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.

Status Legend:

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

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.