GAO says DoD lacks leadership on management issues

Proper implementation of Chief Management Officer is key to improvements

By Jason Miller
Executive Editor

The Department of Defense’s ongoing management problems can be summed up succinctly into a lack of sustained leadership.

Acting Comptroller General Gene Dodaro told the House Armed Services Committee today that the limited or lack of any progress on all of the 19 areas on the Government Accountability Office’s High-Risk list is a result of DoD’s inability or lack of desire to fully install a Chief Management Officer (CMO).

“There are some common issues we see across all high risk areas,” Dodaro says. “There needs to be sustained leadership on the part of the department. That has been lacking over a period of time. That needs to change if there will be any progress made in these areas.”

Dodaro says since Congress passed the CMO legislation in 2007, DoD has not implemented it and some specific positions, such as deputy CMO and CMOs in the services, have not been filled yet.

“Some of the infrastructure is in place and things are poised to make great progress, but a lot will depend on the actions and implementations and a lot of hard work by the department,” Dodaro says.

DoD named former deputy secretary Gordon England as the first chief management officer in September 2007, ahead of the Congressional mandate. And DoD secretary Gates signed a memo last October detailing the responsibilities of a deputy CMO. However, England left after the Bush administration’s term completed, and Gates has not yet named a deputy CMO. Congress last month confirmed William Lynn to be the DoD deputy secretary.

“Our recommendation to create a CMO is to attempt to penetrate these long-standing issues,” Dodaro says. “Many have built up over time and can only be addressed by a top level person.”

Rep. John McHugh (R-N.Y.), ranking member of the committee, says it is disturbing that DoD can’t remove areas from the High Risk list.

“We are truly at a critical juncture as on-going military readiness needs and fiscal pressures place DoD in a position where it can no longer tolerate ineffective and inefficient management processes and technologies,” he says.

Along with the full implementation of the CMO, Dodaro and other GAO witnesses say DoD too often changes policy, but does not follow up to ensure the services are implementing them.

Katherine Schinasi, GAO’s managing director of acquisition sourcing management, says there are no consequences for not following the new policies.

“There is always an exception made to the policy for almost every program, certainly in the weapons system area,” she says. “Then you have the opportunity cost that falls into other programs so overall, you are faced with a difficult situation.”

This failure to turn policy into practice is a major reason DoD has more than $295 billion in cost overruns, Schinasi says.

Congressman Hank Johnson (D-Ga.) asked Schinasi what consequences should there be. While she didn’t offer any specifics, Schinasi did point out that there are several regulations DoD must follow before moving forward with any acquisition.

Dodaro added that the consequences should apply to contractors as well.

Dodaro says GAO previously found DoD too often gave contractors award fees even though they did not meet contract requirements. He says DoD is fixing this issue by putting in place stronger policies and procedures, but more needs to be done.

One of the things DoD could do, he says, is reduce the number of time and materials contracts it uses.

Dodaro says the military’s reduced use of these type of contracts is part of a larger reform effort that is needed around service contracting.

“The amount of people that DoD uses to monitor and evaluate these contracts has not grown hardly at all,” he says. “While the contracting has doubled in real terms over a 4-to-5 year period, the contracting organization has grown by one percent.”

Dodaro says DoD acquisition spending increased to $387 billion in 2008, of which about $200 billion was spent on services.

Rep. Vic Snyder (D-Ark.) asked whether the Levin-McCain bill, introduced in the Senate to begin to reform DoD acquisition, is focusing enough on services. He says he thought not.

Schinasi says the fiscal 2006 Defense Authorization bill addressed services acquisition through the Service Acquisition Reform Act.

She says DoD still is implementing many of the requirements under the law and GAO is following up on their progress.

Dodaro adds that what DoD needs from Congress is a reform framework to include both services and product acquisition.

“A good legislative framework followed by a very detailed implementation plan that the Congress understands and has realistic implementation milestones is the only way you will be able to achieve the progress over time and do it right because a lot of these things will require mid course corrections and refinements,” Dodaro says.


On the Web:

FederalNewsRadio – House Armed Services sets up acquisition panel

FederalNewsRadio – Lawmakers calling for more procurement oversight at White House Summit

DoD – Deputy Chief Management Officer directive (pdf)

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