Acquisition management takes shape at Defense Logistics Agency

The Defense Logistics Agency, which manages millions of supply transactions each year, has failed to meet key criteria for effective acquisition of software used to manage one of its main acquisition programs. But the agency has passed muster by the same criteria in a larger and newer program, according to a new report by the General Accounting Office. The DLA manages two major acquisition programs that rely on management software. The first is the Fuels Automated System (FAS), which manages about $5 billion in annual petroleum contracts for the Defense Energy Support Center. The second is the newer and broader Business Systems Modernization (BSM), which is supposed to modernize the DLA's materiel management component, turning the agency from a supplier and manager of inventory into a manager of entire supply chains. The DLA uses software systems to manage those programs and all of its sales to the armed forces, which amounted to $13 billion in fiscal 2000, the agency reported. In its report, "Information Technology: Inconsistent Software Acquisition Processes at the Defense Logistics Agency Increase Project Risks" (GAO-02-9), GAO determined that the quality of the acquisition processes for the two systems was an important factor in the agency's performance. But for the FAS program, the agency hadn't established basic processes to plan acquisition, manage requirements, track the performance of project teams and vendors, manage project costs and schedule baselines, evaluate products and services and move the software successfully to its support organization, GAO found. The report also critiqued the DLA for lacking an official plan to improve and strengthen its software acquisitions. While the report found critical flaws in the FAS program, it praised the DLA's management of the BSM program. BSM satisfied all the requirements that FAS failed to meet, and also passed inspection in the area of acquisition risk management. May DeVincentis, the DLA's director of information operations, told Government Executive that the FAS management software acquisition was one of the agency's first attempts to use a commercial off-the-shelf product instead of a system created in-house. DeVincentis said the lessons learned in the FAS program were incorporated into the agency's "flagship" BSM, which will be released to the entire DLA workforce in the spring and summer. The FAS program was unable to take advantage of new program management guidance created by such landmark legislation as the 1996 Clinger-Cohen Act and the 1993 Government Performance and Results Act because the program was launched before the laws were passed, DeVincentis added. She said the agency has put a program executive officer in place who oversees all acquisition programs and brings them in line with new guidance. In response to GAO's finding that the DLA doesn't have an improvement plan, DeVincentis said that the agency realized that such a plan is crucial to management success, and that it is now in place. DeVincentis said GAO's review of the two programs should take into account the successes of BSM in spite of the shortcomings of FAS. However, GAO said that the weaknesses of one program affect the agency's entire acquisition management system. Those weaknesses can lead to the acquisition of systems that don't meet DLA employees' needs, don't provide effective program and operations support, cost more money and take more time to complete than expected, the report said.