Recommendation: The Secretary of Defense should ensure that the Director of the Defense Finance and Accounting Service provides customers with more complete information on the agency's rate-setting methodologies in rate documentation, briefings, and other forums where rates are discussed, including the costs included in rates, how those costs are calculated, and how changes in DFAS's workload affect customers' overall costs. (Recommendation 1)

Agency: Department of Defense: Defense Finance and Accounting Service
Status: Open

Comments: The Department of Defense (DOD) concurred with GAO's recommendation and stated that the Defense Finance and Accounting Service (DFAS) provides detailed cost and rate information to customers each year in multiple venues and would reach out to customers to obtain additional details to understand how to fill the information gap regarding rate transparency. In April 2020, DOD provided to GAO DFAS's corrective action plan, which stated that DFAS Client Executives would ask the Army, Navy, and Marine Corps lead Financial Managers for feedback on additional details needed to better plan for the DFAS bill. DFAS would then incorporate this additional detail into the customer bill briefings for the President's Budget Request for fiscal year 2022. DFAS also stated that the Air Force had indicated that DFAS provides appropriate transparency, but had requested that DFAS provide its bill estimate earlier, which DFAS had agreed to do.

Recommendation: The Secretary of Defense should ensure that the Director of the Defense Information Systems Agency provides customers with more complete information on the agency's rate-setting methodologies in rate documentation, briefings, and other forums where rates are discussed, including the costs included in rates, how those costs are calculated, and how changes in DISA's workload affect customers' overall costs. (Recommendation 2)

Agency: Department of Defense: Defense Information Systems Agency
Status: Open

Comments: The Department of Defense (DOD) concurred with GAO's recommendation and stated that the Defense Information Systems Agency (DISA) will make every effort to improve dialogue with customers to ensure the correct people have a full understanding of DISA's methodologies used to develop their rates. In April 2020, DOD provided to GAO DISA's corrective action plan, which stated that DISA would continue to make every effort to improve dialogue with customers to ensure an increased understanding of methodologies used to develop the rates. In this plan, DISA reported that, in February and March 2020, its Chief Financial Officer (CFO) coordinated with the communications and financial management senior leadership for the military services to discuss Defense Working Capital Fund (DWCF) rate methodology and transparency. In May 2020, DOD provided an updated status on this recommendation, stating that a result of the DISA CFO outreach was that DISA would use the regular and recurring DISA Drumbeat engagements with the military departments to present and maintain an open and transparent dialogue on DISA DWCF rates. GAO requested documentation for the recent Navy and Air Force Drumbeat meetings and the pending Army meeting, as well as recent rate briefings that document that DISA is providing this more complete rate-setting information to its customers. GAO will update the status of this recommendation once this documentation is received.

Recommendation: The Secretary of Defense should ensure that the Director of the Defense Logistics Agency provides customers with more complete information on the agency's rate-setting methodologies in rate documentation, briefings, and other forums where rates are discussed, including the costs included in its rates, how it calculates those costs, and how and when proposed changes to its rate-setting methodologies will affect customers' overall costs. (Recommendation 3)

Agency: Department of Defense: Defense Logistics Agency
Status: Open

Comments: The Department of Defense (DOD) concurred with GAO's recommendation and stated that the Defense Logistics Agency (DLA) would include more detailed information in its annual rate briefing to the Office of the Under Secretary of Defense (Comptroller) and the services regarding what is in its costs, how it calculates costs, and how and when changes would impact customers' overall costs. In addition, DLA stated that it conducts semiannual Cost Summits and periodic DLA/Service Days with customers. DLA said it would include discussions, as appropriate, of topics such as potential pricing methodology changes and estimated cost impacts to customers, well in advance of implementation. In March 2020, DLA notified GAO that it had discussed cost rates with the military services during the January 2020 DLA Cost Summit and the Service Days with each of the military services that it held in June and November 2019. GAO requested documentation for these five meetings that includes the more complete information on DLA's rate-setting methodologies that GAO identified in the recommendation. GAO will update the status of this recommendation once this documentation is received.

Recommendation: The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment designates an accountable official responsible for (a) developing job specialty descriptions to help identify non-acquisition personnel supporting services acquisitions; and (b) establishing a schedule to identify these personnel. (Recommendation 1)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation, but has not yet taken any necessary actions to implement it. In its concurrence, DOD noted that the Office of the Secretary of Defense (OSD) would develop and provide the guidance and job specialty descriptions for DOD components to use for identifying acquisition and non-acquisition personnel supporting services acquisitions. DOD also noted that the Director of Human Capital Initiatives has deployed an enterprise-wide coding capability for components to use in identifying acquisition and non-acquisition civilians across DOD. A DOD official stated that during 2020, both OSD and the Office of Human Capital Initiatives have developed reports that discuss issues related to the identification and training of non-acquisition personnel, including those supporting services acquisitions. This official noted that both of these reports are going through the coordination and staffing process and have not been issued. Additionally, DOD has not yet designated an accountable official responsible for efforts to help identify non-acquisition personnel supporting services acquisitions.

Recommendation: The Secretary of Defense should ensure that the Component Acquisition Executives provide non-acquisition personnel training needs to the Defense Acquisition University as part of the annual planning, programming, budgeting, and execution process. (Recommendation 2)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation. In July 2020, a DOD official stated that DOD is planning a revision to its instruction related to the education and training of DOD's acquisition workforce. The official said the revision is intended to help define the acquisition and non-acquisition workforces and the responsibilities for their respective training needs, among other things. However, the revision is in the planning stages and not be expected to be completed until the end of 2021. As a result, DOD is still not ensuring that Component Acquisition Executives provide non-acquisition personnel training needs to the Defense Acquisition University.

Recommendation: The Secretary of Defense should ensure that the Deputy Secretary of Defense makes a determination as to how the CMO is to direct the business-related activities of the military departments. (Recommendation 1)

Agency: Department of Defense
Status: Open
Priority recommendation

Comments: DOD concurred with this recommendation. The National Defense Authorization Act for Fiscal Year 2020 mandated that DOD assess the CMO's position, and the accompanying conference report indicated that the conferees intend to disestablish the position, pending the outcome of DOD's assessments. We continue to believe that DOD needs a CMO, codified in statute as a separate position, at the right level, and with the adequate amount of resources and appropriate authority to be responsible and accountable for its business transformation efforts. In light of pending requirements to assess the CMO position, GAO will continue to monitor the department's response to these recommendations as those assessments and any related actions are completed.

Recommendation: The Secretary of Defense should ensure that the Deputy Secretary of Defense makes a determination regarding the CMO's relationship with the DAFAs, including whether additional DAFAs should be identified as providing shared business services and which DAFAs will be required to submit their proposed budgets for enterprise business operations to the CMO for review. (Recommendation 2)

Agency: Department of Defense
Status: Open
Priority recommendation

Comments: DOD concurred with this recommendation. The National Defense Authorization Act for Fiscal Year 2020 mandated that DOD assess the CMO's position, and the accompanying conference report indicated that the conferees intend to disestablish the position, pending the outcome of DOD's assessments. We continue to believe that DOD needs a CMO, codified in statute as a separate position, at the right level, and with the adequate amount of resources and appropriate authority to be responsible and accountable for its business transformation efforts. In light of pending requirements to assess the CMO position, GAO will continue to monitor the department's response to these recommendations as those assessments and any related actions are completed.

Recommendation: The Secretary of Defense should ensure that the CMO and Chief Information Officer (CIO) conduct an analysis to determine which responsibilities should transfer from the CIO to the CMO, including identifying any associated resource impacts, and share the results of that analysis with the Congress. (Recommendation 3)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation. The National Defense Authorization Act for Fiscal Year 2020 mandated that DOD assess the CMO's position, and the accompanying conference report indicated that the conferees intend to disestablish the position, pending the outcome of DOD's assessments. We continue to believe that DOD needs a CMO, codified in statute as a separate position, at the right level, and with the adequate amount of resources and appropriate authority to be responsible and accountable for its business transformation efforts. In light of pending requirements to assess the CMO position, GAO will continue to monitor the department's response to these recommendations as those assessments and any related actions are completed.

Recommendation: The Secretary of Defense should ensure that the Deputy Secretary of Defense, on the basis of the determinations regarding the CMO's statutory and discretionary authorities, codify those authorities and how they are to be operationalized in formal department-wide guidance. (Recommendation 4)

Agency: Department of Defense
Status: Open
Priority recommendation

Comments: DOD concurred with this recommendation. The National Defense Authorization Act for Fiscal Year 2020 mandated that DOD assess the CMO's position, and the accompanying conference report indicated that the conferees intend to disestablish the position, pending the outcome of DOD's assessments. We continue to believe that DOD needs a CMO, codified in statute as a separate position, at the right level, and with the adequate amount of resources and appropriate authority to be responsible and accountable for its business transformation efforts. In light of pending requirements to assess the CMO position, GAO will continue to monitor the department's response to these recommendations as those assessments and any related actions are completed.

Recommendation: The Secretary of Defense should ensure that the CMO, with input from the human resources management team, requires that all DOD human resources providers adopt consistent time-to-hire measures, as one process for assessing performance. (Recommendation 2)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation and noted planned actions. DOD's Human Resources Reform Team has 3 objectives as part of its reform agenda, including civilian hiring improvements. DOD issued its initial plan for business operations reform in April 2019, which includes detailed information and timelines for actions carried out and planned for this reform team. It stated that the team would conduct an annual review of components' time-to-hire plans and work towards establishment of common DOD process and metrics for civilian hiring and establishing baselines and goals for quality metrics through the end of fiscal year 2019. Further, quarterly assessment of survey data using baseline quality metrics is planned to begin in early fiscal year 2020. DOD officials stated that a departmentwide Time-to-Hire Workgroup was established in March 2019 and conducted six workshops to develop a reengineered process map for civilian hiring and an associated implementation plan. Implementation is to occur along with a new IT system for civilian human resources that is expected to be deployed in fiscal year 2021, but we have not received documentation of the specific requirements for implementation.

Recommendation: The Secretary of Defense should ensure that the CMO, through the human resources management reform team, identifies time frames and deliverables for identifying and adopting optimal IT solutions for human resources and fully assessing, identifying, and implementing the most effective and efficient means of human resources service delivery. (Recommendation 3)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation and noted planned actions. In its written comments, DOD stated the department is on track to achieve substantial savings through its reform team efforts and CMO emphasis on strong management practices, integrated processes, and best value business investments. DOD issued its initial plan for business operations reform in April 2019, which included detailed information regarding the department's plans for reforming its human resources service delivery. Subsequently, DOD identified 3 human resources management IT system reform projects aimed as identifying and adopting optimal IT systems for its overall civilian human resource management, the defense travel program, and overall training and learning. The reform management group has overseen these reform projects. DOD officials stated that it expects these optimal IT systems to be fully operational later in fiscal year 2020 and 2021. Further, DOD has identified timeframes throughout fiscal year 2023 for identifying and implementing an effective and efficient shared service delivery model for human resources. DOD has made considerable progress in identifying optimal IT systems and service delivery model for its human resources services, and we will continue to monitor the assessment and implementation of these systems and delivery models.

Recommendation: The Secretary of Defense should ensure that the CMO, through the human resources management reform team, collects information on the overhead costs charged by all DOD human resources service providers to assist in determining the most effective, economical, and efficient model of human resources service delivery within the department. (Recommendation 4)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation and noted planned actions. In its written comments, DOD stated the department is on track to achieve substantial savings through its reform team efforts and CMO emphasis on strong management practices, integrated processes, and best value business investments. DOD issued its initial plan for business operations reform in April 2019, which included detailed information regarding the department's plans for reforming its human resources service delivery. As part of this effort, DOD officials stated that the department has collected data and information on services, performance, and pricing to provide basis for common definitions and standards as they determine the most effective, economical, and efficient model of human resources service delivery. Further, efforts are continuing to develop a standardized costing model for human resources service delivery, which officials estimate will be approved for use by early fiscal year 2021.

Recommendation: The Secretary of Defense should ensure that the CMO routinely and comprehensively monitors and evaluates ongoing efficiency initiatives within the department, including those related to the reform teams. This monitoring should include establishing baselines from which to measure progress, periodically reviewing progress made, and evaluating results. (Recommendation 5)

Agency: Department of Defense
Status: Open
Priority recommendation

Comments: DOD concurred with this recommendation. In April 2019, DOD submitted to Congress its initial plan for business operations reform. It included an initial plan, schedule, and cost estimate for conducting these reforms. The plan states that a reform initiative framework was implemented to track and report progress of initiatives, and that financial savings will be monitored by a validation process. In December 2019, DOD issued a follow-up report providing additional baseline estimates related to the four areas. DOD officials stated that a reform initiative framework has been implemented to track and report progress of initiatives and that financial savings will be monitored by a validation process. The charter for the Reform Management Group, issued February 2019, directs the governance body to reform and align business functions of the department as well as tracking the progress of those reform efforts. Further, DOD reported on baselines in its January 2020 report to Congress to fulfill the requirements of Section 921 from the FY2019 National Defense Authorization Act. As of June 2020, DOD provided a corrective action plan that details plans to further evaluate results and financial savings associated with its efficiency initiatives. We will continue to review DOD's efforts throughout the year to ensure this monitoring and evaluation is occurring.

Recommendation: The Secretary of Defense should ensure that the CMO fully address all requirements in section 911 of the NDAA for Fiscal Year 2017 and incorporate leading practices for effective cross-functional teams in guidance on Secretary of Defense-empowered cross-functional teams. (Recommendation 3)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation. In December 2019, the Secretary of Defense approved DOD's guidance on cross-functional teams. We found that this two-page guidance addresses most, but not all, of the 911 requirements and leading practices for cross-functional teams. Specifically, it addresses in whole or in part six of the seven section 911 requirements and six of the eight leading practices. The Secretary-approved guidance also directs the Chief Management Officer (CMO) to develop more detailed implementing guidance. According to an Office of the CMO (OCMO) official, OCMO plans to use previously drafted terms of reference as the basis for the CMO's more detailed implementing guidance. Based on our review, when the Secretary of Defense approved guidance is considered along with the draft terms of reference expected to serve as detailed implementing guidance, both documents will fully address all section 911 requirements and leading practices for effective cross-functional teams. To fully implement this recommendation, the CMO will need to develop and issue this detailed implementing guidance to fully address section 911 requirements and our leading practices for effective cross-functional teams. According to an OCMO official, as of April 2020, OCMO was still in the process of developing the detailed implementing guidance.

Recommendation: The Secretary of Defense should ensure that the CMO either: (a) provide training for presidentially-appointed, Senate-confirmed individuals in the Office of the Secretary of Defense that includes the required elements--leadership, modern organizational practice, and collaboration--in section 911 of the NDAA for Fiscal Year 2017, or (b) develop criteria for obtaining a waiver and have the Secretary of Defense request such a waiver from the President for these required elements if the individual possesses--through training and experience--the skill and knowledge otherwise to be provided through a course of instruction. (Recommendation 4)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation. In October 2018, an official from the Office of the Chief Management Officer (OCMO) stated that OCMO had revised the draft training curriculum for individuals filling presidentially-appointed, Senate-confirmed positions in the Office of the Secretary of Defense to include all of the required elements in section 911. According to an OCMO official, as of April 2020, the curriculum had been approved and the training had been provided, but as of July 2020, the department had not provided documentation of the updated curriculum or of the training being provided. To fully implement this recommendation, we will need to review the revised training curriculum to determine if it contains all of the required elements in section 911 and obtain documentation that presidential appointees in the Office of the Secretary of Defense have received the training or were granted training waivers.