Computer Systems:

Navy Needs to Assess Less Costly Ways to Implement Its Stock Point System

IMTEC-89-2: Published: Dec 14, 1988. Publicly Released: Dec 14, 1988.

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Samuel W. Bowlin
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Pursuant to a congressional request, GAO examined the Navy's Stock Point ADP Replacement Project (SPAR), focusing on whether the Navy had: (1) studied less costly alternatives to its SPAR implementation plan; and (2) identified for elimination other Navy supply systems that might duplicate SPAR.

GAO found that the Navy: (1) developed SPAR to improve and modernize stock point operations by replacing the existing automated system with new hardware and software at 38 host and 65 satellite stock points; (2) estimated SPAR life-cycle costs at about $2.3 billion; (3) planned to request approval from the Department of Defense's (DOD) oversight authority, the Major Automated Information System Review Council (MAISRC), before it completed studies of alternative SPAR configurations involving fewer hosts and more satellites; (4) lacked criteria for designating stock points as host sites, but replicated the number of host systems currently planned; (5) planned to eliminate two supply systems when it implemented SPAR; and (6) has not complied with a previous recommendation that it and DOD establish a system design completion review. GAO believes that the Navy could reduce SPAR implementation and operational costs by increasing the number of satellite sites and decreasing the number of host sites.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Navy completed a review of seven implementation alternatives for SPAR in February 1990. As a result, it selected a less costly implementation alternative involving fewer host sites and will achieve savings estimated between $93 million and $107 million.

    Recommendation: To ensure that the Navy pursues the most cost-effective approach for implementing SPAR and provides all requisite information to MAISRC, the Secretary of Defense should direct the Secretary of the Navy to study implementation alternatives for SPAR as a whole (all 38 planned sites). This study should include an analysis of the estimated hardware, telecommunications, and operating costs associated with various host/satellite configurations and examine the feasibility of fewer host systems than the 38 in its current plan. The results of this analysis should be provided to MAISRC as a prerequisite to its approval to acquire and implement the entire SPAR system.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: DOD MAISRC plans to review SPAR implementation plans to ensure that the Navy is pursuing the most cost-effective system approach.

    Recommendation: The Secretary of Defense should plan for MAISRC to annually review any refinements the Navy has made to its analysis of host/satellite configurations prior to each site's scheduled implementation date.

    Agency Affected: Department of Defense


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