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5 ASSESSMENT OF PROGRESS In our midterm report, we said that because of the dynamic nature of the Logistics Systems Modernization Program (LSMP), our assessment of progress would very likely be outdated by the time that report was published. In this report we would like to say the same, but ' unfortunately we cannot. The LSMP started vigorously, and, as far as we can ascertain, it is still generally held to be a difficult but nevertheless worthwhile undertaking. The agency has been frustrated in its efforts to move the program beyond an agreement that need exists for modernization, despite the fact that it is listed as one of the president's priority systems. Our midterm report' cautioned the agency that its decentralized management style, its concurrent and autonomous programs, and its lack of a clear plan and top-down direction favor inertia rather than initiative. In this chapter, we will precede our assessment with a description' of what has occurred since our last report. SINCE OUR LAST REPORT Since our midterm report, the Defense Logistics Agency (DLA) has recently changed its acquisition and management strategy for the LSMP. This change resulted from the DLA's review and evaluation of its agency-wide Automated Information Systems (AIS) modernization program' management and implementation process. The LSMP has been redefined as a series or separate projects as opposed to a single agency-wide program. The LSMP is to maintain the s~me'direction and objectives that were approved by the Major Automated Information System Review Council (MAISRC), but it will achieve those goals through multiple acquisitions to be made under an integrated umbrella program with appropriate oversight reviews. The DLA will use the existing functional requirements to further define individual projects and develop respective requests for proposals for those mission areas judged most critical to the agency. The Office of Telecommunications and Information Systems (OTIS) is now the central focal point for all AIS within the DLA. This resulted in the LSMP program office being merged into the OTIS. 47

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48 Program Approval The DLA has been preparing for the MAISRC Milestone 1 approval since November 1986. The agency had last scheduled its MAISRC Milestone 1 review in March 1989 but had to cancel this review because it was not able to develop all technical costs needed to complete the required cost/benefit analysis. However, according to the DLA, it had completed all other preparations and documentation required for MAISRC review. This documentation is referred to as the Systems Decision Paper (SDP) for Milestone 1. In addition, the DLA is now planning to form an internal review council to help coordinate its efforts, ensure agency-wide support, and improve its preparations for the MAISRC. Such a council would be formed from the agency's principal staff elements and field activities. Concurrent and Independent Programs During our review, we noted that the DLA continued to pursue various modernization efforts independent of the management of the LSMP and the OTIS. As might be expected, this situation occurred because of pressure to satisfy individual needs sooner than the LSMP time frame. As these separate modernization programs were formed, their size was affecting the definition and scope of the LSMP and continually changing its life cycle cost. This condition confused and defocused the program. Furthermore, it allowed the development of AIS to continue without guidelines or standards that would enable integration and interoperability of systems. Under such "business as usual" conditions, accountability for management of agency-wide AIS development is virtually forfeited. Funding We understand why the DLA would consider the large amount of funding associated with using a single prime integration contract to be uncertain of appropriation in a period of zero growth in the defense budget. We can also understand why the use of a single integration contractor might be perceived as a "grand design" even though each project would be implemented individually in keeping with a total design concept. However, we do not understand why the LSMP was funded by the DLA in the Department of Defense's five year plan for only the resources to support the program office planning function.

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49 Regrouping LTG McCausland, Director, DLA, formed a team of senior executives to determine where the agency was going with its disparate modernization efforts and how the agency should be organized to accomplish modernization. This team met at an off-site location in Leesburg, Virginia, on January 9-13, 1989 to answer the questions posed by the director. The team recommended a strategy and technical execution for the DLA's modernization (see Chapter 2, Refocusing) which was subsequently endorsed by the director in his memorandum dated January 20, 1989. SUMMARY AND EVALUATION We must report that there has been little progress toward logistics systems modernization within the DLA in the year since our last report. Even though we regard the recent refocusing effort to be a positive action that can serve to pull the DLA's resources together in support of systems modernization, we underscore the need for executive level follow-up to direct specific changes and maintain emphasis. It is our understanding that the director's memorandum of January 20, 1989 will be quickly followed by specific directives aimed at the organizational issues that remain unresolved. In particular, these issues involve the command and direction of the DLA's multiple design activities and program managers. We urge that such issues be addressed and resolved as soon as possible. However, we also urge that any changes be made with a long-term point of view and that the agency avoid making changes which are adventitious and temporary in nature. The following remarks are offered to summarize our views at this time: . . We found that the LSMP program manager's position is still temporary, and that the program office has been transferred from reporting to the director, DLA, to reporting to the assistant director, OTIS. We believe that modernization is a long-term and continuing process, and that the agency would do well to view it as such and have the LSMP program office serve as a super program manager for agency-wide modernization projects and their individual managers. The OTIS should now have accepted accountability for agency-wide modernization and should pursue this task through the LSMP program office. Furthermore, a senior IRM official should be identified for the DLA. A document entitled "Supporting the Armed Forces -- 1988 Strategic Plan" was produced (Defense Logistics Agency, 1988), but in reviewing this document we found that it contained no specific organizational or operational goals. There are no time schedules or milestones for completion of specific steps toward modernization. It does not offer a plan that outlines where the agency is going and how it intends to get there.

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so The Business Area Analysis process has taken longer to perform than estimated and now appears to have stopped in advance of completion, with relatively little use being made of the results so far. The effort appears to be incomplete because a top-down, cross-functional analysis has not been produced, which was to give the DLA its basis for agency-wide modernization. We warned that this might occur in our midterm report. The agency is rethinking its strategy for seeking approval from the MAISRC and has not yet announced the specifics of its new strategy. Even so, the emerging concept seems to favor the selection of "doable" projects that are part of a long-range plan. We agree with this approach and recommended it a year ago. However, the longer-range goal must be established before a new MAISRC plan can be pulled together. Except for the bottom-up effort of a few organizational elements that were dedicated to the LSMP, we found that the DLA has made very little progress toward overall modernization planning and ~ implementation in the two years of our study. However, during this period, several units such as the Defense Logistics Services Center and the DLA Automatic Addressing Systems Office have made progress in moving ahead with upgraded, newly designed systems to modernize existing functions. The new director of the agency has modernization goals. Getting all top progress and make recommendations was followed up bY organizational chances exhibited his dedication to managers together to critique an excellent step. If this is ~ ~ ~ that centralize responsibility for info' mation management and design, we believe that the agency can create an improved internal environment for moving forward with modernization. environment tor REFERENCE Defense Logistics Agency. 1988. Supporting The Armed Forces. 1988 Strategic Plan. Office of Policy and Plans. Alexandria, VA. Defense Logistics Agency, Cameron Station.