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Despite a two-year-old congressional mandate to better manage how the Defense Department buys services, Pentagon officials have been slow to streamline the department's services acquisition process, according to a new report from the General Accounting Office.

The Defense Department spends more than $93 billion on services each year, including professional, administrative, and management support; construction, repair, and maintenance; information technology; research and development; medical care; operation of government-owned facilities; and transportation, travel, and relocation, according to GAO. In fact, during the past five years, Defense spent more money on services than it did on supplies and equipment.

But despite this huge expenditure, the department's services acquisition process is neither strategically or efficiently managed, GAO said in its report (03-935). "While DoD's leaders express support for a strategic approach in this area, they have not translated that support into broad-based reforms," the report said. Without better management, Pentagon officials can't effectively leverage the department's purchasing power, GAO concluded.

Language in the fiscal 2002 National Defense Authorization Act required Pentagon officials to "establish a management structure and a program review structure and to collect and analyze data on purchases in order to improve management of the acquisition of services," but to date, Pentagon officials have been slow to implement these initiatives and the few initiatives they did implement were poorly coordinated, GAO found.

"DoD has not established a strategic plan that provides a roadmap for transforming its services contracting process and recognizes the integrated nature of services contracting management problems and their related solutions," the report said. Three of the four services are in the early stages of implementing their procurement overhaul initiatives, but none of the services have connected their plans, creating a fragmented reform structure, the watchdog agency found.

"Given the federal government's critical budget challenges, DoD's transformation of its business processes is more important than ever if the department is to get the most from every dollar spent," GAO concluded.

The watchdog agency recommended that Pentagon officials develop a strategic plan that includes guidance so that military departments and Defense agencies are all following the same standard and know their responsibilities. The strategic goals should include performance goals and measurements.

Defense officials said they were "fully committed to improving" acquisition services at the department and are "actively pursuing changes in conjunction with other transformation efforts."

COMMENTS

• Perhaps this applies to the every day consumables like pens and paperclips, but they sure made haste to change the rules which govern major systems acquisition. In fact, the 'redesigned' systems acquisition rules could almost be termed 'reckless' given the breakneck speed they can put new systems in the field. Problem is the new rules will permit a system to field with far less than total capability—the argument being that any capability is better than none, and 'we can build on it in subsequent blocks'. Waste, waste, waste... H Posted September 22, 2003 4:07 PM
• Again the wonderful GAO misses the point and recommends sub-optimal procedures. The DoD should not centralize purchase processes - the entire government should! In fact, DoD has much more importynat things to do than to worry about purchase procedures! Maybe the Dept of Commerce or HHS could develop a centralizewd purchase strategy for the federal government and then the President could apply it across all federal agencies and other units. However, that assumes a competent President. The cost GAO should worry about is the cost to us tax payers and not the cost to DoD! Why doesn't DoD tell the GAO to get lost - they are wrong and DoD is not going to worry about this insignificant items in the DoD mission of national defense! Also, service costs will continue to grow because the contractor fees for outsourcing are in the dollar values. Outsourcing should be handled by a central agency as well - such as Commerce or someone. I think all centralized purchases should go through HHS because they have little value in the constitution for existence at the federal level. If they took over the central purchasing it would give them a reason for being. GovExec.com reader Posted September 16, 2003 6:35 AM