Progress cited on ‘marathon’ Defense business systems upgrade

The Pentagon is making progress on an effort to modernize its massive and complex business systems, but work remains to hammer out details, according to two new Government Accountability Office reports.

One report (GAO-07-538), published Friday, stated that the Defense Department has established the management structures needed to effectively control its business system investments. But officials have yet to fully develop related policies and procedures, the report said.

The second report (GAO-07-733), released Monday, praised Defense for taking steps to comply with fiscal 2005 National Defense Authorization Act provisions. But officials left investments in some Defense agencies out of a plan outlining milestones for the business program, among other deficiencies, the report stated.

"On the one hand, you can't say 'mission accomplished,' but on the other hand, you want to acknowledge their accomplishments," said Randolph Hite, GAO's director of information technology architecture and systems issues. "It's a marathon, not a 100-meter sprint."

The business systems in question help to manage about $1.4 trillion in assets, a $581 billion annual budget and 2.9 million personnel. GAO designated the modernization as a high-risk area in 1995. From 2001 to 2005, the department failed to follow a 2001 recommendation that it adopt a corporate approach to investment decisions. Since then, the Pentagon has made progress, according to GAO.

Significant management changes typically take five to seven years, but the time frame for an organization as large as the Defense Department could stretch even longer, Hite said.

He said that, to the best of his knowledge, Robert Gates' arrival as the new Defense secretary did little to interrupt the department's 18 months of steadily improving business practices. Deputy Defense Secretary Gordon England leads the effort and has kept it on track, Hite said.

But GAO consistently has called for the creation of a chief management officer with the authority to keep momentum across presidential administrations, Hite said. "We're years away from saying these things are accomplished," he said. "What we've tried to do is put in place the means by which things happening now are sustained through administrations."

GAO has recommended that the chief management position -- if authorized -- be filled by a Senate-approved presidential appointee for a seven-year term. Pentagon officials have said they oppose the proposal because the deputy secretary already has the de facto role of chief management officer.

Hite said the Defense organization charged with implementing change across the department -- the Business Transformation Agency -- lacks the authority to accomplish a lot.

"You really have to get high up in the [Defense] organization to get stuff done," Hite said. "Where you sit on that totem pole makes a lot of difference."

David Fisher, the director of the Business Transformation Agency, said in a statement that England has provided top-level leadership and guidance for the business transformation activities across the department over the past two years through the Defense Business Systems Management Committee.

"This support has been instrumental in enabling the Business Transformation Agency and other business stakeholders to achieve significant accomplishments," Fisher said.