Coast Guard calls for audit of logistics system

Citing concerns about cost overruns and slow progress, the Coast Guard's chief information officer has ordered an internal audit of an information technology system being developed that would help it manage and maintain its ships and boats.

The Fleet Logistics System is intended to aggregate for the first time all the resources, equipment, costs and labor associated with supporting Coast Guard ships so that the agency can make informed decisions on future acquisitions, reduce inventory and manage its resources better.

The Coast Guard, which has more than 200 cutters and 1,000 boats, currently has no integrated system to provide a centralized view of its ships.

In a memo calling for the system audit, Rear Adm. George Naccara, CIO of the Coast Guard, described FLS as "one of our top three IT projects, which may become one of our most expensive and longest to build." The agency has spent more than $40 million on FLS since the early 1990s, "with little understanding of what has been done," according to his memo.

Naccara is particularly concerned that the system is being designed without following acquisition guidelines set forth by the Clinger-Cohen Act and by "Raines Rules," eight criteria for evaluating IT projects set forth by Franklin Raines, former director of the Office of Management and Budget.

Clinger-Cohen "demands that we do this kind of audit," Naccara said, adding that he plans to audit other high-profile Coast Guard IT systems, such as the National Distress Modernization Project, which will expand and upgrade the Coast Guard's system used to communicate with boaters in danger.

"At least once a year we should have a review of projects to make sure they are still applicable and managed appropriately," Naccara said.

The audit is an effort to avoid the fate of an earlier logistics and supply project, the Systems to Automate and Integrate Logistics (SAIL), which the Coast Guard began developing in the late 1980s but terminated in 1993 because of management problems and significant cost overruns. The agency began developing FLS about five years ago to serve the same purpose, but it is developing the new system in pieces rather than all at once.

The audit is also an effort to assert the role of the CIO in IT management and require that the Coast Guard follow a formal review process for its programs, Naccara said. He added that the agency wants to fund critical IT programs from a central account to ensure they are appropriately funded.

"I'm concerned that maybe we have not supported [FLS] the way we should have," he said. "There were too many variations in" funding that may have affected its development.

But Naccara may face an uphill battle because CIOs still must struggle for control of agencies' IT management, said Bob Dornan, senior vice president at Federal Sources Inc. Clinger-Cohen tried to make the CIO an important post, but in reality it created "weak CIOs with little authority over IT spending," he said.

Both Naccara and Cmdr. Mike Mangan, chief of the Office of Logistics Systems, said they are optimistic about a favorable outcome of the audit.

"There are people who think FLS is not going too well, but I don't think that is the case," Mangan said. "Because of funding shortfalls, things have slowed down." However, the program is not over budget, he said, and FLS' initial operating capability will occur this summer.

OAO Corp. is the systems integrator. OAO officials could not be reached for comment.

FLS is still a critical system to the agency, Mangan said. "For the first time, anyone on the Coast Guard intranet will be able to access information on maintaining our ships," he said. "We've never been able to see the cost of maintaining ships in the field and therefore never been able to make decisions based on real historical data. No other system that's being considered can do that."

"Supply chain management is a huge deal," said Avon James, chief operating officer at Robbins-Gioia Inc. "That's the big challenge organizations are facing, as well as the challenge of knowing where the assets are while minimizing the need to store a large inventory. It's an attempt to control and reduce costs."