Lawmakers seek DOD modernization fix

Lawmakers are talking tough in what they see as the Defense Department's loitering effort to modernize its business systems.

During a hearing last week by the House Government Reform Committee's Government Efficiency and Financial Management Subcommittee, some lawmakers went so far as to suggest that DOD officials take personnel actions, including job demotions or freezing pay raises, as part of an effort to get its three-year Business Management Modernization Program (BMMP) on track.

A General Accounting Office report, issued in conjunction with the hearing, criticized DOD's wasteful spending and poor oversight of its business systems.

Rep. Todd Platts (R-Pa.), the subcommittee's chairman, said the program is lagging because "there are no consequences. That's the reason why we don't see change."

BMMP is Defense Secretary Donald Rumsfeld's multibillion-dollar initiative to improve the agency's core management systems, such as financial and inventory management.

Platts said DOD officials should be held accountable for ignoring business systems' statutes and policies and not meeting their program schedules. "We need to back up with consequences so they know we mean business," Platts said.

Lawrence Lanzilotta, acting DOD comptroller, told House members that he largely agrees with many of the GAO auditors' recommendations. But he disagrees with them on how to get there.

Platts said lawmakers don't want DOD workers to feel threatened by the legislative and personnel actions under consideration. Instead, members want to try to empower leaders so that the program can move forward more efficiently. "We want a solution that's the right solution for the long term," Platts said.

The focus now is on the House/Senate conference of the fiscal 2005 Defense Authorization bill, which includes provisions to streamline management of the 2,274 systems that make up the modernization program.

House and Senate officials want to break DOD business systems into domains, such as logistics, travel and human resources. They would give specific department officials fiscal and oversight responsibility for them.

The House and Senate versions differ on a provision in the bill that requires that the DOD comptroller approve all expenditures of $1 million or more. The Senate favors the stipulation, but House members say the department is not following it. Instead, the House version of the bill would give more control to the new domain leaders.

In its report, GAO officials said the DOD comptroller's office never reviewed $479 million worth of business system updates. Instead, GAO auditors recommended giving specific leaders more control over those systems by assigning them responsibility for acquisition, deployment, maintenance and operations.

DOD officials, however, disagreed with those recommendations, arguing that information technology and acquisition officials should maintain procurement control.

DOD has created so-called do it committees that are responsible for overseeing specific elements of BMMP, Lanzilotta said.

But Keith Rhodes, GAO's chief technologist, testified that DOD should make program efforts more clear and concise. Rhodes said the department employs many of the world's best engineers, but they can get bogged down in technical details without keeping the simple end goals in sight.

GAO, for example, evaluated the Army's Logistics Modernization Program, which started in 1998, and the Defense Logistics Agency's Business Systems Modernization program, which started in 1999.

Those programs should improve day-to-day operations of the service and the agency, but implementation problems led to schedule delays, cost increases, and insufficient inventory and financial management updates, according to GAO's 79-page report.