ADP Consolidation:

Defense Logistics Agency's Implementation Approach Is Not Justified

IMTEC-91-34: Published: Aug 6, 1991. Publicly Released: Aug 15, 1991.

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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.

Recommendation for Executive Action

  1. 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.

    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


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