Computer Procurement:

Navy CAD/CAM Acquisition Has Merit but Management Improvements Needed

IMTEC-88-22: Published: May 11, 1988. Publicly Released: May 11, 1988.

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Pursuant to a congressional request, GAO reviewed the Navy's second Computer-Aided Design/Computer-Aided Manufacturing (CAD/CAM II) acquisition, focusing on whether the: (1) Navy complied with applicable acquisition regulations; (2) Navy considered the needs of all CAD/CAM users; (3) Navy established adequate contract administration controls; (4) correct Navy organizations conducted the acquisition; (5) Navy fully disclosed the acquisition in its budget requests and followed normal budget processes; and (6) Office of the Secretary of Defense provided adequate oversight.

GAO found that the Navy's CAD/CAM II acquisition approach: (1) focused on equipment standardization across commands and reduced unit costs through large-scale contracts; (2) did not ensure acquisition of the most feasible, cost-effective, and low-risk system available; and (3) did not comply with Department of Defense (DOD) acquisition management regulations requiring the establishment of user needs, evaluation of alternative solutions, and development of a management plan before defining a system solution. GAO also found that: (1) CAD/CAM II acquisition has progressed slowly because of difficulties in resolving management issues and program office and managerial changes; (2) the Navy supplemented formal budget submissions with exhibits which did not separately identify all CAD/CAM funding, and information papers which omitted or inaccurately categorized CAD/CAM purchases; (3) the DOD Major Automated Information Systems Review Council has not yet reviewed the acquisition because of its delayed progress; and (4) DOD and Navy computer-aided acquisition and logistics support organizations provided adequate oversight to ensure adherence to certain technical standards.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Navy reduced the acquisition to one of the strictly commercially available, off-the-shelf technology, and as a consequence, the acquisition now falls under Defense guidance governing requirements contracts. The Navy has complied with this guidance.

    Recommendation: The Secretary of the Navy should direct the Assistant Secretary of the Navy for Financial Management to ensure that the request for proposals for CAD/CAM II is not released until the program office has complied with applicable provisions of defense acquisition regulations; specifically, the program office should conduct an evaluation of alternative system solutions based on validated user requirements before making a system choice.

    Agency Affected: Department of Defense: Department of the Navy

  2. Status: Closed - Implemented

    Comments: The Navy CAD/CAM program office has been moved to NAVDAC. No further moves are contemplated. A senior management Steering Group has been established to resolve management issues.

    Recommendation: The Secretary of the Navy should direct the Assistant Secretary of the Navy for Financial Management to ensure that future program office and program manager changes to CAD/CAM II are minimized and program management issues are quickly resolved.

    Agency Affected: Department of Defense: Department of the Navy

  3. Status: Closed - Implemented

    Comments: The Naval Data Automation Command Comptroller will prepare comprehensive and complete funding data on all CAD/CAM acquisitions prior to the FY 1990 budget submission to the Office of the Secretary of Defense and Congress.

    Recommendation: The Secretary of the Navy should direct the Assistant Secretary of the Navy for Financial Management to ensure that funding for all Navy CAD/CAM is completely and accurately disclosed in special budget information papers to Congress.

    Agency Affected: Department of Defense: Department of the Navy

 

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