Skip to Highlights
Highlights

The National Defense Authorization Act for Fiscal Year 2004 requires GAO to report on the timeliness of Department of Defense (DOD) payments made to small businesses. GAO's report focuses on (1) whether, at DOD payment centers for which data were available, small business invoices were more likely to be paid late; (2) whether systemic weaknesses in DOD payment processes result in late payments to contractors--including small business contractors; and (3) the impact of late payments on small businesses. To calculate timeliness rates, GAO used the data DOD was able to provide for 9 of its 20 vendor payment locations as well as its one contract pay location. GAO used a case study approach for the third objective because data limitations did not permit the use of statistically reliable sampling techniques for assessing the experiences of DOD small business contractors as a whole. Case study contractors were selected because they experienced a high frequency of late payments and may not be reflective of all small businesses.

Skip to Recommendations

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To clarify the management structure and policies over Wide Area Work Flow (WAWF), the Secretary of Defense should direct the Director of the Defense Business Transformation Agency to provide strategic direction for the Defense Finance and Accounting Service, Defense Contract Management Agency, Defense Information Systems Agency, the military services, and defense agencies in their efforts to fully implement and effectively utilize WAWF.
Closed - Implemented
On March 3, 2008, DOD amended the Defense Federal Acquisition Regulation Supplement to require the military services and the defense agencies to use WAWF.
Department of Defense To clarify the management structure and policies over WAWF, the Secretary of Defense should direct the Director of the Defense Business Transformation Agency to establish a strategic plan that defines the roles and responsibilities of the various organizations that are integral to the success of the program and outlines a strategy for improving the utilization of WAWF--including correcting WAWF functionality or processing issues that may hamper effective utilization.
Closed - Implemented
A March 5, 2010, memorandum from DOD's Assistant Deputy Chief Management Officer, cited the Enterprise Transition Plan (ETP) as the strategic plan plan for WAWF implementation and DOD's governance framework, which tasked the Supplier Management Portfolio Board to be responsible for, among other things, approving enterprise requirements for WAWF. The board's members represent various organizations across DOD that are integral to the success of WAWF.
Department of Defense To clarify the management structure and policies over WAWF, the Secretary of Defense should direct the Director of the Defense Business Transformation Agency to develop performance metrics that enable the department to measure the success of the program--including comprehensive metrics on the volume of invoices and receiving documents transmitted electronically.
Closed - Implemented
DOD'S Enterprise Transition Plan that was released in March 2007 includes WAWF system metrics to measure performance. The number of invoices submitted through WAWF, as a percentage those eligible to be submitted through WAWF, is reported monthly and quarterly, broken out by Service and Agency. The number of invoices eligible to be processed through WAWF is reported to the PMO by the Service and Agencies. The number of receiving reports in WAWF is also reported monthly and quarterly at the aggregate level but not broken out by Service and Agency.
Department of Defense To clarify the management structure and policies over WAWF, the Secretary of Defense should direct the Director of the Defense Business Transformation Agency to consider incorporating, as part of the WAWF application, a data element that would flag invoices submitted by small disadvantaged business so that they may be paid more expeditiously, in accordance with DOD policy.
Closed - Implemented
On March 13, 2009, DOD incorporated a data element into the Wide Area Workflow (WAWF) application to flag invoices submitted by small-disadvantaged businesses.
Department of Defense To help ensure that the military services and defense agencies effectively utilize WAWF the Secretary of Defense should establish a clear requirement that the military services and defense agencies process all receiving and acceptance reports and other supporting payment documentation electronically.
Closed - Implemented
On March 3, 2008, DOD amended the Defense Federal Acquisition Regulation Supplement to require the military services and the defense agencies to process receiving reports and acceptance reports and other payment documentation electronically.

Full Report