the department, particularly during the early stages of the program,
had a positive effect on the implementation of DRI. Strong support and
leadership from the then Secretary and Deputy Secretary of Defense, for
example, gave the DRI a high priority within the department. Through its
organizational framework, DOD tried to institutionalize and provide a
centralized, sustained emphasis on the former DRI. The Defense Management
Council and the DRI Office were established to provide the type of
management attention and oversight necessary for successful reform by
effectively communicating the reason for the change, setting the overall
scope and agenda, and establishing policy. One of the direct communication
tools DOD developed was the Defense Reform Initiative Directive. These
directives, reviewed by DMC and issued by the Deputy Secretary of Defense,
communicated specific goals and objectives, milestones, and decisions for
selected initiatives. A total of 54 Defense Reform Initiative Directives
were issued between November 1997 and March 2000. 1

DOD also developed performance contracts to improve oversight of Defense
agencies that provide numerous products and services to the military
services and to other Defense agencies. These performance contracts were
formal agreements delineating improvement goals related to cost,
productivity, quality, and responsiveness to customers. According to a DOD
official, emphasis on performance contracts continues; however, they have
evolved into customer support agreements, which means customers will now
be more involved in developing the goals and metrics for the Defense
agencies.

DOD developed a departmentwide strategic plan, the Quadrennial Defense
Review (QDR), which set DOD*s general direction for 4 years. Then, in
1998, the Secretary directed organizations at all levels of the department
to review their strategic plans and mission objectives to ensure they were
linked to the QDR and DRI goals and objectives.

In an effort to overcome typical budget shortfalls for management reform
initiatives, DOD directed the services and Defense agencies to construct
budgets and programs consistent with the corporate- level goals in the
QDR. Budget guidance included DOD*s mission statement and strategic goals,
including the goal to *fundamentally reengineer the department.*

1 While Defense Reform Initiative Directives were used to communicate
specific goals, objectives, milestones, and decisions associated with the
Defense Reform Initiative program, not every directive resulted in a
separate initiative.

Briefing Section II: Management Structures Page 18 GAO- 03- 58 Defense
Management

Briefing Section II: Management Structures Page 19 GAO- 03- 58 Defense
Management

The DRI included a variety of reform or reengineering initiatives, many of
which were already ongoing before they were brought under the DRI
umbrella. These included a series of 17 Management Reform Memoranda, which
had been issued in early 1997 by the Deputy Secretary of Defense. To
varying degrees, DRI gave each of those initiatives increased visibility
and top- level support within the department and, in many instances,
imposed new goals and milestones for accomplishing their objectives.

The Defense Management Council played an effective role in getting DRI
started. For example, it helped establish goals, objectives, and time
frames for completing many of the initiatives; supported the need for
reform throughout the department; and helped ensure that staff at all
levels understood the significance and purpose of DRI.

As we previously reported, DMC might have been more effective in serving
as the Secretary*s Board of Directors had the DMC members been able to (1)
work in a more collaborative fashion on major departmentwide issues, (2)
establish priorities among the numerous reform initiatives, (3) enhance
the DMC*s decision- making role and authority, and (4) obtain better
information on the initiatives* status. In April 1999, we recommended that
the Secretary of Defense establish a comprehensive, integrated strategy
and action plan for reforming the department*s major business operations
and support activities. 2 Then again in a July 2000 report, we reiterated
that recommendation, stating that an integrated strategy and action plan
could help DOD maintain program momentum and continuity during any
transition in department leadership. 3

2 U. S. General Accounting Office, Defense Reform Initiative:
Organization, Status, and Challenges, GAO/ NSIAD- 99- 87 (Washington, D.
C.: Apr. 21, 1999). 3 GAO/ NSIAD- 00- 108.

Briefing Section II: Management Structures Page 20 GAO- 03- 58 Defense
Management

Defense Business Practice Implementation Board

Joint Integration and Support Team

Acquisition Management Process/ Functional

Board Installations and

Logistics Process/ Functional

Board Resource

Management Process/ Functional

Board Information

Technology Process/ Functional

Board Manpower &

Personnel Process/ Functional

Board Research &

Engineering Process/ Functional

Board Test &

Evaluation Process/ Functional

Board Business Initiative Steering Committee

Business Initiative Council Senior Executive Council

(chaired by the Secretary of Defense) Specific Efforts

DOD Business Transformation Program Management Structure

Executive Directors

Source: DOD.

Briefing Section II: Management Structures Page 21 GAO- 03- 58 Defense
Management

DOD Directive 5105.66 created the SEC on July 10, 2001. The SEC mission is
to advise the Secretary of Defense in the application of sound business
practices in the military departments, Defense agencies, and other DOD
components. SEC is intended to be the principal mechanism to evaluate such
practices and develop and implement proposals for improvement. Such
proposals, or special efforts, may initially be developed under the
purview of SEC and then referred to either BIC or the applicable
functional area for implementation.

The Defense Business Practice Implementation Board (the Board) reports to
SEC. Its mission is to make recommendations to SEC on strategies for
implementing best business practices of interest to DOD in matters
relating to management, acquisition, production, logistics, personnel
leadership, and the defense industrial base. The Board is to consist of 20
members and ad hoc consultants as necessary (see app. VI) and is subject
to renewal every 2 years.

The stated mission of BIC is to improve efficiency of DOD business
operations by identifying and implementing business reform actions that
allow savings to be reallocated to higher priority efforts. Membership is
similar to SEC.

The Steering Committee is responsible for developing project guidelines,
plans, and direction and ensuring that individual reforms are integrated.
It is composed of designated service three- star flag and general
officers, selected executives from the Office of the Secretary of Defense,
and a Joint Chief of Staff warfighter liaison.

The Joint Integration and Support Team (the Team) provides the necessary
analysis, coordination, facilitation, and support needed for a project.
The Team is comprised of BIC Executive Directors from the Office of the
Secretary of Defense, Joint Staff, the services, and their supporting
staff.

Seven multiservice/ department process/ functional boards conduct the
actual reform work efforts within the framework of the guidelines,
assessment methodologies, and information requirements of the Steering
Committee. Among other things, these boards develop action plans that
identify resource requirements, integration efforts with other reforms,
policies, directives, and training, where applicable.

The BIC, the Steering Committee, and the functional boards are replicated
at the individual service level.

Briefing Section II: Management Structures Page 22 GAO- 03- 58 Defense
Management

Briefing Section II: Management Structures Page 23 GAO- 03- 58 Defense
Management

The SEC assists the Secretary of Defense in determining broad policy and
implementing initiatives relating to the efficient organization and
management of the department. It identifies opportunities to achieve
improved efficiency and effectiveness in DOD operations, such as improved
business practices and consolidation of managerial functions and
activities. A senior Defense official acknowledges, however, that given
the high level of membership, the lines between ongoing management
responsibility and the management reform agenda may sometimes appear
blurred. Formal SEC meetings are held monthly.

The directive that created SEC required it to *consult with members of the
business and the academic communities to seek innovative methods to
resolve management problems, reengineer business practices, and streamline
operations.* To fulfill this requirement, a formal advisory board, the
Defense Business Practice Implementation Board, was created and met for
the first time on March 15, 2002. It plans to meet quarterly, and has met
three times to date and covered a variety of issues, such as human capital
transformation and financial performance metrics.

The SEC and BIC memberships overlap considerably. Four of the six members
of the SEC also sit on the seven- member BIC. Such a considerable overlap
in membership provides a direct line of communication between the two
councils and ensures consistency between the intent and implementation of
business transformation initiatives. In addition, the Executive Secretary
of the SEC also attends BIC meetings and acts as a liaison.

Briefing Section II: Management Structures Page 24 GAO- 03- 58 Defense
Management

Briefing Section II: Management Structures Page 25 GAO- 03- 58 Defense
Management

According to its charter, the BIC *will establish the overall DOD business
reformation objectives and strategic direction, champion the
implementation of this initiative across DOD, and hold the participating
organizations responsible and accountable for positive results and stated
outcomes.* The BIC approves the business reform initiatives.

The BIC charter provides for a phased approach, with the initial focus
aimed at near- term reform actions. The four phases are:

1. Scoping of the Business Initiative (July 2001- September 2001):
recommend and implement near term *quick hits* that were expected to
result in some budgetary savings in fiscal year 2003 and recommend longer-
term initiatives.

2. Exploration of Long- Term Initiatives (October 2001- March 2002): begin
to implement longer- term initiatives and define metrics to be used to
measure effectiveness of reforms, including feedback from the warfighter
and achievement of projected savings.

3. Implementation of Long- Term Opportunities (April 2002- September,
2002): commence execution phase for long- term reform and provide reports
and results regarding progress and outcomes of reform actions.

4. Continuation of Reform Implementation (October 2002- March 2003):
follow- on work to the previous phase and document and present final
report of BIC efforts to the Under Secretary of Defense for Acquisition,
Technology and Logistics.

Lead responsibility for each phase of the effort rotates among the
military departments, with the Navy leading the first phase, followed by
the Air Force and the Army for subsequent phases. The lead military
department is primarily responsible for maintaining the forward- motion of
the BIC efforts. The intent is to ensure that all participating military
departments share in leading the BIC efforts and provide a climate for the
exchange of good ideas. The leadership role lasts approximately 6 months.

The BIC establishes the overall DOD business reformation objectives and
strategic direction, champions the implementation of this initiative
across DOD, and holds the participating organizations responsible and
accountable for positive results and stated outcomes. The Business
Initiative Executive Steering Committee, the Joint Integration and Support
Team, and the Process/ Function Boards support the BIC work.

Briefing Section II: Management Structures Page 26 GAO- 03- 58 Defense
Management

The SEC has a higher- level membership than the former Defense Management
Council and a much smaller membership as well* 6 members instead of 17.
Unlike the DMC, the SEC does not have any military members* all are
currently civilians. According to DOD officials, one lesson learned from
the DMC was that in order for members to be effective, they had to be
willing to focus on departmentwide solutions, putting aside their
individual service and agency interests as necessary. According to a high-
ranking DOD official, the service secretaries

Briefing Section II: Management Structures Page 27 GAO- 03- 58 Defense
Management

understood that they would be expected to work for the Secretary of
Defense as well as their own service organizations.

There appears to be less emphasis on a formal program construct than with
the DRI structure, which relied heavily on a central management office
(DRI Office) and formal Defense Reform Initiative Directives and
Management Reform Memoranda. In contrast, a senior Defense official told
us that much of the coordination and cooperation within the DOD Business
Transformation program seems to be based on relationships and personality
rather than on formal program structure. Additionally, there is a higher
level of personal accountability. Each level in the management structure
is accountable to the next level, up to the service secretaries and,
ultimately, to the Secretary of Defense.

To date, the business transformation program has focused on the
effectiveness of reforms with the belief that efficiencies and savings
will ultimately result rather than on initially focusing on specific
savings targets. Under DRI, projected savings from the Base Realignment
and Closure and A- 76 initiatives were taken from the budget and put
toward higher priority efforts. Department officials told us that the
business transformation program has not programmed projected savings into
future budget plans from its new initiatives and remains undecided whether
to focus on savings being retained in the implementing office or shifted
elsewhere, such as to support force transformation. Furthermore, DOD
officials acknowledge that savings from some initiatives, while expected,
may be difficult to quantify. Additionally, a senior Defense official told
us that not all initiatives require budgetary savings to be an objective*
they can be approved on the basis of good business practice. However, we
believe this could change as the initiatives move from being *quick hits*
to longer term, which require more investment dollars.

The DOD Business Transformation program structure includes a formal
advisory board to make recommendations to SEC on implementing best
business practices of interest to the department. This is quite different
than the DRI program. While DRI had working groups that included some
individuals from the private sector, it did not provide for a private
sector board to advise and help formulate the reform program as a whole.

The new program is still evolving* SEC and BIC were established in July
2001 and the events of September 11, 2001, changed the focus of both
councils, at least for a time. Like the DRI program before, the current
program may also change focus. At this point, it is difficult to determine
where the change in focus might occur.

Briefing Section III: Types of Initiatives Page 28 GAO- 03- 58 Defense
Management

Briefing Section III: Types of Initiatives

DOD Business Transformation Program Initiatives

 BIC initiatives have been publicized and visible.  To date, most
initiatives have been smaller in scope than

DRI efforts.  Initiatives are a combination of top- down and bottom- up.

 BIC directed some of the initiatives, such as optimize professional
continuing education and streamline contract close- out process.

 SEC has oversight responsibility for broader initiatives.  Recently
directed actions on financial management

reform, organization of Defense agencies, and alternatives to A- 76 for
noncore activities.

 SEC and BIC envision taking on broader projects over time.

Briefing Section III: Types of Initiatives Page 29 GAO- 03- 58 Defense
Management

DOD issues press releases to announce business reform initiatives approved
by BIC. The first press release, issued October 15, 2001, announced the
initial round of approved initiatives. The press release announcing the
sixth round of approved initiatives approved on September 4, 2002, was
issued on October 15, 2002. Early initiatives were dubbed *quick hits* by
DOD and defined as *those that have positive influence/ benefit in FY03.*
They were smaller in scope than the DRI efforts, owing in part to the
short time frame to accomplish the initiatives by fiscal year 2003 and
because DOD already had the authority and ability to implement the
initiatives. A list of initiatives approved in each round is shown in
appendix V.

BIC initiatives may come from a variety of sources, such as the services,
their major commands, the functional boards, BIC itself, and even SEC,
although DOD officials stated most are generated from the bottom- up.
Initiatives originating at the lower levels of the management structure
were identified in different ways. For example, the Air Force sent out a
general servicewide request for initiatives, while the Navy reviewed
Defense Science Advisory Board reports for potential initiative
candidates. The functional boards included brainstorming sessions as part
of their periodic meetings and also formed integrated product teams to
help identify initiatives.

The SEC is responsible for the oversight of broader initiatives and
recently directed each military service and Defense agency to participate
in the development of a core- competency based approach for determining
the source of services required. Such sources could include current DOD
employees, other federal agencies, and private- sector contracts and/ or
partnerships. The premise behind this approach is for DOD to focus its
energies and talents on core functions and transition the noncore
competencies to alternative sources, initially through pilot programs.
These pilot programs, referred to as pioneer projects, were approved in
the May 31, 2002, round of BIC initiatives. This was in keeping with the
phased approach of the BIC, which started with near- term initiatives and
is progressing toward long- term opportunities. DOD is still in the early
stages of initiating this effort.

Briefing Section IV: Conclusions Page 30 GAO- 03- 58 Defense Management

Briefing Section IV: Conclusions

Briefing Section IV: Conclusions Page 31 GAO- 03- 58 Defense Management

In an effort to reform DOD*s business processes, the Secretary of Defense
established two top- level councils, empowering both to make decisions
that have the potential to transform DOD. The councils* structures include
senior level management from the various services with decision- making
authority. The joint membership and leadership efforts of the councils are
intended to ensure that all the services and Defense agencies are engaged
in changing the way DOD does business. The Secretary also established a
private sector advisory council in the form of the Defense Business
Practice Implementation Board to tap management reform innovations and
ideas from outside the federal government.

The department*s efforts are still evolving, and consequently, it is too
soon to tell how effective this approach will be in transforming DOD*s
business operations. We believe this new management program has the
potential to be an effective mechanism for reform, given the high- level
membership and significant amount of interservice participation. However,
like the former DRI program, the DOD Business Transformation program has
not yet developed an overarching plan tying all the individual reform
efforts together. Although the Business Initiative Council Charter
suggests one was anticipated, it states,

*The BIC efforts will be conducted within a total systems approach, with
individual reforms identified, reviewed, and executed within the context
of an integrated business model for DOD. This approach will also allow for
an assessment of the overall extent of the proposed changes to ensure that
DOD has the capacity and resilience to effectively integrate the
cumulative impact of the various functionally oriented changes.*

As the new program takes on broader initiatives, the development of an
overarching integrated plan could take on increased importance,
particularly where initiatives become more interrelated and up- front
investments are required.

We have previously recommended that the department establish a
comprehensive, integrated strategy and action plan for reforming its major
business processes and support activities. 1 We believe that
recommendation is in line with the plan cited in the BIC Charter.

1 GAO/ NSIAD- 99- 87.

Appendix I: Status of Defense Logistics Reform Efforts

Page 32 GAO- 03- 58 Defense Management

The Defense Reform Initiative (DRI) program had three broad logistics
initiatives, two of which dealt with aspects of strategic planning.
Subsequently, the Department of Defense (DOD) restructured its logistics
improvement initiatives, discontinuing the framework for reform begun
under the DRI process. Many of the objectives identified in the DRI are
continued in varying degrees under current departmental improvement
initiatives* though not specifically under the oversight of the new Senior
Executive Council (SEC) or Business Initiative Council (BIC). A key
difference under the DOD Business Transformation program is the departure
from previous efforts to develop a comprehensive, integrated logistics
strategic plan, with the military components developing complementary
implementation plans. At the same time, many other previously initiated
service- led logistics reform efforts continue. Providing logistics
support that is economical and responsive has been identified by us as a
major management challenge facing the department, as reported in our
periodic Performance and Accountability reports covering 21 federal
agencies.

The DRI, begun in 1997, was aimed at improving the effectiveness and
efficiency of DOD business operations. This effort included three broad
logistics improvement initiatives:

 development and implementation of a logistics strategic plan to provide
a vision and set of objectives for improving logistics support to the
warfighter;  submission of annual logistics transformation plans by DOD
components

to document how these organizations were to reach the goals and objectives
laid out in the logistics strategic plan; and  improvement of the value
of logistics to the warfighter by reducing

logistics response time, increasing total asset visibility, 1 and reducing
supply inventories.

DOD identified 11 associated objectives that represent the specific
actions it would undertake to implement the three DRI logistics
improvement initiatives. Table 1 provides the objectives of each DRI
logistics initiative, along with its associated metrics and milestones.
This table also characterizes the extent to which the initiatives are
continued under current logistics improvement initiatives.

1 Total asset visibility involves the use of automatic identification
technology to access the location of DOD assets throughout the supply and
distribution systems. Appendix I: Status of Defense Logistics

Reform Efforts DRI Logistics Reform Initiatives

Appendix I: Status of Defense Logistics Reform Efforts

Page 33 GAO- 03- 58 Defense Management

Table 1: Status of DRI Logistics Initiatives Initiative objective Metrics
Milestones

Extent to which prior efforts continued under current logistics
improvement initiatives

I* Develop Logistics Strategic Plan See below. See below. DOD- wide
strategic plan is no

longer directed, although several planning efforts continue. Optimize
support to the warfighter by baselining existing mission- capable rates,
and then establishing and moving toward achieving higher target rates.

Mission- capable rates. Establish baseline and target rates by 2001, and
achieve improvement through the end of fiscal year 2006 with components
reporting progress annually.

The Office of the Secretary of Defense (OSD) no longer tracks mission-
capable rate metrics but continues to focus on support to the warfighter
by using weapon system performance metrics such as weapon system
availability. The services continue to track mission capable rate goals
and status. Improve strategic mobility to meet warfighter requirements by
increasing cargo airlift, sealift surge, and afloat preposition capacity
to meet current DOD guidance.

Ton- miles/ square footage/ containers.

Eliminate all shortfalls by end of fiscal year 2006.

This specific objective is not carried over into new OSD logistics
initiatives. However, the U. S. Transportation Command has a strategic
plan that includes metrics and milestones for resolving projected
shortfalls and that no longer calls for eliminating all shortfalls by the
end of fiscal year 2006. It currently estimates being able to meet the
sealift shortfall by fiscal year 2003 and the airlift shortfall by 2018.
Improve strategic mobility to meet warfighter requirements by developing a
measurement approach and appropriate targets for mobility infrastructure
and mobility process improvements.

Not developed. Develop an improvement plan by the end of 2001 and achieve
improvement goals by the end of fiscal year 2006.

This specific objective is not carried over into new OSD logistics
initiatives. However, the U. S. Transportation Command has a strategic
plan that includes metrics and milestones for improving the mobility
infrastructure and processes by the end of 2006. Refine the definition of
customer wait time, develop appropriate measures, and implement as the
departmentwide logistics metric.

Number of days from customer order to delivery (for total supply chain).

Develop definition and measurement by end of fiscal year 2001 and fully
implement measurement for all selected segments by the end of fiscal year
2006.

This objective, and its associated metric and 2006 milestone, continues
under the current OSD logistics improvement initiatives.

Appendix I: Status of Defense Logistics Reform Efforts

Page 34 GAO- 03- 58 Defense Management

Initiative objective Metrics Milestones Extent to which prior efforts

continued under current logistics improvement initiatives

Fully implement total asset visibility across DOD to allow users to view
information on the identity and status of Defense materiel and assets and
to complete business transactions using this information.

Visibility into the location of assets. Determine methods, asset

information requirements, and associated measures by the end of fiscal
year 2000 and implement 100 percent of requirements by the end of fiscal
year 2006.

This objective is no longer continued under current OSD logistics
initiatives.

Reengineer and modernize applicable logistics processes and systems by
developing modernization plans by the end of fiscal year 2001 and by
increasing the proportion of modernized logistics business systems
according to those plans.

Percentage of systems modernized. Develop modernization

plans by the end of 2001 and increase the proportion of modernized
logistics business systems according to those plans by the end of fiscal
year 2006, with components reporting annually against targets.

While this objective continues under the new OSD logistics initiative, the
approach has changed. Milestones have been established for initial and
midterm tasks* such as reviewing ongoing information system development
efforts* but new metrics and milestones for full program implementation
have not yet been developed. Minimize logistics costs while meeting
warfighter requirements by reducing the overall costs of logistics support
for selected weapon systems.

Logistics costs. Reduce the overall costs of logistics support for
selected fielded weapon systems by 7 percent by fiscal year 2000, by 10
percent by fiscal year 2001, and by 20 percent by the end of fiscal year
2005.

This objective, and its associated metrics and milestones, continues under
the current OSD logistics initiatives.

II* Implement Logistics Strategic Plan using Component Transformation
Plans

See below. See below. Logistics transformation plans have been
discontinued.

Each DOD component submits a logistics transformation plan that documents
how the component plans to reach the goals and objectives laid out in the
DOD Logistics Strategic Plan.

Not fully developed. Submit plans annually to OSD beginning in fiscal year
2000. This objective is not being

continued, and the components are not preparing transformation plans to
support a coordinated DOD- wide logistics transformation strategy.

Appendix I: Status of Defense Logistics Reform Efforts

Page 35 GAO- 03- 58 Defense Management

Initiative objective Metrics Milestones Extent to which prior efforts

continued under current logistics improvement initiatives

III* Improve Logistics Value to the Warfighter. See below. See below.
Initiative as structured in the DRI

has significantly changed or been discontinued, but the general goal of
improving support to the warfighter continues under current OSD
initiatives. Reduce logistics response time. Number of days from customer

order to delivery (for wholesale portion of supply chain).

Obtain orders from the wholesale system in 24 days in fiscal year 1999,
and 18 days in fiscal year 2000.

This objective continues under the current OSD logistics initiatives;
however, OSD is now using as a metric the number of days from customer
order to delivery for the total supply chain. Current measurements are
limited to spare and repair parts and do not include other classes of
supply. Increase total asset visibility. Percentage of inventories that

are visible to all integrated material managers.

Achieve 80 percent visibility of asset inventories in fiscal year 1999 and
90 percent in fiscal year 2000.

This objective does not continue under the current OSD logistics
initiatives.

Reduce supply inventories. Adjusted acquisition value of DOD*s secondary
item inventories.

Reduce secondary item inventories to an adjusted value of $56 billion by
fiscal year 2000.

This objective does not continue under the current OSD logistics
initiatives.

Source: GAO analysis of DOD data.

Under DRI, the department had recognized two broad approaches for
addressing critical logistics shortfalls* strategic planning and
implementation and optimizing support to the warfighter. As a result of
its DRI improvement initiatives, the department then developed several
versions of a logistics strategic plan and each of the components produced
plans intended to support the implementation of goals and objectives in
the DOD plan. We have recommended improvements to DOD*s strategic planning
process, including the development and implementation of a logistics
strategic plan in several reports since the mid- 1990*s. 2 While we
identified weakness in these efforts, we recognized that they were a
positive step since the implementation of effective strategic planning is

2 U. S. General Accounting Office, Logistics Planning: Opportunities for
Enhancing DOD*s Logistics Strategic Plan, GAO/ NSIAD- 97- 28 (Washington,
D. C.: Dec. 18, 1996), Defense Logistics: Actions Needed to Enhance
Success of Reengineering Initiatives,

GAO/ NSIAD- 00- 89 (Washington, D. C.: June 23, 2000), and Defense
Logistics: Strategic Planning Weaknesses Leave Economy, Efficiency, and
Effectiveness of Future Support Systems at Risk, GAO- 02- 106 (Washington,
D. C.: Oct. 11, 2001).

Appendix I: Status of Defense Logistics Reform Efforts

Page 36 GAO- 03- 58 Defense Management

essential to the comprehensive transformation of logistics structures,
processes, and supporting information systems to improve customer service
and reduce support costs. Further, regarding the need to improve support
to the warfighter, DOD recognized three significant problems impacting
successful, timely, and economical support* logistics response time, total
asset visibility, and inventory reduction.

Various DOD organizations and activities were involved in pursuing aspects
of the DRI logistics improvement efforts. The department produced several
reports on its progress in implementing the logistics improvement
initiatives, with the last report completed in 2001. Concluding that
logistics strategic planning was on track, the report stated, *although
logistics reform is relatively new compared with acquisition reform,
progress has been achieved within the past 18 months, and the Department
has developed an overarching logistics strategic plan in August 1999 that
provides vision and a set of objectives for meeting the logistics
challenges of the 21st century.* However, the report acknowledged that the
components* transformation plans showed programs that were *underfunded,
not cohesive, lacked specific performance metrics and milestones, and had
no clear relationship to DOD strategic objectives.* Also, regarding the
effort to improve logistics value to the warfighter, the report indicated
that the services had achieved the three metrics established for this
initiative.

With the change in administration in 2001, DOD*s new leadership began
formulating a new approach for dealing with problems within the
department. Regarding logistics issues, in September 2001, the current
Deputy Under Secretary of Defense for Logistics and Materiel Readiness
announced a management improvement program, which discontinued the three
DRI initiatives and refocused the department*s top- level logistics
improvement efforts. DOD officials stated that these new logistics
initiatives, designated the Future Logistics Enterprise, would be the
focus of the department*s logistics support improvement efforts during the
current administration. However, the officials stated that the tenets of
the DRI logistics initiatives have been incorporated into the department*s
Future Logistics Enterprise or into other logistics improvement efforts
within DOD.

The Future Logistics Enterprise is comprised of six new objectives. Table
2 summarizes the objectives with the associated metrics and milestones.
The table also describes the extent to which current efforts are a
continuation of prior DRI improvement initiatives. New Reform Focus

Appendix I: Status of Defense Logistics Reform Efforts

Page 37 GAO- 03- 58 Defense Management

Table 2: Status of Future Logistics Enterprise Initiatives Objective
Metrics Milestones

Extent to which current logistics improvement initiatives continue prior
DRI efforts Pursue depot maintenance public- private partnerships to
achieve greater facility utilization, reduce cost, and realize greater
investment in organic depots by empowering DOD depots to develop
partnerships with the commercial sector.

Metrics are under development. Potential metrics include the value of
private- sector investment in DOD depots and increased workload at DOD
depots resulting from public- private partnerships. Officials said it will
be sometime in early 2003 before the metrics will be finalized.

Not yet developed. This was not an objective addressed by DRI.

Use more accurate conditionbased maintenance data to predict failures and
maintenance requirements, reduce unnecessary maintenance, and increase
operational availability and readiness.

Not yet developed. Not yet developed. This was not an objective addressed
by DRI.

Adopt a total life- cycle approach to weapon system management to achieve
effective performance and optimum readiness while reducing operations and
support costs, in order to meet warfighter weapon systems performance
requirements.

Not yet developed for measuring collective success of this objective. DOD
plans to develop metrics by February 2004.

Near- term milestones were established for six areas: (1) establish the
framework and structure for the effort, including DOD policy and guidance
by December 2002; (2) change the business processes within the current
logistics environment and revise financial mechanisms by December 2005;
(3) marshal resources to support the initiative, including the public and
private supplier bases, new workforce, and investment funds by October
2003; (4) synchronize this effort with other initiatives by November 2002;
(5) enhance existing and implement new oversight mechanisms for weapon
system sustainment by December 2003; and (6) institutionalize this new
acquisition and support concept throughout DOD by December 2003.

This objective continues the general DRI objective to optimize logistics
support to the warfighter by requiring the use of performance measurements
such as weapon systems availability and reliability.

Appendix I: Status of Defense Logistics Reform Efforts

Page 38 GAO- 03- 58 Defense Management

Objective Metrics Milestones Extent to which current

logistics improvement initiatives continue prior DRI efforts Pursue end-
to- end distribution

to streamline supply support to the warfighter by providing materiel,
including retrograde, from the source of supply or point of origin to the
point of use or disposal, as defined by the combatant commander. a

Customer wait times: number of days from customer order to delivery (for
total supply chain).

Reduce the time for spare and repair parts from 18 days in 2001 to 17 days
in 2002, and to 16 days in 2003. Unclear whether milestones will be
established for other commodities.

This objective continues the DRI objective to reduce customer wait time.

Establish new executive agents determination process to assign
responsibility to a service or Defense agency for providing common
services (i. e., bulk fuel or area decontamination) and to improve
planning to ensure that the needed resources are available.

Not yet developed. Not yet developed. This was not an objective addressed
by DRI.

Enhance enterprise integration

by building on service and Defense Logistics Agency software integration
efforts and reduce information system support costs by streamlining and
changing current DOD business processes and practices so that they are
supported by commercially available software.

Not yet developed. Not yet developed. Near- term milestones are in
development.

This objective continues the DRI objective to reengineer and modernize
logistics systems, but takes a different approach. b

a This effort is also supposed to ensure a smooth transition from
peacetime to wartime distribution processes and to resolve conflicting
demands for airlift and sealift that currently exist between deploying
forces and sustainment distribution requirements. b DOD reviewed six
ongoing systems* software modernization efforts* four in the Navy and one
each

in the Army and the Air Force* resulting in seventeen general findings and
fourteen follow- on actions to guide and expand the enterprise integration
effort. Based on the findings and recommended actions, DOD is developing a
detailed logistics architecture for the services to follow in
reengineering their information management systems.

Source: GAO analysis of DOD data.

While the Future Logistics Enterprise initiatives were originally adopted
in 2001, many details have yet to be worked out regarding DOD*s approach
for implementing these initiatives. In some cases, policy is still being
formulated. For five of the six objectives, the metrics to monitor and
evaluate the success of the initiatives and milestones for achieving
improved states are not yet developed or are not fully developed.
Officials said that, in general, these initiatives are in their infancy.
DOD has focused on initiating the efforts, setting policy for the new
initiatives, and exploring

Appendix I: Status of Defense Logistics Reform Efforts

Page 39 GAO- 03- 58 Defense Management

potential approaches for evaluating progress toward achieving the
objectives.

Many of the logistics improvement objectives under the former DRI are
continuing to varying degrees today. The following discussion highlights
the metrics and milestones of the DRI objectives shown in table 1 and
provides an assessment of the extent to which each is continued in the
current Office of the Secretary of Defense logistics improvement
initiatives.

 Optimize support to the warfighter: The Office of the Secretary of
Defense is modifying its approach for evaluating logistics support to the
warfighter, based on the adoption of its performance- based logistics
support concept. The new measure should indicate the effectiveness of
logistics support for specific weapon systems, but it does not provide as
broad an indicator of the effectiveness of the total logistics support
system as the mission- capable rates measure adopted under DRI to assess
the effectiveness of logistics support to the warfighter. To optimize
improvements in warfighter logistics support, DRI provided that each
military component identify existing mission- capable rates for its
various systems. Using these rates as a baseline, the services were to
establish a goal of higher mission- capable rates and move toward
achieving these higher rates by fiscal year 2006. While operational units
will continue to use mission- capable rates, according to DOD officials,
the adoption of performance- based logistics has resulted in the need for
measures that will evaluate the performance of logistics providers in
supporting weapon systems based on factors within their control. The
process calls for program offices, in conjunction with the warfighter, to
establish weapon systems- level performance metrics* such as system
availability and mission reliability* based on existing constraints,
including available funding levels, physical space for maintenance, and
information about the quality of the weapon system. For example, the F-
117 aircraft program is evaluated primarily on an aircraft availability
measure of 99 percent for the aircraft system, excluding the engine. While
DOD officials stated that improved system availability and reliability
should equate to improved mission- capable rates, the mission- capable
rates measure is a broader indicator of the health of a system and
therefore a better indicator of the performance of the logistics system in
supporting the warfighter.  Increase strategic mobility capacity: The
Future Logistics Enterprise

includes a general goal to improve strategic mobility capability as
envisioned by DRI, but the new initiative does not specifically address
the DRI strategic mobility goals. Nonetheless, other improvement
initiatives continue to track the strategic mobility shortfall and develop
approaches for improving mobility infrastructure and processes. Strategic
airlift Many Logistics Objectives

Continue

Appendix I: Status of Defense Logistics Reform Efforts

Page 40 GAO- 03- 58 Defense Management

shortfalls have been a long- standing defense problem affecting the
capability of the military services to transport required forces and
support to the theater of operations in a timely manner. For example, when
completed in 2001, the Mobility Requirements Study 2005 identified a
strategic airlift carrying capacity requirement of 54.5 million ton miles.
The DRI set a goal of achieving the required airlift, sealift, and afloat
preposition capacity identified by the Mobility Requirements Study by
2006. The department currently estimates that it should be able to satisfy
this requirement by the end of 2018 with the acquisition of 180 C- 17
aircraft and modernization of 100 C- 5 aircraft.  Improve strategic
mobility processes and infrastructure: While DOD

is not focusing on strategic mobility shortfalls in its Future Logistics
Enterprise initiatives, its other logistics improvement efforts continue
to address these issues. For example, DRI called for developing a
measurement plan and goals for mobility infrastructure and process
improvements. The Transportation Command strategic plan identifies goals
and measures for improving mobility infrastructure and processes. The
Transportation Command also tracks DOD*s progress toward resolving the
defense strategic mobility shortfall, although officials noted that the
requirement is currently being reassessed. It is appropriate for the
Transportation Command to follow mobility shortfall issues. However, it
also appears appropriate that (1) the ability of DOD to marshal its assets
to the required theater of operations in a timely manner be identified as
a critical logistics goal and (2) such a logistics improvement initiative
be managed and measured within the Office of the Secretary of Defense,
which has responsibility for setting transportation policy within DOD. 
Reduce customer wait time: DOD has carried forward the DRI goal of

implementing customer wait time as a departmentwide logistics metric, and
it uses customer wait time as the sole measure of logistics performance
reported under the Government Performance and Results Act. 3 The DRI
required the development of a definition and measurement of customer wait
time and full implementation of the selected measurement by the end of
fiscal year 2006. The department has defined and developed measures for
customer wait time, and it is pursuing full implementation as part of its
Future Logistics Enterprise initiative to pursue end- to- end
distribution. However, the capability to capture and report customer wait
time is still under development. The DOD definition

3 The Results Act (P. L. 103- 62) requires agencies to develop periodic
strategic and annual performance plans. Among other things, the
performance plans provide agencies with a vehicle to identify their long-
term goals and objectives for all major functions and operations, the
measures they will use to gauge performance, and the strategies and
resources they will use to achieve their performance goals.

Appendix I: Status of Defense Logistics Reform Efforts

Page 41 GAO- 03- 58 Defense Management

of customer wait time* the elapsed time from order to receipt when a
customer orders an item* is broader than what the department is currently
able to measure. While the long- range goal is to use the customer wait-
time measure to encompass all wholesale and retail transactions associated
with customer orders, DOD*s current capability is limited to measuring
spare and repair parts ordered by organizational- level maintenance
activities. DOD officials said they intend to meet the 2006 goal for full
implementation of the broader customer wait time definition.  Increase
total asset visibility: Under the new business transformation

program, DOD shifted its focus from total asset visibility to customer
wait time. The DRI required the determination of appropriate asset
visibility measures and the implementation of total asset visibility
requirements by the end of fiscal year 2006. Office of the Secretary of
Defense officials said that while they believe total asset visibility is a
capability that in some instances should enable reductions in customer
wait time, DOD is not pursuing total asset visibility as a part of its
Future Logistics Enterprise. However, we found that total asset visibility
continues to have importance to the combat commander by providing the
ability to (1) see the flow of logistics into the theatre and make lateral
transfers as needed, (2) reduce the potential for multiple/ duplicative
requisitions when assets do not show up on time, and (3) allow a commander
to perform support- gap analyses on proposed operational plans. We have
reported the need for gaining total asset visibility as an important tool
in managing the procurement, distribution, and disposal of defense assets
and have identified shortfalls in this capability as a factor in making
supply management a high- risk area in DOD. According to joint staff
officials, asset visibility is a critical capability that merits continued
focus and resources to ensure the accomplishment of needed improvement.
Consequently, a working group* comprised of Office of the Secretary of
Defense, service, Defense agency, and selected Combatant Command
membership* has formed to begin crafting a long- term total asset
visibility strategy. We have previously recommended that DOD develop a
total asset visibility system.  Reengineer and modernize logistics
processes and systems: The goal

of updating or replacing logistics systems with modern systems has been
carried forward under the Future Logistics Enterprise initiative to
enhance enterprise integration, but the specific measures contained in the
DRI are not part of the current initiative. The DRI required DOD to
develop information system modernization plans with annual implementation
targets and then to implement improvements according to those plans by
fiscal year 2006, with each military component reporting annually on its
progress toward modernization. Instead of continuing to pursue DRI
information system improvement goals, DOD began the initiative to enhance
enterprise integration in November 2001 with a different

Appendix I: Status of Defense Logistics Reform Efforts

Page 42 GAO- 03- 58 Defense Management

information systems approach. The new logistics information system*s
objective is to achieve a common operating environment built on ongoing
service and Defense Logistics Agency software integration efforts and
reduce system support costs. The department began by reviewing six ongoing
Enterprise Resource Program efforts within the services to identify best
business practices to be considered for adoption agencywide. Based on the
results of the review, DOD is developing a detailed logistics architecture
for the services to follow in reengineering their information management
systems. Whether the initiative to enhance enterprise integration will
result in the same changes anticipated by DRI is not yet known because
specific measures are only now being developed to support the desired
enterprise integration end- state in 2015.  Minimize logistics costs
while meeting warfighter requirements:

The goal to reduce logistics support costs for selected weapon systems has
continued under the Under Secretary of Defense for Acquisition, Technology
and Logistics functional area of responsibility within the department. DRI
required the reduction of logistics support costs from a 1997 baseline for
selected weapon systems by 7 percent by fiscal year 2000, by 10 percent by
fiscal year 2001, and with a stretch goal of 20 percent by the end of
2005. To comply with the requirement, DOD used an ongoing effort to
address the rising cost of sustaining weapon systems. This effort, called
Reduction of Total Ownership Costs, tested approaches for reducing the
weapons systems logistics sustainment costs in 10 weapons system pilot
programs from each military department. This effort set goals to reduce
the overall costs of logistics support for selected systems by fiscal year
2006. The ownership cost reduction effort is not specifically part of the
Future Logistics Enterprise; however, according to program officials, the
pilot programs have achieved some ownership cost reduction results, and
the lessons learned are available to weapon system program offices in
their ongoing efforts to reduce ownership costs.  Develop component
logistics transformation plans: DOD

discontinued the DRI objective that required the components to prepare
annual plans to serve as the primary vehicle for aligning the military
component initiatives, attaining resources, and documenting the approach
for achieving the goals and objectives as identified by the logistics
strategic plan. In requiring the components to develop logistics
transformation plans based on strategies and objectives established in a
DOD- wide plan, the department recognized the need to implement a more
coordinated approach to logistics support planning. While we identified
disconnects in the transformation plans, the strategic planning process
was designed to identify disconnects so that they might be resolved.
Further, our review of the services* transformation plans found other
weaknesses, but we recognized that the plans were a step in the right

Appendix I: Status of Defense Logistics Reform Efforts

Page 43 GAO- 03- 58 Defense Management

direction. As we have previously recommended, we believe DOD needs a
logistics strategic plan that is linked to service specific logistics
plans. 4  Reducing logistics response time: DOD discontinued the metrics

and milestones associated with this objective and instead adopted customer
wait time to measure the effectiveness of logistics support to the
warfighter. According to DOD officials, customer wait time is a broader
measure for assessing logistics value to the warfighter. As discussed
previously, the department is pursuing full implementation of measures for
customer wait time as part of the Future Logistics Enterprise initiative
to pursue end- to- end distribution. DOD officials said they intend to
meet the 2006 goal for full implementation of the broader customer wait
time definition.  Reducing inventory levels: The department has
discontinued the

metrics and milestones associated with this objective and has adopted
customer wait time as a broader measure for assessing logistics value to
the warfighter. Officials stated that the drive to reach reduced inventory
levels has resulted in the unintended consequence of parts shortages.
Officials said DOD is pursuing better inventory practices that optimize
inventory levels to provide for needed parts with minimum holding costs.
While we recognize the need to maintain needed inventories, we have
identified inventory management as a high- risk area since 1990. 5 We have
reported that there are still opportunities to improve inventory
processes, systems, and practices to prevent overbuying based on imprecise
or inaccurate inventory management data.

4 Both we and the department have recognized that the disparate approaches
to dealing with logistics planning in the past resulted in the initiation
of some 400 different service- or DOD- sponsored logistics improvement
initiatives.

5 Our high- risk status reports are provided at the start of each new
Congress. Historically, we have designated federal programs and operations
as high risk because of their greater vulnerabilities to fraud, waste,
abuse, and mismanagement.

Appendix II: Status of Defense Electronic Business/ Electronic Commerce
Reform Initiatives

Page 44 GAO- 03- 58 Defense Management

In 1997, the Defense Reform Initiative (DRI) called for DOD to
revolutionize its business operations by adopting best business practices,
particularly those that promote electronic business operations. To
accomplish this, the department identified and began implementing a number
of specific, electronic business initiatives that it believed would help
modernize selected business practices. The electronic business program and
the related initiatives that began under the DRI rubric are, for the most
part, continuing; however, management oversight generally has occurred
under the responsible functional areas rather than under the Senior
Executive Council (SEC) and the Business Initiative Council (BIC). 1
Nonetheless, the electronic business area is receiving significant
departmental attention by the Chief Information Officer since it is one of
the five governmentwide initiatives* Expanded Electronic Government* of
the President*s Management Agenda for fiscal year 2002.

As an outgrowth of DRI, DOD established a Joint Electronic Commerce
Program in May 1998 to increase the use of electronic business practices
and associated information technologies that are common in privatesector
companies, such as using the Internet and commercially available computer
software to conduct business. In March 1999, DOD issued policy guidance
for the program. The policy guidance identified three essential elements
that DOD believed was needed to achieve its electronic business goals,
including (1) an overarching electronic commerce architecture, (2) a
strategic plan, and (3) an overarching implementation plan.

In June 2000, the department issued DOD Directive 8190.2 establishing
policy and responsibilities for DOD*s electronic business/ electronic
commerce program. This directive replaced Department of Defense Reform
Initiative Directive #43* Defensewide Electronic Commerce* as well as the
March 1999 policy guidance. Directive 8190.2 instructed DOD components to
plan, develop, and implement electronic business from a DOD- wide
perspective; describe and adhere to an architecture; and implement
electronic business security solutions, among other things. The Chief
Information Officer was designated the primary Principal Staff Assistant
responsible for the program*s overall policy direction, oversight,
planning, development, architectures, security, technical integration, and
implementation of approved DOD- wide initiatives.

1 In February 2002, the BIC approved an effort that complements part of
the DRI electronic mall initiative. Appendix II: Status of Defense
Electronic

Business/ Electronic Commerce Reform Initiatives

DRI Electronic Business Initiatives

Appendix II: Status of Defense Electronic Business/ Electronic Commerce
Reform Initiatives

Page 45 GAO- 03- 58 Defense Management

In July 2000, we reported on the status of DOD*s electronic commerce
program. 2 At that time, we found that DOD had not yet (1) completed a
detailed plan to implement its strategic vision, (2) developed an
electronic commerce architecture, (3) determined how to best manage the
electronic commerce program, and (4) fully implemented key security
measures needed for electronic commerce.

Also in July 2000, DOD chartered its Electronic Business Board of
Directors to recommend improvements to the electronic business vision,
goals, and direction as well as coordinate implementation of activities
and monitor metrics. The Board was established to focus primarily on
crossfunctions and cross- component programs, such as departmental
priorities, departmental performance measures, and architecture/
infrastructure. This board continues to place emphasis on electronic
business issues, policies, and concerns.

In addition, the Electronic Business Steering Group was recently
established within the Office of the Under Secretary of Defense
Acquisition, Technology and Logistics (AT& L) to oversee DOD- wide
initiatives that fall under AT& L*s purview. It is chaired by the
Principal Deputy Under Secretary of Defense (AT& L) with membership from
the AT& L staff and representatives from the Offices of the Chief
Information Officer and Chief Financial Officer. There is an overlap in
membership between DOD*s Electronic Business Board of Directors and AT&
L*s Electronic Business Steering Group.

The Defense Reform Initiative Transition Report 2001 indicated that most
electronic business initiatives were continuing on- track, but that some
efforts were identified as needing a reevaluation. In addition, DOD*s
February 28, 2002, DRI status report (see app. IV) identified successes
and challenges related to electronic commerce or electronic business. Key
among these initiatives are an electronic business architecture, an
electronic business strategic plan, an electronic business implementation
plan establishing electronic malls, and the safeguarding of electronic
data.

2 U. S. General Accounting Office, Defense Management: Electronic Commerce
Implementation Strategy Can Be Improved, GAO/ NSIAD- 00- 108 (Washington,
D. C.: July 18, 2000).

Appendix II: Status of Defense Electronic Business/ Electronic Commerce
Reform Initiatives

Page 46 GAO- 03- 58 Defense Management

Under the new business transformation program, DOD*s Chief Information
Officer has responsibility for the Electronic Business/ Electronic
Commerce Program*s overall policy direction, oversight, planning,
development, architectures, security, technical integrations, and
implementation of approved DOD- wide electronic business initiatives. The
Chief Information Officer also provides direction and oversight to the
Joint Electronic Commerce Program Office, which, among other things,
ensures the coordination and integration of business processes throughout
the department, much like it did under the DRI management structure.

DRI provided for a number of specific electronic commerce initiatives
covering aspects of several DOD business processes, such as acquisition,
logistics, and financial management. However, for this report, we focused
our review on five key efforts, including the development of (1) an
architecture, (2) a strategic plan, (3) an implementation plan, (4) an
electronic mall, and (5) a public key infrastructure. 3 The first three
efforts were developed as a result of policy guidance and were viewed by
DOD as necessary underpinnings for the program*s success. The other two
efforts were specific Defense Reform Initiatives with associated goals and
performance measures. Table 3 provides information on each of these
efforts.

3 A public key infrastructure is a system of hardware, software, policies,
and people that, when fully and properly implemented, can provide
information security assurances that are important in protecting sensitive
communications and transactions. Current Electronic

Business Reform Efforts

Appendix II: Status of Defense Electronic Business/ Electronic Commerce
Reform Initiatives

Page 47 GAO- 03- 58 Defense Management

Table 3: Status of DRI Electronic Business Initiatives Objective Metrics
Milestones

Extent to which prior efforts continued under current program Electronic
Business Architecture:

Integrate business processes and information systems across the military
services and Defense agencies.

Not developed. Initial architecture development in 3- 5 years. Changing
requirements, new technologies, and improved business practices will cause
the initial architecture to continually evolve.

Work continues on the electronic business architecture, overseen by the
Defense Information Systems Agency and the Defense Logistics Agency. The
financial management enterprise architecture, overseen by the Comptroller,
currently overlaps some electronic business architecture efforts.

Electronic Business Strategic Plan: Identify goals, objectives, and
strategies DOD will pursue over the next 10 years to achieve an electronic
business operations environment.

Plan included 3 overall goals supported by 10 objectives that were
supported by 41 strategies.

Strategic plan issued May 1999. Plan is being updated by the Chief
Information Officer as Principal Staff Assistant, with expected completion
in 2003.

Electronic Business Implementation Plan: Guide the military services and
Defense agencies to develop their individual electronic commerce programs
in a manner consistent with the goals and objectives of the strategic
plan.

Not developed. Not established. In February 2000, DOD decided to abandon
efforts to develop a DOD- wide plan.

DOD Electronic Mall: Create a primary source for DOD users to acquire
commercially available items on- line.

Total sales, items available, catalogs available, and total registered
users.

Use purchase cards for all mall purchases by January 1, 2000.

Efforts continue under the oversight of Defense Logistics Agency as the
Executive Agent. Additionally, the BIC has initiated two efforts that
expand capabilities of information technology (IT) purchases.

Safeguarding Electronic Data/ Public Key Infrastructure:

Improve DOD*s ability to safeguard the integrity of data and verify the
authenticity of transactions.

Not finalized but officials considering distribution of cards and
reduction in paperwork.

Begin implementation of a DOD- wide *smart card* program in fiscal year
2001.

Work continues, managed by the Assistant Secretary of Defense for Command,
Control, Communications, and Intelligence as the DOD Chief Information
Officer.

Source: DOD and GAO reports.

The extent to which elements of the DRI objectives continue under current
reform efforts is discussed more fully in the following sections.

Appendix II: Status of Defense Electronic Business/ Electronic Commerce
Reform Initiatives

Page 48 GAO- 03- 58 Defense Management

The department believes that an architecture is necessary to integrate
business processes and information systems across the military services
and Defense agencies. Without such an architecture, DOD runs the risk of
having the services and Defense agencies develop and implement initiatives
that are redundant, do not readily share information, and do not maximize
the department*s investments in information technology.

In July 2000, we reported that although DOD was making efforts to develop
an electronic commerce architecture, little progress had been made.
Currently, the Defense Information Systems Agency and the Defense
Logistics Agency are continuing to work to jointly develop an electronic
business architecture. An upgrade* version 4.0* is now being used by these
agencies and may be released DOD- wide later this fiscal year. However,
further development of this architecture is currently uncertain, pending
the future direction of a financial management enterprise architecture.

In July 2001, the Secretary of Defense directed the development of a
Defense- wide enterprise architecture, also referred to as the financial
management enterprise architecture. According to senior DOD officials, the
scope of this architecture includes all of DOD except the warfighter and
is intended to seamlessly link the department*s reengineered business
practices and its financial and management information. In April 2002, DOD
awarded a $100 million contract to IBM to develop this financial
management enterprise architecture. Defense- wide implementation is
expected to begin by 2005 and take several years to fully implement. The
Office of the Comptroller is overseeing this effort.

DOD officials acknowledge that there are overlapping efforts between the
financial management architecture and the electronic business
architecture. The offices responsible for the development of the two
architectures have recently begun discussing their separate efforts, but
it is unclear how the current electronic business architecture may be
incorporated into this broader enterprise architecture. However, the
Office of the Chief Information Officer recognizes the need for such
integration.

In May 1999, DOD released its Electronic Business Strategic Plan, which
identified the goals, objectives, and strategies that DOD planned to
pursue over the next 10 years to achieve an electronic business operations
environment. The strategic plan broadened the scope of electronic commerce
to include all DOD business processes, not just the buying and selling
activities traditionally associated with electronic commerce. The
Electronic Business

Architecture Electronic Business Strategic Plan

Appendix II: Status of Defense Electronic Business/ Electronic Commerce
Reform Initiatives

Page 49 GAO- 03- 58 Defense Management

plan included 41 strategies aimed at achieving broad goals, such as
improving productivity and promoting cultural changes in the department. 4
The goals were to be achieved through actions such as establishing
training programs, partnering with industry, and basing new electronic
commerce applications on commercial standards and practices.

According to DOD officials, the strategic plan is being updated to reflect
the numerous changes that have occurred in the electronic business area
since the plan was first issued in 1999. DOD expects the update will be
completed sometime in fiscal year 2003.

After the strategic plan was issued in May 1999, the joint program office
prepared two draft implementation plans that the military services and
Defense agencies reviewed. The departmentwide Electronic Business
Implementation Plan was intended to support the strategic plan and assure
that the military services* and Defense agencies* individual electronic
commerce programs would be consistent with the goals and objectives of the
strategic plan. However, military service officials and others were not
satisfied with the draft implementation plans, primarily because they
believed the draft plans were too narrowly focused. Further, officials
contended the drafts did not describe how the strategies outlined in the
strategic plan would be implemented, and consequently, accountability and
milestones for accomplishing the strategies were not established. In
February 2000, DOD decided to abandon efforts to develop an implementation
plan primarily because the Chief Information Officer and the Joint
Electronic Commerce Program Office were unable to reach agreement with the
military services and Defense agencies on the scope and content of an
overarching implementation plan. At this time, there are no efforts
underway to develop a departmentwide implementation plan in the near
future.

While the services and the Joint Electronic Commerce Program Office have
continued with separate programs without a joint implementation plan, some
DOD officials told us they believe the risks associated with this

4 Three broad goals were identified in the May 1999 Electronic Business/
Electronic Commerce Plan. They were to achieve (1) global flexibility,
increased productivity, and a dynamic working environment through the
application of electronic business/ electronic commerce; (2) efficient and
effective responses to changing environments by the rapid introduction of
business process improvements or reengineering and the exploitation of
electronic business/ electronic commerce technologies; and (3) cultural
changes and shifts from current business practices through guidance and
the attainment of necessary skills for implementation of electronic
business/ electronic commerce. Electronic Business

Implementation Plan

Appendix II: Status of Defense Electronic Business/ Electronic Commerce
Reform Initiatives

Page 50 GAO- 03- 58 Defense Management

condition are mitigated by the oversight provided by the DOD Electronic
Business Board of Directors. This board has high- level representation
from the services and Defense agencies, and critical issues and decisions
related to electronic business within DOD receive high- level visibility
via this board.

The DOD electronic mall provides users with a simple means to order
commercially available items on- line from different catalogues through a
single location. Similar to a new retail business, the primary focus of
the electronic mall has been to establish itself in the marketplace. Since
its inception in 1998, electronic mall management has concentrated on
expanding the number of items offered, catalogs available, and customers
using the site.

In July 2000, we reported that although the electronic mall was available
to DOD shoppers, it was not a completed effort, with several pieces still
under development. DOD wanted to have four *shopping corridors* on the
mall that would group items under the categories of commodities,
information technology, services, and training. As of March 2000, only the
commodities and information technology corridors had been established,
with most items falling under the commodities corridor. Further, commodity
sales were lower than expected.

According to a Defense Logistics Agency official, the electronic mall has
made reasonable progress toward achieving the goals set out in the
legislation. 5 The Army, Navy, and Defense Logistics Agency have selected
the DOD electronic mall as their electronic ordering platform. Consistent
with the goal of having the suppliers host the catalogs (rather than
having the government host catalog data), the DOD electronic mall now
provides access to many suppliers that have electronic catalogs. In fiscal
year 2002, 73 commercial catalogs with approximately 10 million catalogue
listings accounted for sales of about $13.7 million. This is up from
approximately $175,000 in fiscal year 1998 and $2.8 million in fiscal year
2000.

The BIC has also initiated two efforts that affect the procurement of IT
goods and services. The first effort, *Enterprise Software Initiative,*
was approved in the BIC*s first round of initiatives in September 2001 and
was intended to streamline the acquisition process for commercial software
products. To extend the Enterprise Software Initiative to include

5 Strom Thurmond National Defense Authorization Act for Fiscal Year 1999,
Pub. L. 105- 261, Oct. 17, 1998. DOD Electronic Mall

Appendix II: Status of Defense Electronic Business/ Electronic Commerce
Reform Initiatives

Page 51 GAO- 03- 58 Defense Management

IT hardware and selected services, BIC approved an initiative titled
*Virtual IT Marketplace* at its February 6, 2002, meeting. This initiative
addresses a concern that current Defense customers have access to numerous
stand- alone alternatives to shop for IT products and services. This new
DOD initiative would allow DOD customers to access this IT corridor either
directly through a General Services Administration portal or through the
DOD electronic mall. The Assistant Secretary of Defense for Command,
Control, Communications, and Intelligence as the DOD Chief Information
Officer is overseeing this effort. The Virtual IT Marketplace will also
provide a software assessment management capability to support the
Enterprise Software Initiative.

DOD*s electronic commerce goals cannot be fully realized unless it
improves its ability to safeguard and verify the authenticity of
electronic data and transactions. DOD has launched many initiatives to
improve security over information. However, one effort* the public key
infrastructure (PKI)* is seen as critical because it will provide
important safeguards. The President*s Management Agenda for fiscal year
2002 specifically directs federal agencies to undertake a PKI program to
promote digital signatures for transactions within the federal government,
between government and businesses, and between government and citizens.

PKI is essential to improving security because it allows DOD to ensure
that (1) the data contained in electronic transactions and messages have
not been tampered with, (2) systems users can confirm who is on the other
end of an electronic transaction, (3) the parties involved in a
transaction cannot later deny that they participated in the transaction,
and (4) the transaction or message data cannot be accessed and read
without proper authorization. The program will achieve these assurances by
giving digital signature and data encryption capabilities to DOD
personnel.

In July 2000, we reported that the PKI program is not a simple undertaking
for DOD. The *infrastructure* in the program*s title refers to the
policies, procedures, systems, facilities, and organizations that need to
be involved in issuing, managing, and revoking digital certificates that
vouch for a user*s identity and contain the keys that are used to
digitally sign and encrypt documents and data. In short, PKI is a system
of hardware, software, policies, and people that, when fully and properly
implemented, can provide information security assurances that are
important to protecting sensitive communications and transactions.
Safeguarding Electronic

Information/ Public Key Infrastructure

Appendix II: Status of Defense Electronic Business/ Electronic Commerce
Reform Initiatives

Page 52 GAO- 03- 58 Defense Management

The DRI Transition Report 2001 reiterated that the PKI program was a very
difficult challenge for the department. The necessary technology was not
mature and technical issues, including interoperability and ease of use,
had not been fully resolved. Moreover, for the infrastructure to work
properly, DOD sources noted that the department will have to

 confirm the identity of each user;  mass distribute programmable *smart
cards* that will carry a

mathematical key and PKI certificate that will enable DOD personnel to
digitally sign documents and enable the encryption of data;  ensure that
individual computer workstations have the necessary

*middleware,* 6 which allows the hardware to accept the smart cards; and 
enable appropriate DOD software applications to interface with the

smart cards. According to department officials, the DOD PKI, based on
commercial industry standards, is being deployed in phases, introducing
new features and capabilities in an orderly fashion, consistent with
commercial technology progression. Each release adds new capabilities
while maintaining the core functionality that defines a successful PKI.
DOD is in the process of issuing smart cards; in fact, over a million
cards have been issued and more are being issued each day. DOD expects to
have over 3.5 million cards and certificates issued to all eligible DOD
personnel by October 2003. Middleware is being installed and made
operational at many DOD locations.

The DOD Office of the Inspector General issued a report in December 2001,
which stated DOD had made progress in implementing the PKI program.
However, the report also identified several unfunded requirements for the
program. The unfunded requirements included enabling applications to work
with PKI, security support for the smart card, and middleware development.
This is consistent with comments from DOD officials, who reported that DOD
still needs to issue smart cards, put middleware in place, and establish a
PKI system of hardware, software, and policies.

6 Middleware is a layer of software between the network and applications
that provides services, such as identification, authentication,
authorization, directories, and security.

Appendix III: Summary Table of Defense Reform Initiatives

Page 53 GAO- 03- 58 Defense Management

Defense Reform Initiative Completed Ongoing (as is) Ongoing with revision
Subsumed

Streamlined Headquarters  Paperless Contracting  Prime Vendor Program 
Simplifying Payments with the Government Purchase Card

 Defense Agency Performance Contracts  Electronic Business Strategic
Plan  Simplifying and Saving with Electronic Malls  End- to- End
Procurement Process  Safeguarding Electronic Data  Improved Military Pay
and Retirement Benefits  Basic Allowance for Housing  Family Programs 
Household Goods Transportation  Consolidate and Improve Financial
Management Operations

 Reduce the Number of Financial Systems  Reconciling Disbursements 
Reduce Characters in Lines of Accounting  A- 76 Process (Meeting the
Office of Management and Budget Goal for Competitions)

 Demolition and Disposal of Excess and Obsolete Defense Facilities

 Reduce Energy Consumption  Base Realignment and Closure  New Approach
to Systems Acquisition  Performance- Based Service Acquisition  Civil/
Military Integration  Shaping the Civilian Acquisition Workforce of the
Future  DOD Logistics Strategic Plan Objectives  Logistics Value to the
Warfighter  Contract Conversion  DOD Electronic Business Implementation
Plan  Electronic Commerce Architecture  Permanent Change of Station 
Temporary Duty Travel  Improve Military Housing  Reengineer DOD Business
Practices  Auditable Financial Statements  A- 76 Process (Changing
Business Processes to Improve Mission Effectiveness and Reduce Cost)

 Privatize DOD Utility Systems  Appendix III: Summary Table of Defense
Reform Initiatives

Appendix III: Summary Table of Defense Reform Initiatives

Page 54 GAO- 03- 58 Defense Management

Defense Reform Initiative Completed Ongoing (as is) Ongoing with revision
Subsumed

Reduce Acquisition Cycle Time  Transforming Logistics  Defense
Management Council Charter and Authority  Source: DOD February 28, 2002,
report.

According to DOD, the following definitions were used to categorize the
DRI initiatives:

 Completed: The initiative is considered to have been completed, i. e.,
met the goal( s) established.  Ongoing (as is): The initiative remains
active, without change, and there

are existing efforts to meet the established goal( s) or objective( s). 
Ongoing With Revision: The initiative remains active, although the target

goal( s) or objective( s) has been changed.  Subsumed: The initiative has
been made part of another management

effort but remains viable.

Appendix IV: Status Report of the Defense Reform Initiatives

Page 55 GAO- 03- 58 Defense Management

Appendix IV: Status Report of the Defense Reform Initiatives

Appendix IV: Status Report of the Defense Reform Initiatives

Page 56 GAO- 03- 58 Defense Management

Appendix IV: Status Report of the Defense Reform Initiatives

Page 57 GAO- 03- 58 Defense Management

Appendix IV: Status Report of the Defense Reform Initiatives

Page 58 GAO- 03- 58 Defense Management

Appendix IV: Status Report of the Defense Reform Initiatives

Page 59 GAO- 03- 58 Defense Management

Appendix IV: Status Report of the Defense Reform Initiatives

Page 60 GAO- 03- 58 Defense Management

Appendix IV: Status Report of the Defense Reform Initiatives

Page 61 GAO- 03- 58 Defense Management

Appendix V: Summary Table of Business Initiative Council Initiatives

Page 62 GAO- 03- 58 Defense Management

BIC initiatives approved September 14, 2001 Description of initiatives

One- Time Clearance of Priority Placement for Scientific and Engineering
Positions To eliminate unnecessary delays in hiring hard to fill
scientific and engineering

positions by allowing for a one- time clearance of the Priority Placement
Program. Modify 180- Day Waiting Period to Hire Retired Military To
encourage highly qualified retired military personnel to pursue civil
service

careers by changing the DOD policy to allow service secretaries to
delegate within the components the 180- day waiver authority. Management
Mix Management Flexibility To allow the services to make the most
efficient use of civilian/ contract personnel

without predetermined constraints/ expectations. Recovery Auditing To use
contingency fee auditing services contract to identify and recover

overpayments in the Working Capital Funds to providers of goods and
services. Raise Below Threshold Reprogramming (BTR) Thresholds To raise
the thresholds for BTR actions by providing program managers greater

flexibility to execute their programs by increasing the threshold for
procurement accounts from $10 million to $20 million and by increasing the
threshold for research and development from $4 million to $10 million.
Web- Based Invoice/ Receipt Processing To reduce the incurrence of
incorrectly prepared or missing receiving reports and

to move toward a paperless process by using existing automated systems
that will allow the Defense Finance and Accounting System to pay vendors
more quickly and accurately. Common Range Scheduling Tool To enhance
coordination of testing schedules across multiple sites and to avoid

unnecessary scheduling delays by developing and implementing a Web- based
scheduling tool capable of real or near real- time updates. Local/
Regional Cell Phone Pooling To overcome rising cost of cellular telephone
bills and inefficient phone purchases,

negotiate new local or regional cell phone contracts to consolidate cell
phone users into appropriate pools. Enterprise Software Initiative (ESI)
To streamline the acquisition process by providing best- priced,
standardscompliant software products through expanding the use of the ESI
process as the

benchmark acquisition strategy by using the current structure of executive
agents distributed among military departments/ Defense agencies,
maintaining a flexible process to be responsive to customer needs, and
extending a software asset management framework within DOD to enhance
enterprise software- life cycle management capability. Common Flight
Clearance Process To reduce clearance turnaround time, develop and
implement a *common* flight

clearance process by incorporating the latest information technology
advancements.

BIC initiatives approved December 3, 2001

Description of initiatives

Optimize Professional Continuing Education (PCE) To streamline
professional continuing education by allowing the services to

determine where PCE will take place and which service is best suited to
provide PCE. Modify Joint Professional Military Education (JPME) II
Requirements To modify JPME II by allowing the course to be less than 12
weeks, removing the

mandatory sequencing requirements for Joint Specialty Officer designation,
and by allowing service staff and War Colleges to provide resident and
nonresident Joint Professional Military Education II. Allow for
Contracting of Security Guards To allow services to contract security
guards in the continental United States at

small locations to provide increased flexibility as DOD continues to
enhance antiterrorism/ force protection measures. Revise Davis- Bacon Act
Thresholds To raise the Davis- Bacon Act threshold from $2,000 to
$100,000.

Appendix V: Summary Table of Business Initiative Council Initiatives

Appendix V: Summary Table of Business Initiative Council Initiatives

Page 63 GAO- 03- 58 Defense Management

Improve Interservice Product Quality Deficiency Reporting (PQDR) Business
Process To develop and implement a methodology to seamlessly share PQDR
data across

all services and agencies. Establish Process for Property Conveyance for
Conservation Purposes

To allow DOD to convey surplus property to a state or local government, or
nonprofit conservation organization for natural resource conservation
purposes. Establish Funding Flexibility within a Program To establish
transfer flexibility *between* appropriations in the *same program* at

$30 million or 10 percent, whichever is less. Increase Flexibility of
Expired Year Funds To avoid the need to request specific program
legislation when expired

appropriations have been exhausted by establishing the authority to
reprogram expired dollars. Increase Expense/ Investment Threshold To
provide field commanders greater flexibility in their decision- making
process

and ability to fund critical requirements by increasing the expense/
investment threshold from $100,000 to $500,000. Establish Operations and
Maintenance (O& M) Close- Out Flexibility

To pay for emerging but not forecasted must- pay bills by allowing DOD to
carryover up to 2 percent of O& M funding for 1 year. Streamline
Administrative Coordination Process To streamline and simplify the
procedures used to coordinate documents and

actions within DOD. Streamline Contract Close- Out Process To close out
400 plus completed cost contracts that are under $1 million and that

are at least 9 years old; and by using lessons learned develop new
business practices within the contract close- out community. Streamline
Clinger- Cohen Implementation To develop a process for the appropriate
implementation of the Clinger- Cohen Act

while avoiding the duplication of existing acquisition processes and
oversight. Eliminate Excise Tax on DOD Tactical Vehicles To request
exemption from the Treasury department from paying the federal retail

excise tax on military and tactical- wheeled vehicles above 33,000 pounds
gross vehicle weight.

BIC initiatives approved February 6, 2002

Description of initiatives

Commercialize Military- Developed Systems To have the private sector
purchase up to 10 C- 17 aircraft for its use with the agreement that the
aircraft would be available to DOD if required in a contingency.
Commercializing Acquisition: Raise the Truth in Negotiations Act (TINA)
Thresholds To raise the TINA dollar threshold to $7. 5 million. Virtual IT
Marketplace To implement a virtual IT marketplace portal to extend the DOD
Enterprise

Software Initiative to include IT hardware and selected services using the
General Services Administration. Streamline the General Officer/ Flag
Officer Nomination Process

To simplify the nomination process and allow the services to make timely
and flexible moves of general/ flag officers.

BIC initiatives approved March 18, 2002

Description of initiatives

Cell Phone Subsidy To develop procedures to select and reimburse employees
a flat payment for official use of their personal cell phone. Streamline
Technology Readiness Assessments To modify the mandatory requirement for
Technology Readiness Assessments. Elimination of Value Engineering
Reporting To eliminate the annual value engineering reporting requirements
of the Office of

Management and Budget Circular A- 131. Streamline IT Equipment Disposal
Process To eliminate duplicative IT equipment disposal processes.

BIC initiatives approved May 31, 2002

Description of initiatives

Pioneer Projects To use a variety of sourcing arrangements such as
commercial cost comparison; divestiture; reengineering; and/ or further
expansion of privatization efforts in order to transition noncore
competencies to the private sector.

Appendix V: Summary Table of Business Initiative Council Initiatives

Page 64 GAO- 03- 58 Defense Management

Buy to Budget To allow DOD to purchase increased amounts of major
procurements without obtaining prior congressional approval. Simplify
Physical Access Control at DOD Installations and Facilities by Using the
Common Access Card

To eliminate the necessity for DOD to issue and for personnel to carry
additional physical access badges after the Common Access Card is issued.

Eliminate Unnecessary Reports To implement a process to routinely evaluate
potential unnecessary, duplicative, or excessive reporting requirements.
Embedded Instrumentation To establish acquisition policy that requires all
systems to have an integrated set

of embedded instrumentation for diagnostics, prognostics, testing, and
training if the business case analysis considers it reasonable and
practicable.

BIC initiatives approved September 4, 2002

Description of initiatives

Improve Visibility of Contract Services To obtain better visibility of the
contractor work force by establishing the Army as the DOD pilot to test
the contractor manpower and cost reporting process. Consolidate Defense
Agency Overhead Functions To examine opportunities for potential
consolidation of the noncore functions

performed by the Defense agencies and field activities. Reengineer
Personnel Security Investigation To seek relief from the burdensome and
slow processes associated with granting

personnel security investigations. e- Content Enterprise Licensing To
expand the enterprise agreement methodology in order to further leverage
the

purchasing power of DOD. International Electronic Information Release
policy To determine the best method of sharing information between U. S.
government

offices and foreign government organizations for the purpose of conducting
foreign military sales business, military equipment loans, and cooperative
programs for the development and production of military equipment.
Managing for Results To link resources consumed by DOD installation
activities to performance

outcomes (results), customer demands, and work outputs by using activity-
based costing and management tools, performance measures, and benchmarks.
Guaranteed Fixed- Price Remediation (GFPR) To use GFPR contracts, a new
contracting method that obligates contractors to

guarantee achievement of DOD*s environmental cleanup objectives for a
fixed price, and the contractors use insurance to protect against cost
overruns. Reengineer Legislative Coordination Process To redesign DOD*s
procedures for formulating, reviewing, and submitting

legislative proposals to Congress. Cost- Effective Multiyear Contracting
Arrangements and/ or Purchase of Military Sealift Command Ships

To explore alternative approaches for acquiring the required capability
with the primary objective of reducing rates charged to customers while
still meeting mission requirements. Working Capital Fund* Business
Practices To improve the business practices and financial policies of the
Defense Working

Capital Fund across all business areas. Provide Adequate Fitness
Facilities To establish a team with representatives from the Office of the
Secretary of

Defense and the services to explore various fitness facilities
alternatives that each service could use as appropriate for addressing its
unique requirements. Improve the Speed and Quality of the DecisionMaking
Process within DOD To establish a cross- component team to study the
reengineering of DOD*s

decision- making process. Source: DOD.

Appendix VI: Defense Business Practice Implementation Board Members

Page 65 GAO- 03- 58 Defense Management

Member Affiliation

William (Gus) Pagonis (Chair) Executive Vice President, Supply Chain,
Sears, Roebuck and Company Michael Bayer (Vice Chair) Private consultant
engaged in enterprise strategic planning and mergers and acquisitions Neil
Albert Senior Vice President and Director of MCR Federal, Inc. Brad Bends
Vice President, Financial Services, KPMG Denis Bovin Vice Chairman, Bear
Stearns and Company, Inc. Frederic Cook Frederic Cook & Company Travis
Engen President and CEO, Alcan, Inc. Steve Friedman Chairman, Board of
Columbia University Robert Hale Senior Fellow, Logistics Management
Institute W. N. Johnson Vice President, Dean of Students, Boston
University James Kimsey Founding CEO and Chairman Emeritus of America
Online Dana Mead Retired Chairman, Tenneco, Inc. Phil Merrill Board of
Capital- Gazette Communications Richard Perle Chairman, Defense Policy
Board, ex officio William Phillips Partner, PricewaterhouseCoopers,
Washington Arnold Punaro Senior Vice President and Director, Federal
Business Development, Science Applications

International Corporation William Schneider, Jr. Chairman, Defense Science
Board, ex officio Andrew Siegel Deutsche Bank Frank Sullivan Frank
Sullivan Associates Mortimer Zuckerman Editor- in- Chief, U. S. News &
World Report

Observer Affiliation

David Walker Comptroller General of the United States Mark Everson
Controller, Office of Federal Financial Management, Office of Management
and Budget

Source: DOD.

Appendix VI: Defense Business Practice Implementation Board Members

Appendix VII: Comments from the Department of Defense

Page 66 GAO- 03- 58 Defense Management

Appendix VII: Comments from the Department of Defense

Appendix VIII: Staff Acknowledgments Page 67 GAO- 03- 58 Defense
Management

Debra McKinney, Nancy Lively, Cheryl Andrew, Julia Denman, James Fuquay,
James Hatcher, Larry Junek, John Strong, and R. K. Wild also made
significant contributions to this report. Appendix VIII: Staff
Acknowledgments

Acknowledgments

Related GAO Products Page 68 GAO- 03- 58 Defense Management

Defense Reform Initiative: Organization, Status, and Challenges.

GAO/ NSIAD- 99- 87. Washington, D. C.: April 21, 1999.

Defense Infrastructure: Improved Performance Measures Would Enhance
Defense Reform Initiative. GAO/ NSIAD- 99- 169. Washington, D. C.: August
4, 1999.

Defense Management: Electronic Commerce Implementation Strategy Can Be
Improved. GAO/ NSIAD- 00- 108. Washington, D. C.: July 18, 2000.

Defense Management: Actions Needed to Sustain Reform Initiatives and
Achieve Greater Results. GAO/ NSIAD- 00- 72. Washington, D. C.: July 25,
2000.

Defense Headquarters: Status of Efforts to Redefine and Reduce
Headquarters Staff. GAO/ NSIAD- 00- 224. Washington, D. C.: September 6,
2000.

Defense Logistics: Strategic Planning Weaknesses Leave Economy,
Efficiency, and Effectiveness of Future Support Systems at Risk.

GAO- 02- 106. Washington, D. C.: October 11, 2001. Related GAO Products

(350233)

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