Resistance to change, managers' lack of accountability, inadequate performance measures and poor data have allowed the Defense Department to overpay contractors and waste billions of dollars on excess inventory, a General Accounting Office study has concluded.
The myriad financial management, technology and inventory problems plaguing the Pentagon can only be solved if DoD addresses their underlying causes, GAO said.
"If DoD is successful in attacking the underlying causes of the problems, the Congress should expect to see positive outcomes, including the successful completion of full-scale financial audits; reductions in operation and support costs; and the fielding of major weapon and computer systems that meet cost, schedule and performance estimates," GAO concluded.
DoD overpays or underpays contractors hundreds of millions of dollars every year, the GAO study showed. But the Pentagon plans to cut staff at the Defense Contract Management Command and the Defense Contract Audit Agency by 41 and 32 percent, respectively, from fiscal year 1991 to 2001.
"DOD will need to be creative in finding ways to meet an expected increase in demand for contract oversight and be more efficient in using its existing resources," GAO said.
GAO identified five underlying causes of the problems facing DoD:
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Cultural barriers and parochialism limit opportunities for change.
DoD's culture supports status quo thinking and actions and discourages new ideas. -
Incentives for seeking and implementing change are lacking.
Managers' careers depend more on creating new programs and adhering to DoD processes than on finding ways to improve processes. -
Management data are deficient.
Managers don't have the information they need to make smart choices and prevent duplication of efforts at different locations. -
Clear, results-oriented goals and performance measures are lacking.
DoD decisionmakers have difficulty determining how their programs fit into the department's big picture. -
Management accountability and follow-through have been inadequate.
Line managers should be given greater flexibility to try different ways of doing things and be made more accountable for their performance.
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