Defense Logistics Agency's Implementation Approach Is Not Justified
IMTEC-91-34, Aug 6, 1991
Pursuant to a congressional request, GAO reviewed the Defense Logistics Agency's (DLA) decision to consolidate its 23 automated data processing facilities into 6 regional processing centers.
GAO found that DLA: (1) did not adequately justify its consolidation decision; (2) did not follow the contractors' or its own task force's alternative consolidation recommendations or perform an economic analysis of those alternatives before making its decision to consolidate into six sites; (3) based its justification for a six-site consolidation on a cost and benefit analysis that used incomplete or unverifiable data regarding operating, transition, computer equipment, and telecommunications costs; (4) could not support the results of its analysis with any verifiable data sources; (5) substantially completed one consolidation processing center, and was in the process of implementing the remaining five centers; and (6) failed to act on its program manager's November 1990 request to perform an economic analysis prior to proceeding with implementation of the remaining five consolidation centers.
- Closed - implemented
- Closed - not implemented
Recommendation for Executive Action
Recommendation: The Secretary of Defense should instruct the Director, DLA, to stop all implementing actions for the remaining five sites until a thorough economic analysis, which includes the current environment and viable alternatives, is completed and a decision is made on the most cost-effective alternative for consolidation.
Agency Affected: Department of Defense
Status: Closed - Implemented
Comments: DLA implemented the recommendation, completed a new economic analyses in December 1991, and altered consolidation plans downward from six to five sites due to the GAO report and changes in DMRD 924 OSD consolidation plans.