Report: Halt Navy HR system

The Navy should stop spending money to develop its own human resources system because the entire Defense Department will be using the Defense Integrated Military Human Resources System (DIMHRS) by the end of fiscal 2005, according to a DOD inspector general's report issued last month.

The Navy has been developing the Navy Standard Integrated Personnel System (NSIPS), designed to be an interim human resources system that bridges the numerous Navy legacy HR systems with DIMHRS. Development of NSIPS began in 1995 and was designed to replace four legacy systems.

"By the time the Navy system reaches full operating capability in the second quarter of fiscal 2003, the Navy will have spent $265 million on development," the report read. "Further, the Navy intends to spend an additional $201.8 million on the system after it reaches full operating capability."

Navy officials in the past have argued that NSIPS will smooth the transition to DIMHRS, rather than the service just eliminating legacy applications and thrusting the Navy into the new HR system.

But the Defense Financial Auditing Service directorate that prepared the report noted: "We recommend that the Navy Program Executive Office — Information Technology (PEO-IT) direct the Navy Standard Integrated Personnel System Program Management Office to discontinue further spending for NSIPS development."

The Navy has not responded to the report, and Lt. Cmdr. Pauline Storum, a Navy spokeswoman, said that until an official response to the report is delivered to the inspector general, the matter remains "pending."

In a memo written to a long list of report recipients, David Steensma, the deputy assistant inspector general for auditing, requested a response from the Navy's Program Executive Office for Information Technology by April 14.

"Because [Navy] management did not respond to the draft report, both the recommendation to discontinue further spending on the program and the issue related to the management control program remain unresolved," Steensma wrote.

A spokesman for the Navy PEO-IT said the Navy plans to respond to the report some time this week.

Navy Capt. Peggy Feldmann, the NSIPS program manager, wrote in a fall 2002 article for the Navy that the service actually has a head start on DIMHRS by implementing NSIPS now.

"In order to get accurate data for DIMHRS, the Navy needs to eliminate its old corporate systems and move to a consolidated data model," Feldmann wrote. "As NSIPS migrates to [the latest PeopleSoft Inc. application], it will actually have a head start on gathering authoritative data to populate DIMHRS."

This is not the first time the Navy has been told it should steer away from NSIPS and toward a more comprehensive, DOD-wide system. In 1996, before DIMHRS was a developed concept, the Defense Science Board strongly recommended development of a joint, commercially based personnel and pay system for the Defense Department, rather than NSIPS.

Lockheed Martin Corp., the lead systems integrator on the NSIPS project, deferred all questions regarding the report to the Navy. PeopleSoft, which provided the software on which both the NSIPS and DIMHRS applications are built, said the Navy's decision to go forward with PeopleSoft's applications was intended to resolve issues that would later arise with legacy applications.

"Clearly the Navy purchased our software to improve their operations, efficiencies and cost," said Steve Swasey, a PeopleSoft spokesman. "They were running disparate systems and our software will help them consolidate."

The goal of NSIPS is to move the Navy from paper to electronic records, putting personnel and pay documents into a format accessible via a portal on the service's intranet. The current version of NSIPS is based on a client/server model, with field-level servers that connect to Navy and Defense Department servers in several locations. The Web-enabled version is nearly finished, but the completion date remains unclear.

When it first started, the estimated cost for NSIPS was about $165 million, with a total lifecycle cost around $470 million.