Information Technology:

DLA Should Strengthen Business Systems Modernization Architecture and Investment Activities

GAO-01-631: Published: Jun 4, 2001. Publicly Released: Jun 29, 2001.

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The Defense Logistics Agency (DLA) plays a critical role in supporting America's military forces worldwide. DLA employs about 28,000 civilian and military workers at about 500 sites in all 50 states and 28 countries; in round numbers, it manages 4 million supply items and processes 30 million annual supply distribution actions. This report reviews DLA's efficiency and effectiveness in managing it is Business Systems Modernization (BSM) acquisition program. Specifically GAO determines (1) whether DLA is using an enterprise architecture to guide and constrain its investment in (BSM) and (2) whether DLA is investing in BSM in an incremental manner. GAO found that DLA does not have an enterprise architecture to guide its investment in BSM. DLA plans call for creating an architecture as a byproduct of BSM's implementation. In addition, GAO found that DLA has not been managing its investment in this program in an incremental manner; that is, DLA has not treated the first of its four planned incremental releases of BSM as a separate investment decision. Instead, DLA has thus far treated the entire BSM program as a single investment decision, according to BSM officials. DLA now plans to take an incremental approach to future releases. This change would ensure that DLA's investment decisions are consistent with statutory requirements and federal guidance.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To ensure that the approach to DLA's logistics modernization (as well as that of the Department of Defense (DOD) component organizations) recognizes the logistics management interdependencies and interrelationships among DOD components and aims to optimize departmentwide performance and accountability, the Secretary of Defense direct the Under Secretary of Defense for Acquisition, Technology, and Logistics to (1) expedite development of a DOD-wide logistics management enterprise architecture in a manner consistent with CIO Council published guidance and (2) establish effective controls for ensuring that component investments in modernized logistics systems are compliant with the architecture, or are otherwise granted an explicit waiver to this requirement on the basis of analytical justification.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: DOD officials indicated that they had developed a Future Logistics Enterprise architecture plan that would be part of the DOD-wide effort to develop a Business Enterprise Architecture (BEA). This "logistics" enterprise architecture plan is termed Business Enterprise Architecture - Logistics (BEA-LOG). According to these officials, DOD is basing its BEA-LOG plans on federal CIO Council's "A Practical Guide to Federal Enterprise Architecture," and the DOD Architecture Framework. Additionally, the DOD CIO's office will include architectural alignment with the BEA as a requirement for any major program that requires approval in the systems life cycle milestone approval process.

    Recommendation: The DLA Director impose three further conditions on investment in BSM beyond its first increment. Specifically, such investment should not occur until the BSM program manager develops plans and implements processes for (1) measuring and validating whether completed BSM increments actually produce benefits commensurate with costs, (2) developing economic justifications for each subsequent increment that consider the actual performance of preceding increments, and (3) ensuring that decisions on each subsequent increment are based on these incremental economic justifications.

    Agency Affected: Department of Defense: Defense Logistics Agency

    Status: Closed - Implemented

    Comments: In its comments in response to GAO's report, DOD stated that the three conditions would be part of the standard by which DOD's CIO, the Deputy Undersecretary for Logistics and Materiel Readiness office, and other DOD oversight officials would assess BSM. In May 2003, the DOD CIO provided the BSM program Milestone C approval covering implementation of the remainder of the first BSM increment. DLA officials indicated that consistent with GAO's recommendation, to obtain this approval they (1) completed an incremental economic analysis, (2) determined the projected return on investment for each planned increment, (3) established a post investment analysis team and process including metrics for determining success on the current increment, and a policy that the Modernization Executive Board will consider results of the post investment analysis prior to deployment decisions on future increments.

    Recommendation: Until a DLA enterprise architecture is developed and can be used to effectively guide and constrain DLA IT investment, the Director, DLA, should limit future investment in BSM to only its first incremental release.

    Agency Affected: Department of Defense: Defense Logistics Agency

    Status: Closed - Implemented

    Comments: DOD has taken action to make future investments (for the first and subsequent increments of DLA's BSM) contingent upon the Modernization Executive Board's (MEB) post investment analysis. According to DLA, they have completed an incremental economic analysis and used this analysis to obtain approval from DOD's CIO to continue investing in the on-going first increment of BSM. Additionally, the return on investment was determined for each proposed increment, and a post investment analysis team and process was established including metrics for determining success on the current increment. The MEB will consider the results of the post investment analysis prior to granting approval to proceed to the next increment. This information will also be provided to DOD as part of DLA's request to proceed to the next milestone in the DOD acquisition system life cycle approval process.

    Recommendation: To ensure that, once developed, the enterprise architecture is effectively implemented, the Director, DLA, should require the DLA 21 Executive Board and its subsidiary investment review boards to ensure that only architecturally compliant IT investments are approved and funded, unless the investment decision-making authority issues a written waiver in response to a written justification.

    Agency Affected: Department of Defense: Defense Logistics Agency

    Status: Closed - Implemented

    Comments: DOD concurred with the recommendation to require the DLA 21 Executive Board (now referred to as the Modernization Executive Board) to ensure that only architecturally compliant IT investments are approved and funded, unless the Board issues a waiver in response to a written justification. DOD indicated that architectural compliance would be determined by comparison with the enterprise architecture, in accordance with a risk-managed, evolutionary approach to architecture development, and DLA reports that enterprise architecture compliance is enforced through its Portfolio Management process. Architectural compliance of proposed IT investments is analyzed and reviewed before being approved. Also, the Senior Architect participates in program milestone reviews to ensure architectural alignment. DLA stated that a formal procedure for conducting compliance reviews and requesting waivers is in draft form and will be implemented.

    Recommendation: The CIO should have the Chief Architect, as appropriate, follow the steps outlined in the CIO Council's published guide for managing enterprise architectures, including (1) obtaining executive buy-in and support, (2) establishing architecture management structure and controls, (3) defining the architecture process and approach, (4) developing the baseline architecture, the target architecture, and the sequencing plan, (5) facilitating the use of the architecture, and (6) maintaining the architecture.

    Agency Affected: Department of Defense: Defense Logistics Agency

    Status: Closed - Implemented

    Comments: DOD concurred with the recommendation to have the DLA Chief Architect follow the steps outlined in the CIO Council's published guide for managing enterprise architectures. According to DLA, it has developed and is implementing an enterprise architecture plan that is based on best-practices as defined by the GAO, OMB, and Federal CIO Council guidance. Specifically, (1) to achieve executive buy-in on the plan, the Senior Architect briefed the Enterprise Architecture Implementation Plan and representative architecture products to the Modernization Executive Board (MEB), DLA program managers, and the Business Systems Modernization Steering Group; (2) enterprise architecture structure and control have been defined in the new enterprise architecture policy and the implementation plan; (3&4) DLA has begun the development of the architecture products, including the to-be and as-is architecture, and the transition plan; (5&6) the DLA CIO is accountable to the MEB for developing, maintaining, and facilitating the use of the enterprise architecture baselines and for periodic reviews of the architecture to ensure its currency.

    Recommendation: To provide for the effective development and maintenance of the DLA enterprise architecture, the DLA Director should make the CIO accountable to the enterprise architecture steering committee for developing and maintaining the agency's enterprise architecture. In fulfilling this responsibility the CIO should appoint a Chief Architect for DLA and establish a program office responsible for developing and maintaining a DLA-wide enterprise architecture.

    Agency Affected: Department of Defense: Defense Logistics Agency

    Status: Closed - Implemented

    Comments: DOD concurred with the recommendation to make the CIO accountable to the enterprise architecture steering committee, appoint a Chief Architect for DLA, and establish a program office responsible for developing and maintaining a DLA-wide enterprise architecture. In February 2002, the Director of DLA designated the Director J-6, Information Operations/CIO, as the Chief Architect reporting directly to the DLA Director. The CIO/Chief Architect has designated a Senior Architect responsible for leading an enterprise architecture office and implementing the DLA Enterprise Architecture Implementation Plan. DLA also issued a policy that states the DLA CIO is accountable to the Modernization Executive Board for developing and maintaining the DLA Enterprise Architecture baselines and periodic reviews of the architecture to ensure its currency.

    Recommendation: The Director, DLA, should (1) issue a policy governing development, implementation, and maintenance of an enterprise architecture, and (2) establish a DLA enterprise architecture steering committee, chaired by the DLA Vice Director, to provide a DLA-wide direction and focus to the enterprise architecture, and to ensure that one is developed and maintained in a manner consistent with the Chief Information Officers (CIO) Council published guide on managing enterprise architectures.

    Agency Affected: Department of Defense: Defense Logistics Agency

    Status: Closed - Implemented

    Comments: DOD concurred with this recommendation. In February 2002, DLA issued policy governing development, implementation, and maintenance of its enterprise architecture. DLA also established its Modernization Executive Board (MEB, formerly the DLA21 Executive Board), which is chaired by the DLA Director of Enterprise Transformation, a position established to report directly to the DLA Director. The MEB consists of DLA-wide executive leadership and the MEB charter includes the responsibility to provide an enterprise architecture-wide direction and focus.

    Recommendation: To address DLA's need for an enterprise architecture to guide and constrain its information technology (IT) capital investments, including BSM, the Secretary of Defense direct the DLA Director to designate and treat development, implementation, and maintenance of a DLA enterprise architecture as an agency priority.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: In its comments on a draft of the report, DOD concurred with the recommendation. In February 2002, DLA demonstrated its commitment to treating enterprise architecture development, implementation, and maintenance as an agency priority by issuing a policy entitled "Defense Logistics Agency Enterprise Architecture" that directed the Chief Information Officer to develop, maintain, and use a DLA enterprise architecture. The agency also made enterprise architecture use part of its plan for meeting the DLA strategic goals, and objectives.

    Recommendation: The CIO should direct the Chief Architect to work collaboratively with the appropriate offices within the Office of the Deputy Under Secretary for Logistics to appropriately align the DLA enterprise architecture with this office's ongoing efforts to develop a DOD-wide logistics enterprise architecture.

    Agency Affected: Department of Defense: Defense Logistics Agency

    Status: Closed - Implemented

    Comments: DOD concurred with the recommendation that DLA work closely with the Office of the Deputy Undersecretary of Defense for Logistics and Materiel Readiness to align DLA's enterprise architecture with on-going efforts to develop a DOD-wide logistics enterprise architecture. At the close of GAO's review, the Deputy Undersecretary's office established the logistics systems modernization consortium as a means of providing ongoing input and feedback to DOD about the services and DLA's separate logistics modernization programs. DOD envisions using the consortium to coordinate the DOD-wide logistics enterprise architecture plan with DLA's separate plan. In addition, DOD has developed Version 1.0 of a DOD-wide business enterprise architecture. DLA reported that its enterprise architecture office is working with the Deputy Undersecretary's office's Future Logistics Environment Architecture Working Groups. These groups are developing the operational and systems views for the DOD-wide logistics enterprise architecture--a component of the DOD Business Enterprise Architecture.

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