DoD said to lack plan for logistics reform effort

The Defense Department's effort to modernize its $84 billion logistics operation is showing the warning signs of impending failure, the General Accounting Office concludes in a new report.

GAO officials presented the report Tuesday at a hearing before the House Armed Services Committee. The most glaring red flag is the lack of a single department-wide plan for implementing numerous reform efforts, they said.

While DoD has established an office that oversees logistics reforms, it still hasn't linked more than 400 service-level initiatives to the larger departmentwide effort, GAO said.

"Although the services have been directed to develop a plan that links their initiatives to DoD's overall vision, it remains unclear how these individual service plans will be integrated into the overarching architecture," said GAO's report, "Defense Logistics: Actions Needed to Enhance Success of Reengineering Initiatives" (NSIAD-00-89).

Pentagon officials said GAO was being overly cautious.

"We share some of your concerns about the pace, risk and costs of logistics reengineering, but the alternative- to go slow, take no risk, and let logistics costs continue to rise- is untenable," said Roger W. Kallock, deputy undersecretary of defense for logistics, in a letter to GAO.

DoD's overall strategy for logistics reform is outlined in its 1999 Logistics Strategic Plan, which asserts that by 2005, the system will be efficient and will effectively support DoD troops.

Defense logistics operations are no small matter. This year, the department estimates that logistics support, including repairs and maintenance of weapons and storage, transportation and distribution of military goods, will account for one-third of its budget. Many of the services' logistics reform efforts rely heavily on increasing use of private contractors. But those efforts lack overall coordination, GAO concluded.

For example, Marine Corps weapon system program managers could decide to contract out weapon support while at a higher level, the Marine Corps Material Command decided to keep logistics support in-house, GAO said.

DoD leaders say they recognize the problems GAO identified. "The Office of the Secretary of Defense recognized there were many positive logistics initiatives underway throughout the department that needed to be fit together," DoD officials said in their response to the report. DoD plans to have an integrated plan in working order by October.

Nonetheless, GAO cast doubts that the 2005 deadline for a full logistics overhaul would be met, particularly because many of the 30 pilot programs DoD has in place already are behind schedule. The pilot programs are testing reform concepts. Twenty-one of the plans will not meet a 2002 deadline for producing results that can be evaluated, GAO said.

GAO also noted that some military leaders are concerned that outsourcing logistics operations to private contractors could have an adverse impact on troops. They cite hypothetical scenarios where contractors might refuse to work on or near battlefields as examples of how the planned reforms could adversely affect national defense.