DOD stepping back on SPS work

The Defense Department has halted further development of its troubled, $326 million Standard Procurement System to focus on perfecting the current version of the system, designed to streamline DOD's procurement process.

In response to a harsh review by the General Accounting Office and two independent reviews, DOD has stopped further development of SPS Version 5.0 and is focusing on ironing out the problems with SPS Version 4.2.

"The department has shifted the program strategy to focus squarely on fielding this next version to fix many of the problems our users are experiencing with the current fielded system," said Deidre Lee, DOD director of defense procurement, in a written testimony to the House Government Reform Committee's National Security, Veterans Affairs and International Relations Subcommittee.

SPS is DOD's attempt to replace some 76 legacy procurement systems with a single system that would give DOD managers greater access to contract data and allow them to interoperate with DOD financial systems, eliminate antiquated paper-based processes and provide better service to warfighters.

SPS, awarded in 1997, seeks to automate the complex process that Pentagon procurement shops use to buy $130 billion in goods and services yearly.

But SPS, which was originally slated to be fully operational by March 31, 2001, has repeatedly missed target deadlines and is over budget.

"This is not the way to go about managing a multimillion-dollar information technology system," said Joel Willemssen, GAO's managing director of information technology issues, in a Feb. 7 hearing.

"It's going to have to be restructured," said Robert Lieberman, DOD's deputy inspector general. "That restructuring is under way."

DOD officials said that the SPS contract with American Management Systems Inc. of Fairfax, Va., had also been modified to fit the new scope of the project.

SPS officials said that they were focusing on user satisfaction, something that had been a significant hurdle for the system. Col. Jake Haynes, SPS program manager with the Defense Contract Management Agency, said part of the issue had been educating users.

The legacy systems were tailor-made for specific user groups, Haynes said, but SPS is a system that will enable DOD to share data across the organization. Once users understand the need for collecting data that they did not have to provide previously, they are more willing to work with the system.

SPS has been deployed to 21,000 procurement personnel at 777 sites, Haynes said, more than half of all intended users and more than two-thirds of intended sites. Lawmakers, however, questioned why the system appears to be off track.

Margaret Myers, DOD's deputy assistant chief information officer, said that the procurement community would assess whether it was necessary to continue development of the system beyond the current version.

GAO report: "DOD's Standard Procurement System: Continued Investment Has Yet to Be Justified"