Defense business modernization still a work in progress
Department has completely satisfied only one of six requirements in 2005 law, GAO says.
The Defense Department has not satisfied all the requirements for modernizing its business systems outlined in the 2005 Defense Authorization Act, according to the Government Accountability Office.
The department has fully complied with only one of the act's provisions, GAO stated in a recent report (GAO-06-219).
Defense officials have fulfilled the act's requirement to delegate responsibility for information technology systems to specific authorities, the auditors found. But while the department has established structures for reviewing and approving IT purchases, it has yet to put them in place, and some reviews have not followed criteria in the authorization law.
The Pentagon's business systems modernization project has been designated as high risk since 1995 by GAO and will remain that way until Defense complies with the six requirements outlined in the 2005 law, the auditors said. Despite repeated attempts, the Pentagon has yet to "modernize its timeworn business systems," the report stated.
Defense Secretary Donald Rumsfeld estimated that improvements to business systems and operations could generate annual savings of as much as 5 percent of the department's budget. This would amount to more than $20 billion in savings a year, according to GAO.
The Pentagon recently created an agency devoted to business change -- dubbed the Business Transformation Agency -- that will bring departmentwide projects like the Defense Travel System, the Defense Cash Accountability System and the Standard Procurement System under one roof.
The Pentagon's fiscal 2006 budget includes $4.2 billion for business modernization efforts, of which $777.7 million is slated to go to departmentwide projects. The fiscal 2007 budget for business transformation is projected to drop slightly, to $4.19 billion overall, with $739.5 million allocated for departmentwide projects.
In response to the report, Paul Brinkley, Defense deputy undersecretary for business transformation, wrote that he disagreed with some of the GAO findings, including a recommendation to create a current description, or architecture, of the department's business processes and information technology systems.