Pursuant to a congressional request, GAO assessed the: (1) cost-effectiveness of the Defense Data Network (DDN); and (2) Defense Communication Agency's (DCA) plans to spend $126 million over 7 years to expand DDN.

GAO found that: (1) the Department of Defense (DOD) established DDN to provide its users cost-effective long distance data communications; (2) even though DDN may not be the most cost-effective solution, DCA still plans to spend millions of dollars to expand DDN over the next several years; (3) some DOD users would have to spend millions to make their systems compatible with DDN; (4) the DCA single-network approach to making DDN the most cost-effective solution to DOD long distance data communication needs was not supported by an economic analysis evaluating alternatives to the network; (5) the DCA approach also failed to recognize cheaper alternatives, technical incompatibilities, and possible network transfers; and (6) DDN is expected to lose part of its current and projected customer base if DOD systems that do not perform command and control applications switch to another federal telecommunications system.

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 direct the Assistant Secretary of Defense for Command, Control, Communications, and Intelligence to: (1) perform a thorough economic analysis to determine the most cost-effective way to meet DOD long distance data communication needs; and (2) require the Director, DCA, to reflect the results of this analysis in any plans for DDN. At a minimum, this analysis should consider: (1) discarding the policy of mandating DDN use; (2) focusing on the needs of individual users on a case-by-case basis, particularly those that are not well-suited for DDN packet switching technology; (3) recognizing the impact of some DDN users switching to Federal Telecommunications Systems (FTS) 2000; and (4) including cost as a factor in all decisions.

Agency Affected: Department of Defense

Status: Closed - Implemented

Comments: In response to the recommendation, DOD initiated a study which showed that DDN should be downsized, resulting in a $53.9-million savings over the next 10 years.