GAO/NSIAD-00-183R Selected DOD Consulting Services

United States General Accounting Office

Washington, DC 20548

National Security and

International Affairs Division

B-285538

June 23, 2000

The Honorable John Warner

Chairman

The Honorable Carl Levin

Ranking Minority Member

Committee on Armed Services

United States Senate

Subject: Contract Management: Selected DOD Consulting Services

The Senate Armed Services Committee’s report accompanying the National Defense

Authorization Act for Fiscal Year 2000 directed us to review Department of Defense (DOD)

contracts for advisory and assistance services and other services. 1

In response to the

mandate, and as agreed with committee staff, we reviewed 30 contracts associated with the

largest fiscal year 1999 obligations for advisory and assistance and other services and

described these services obtained by the Office of the Secretary of Defense; the Secretariats

of the Air Force, the Navy, and the Army; and Headquarters, Defense Logistics Agency.

About $36 million was obligated for these contract services.

Enclosure 1 describes the services obtained and provides general information on each of the

30 contracts, including the contractor, amount obligated, the performance period funded by

this amount, and examples of services provided.

AGENCY COMMENTS

DOD provided written comments and agreed with the information in this report. DOD’s

comments are reprinted in enclosure 2.

1 As provided for in Office of Management and Budget Circular A-11, advisory and assistance services are (1) management and

professional support services that provide for the efficient and effective management and operations of DOD organizations;

(2) studies, analyses, and evaluations that provide analytical assessments of complex issues to improve policy development,

decision-making, management, or administration; and (3) engineering and technical services that are necessary to maintain and

operate fielded weapon systems, equipment, and components. Other services are defined as services that cannot be classified as

either advisory and assistance services or any of the other service categories, including research and development contracts;

operation and maintenance of facilities and equipment; purchases of goods and services from government accounts; medical

care; and subsistence and support of persons.
B-285538

Page 2 GAO/NSIAD-00-183R Selected DOD Consulting Services

Our scope and methodology are discussed in enclosure 3. We conducted our review from

October 1999 through June 2000 in accordance with generally accepted government auditing

standards.

We are sending copies to the Honorable William S. Cohen, Secretary of Defense; Lieutenant

General Henry T. Glisson, Director, Defense Logistics Agency; the Honorable Louis Caldera,

Secretary of the Army; the Honorable Richard Danzig, Secretary of the Navy; and the

Honorable F. Whitten Peters, Secretary of the Air Force. We will also make copies available

to others on request.

Please contact me at (202) 512-4841 or Ralph C. Dawn, Jr. at (202) 512-4544 if you or your

staff have any questions. Major contributors to this report were Johana R. Ayers, Charles D.

Groves, and Rosa M. Johnson.

Signed

David E. Cooper

Associate Director

Defense Acquisition Issues
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3 GAO/NSIAD-00-183R Selected DOD Consulting Services

SELECTED ADVISORY AND ASSISTANCE

AND OTHER SUPPORT SERVICES

The table below lists the titles of the services obtained by the organizations included in our

review.

Table 1: Titles of Services Obtained by Selected DOD Organizations

Secretary of Defense Page

Office of the Secretary of Defense’s Study Program

-- Transforming DOD Logistics Processes and Operations 5

-- Science and Technology Program Strategic Planning 6

-- Media Mix for National and Local Recruitment Advertising: A Cost Effectiveness Analysis 7

-- Research and Strategy for Obtaining Base Realignment and Closure Authority 8

-- North Atlantic Treaty Organization’s (NATO) and Other Countries’ Defense Capabilities and

Contributions

9

Deputy Under Secretary of Defense (Acquisition Reform)

-- Satellite Broadcasts on Acquisition Reform Issues 10

-- Performance Measurement System for DOD’s Military Acquisition Workforce 11

-- Workforce Analyses, Acquisition Reform Newsletter, and Web Page 12

-- Defense/Civil Military Integration: Strategy to Standardize DOD-wide Manufacturing

Processes

13

-- Contribution-based Compensation and Appraisal System for DOD’s Civilian Acquisition

Workforce

14

Secretary of the Navy

Assistant Secretary of the Navy (Research, Development, and Acquisition)

-- Management Support for the Navy’s Standard Procurement System 15

-- Installing the Standard Procurement System at Navy Sites 16

-- Revising the Navy’s Acquisition Documents and Supporting the Navy’s Single Process

Initiative

17
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-- Guide for Navy Weapon System Power Supplies and Engineering Analyses and

Investigations

18

-- Strategic Planning for the Assistant Secretary of the Navy (Research, Development, and

Acquisition)

19

Secretary of the Air Force

Assistant Secretary of the Air Force, Acquisition

-- Restructuring Headquarters Air Force Business Processes and Providing a 13,500-Squarefoot Work Location20

-- Analyses and Technical Support for Weapon Related Programs 21

-- Integrated Budget Documentation and Financial Execution Systems 22

-- Business Process Improvements for Air Force Acquisition 23

-- Alternative Approaches to Air Cargo Delivery 24

Secretary of the Army

Office of the Director of Information Systems, Command, Control, Communications,

and Computers

-- Management Control Over Information System Acquisitions 25

-- Linking Military Operational Requirements to Information System Concepts 26

-- Translating Concepts for Information Systems Into Specific System Requirements 27

-- Computer-based Information Technology Training 28

-- Information System Acquisitions to Support Battlefield Communication Needs 29

Defense Logistics Agency (DLA)

-- Improve the Quality of DLA’s Financial Management 30

-- Develop a Vision and Organizational Structure for DLA in the New Millenium 31

-- Develop an Activity-based Cost Model for DLA’s Corporate Administration 32

-- Develop and Maintain DLA’s Safety and Health Information Reporting System 33

-- Develop Improved DLA Procedures for Collecting and Reporting Hazardous Waste Disposal

Information

34
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Transforming DOD Logistics Processes and Operations

Organization: Deputy Under Secretary of Defense (Logistics)

Contractor: Logistics Management Institute

Fiscal year 1999

obligation amount: $1,199,121

Performance period: February 6, 1999, to August 31, 2000

The Deputy Under Secretary of Defense (Logistics) oversees a logistics infrastructure that

consumes one-third of DOD’s annual budget and employs nearly 40 percent of Defense

personnel. Despite reductions throughout the 1990s, DOD regards its logistics infrastructure as

too large and expensive in today’s constrained budget environment. To assist in identifying

ways to reduce logistics costs, the Deputy Under Secretary obtained consulting service support

from the Logistics Management Institute. The institute has been providing contract services in

support of this effort to the Deputy Under Secretary for many years.

The Logistics Management Institute’s efforts under this contract cover eight areas, including

logistics strategic planning, performance measurements, supply operations, joint maintenance,

field-level maintenance, condition-based maintenance,1

integration of commercial support with

DOD’s logistics system, and automatic identification technology (commonly known as bar

coding). Examples of services being provided during the performance period include

• preparing a plan entitled “DOD Logistics Strategic Plan–21st Century Logistics” by assisting

teams in developing goals and objectives, recommending new strategies, and drafting the

plan;

• preparing a report entitled “Supply Chain Management: A Recommended Performance

Measurement Scorecard” by researching measurements used by industry and DOD, selecting

a measurement framework, and recommending performance measures for use by DOD;

• preparing a report entitled “Public-Private Partnerships for Depot-Level Maintenance” by

identifying implemented, ongoing, and planned partnerships between the military services

and commercial business; and

• conducting a 1999 DOD Maintenance Symposium by researching key areas of interest to

joint-service maintenance communities, assessing major factors in each area, developing an

agenda based on the assessments, and identifying subject matter experts to make

presentations in each area at the symposium.

1

Condition-based maintenance takes place when there is a deterioration or failure in equipment condition outside a fixed schedule

or interval.
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Science and Technology Program Strategic Planning

Organization: Director of Defense Research and Engineering

Contractor: Systems Planning Corporation

Fiscal year 1999

obligation amount: $952,732

Performance period: April 30, 1999, to May 31, 2000

The Secretary of Defense is required to submit to Congress an annual science and technology

plan that supports the development of future joint war-fighting capabilities.2

To meet this

requirement, the Director of Defense Research and Engineering prepares a series of plans,

including the Joint Warfighting Science and Technology Plan. The plans are based on input from

various science and technology panels made up of experts throughout the military services. To

support these panels, contract services have been obtained from Systems Planning Corporation

since 1996.

Systems Planning Corporation supported science and technology program strategic planning in a

variety of ways. Examples of services provided during the performance period include

• supporting planning workshops to recommend changes to improve the strategic planning

process and requirements for documentation;

• providing technical and editorial support for the science and technology panels that

prepared year 2000 updates to strategic planning documents, including the Joint Warfighting

Science and Technology Plan, the Defense Science and Technology Strategy, the Defense

Technology Area Plans, and the Basic Research Plan; and

• conducting a pilot project to test an approach to identify limitations and shortfalls in meeting

joint war-fighting capability objectives.

2

P.L. 104-201.
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Media Mix for National and Local Recruitment Advertising: A Cost Effectiveness

Analysis

Organization: Under Secretary of Defense (Personnel and Readiness)

Contractor: RAND National Defense Research Institute

Fiscal year 1999

obligation amount: $800,000

Performance period: October 1, 1998, to September 30, 1999

In fiscal year 1996, the Secretary of Defense initiated a comprehensive evaluation of DOD’s

advertising programs to recruit military personnel. To conduct this evaluation, the RAND

National Defense Research Institute provided contractor support from 1996 through 1998 to

(1) review previous research on advertising effectiveness, (2) review and analyze ongoing and

prospective developments in the evolution of advertising techniques, and (3) develop a

conceptual model design for evaluating advertising effectiveness. In fiscal year 1999, the last

year of this contract, the contractor continued efforts begun in the previous years.

RAND developed cost-effectiveness measures to evaluate the current mix of advertising media

for each service. In addition, RAND, assisted by two advertising consulting firms, reviewed

components of the advertising program to recommend improvements. Examples of services

provided during the performance period include

• conducting focus groups with recruiters and recent recruits to assess the prime motivations

for enlistment, obtain their views on recruitment advertising, and develop recommendations

for changes in the advertising program;

• interviewing officials on the research tools used by advertising agencies, recruitment

development strategies, and the advantages of pooling advertising buys to increase market

leverage; and

• preparing a briefing used by DOD to support, among other things, increased funding for

recruitment advertising.
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Research and Strategy for Obtaining Base Realignment and Closure Authority

Organization: Deputy Under Secretary of Defense (Installations)

Contractor: Technology Strategies and Alliances Corporation

Fiscal year 1999

obligation amount: $706,083

Performance period: April 14, 1999, to July 30, 1999

In the late 1980s, changes in the national security environment resulted in a military

infrastructure with more bases than DOD needed. To enable DOD to close unneeded bases,

Congress enacted legislation that instituted base closures in 1988, 1991, 1993, and 1995. In

conjunction with the President’s fiscal year 2000 budget request, DOD submitted a legislative

proposal asking for additional base closure authority in fiscal years 2001 and 2005. To prepare

the legislative proposal, the Secretary organized a DOD team under the leadership of the Deputy

Under Secretary of Defense (Installations).

To assist this team, contract services were obtained from Technology Strategies and Alliance

Corporation beginning in April 1999 to analyze DOD’s data and assess the legislative proposal.

Examples of services provided during the performance period include

• preparing a briefing to justify additional base realignment and closure authorization and

inform Congress and other interested parties;

• developing possible legislative options, such as the number and timing of base closure

rounds, along with the advantages and disadvantages of each option;

• analyzing the impacts of previous base closure rounds on a state-by-state basis to identify

significant issues; and

• preparing information to highlight past examples of benefits from closing unneeded bases

and show that past closures have not adversely affected future mobilization efforts.
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North Atlantic Treaty Organization’s (NATO) and Other Countries’ Defense

Capabilities and Contributions

Organization: Director (Program Analysis and Evaluation) and Under

Secretary of Defense for Policy

Contractor: General Research Corporation

Fiscal year 1999

obligation amount: $642,000

Performance period: September 1, 1999, to August 31, 2000

To assess changes in the defense capabilities, forces, defense spending, and other contributions

of U.S. allies, DOD obtained contract services to develop a database that accumulates

information on NATO members, those countries that may be invited to join NATO, and other

U.S. allies around the world. General Research Corporation has provided contract services to

update the database and conduct defense capabilities analyses for the past 9 years.

The General Research Corporation analyzes data on defense capabilities and contributions, and

DOD officials use this information to prepare reports and interact with Congress, NATO military

and civilian staff personnel, NATO countries, and other countries. Examples of services being

provided during the performance period include

• providing analyses and data that supported establishing the NATO Defense Capabilities

Initiative, preparing the Secretary of Defense’s report to Congress on the initiative, and

assessing future NATO progress in implementing the initiative;3

• providing analyses and data used in preparing the Secretary of Defense’s annual report to

Congress on allied contributions to the common defense;4

and

• providing assessments of various countries’ defense capabilities and contributions to be used

by U.S. officials in dealing with Congress, NATO members, and other countries on a wide

range of defense and regional security issues.

3

P. L. 106-65 section 1039 mandates a report on the implementation of the Defense Capability Initiative by NATO countries. 4

P. L. 105-261 title XII section 1233 mandates a report on national security bases to be used for forward deployment and burdensharing relationships. Additionally, the report covers burden-sharing reporting requirements as set forth in P.L. 105-237 section 119.
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Satellite Broadcasts on Acquisition Reform Issues

Organization: Deputy Under Secretary of Defense (Acquisition Reform)

Contractor: MTS Technologies Inc.

Fiscal year 1999

obligation amount: $1,285,348

Performance period: April 2, 1999, to April 1, 2000

Following the acquisition policy changes of the early 1990s, DOD determined that satellite

broadcasts on specific acquisition issues should be used to provide information to the

acquisition workforce and other interested groups. To develop and produce these broadcasts,

the Deputy Under Secretary of Defense (Acquisition Reform) obtained these services from MTS

Technologies beginning in April 1999.

MTS Technologies developed and produced satellite broadcasts covering Acquisition Reform

Week (used to promote new reform initiatives), System Acquisitions, A-76 Competitive Sourcing,

and the Defense Reform Initiative Update. Examples of services provided during the

performance period include

• working with acquisition reform officials to identify the issues and learning objectives and to

develop the format and scripts for each broadcast;

• producing pre-broadcast videos and developing the graphics and other materials used in the

broadcasts;

• arranging studio and satellite time for the broadcasts and publicizing the broadcasts;

• providing technical support by troubleshooting and correcting problems on the day of the

broadcasts;

• tracking the number of individuals who view each broadcast; and

• making copies of each broadcast available to the government workforce and industry upon

request.
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Performance Measurement System for DOD’s Military Acquisition Workforce

Organization: Deputy Under Secretary of Defense (Acquisition Reform)

Contractor: Logistics Management Institute

Fiscal year 1999

obligation amount: $999,816

Performance period: January 27, 1999, to June 30, 2000

In 1997, the Office of the Secretary of Defense began a phased effort to review the system of

incentives and personnel actions for encouraging excellence in the management of defense

acquisition programs.5

The system was expected to relate incentives to performance and

consider the extent to which performance contributes to the attainment of strategic goals as

well as to the achievement of weapon system cost, schedule, and performance goals. Logistics

Management Institute was awarded a contract to support this phased effort. Under the first

phase, begun in fiscal year 1997, the institute conducted research on how existing incentives

related to performance and what new incentive programs were being tested. Under the second

phase, covering fiscal year 1998, the institute designed a statistical test for measuring program

success and recommended an enhanced system of incentives.

Under the third phase of the effort, the Logistics Management Institute is exploring the

development of a performance measurement system and the use of various incentives such as

medals, savings bonds, and time off. Examples of services being provided during the

performance period include

• developing an approach to link the performance measurement system to DOD’s acquisition,

technology, and logistics goals;

• testing the performance measurement approach on five major defense acquisition programs

within the Naval Air Systems Command; and

• identifying incentives that can be used to reward military personnel within current statutes.

5

P. L. 103-355 section 5002 requires the Secretary of Defense to review the incentives for encouraging excellence in the management

of defense acquisition programs.
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Workforce Analyses, Acquisition Reform Newsletter, and Web Page

Organization: Deputy Under Secretary of Defense (Acquisition Reform)

Contractor: Systems Research and Applications International

Fiscal year 1999

obligation amount: $553,000

Performance period: April 1, 1999, to December 31, 1999

The Deputy Under Secretary of Defense (Acquisition Reform) is responsible for ensuring that

the acquisition workforce’s education and training incorporates reform initiatives and for

disseminating information on those initiatives to the workforce and private industry. To assist

in accomplishing these responsibilities, the Deputy Under Secretary has obtained contract

services from Systems Research and Applications International since 1996.

Systems Research and Applications International analyzed acquisition workforce issues and

assisted in disseminating information on acquisition initiatives. Examples of services provided

during the performance period include

• compiling and analyzing data for inclusion in a congressionally mandated report on the

promotion rates of officers in the acquisition workforce compared with rates of officers

outside the acquisition workforce;6

• analyzing demographic data on the acquisition workforce to develop job position categories

and identify training needs; and

• writing and publishing a bimonthly acquisition reform newsletter, as well as designing and

maintaining the acquisition reform web page.

6

P. L. 105-85 section 849(b) required DOD to assess for three years the extent to which each military department is complying with

the requirement set forth in 10 USC 1731(b) to ensure that the qualifications of officers selected for an Acquisition Corps be such

that those officers may be expected to achieve promotion parity with officers outside the Acquisition Corps. The intent of 10 USC

1731(b) is to ensure that the services select high-quality officers to perform acquisition duties.
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Defense/Civil Military Integration: Strategy to Standardize DOD-wide Manufacturing

Processes

Organization: Deputy Under Secretary of Defense (Acquisition Reform)

Contractor: The Analytic Science Corporation

Fiscal year 1999

obligation amount: $527,622

Performance period: January 28, 1999, to January 28, 2000

In December 1995, the Secretary of Defense announced a policy to implement a single-process

initiative to eliminate multiple management and manufacturing requirements across existing

defense contracts at a given facility. This initiative allows contractors to use their most efficient

business and manufacturing practices instead of government standards. The Analytic Science

Corporation’s services were obtained in January 1999 to support this initiative. The contractor

has supported the Deputy Under Secretary on related initiatives since 1990.

Examples of services provided during the performance period include

• maintaining and updating data used to measure the progress in transitioning from

government-unique manufacturing requirements to common standards and processes;

• providing briefings and reports based on field visits to industry and the military services to

identify success stories and obstacles to implementation; and

• providing administrative support, including coordinating agendas, disseminating materials,

facilitating meetings, and drafting minutes of the meetings.
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Contribution-based Compensation and Appraisal System for DOD’s Civilian

Acquisition Workforce

Organization: Deputy Under Secretary of Defense (Acquisition Reform)

Contractor: Systems Research and Applications International

Fiscal year 1999

obligation amount: $505,000

Performance period: April 13, 1999, to August 14, 2000

In 1996, DOD initiated the Acquisition Personnel Demonstration Project to enhance its ability to

attract, retain, and motivate the civilian acquisition workforce. 7

The demonstration project

seeks to accomplish these goals by changing personnel management policies and establishing a

stronger link between pay and performance. Between 1996 and 1998, DOD focused its efforts on

designing the demonstration project, and it began implementing the project in early 1999 with

contractor support.

As part of the implementation phase, Systems Research and Applications International

developed the software used in conducting employee appraisals. Examples of services being

provided during the performance period include

• designing, developing, and testing software for the Contribution-based Compensation and

Appraisal System, which is accessible to authorized personnel through the web;

• developing a training plan and delivering training to supervisors and managers on how to use

the software for conducting employee appraisals and setting employee expectations; and

• providing assistance in using the software during the first contribution-based appraisal and

compensation cycle.

7

P. L. 104-106 section 4308, as amended by P. L. 105-85 section 845, encouraged DOD to conduct a demonstration project to improve

the personnel management policies or procedures that apply to its civilian acquisition workforce.
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Management Support for the Navy’s Standard Procurement System

Organization: Assistant Secretary of the Navy (Research, Development,

and Acquisition)

Contractor: PricewaterhouseCoopers LLP

Fiscal year 1999

obligation amount: $3,598,100

Performance period: October 1, 1998, to September 30, 1999

The Standard Procurement System program is an ongoing DOD initiative intended to create a

common operating environment for DOD’s procurement community. The standard system is

expected to centralize the management of numerous automated procurement systems

performing similar functions. To support the planning, implementation, and documentation of

the Standard Procurement System as it is installed at Navy sites, the Navy has obtained contract

services from PricewaterhouseCoopers since 1997. Another contractor is responsible for

initially deploying and providing technical support for the system (see p. 16).

PricewaterhouseCoopers assisted in developing, validating, and revising the Navy’s Standard

Procurement System strategy and project plan. Examples of services provided during the

performance period include

• assisting in installing and implementing the Standard Procurement System at Navy sites;

• identifying, documenting, and tracking implementation, as well as performance and

productivity measurements;

• assisting in training issues related to installing and implementing the Standard Procurement

System at Navy sites; and

• drafting briefings and providing administrative support for conferences and meetings as

required.
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Installing the Standard Procurement System at Navy Sites

Organization: Assistant Secretary of the Navy (Research, Development,

and Acquisition)

Contractor: American Management Systems

Fiscal year 1999

obligation amount: $2,058,000

Performance period: May 7, 1999, to September 30, 1999

The Standard Procurement System program is an ongoing DOD initiative intended to create a

common operating environment for DOD’s procurement community. The standard system is

expected to centralize the management of numerous automated procurement systems

performing similar functions and to reduce maintenance costs for these systems. American

Management System’s proprietary software, entitled Procurement Desktop-Defense, was

procured and will be used throughout DOD. To install the system at Navy sites, the Navy has

contracted with American Management System since 1997. Another contractor is providing the

overall management support associated with planning, implementing, and documenting the use

of the system as it is installed throughout the Navy (see p. 15).

American Management Systems is installing the Standard Procurement System at Navy sites.

Examples of services provided during the performance period include

• installing the Standard Procurement System at approximately 300 Navy sites and

• providing the Navy with advice, analysis, and technical assistance in support of the Navywide execution of the Standard Procurement System.
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Revising the Navy’s Acquisition Documents and Supporting the Navy’s Single Process

Initiative

Organization: Assistant Secretary of the Navy (Research, Development,

and Acquisition)

Contractor: Parallax, Inc.

Fiscal year 1999

obligation amount: $737,000

Performance period: December 10, 1998, to December 9, 1999

To keep up with changes in acquisition policy and other DOD and Navy acquisition reform

efforts, the Assistant Secretary of the Navy (Research, Development, and Acquisition) obtained

contract services from Parallax, Inc., which has provided acquisition policy and acquisition

reform support to the Assistant Secretary since 1995.

Parallax, Inc. primarily supported the Assistant Secretary by revising documents to incorporate

changes in acquisition policy and supporting the Single Process Initiative, a DOD-wide initiative

that allows contractors to use their most efficient business and manufacturing practices instead

of government standards. Examples of services provided during the performance period include

• coordinating inquiries and responses to potential changes in DOD and Secretary of the Navy

acquisition instructions and regulations;

• providing support for the implementation and integration of the Single Process Initiative into

the Navy, including assessing the Navy’s progress in implementing the initiative and

developing draft policies and recommendations to replace military specifications; and

• providing administrative support, including drafting presentation materials for participants

attending conferences, maintaining training files for students attending acquisition courses,

preparing correspondence, and providing customer liaison services.
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Guide for Navy Weapon System Power Supplies and Engineering Analyses and

Investigations

Organization: Assistant Secretary of the Navy (Research, Development,

and Acquisition)

Contractor: EG&G Washington Analytical Services

Fiscal year 1999

obligation amount: $418,000

Performance period: January 11, 1999, to January 10, 2000

For a number of years, the Assistant Secretary of the Navy (Research, Development, and

Acquisition) has been pursuing initiatives to reduce the technical risk in the design, testing, and

production of naval weapon systems. The Navy believes that one of the more critical

components in today’s combat weapon systems—power supply—is resurfacing as a growing

risk. Other related concerns deal with engineering analyses or investigations of technical risks

associated with naval weapons and their components. To assist the Assistant Secretary in

assessing risk, the Navy obtained support from EG&G Washington Analytical Services beginning

in 1998.

During the performance period, EG&G Washington Analytical Services spent the majority of its

time developing a Navy power supply guide, with the remaining time spent on other technical

and risk management support. Examples of services provided during the performance period

include

• developing a Navy power supply guide, “More Power For the Dollar,” for use by program

managers in identifying and understanding alternative power supplies that can be used in

Navy weapon systems and equipment;

• supporting the Naval Air Systems Command in its goal of institutionalizing risk management

as a tool for ensuring success in developing weapon systems and equipment by developing a

training course to deal with technical risks; and

• conducting independent risk assessments and engineering analyses of Navy weapon systems,

including aircraft mishaps.
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19 GAO/NSIAD-00-183R Selected DOD Consulting Services

Strategic Planning for the Assistant Secretary of the Navy (Research, Development,

and Acquisition)

Organization: Assistant Secretary of the Navy (Research, Development,

and Acquisition)

Contractor: Information Spectrum Inc.

Fiscal year 1999

obligation amount: $306,000

Performance period: December 4, 1998, to February 29, 2000

During fiscal year 1998, the Navy contracted with Information Spectrum Inc. to assess a 1996

strategic plan and develop recommendations for preparing a new strategic plan that identifies

the mission, vision, and goals for the Assistant Secretary of the Navy for Research, Development,

and Acquisition. Information Spectrum Inc. continued to provide contract support in 1999 to

identify the strategies and measures of success to attain the goals set out in the plan.

Information Spectrum Inc. supported Navy personnel in creating a strategic plan and supported

the implementation of the plan by Navy subordinate commands and activities. Examples of

services provided during the performance period include

• guiding the creation and publication of the Naval Research, Development, and Acquisition

Team 1999-2004 Strategic Plan by interviewing senior leaders to identify issues, presenting

the findings to the Navy leadership, and building consensus on the measures to be used in

evaluating the progress in reaching the plan’s goals;

• preparing a 1999-2004 Strategic Plan Outreach Communications Plan to inform Navy

organizations about the strategic plan by setting outreach objectives, scheduling outreach

briefings, and preparing outreach briefing talking points; and

• planning a coordination meeting to link individual subordinate commands’ strategic plans to

the overall 1999-2004 strategic plan, including establishing the meeting’s objectives, stressing

the need for strategic plan coordination officers at subordinate commands, and preparing the

agenda for the meeting.
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20 GAO/NSIAD-00-183R Selected DOD Consulting Services

Restructuring Headquarters Air Force Business Processes and Providing a 13,500-

Square-foot Work Location

Organization: Assistant Secretary of the Air Force (Acquisition)

Contractor: DSD Laboratories, Inc.

Fiscal year 1999

obligation amount: $5,452,149

Performance period: January 14, 1999, to January 13, 2001

Due to past and anticipated staff reductions at the headquarters level, the Air Force has initiated

an effort, known as Headquarters Air Force 2002, to streamline its headquarters processes, cut

costs, and improve the quality of its work. In January 1999, the Assistant Secretary of the Air

Force (Acquisition) obtained the services of DSD Laboratories to evaluate various acquisition

processes. On the basis of the results of DSD Laboratories’ effort, Air Force Headquarters

formed three process design teams to assess the operational requirements process, information

technology support services, and administrative support services.

DSD Laboratories provided contract services in the initial planning efforts for restructuring

Headquarters Air Force business processes. More specifically, it assisted the Assistant Secretary

in streamlining the acquisition business processes. Due to a lack of suitable space at the

Pentagon to accommodate design teams composed of government and industry representatives,

DSD Laboratories leased a work location where design teams assessing headquarters and

acquisition business processes could complete their work. Examples of services being provided

during the performance period include

• briefing Air Force Headquarters leaders on various business processes that could be

restructured and helping to select a qualified vendor to validate the processes to be

redesigned;

• assisting Air Force Headquarters in redesigning acquisition processes and preparing monthly

trend analyses of cost, schedule, and performance of major weapon systems; and

• providing a 13,500-square-foot work location with resources, such as a database of best

practices to compare existing acquisition practices with those of the private and

international sector.
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21 GAO/NSIAD-00-183R Selected DOD Consulting Services

Analyses and Technical Support for Weapon Related Programs

Organization: Assistant Secretary of the Air Force (Acquisition)

Contractor: Analytic Services Inc.

Fiscal year 1999

obligation amount: $5,008,200

Performance period: January 1, 1999, to June 30, 2001

Historically, the Assistant Secretary (Acquisition) has contracted for research and analyses that

have been used as the basis for decisions regarding Air Force weapon system acquisitions. The

Assistant Secretary has obtained contract services to address concerns associated with defining

weapon system operational requirements, analyzing proposed changes to improve weapon

system capabilities, programming and budgeting for acquisition systems, and undertaking other

activities to research, develop, and acquire weapon systems. Analytic Services Inc. has provided

these services to the Assistant Secretary since 1991.

Analytic Services Inc. has provided contract services, such as conducting policy, program,

budget, and technical analyses, and has made recommendations concerning weapon related

programs. Examples of services being provided during the performance period include

• analyzing the impacts of operational requirements and system changes on the programming

and budgeting of various weapon systems such as the Joint Surveillance Attack Radar

System;

• analyzing and reporting on international cooperation and standardization of weapon

systems, including the interoperability of weapon systems used by NATO member countries;

and

• analyzing munitions export license applications and advising on the transfer of technologies

to ensure that they are consistent with U.S. national security and foreign policy concerns.
ENCLOSURE 1 ENCLOSURE 1

22 GAO/NSIAD-00-183R Selected DOD Consulting Services

Integrated Budget Documentation and Financial Execution Systems

Organization: Assistant Secretary of the Air Force (Acquisition)

Contractor: CMS Information Services Inc.

Fiscal year 1999

obligation amount: $2,050,000

Performance period: April 1, 1999, to June 30, 2000

The Assistant Secretaries of the Air Force for Acquisition and Financial Management are trying

to streamline and improve the budget documentation and financial execution of weapon system

acquisition programs. Currently, various Air Force acquisition organizations use different

formats in preparing budget documentation. Once the budget documents have been approved,

these same Air Force organizations use different financial systems to execute or track funding

allocated to the weapon system programs. CMS has been providing services to the Assistant

Secretaries in support of these efforts since 1998.

Examples of services being provided by CMS Information Services during the performance

period include

• installing the Investment Budget Documentation System, a prototype used in preparing

budget documents to ensure that Air Force organizations present budget data using the same

format and that the numbers balance;

• enhancing the Acquisition Funds Control System, an operational system designed to track

the current funding status of three appropriations; and

• developing the concept of an integrated system, the Investment Budget and Execution

System, to merge budget documentation and fund control information.
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23 GAO/NSIAD-00-183R Selected DOD Consulting Services

Business Process Improvements for Air Force Acquisition

Organization: Assistant Secretary of the Air Force (Acquisition)

Contractor: Systems Research and Applications International

Fiscal year 1999

obligation amount: $1,769,231

Performance period: April 12, 1999, to March 31, 2001

Over the past few years, the Assistant Secretary (Acquisition) has been using contract services

to redesign the way work is done to better support the organization’s mission and reduce costs.

After assessing the organization’s mission, strategic goals, and customer needs, the redesign

effort focused on business processes—the steps and procedures that govern how resources are

used to meet the needs of particular customers. Systems Research and Applications

International has been providing these contract services to support the Assistant Secretary since

1995.

Systems Research and Applications International is providing support in reviewing Air Force

acquisition policy, identifying business process improvements, assessing the costs to acquire

weapon systems, conducting workshops, and disseminating information on Air Force acquisition

issues. These services are intended to promote collaboration and sharing of information among

the acquisition community. Examples of services being provided during the performance period

include

• briefing Air Force officials on the status of acquisition policy changes that have taken place

and suggesting ways to incorporate the latest reforms;

• analyzing and reporting on the costs associated with producing, operating, maintaining, and

disposing of weapon systems;

• arranging and conducting executive conferences to improve businesses processes, including

identifying customers’ needs and expectations for quality products; and

• researching and publishing newsletters about acquisition reform initiatives and maintaining

a web site.
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24 GAO/NSIAD-00-183R Selected DOD Consulting Services

Alternative Approaches to Air Cargo Delivery

Organization: Assistant Secretary of the Air Force (Acquisition)

Contractor: DSD Laboratories, Inc.

Fiscal year 1999

obligation amount: $672,000

Performance period: September 20, 1999, to September 19, 2000

The Secretary of the Air Force has been evaluating alternative approaches to air cargo delivery.

To support this effort, DSD Laboratories’ services were obtained by the Assistant Secretary

(Acquisition) in September 1999 to conduct a study that evaluates the use of Air Force cargo

aircraft for commercial use and the potential for leasing commercial aircraft for use by the

military services. This study is being prepared in consultation with the Federal Aviation

Administration, aircraft manufacturers, and the financial industry.

Examples of services being provided by DSD Laboratories during the performance period

include

• analyzing the use of military cargo aircraft in a commercial environment, including the

financial industry’s acceptance of the concept and industry’s ability to fund it;

• analyzing the possibility of the Air Force leasing commercial aircraft rather than producing

its own military cargo aircraft; and

• validating the costs and identifying the obstacles to various alternatives such as certifying

the C-17 military cargo aircraft for use by the commercial community.
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25 GAO/NSIAD-00-183R Selected DOD Consulting Services

Management Control Over Information System Acquisitions

Organization: Secretary of the Army, Office of the Director of

Information Systems for Command, Control,

Communications, and Computers

Contractor: MITRE Corporation8

Fiscal year 1999

obligation amount: $1,227,600

Performance period: October 1, 1998, to September 30, 1999

To prescribe the processes and standards for developing, managing, and using information

technology systems, the Army has established the Army Enterprise Architecture. The

architecture seeks to link the Army’s information system acquisitions with military operational

requirements, ensure the interoperability of those systems, and maintain standards by which the

Army can evaluate and acquire new systems. The Army uses contract services to assist in

maintaining overall management control of information system acquisitions, linking military

operational requirements to concepts for information systems, translating these information

system concepts into specific system requirements, and developing investment strategies to

evaluate and acquire new information systems.

The MITRE Corporation primarily provides configuration management control assistance to the

Army, while trying to ensure the interoperability of the information technology systems acquired

by the Army. MITRE has been supporting the Army’s architecture efforts since 1993. Examples

of services provided during the performance period include

• providing configuration management and control to ensure military requirements are

translated into specific information systems for use by various Army organizations;

• analyzing whether technical standards are used to ensure interoperability throughout DOD

and with U.S. allies; and

• developing a database to track Y2K compliance of critical Army functions and missions such

as the fire support needed during a military engagement.

8

The MITRE Corporation is a federally funded research and development center. Unlike a commercial contractor, MITRE accepts

restrictions intended to allow DOD to maintain a special relationship with the center and to allow center staff access to sensitive

government or contractor data.
ENCLOSURE 1 ENCLOSURE 1

26 GAO/NSIAD-00-183R Selected DOD Consulting Services

Linking Military Operational Requirements to Information System Concepts

Organization: Secretary of the Army, Office of the Director of

Information Systems for Command, Control,

Communications, and Computers

Contractor: EER Systems Inc.

Fiscal year 1999

obligation amount: $1,148,450

Performance period: June 21, 1999, to June 20, 2000

To prescribe the processes and standards for developing, managing, and using information

technology systems, the Army has established the Army Enterprise Architecture. The

architecture seeks to link the Army’s information system acquisitions with military operational

requirements, ensure the interoperability of those systems, and maintain standards by which the

Army can evaluate and acquire new systems. The Army uses contract services to assist in

maintaining overall management control of information system acquisitions, linking military

operational requirements to concepts for information systems, translating these information

system concepts into specific system requirements, and developing investment strategies to

evaluate and acquire new information systems.

EER Systems is providing assistance to the Army by linking defined military operational

requirements to concepts for information systems. EER Systems has been providing these

services to the Army since 1997. Examples of services provided during the performance period

include

• supporting a requirements definition program by developing, validating, and implementing

information technology requirements for existing and future Army communications

equipment for National Guard, Reserve, and Active Army units;

• supporting modeling and simulation efforts, such as for understanding the shortfall between

the message traffic requirements for existing communication equipment and potential

message traffic for future equipment; and

• developing products that depict graphical displays identifying information technology

equipment types and locations for future Army organizations, especially the brigade combat

team, which is a planned medium-sized Army organization that can be self-sustaining until

larger Army organizations or forces arrive.
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27 GAO/NSIAD-00-183R Selected DOD Consulting Services

Translating Concepts for Information Systems Into Specific System Requirements

Organization: Secretary of the Army, Office of the Director of

Information Systems for Command, Control,

Communications, and Computers

Contractor: Booz, Allen, & Hamilton

Fiscal year 1999

obligation amount: $884,000

Performance period: March 10, 1999, to March 31, 2000

To prescribe the processes and standards for developing, managing, and using information

technology systems, the Army has established the Army Enterprise Architecture. The

architecture seeks to link the Army’s information system acquisitions with military operational

requirements, ensure the interoperability of those systems, and maintain standards by which the

Army can evaluate and acquire new systems. The Army uses contract services to assist in

maintaining overall management control of information system acquisitions, linking military

operational requirements to concepts for information systems, translating these information

system concepts into specific system requirements, and developing investment strategies to

evaluate and acquire new information systems.

Booz, Allen, & Hamilton develops analytical tools and maintains the Army System Architecture

database that together assist the Army in translating concepts for military equipment and

weapons into detailed system requirements. Booz, Allen, & Hamilton has been providing these

services to the Army since 1996. Examples of services provided during the performance period

include

• conducting research and development of software integration tools that aid in transforming

conceptual information systems into detailed Army system architectures;

• ensuring that all Army concepts for information systems are entered in the database of

various systems such as the First Digitized Force Systems Architecture;

• providing output from the Systems Architecture database in customized formats required by

various Army customers; and

• ensuring integrity for information system data so that it can be used by various Army

personnel working in different areas such as budget, engineering, and systems integration.
ENCLOSURE 1 ENCLOSURE 1

28 GAO/NSIAD-00-183R Selected DOD Consulting Services

Computer-based Information Technology Training

Organization: Secretary of the Army, Office of the Director of

Information Systems for Command, Control,

Communications, and Computers

Contractor: SmartForce (Previously CBT Systems USA)

Fiscal year 1999

obligation amount: $772,000

Performance period: September 30, 1999, to September 29, 2000

To provide Army personnel with computer-based information technology training, the Army’s

Office of the Director of Information Systems for Command, Control, Communications, and

Computers obtained the services of CBT Systems USA, now known as SmartForce. SmartForce

provided this service in the previous year.

Examples of services being provided by SmartForce during the performance period include

• providing over 1,000 training courses covering data communications, computer

programming, networks, operating systems, and office programs for up to 200,000 Army

civilian personnel and soldiers, including those in the National Guard and Reserves, through

the worldwide web, local area networks, and CD-ROMs;

• providing more intensive information technology training for up to 355 Army personnel

through computer-based courses that provide additional materials and mentoring from

subject matter experts;

• tracking the courses accessed, the percentage of courses completed, and pass/fail rates for

personnel who register for training; and

• providing help desk and software support to ensure that the courseware is properly installed.
ENCLOSURE 1 ENCLOSURE 1

29 GAO/NSIAD-00-183R Selected DOD Consulting Services

Information System Acquisitions to Support Battlefield Communication Needs

Organization: Secretary of the Army, Office of the Director of

Information Systems for Command, Control,

Communications, and Computers

Contractor: Raytheon Systems

Fiscal year 1999

obligation amount: $260,000

Performance period: July 29, 1999, to December 31, 1999

To prescribe the processes and standards for developing, managing, and using information

technology systems, the Army has established the Army Enterprise Architecture. The

architecture seeks to link the Army’s information system acquisitions with military operational

requirements, ensure the interoperability of those systems, and maintain standards by which the

Army can evaluate and acquire new systems. The Army uses contract services to assist in

maintaining overall management control of information system acquisitions, linking military

operational requirements to concepts for information systems, translating these information

system concepts into specific system requirements, and developing investment strategies to

evaluate and acquire new information systems.

Raytheon provides detailed engineering analyses that assist the Army in allocating radios,

computers, and other equipment among individual Army units so that communications can take

place while these units are moving around on the battlefield. Raytheon has been providing these

services to the Army since 1998. Examples of services provided during the performance period

include

• conducting engineering analyses of radios, computers, and other communication equipment

needed by mobile Army units;

• conducting detailed technical analyses to ensure that the mobile Army units can interact

with fixed Army units such as air defense and artillery;

• preparing technical analyses for review boards on technical design tradeoffs and potential

operational effects of equipment design changes; and

• developing a list of radios, computers, and other communication equipment that can be

acquired for various mobile and fixed Army units positioned on the battlefield.
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30 GAO/NSIAD-00-183R Selected DOD Consulting Services

Improve the Quality of DLA’s Financial Management

Organization: Defense Logistics Agency

Contractor: KPMG Peat Marwick

Fiscal year 1999

obligation amount: $763,258

Performance period: August 6, 1999, to August 5, 2000

To comply with the requirements of the Chief Financial Officers Act of 19909and other

initiatives, the DLA has an ongoing effort to improve its financial processes and reports. DLA

has obtained the services of KPMG Peat Marwick to assist it in obtaining an unqualified audit

opinion on its financial statements and to correct financial management deficiencies.

KPMG Peat Marwick has provided these services to DLA in prior years. Examples of services

being provided during the performance period include

• compiling and reconciling financial data for monthly reports;

• developing a standardized process and format for submitting, producing, and presenting

financial reports, including the annual Chief Financial Officer statement;

• independently reviewing financial statements to ensure that needed data is included,

properly documented, and consistent; and

• analyzing financial operations and reporting processes, such as those related to data

validation, and developing recommendations for improving those processes.

9

P.L. 101-576.
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31 GAO/NSIAD-00-183R Selected DOD Consulting Services

Develop a Vision and Organizational Structure for DLA in the New Millenium

Organization: Defense Logistics Agency

Contractor: KPMG Peat Marwick

Fiscal year 1999

obligation amount: $298,623

Performance period: March 17, 1999, to July 14, 1999

In early 1999, DLA initiated a review of its organizational structure. DLA employee and

management groups were charged with examining the current organizational structure in light of

changes in the agency’s missions, roles, and responsibilities; identifying opportunities to

improve the agency’s efficiency and effectiveness; and developing a new organizational structure

and vision for the agency.

To support and facilitate the groups’ efforts, DLA obtained the services of KPMG Peat Marwick

beginning in March 1999. Examples of services provided during the performance period include

• developing processes such as a timeline and background materials to guide the various

groups’ meetings as they examined organizational alternatives;

• arranging seminars where industry leaders spoke with DLA officials on various aspects of

reorganization;

• providing information on commercial best practices for use in the groups’ deliberations;

• compiling and analyzing data on the different functions individuals performed throughout

the agency; and

• assisting with administrative matters, including preparing and distributing the minutes of the

groups’ meetings.
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32 GAO/NSIAD-00-183R Selected DOD Consulting Services

Develop an Activity-based Cost Model for DLA’s Corporate Administration

Organization: Defense Logistics Agency

Contractor: Vector Research Inc.

Fiscal year 1999

obligation amount: $200,000

Performance period: March 9, 1999, to September 30, 2000

To focus management on continuous improvement, DLA is implementing an activity-based cost

program, which maintains and processes data on a firm’s activities and products.

To develop an activity-based cost model, DLA obtained the services of Vector Research Inc.

beginning in March 1999. Examples of services being provided during the performance period

include

• defining cost objectives and work tasks that involve labor costs for all organizational

elements within DLA’s Corporate Administration, including the identification of cost

components for particularly complex tasks;

• developing, administering, and analyzing an automated labor survey instrument to identify

work tasks that were being performed by DLA personnel within Corporate Administration;

• developing an initial activity-based costing model using an Excel spreadsheet format with a

more complex model being developed and supported by a database consisting of both labor

and nonlabor costs;

• facilitating the establishment of a program to develop performance measures and identify

cost savings; and

• training DLA personnel, initially on the elements of activity-based costing, with future

training planned to explain the development and operation of the final activity-based costing

model.
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33 GAO/NSIAD-00-183R Selected DOD Consulting Services

Develop and Maintain DLA’s Safety and Health Information Reporting System

Organization: Defense Logistics Agency

Contractor: Synergy Inc.

Fiscal year 1999

obligation amount: $97,672

Performance period: December 21, 1998, to December 31, 1999

Under federal regulations, DLA, like all other federal agencies, is required to collect and evaluate

occupational safety and health data.10 To fulfill this requirement, DLA uses its Safety and Health

Information Reporting System. The reporting system, established in 1995, serves as a database

for tracking work-related injuries and illnesses, as well as safety hazards and inspections. The

database can be queried to produce trend analyses, performance measures, and other data.

To assist in the analyses and maintenance of the database, DLA acquired the services of Synergy

Inc. beginning in December 1998. Examples of services provided during the performance period

include

• querying the database to extract and analyze data to produce monthly, quarterly, and annual

reports, as well as to provide data on an as-needed basis for management decisions;

• preparing the DLA Safety Management Plan, which incorporated the contractor’s research on

commercial best practices and performance measures for evaluating DLA’s safety and health

program performance;

• assisting field activities in carrying out their own queries of the database; and

• performing routine checks of the system to ensure the consistency and accuracy of data.

10 29 CFR 1960 subpart I requires the collection and compilation by agencies of occupational safety and health data for proper

evaluation and necessary corrective action.
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34 GAO/NSIAD-00-183R Selected DOD Consulting Services

Develop Improved DLA Procedures for Collecting and Reporting Hazardous Waste

Disposal Information

Organization: Defense Logistics Agency

Contractor: Louis Berger and Associates, Inc.

Fiscal year 1999

obligation amount: $90,000

Performance period: September 30, 1999, to June 30, 2000

In 1999, the DOD Inspector General conducted a DOD-wide audit of the costs, quantities, budget

formulation, and review processes related to DOD hazardous waste disposal. The Inspector

General recommended that DLA issue policy that specifies standard procedures for reporting

budget estimates and data on progress toward meeting DOD’s goal of reducing the amounts of

hazardous waste disposal.

DLA contracted with Louis Berger and Associates beginning in September 1999 to develop

improved standardized procedures for DLA subordinate organizations to report consistent and

validated hazardous waste budget data and progress in meeting DOD’s hazardous waste

reduction goal. Examples of services being provided during the performance period include

• preparing a work plan containing things such as a list of detailed project objectives and

planning assumptions;

• on the basis of six site visits, preparing a needs assessment report documenting what is

needed for improved data collection and reporting of hazardous waste disposal within DLA;

• evaluating alternative data reporting systems by visiting organizations outside DLA such as

the Naval Facilities Engineering Service Center; and

• recommending data collection and reporting procedures for hazardous waste budget

estimates and hazardous and non-hazardous waste data reported to the Deputy Under

Secretary of Defense (Environmental Security) within the Office of the Secretary of Defense.
ENCLOSURE 2 ENCLOSURE 2

35 GAO/NSIAD-00-183R Selected DOD Consulting Services

AGENCY COMMENTS
ENCLOSURE 3 ENCLOSURE 3

36 GAO/NSIAD-00-183R Selected DOD Consulting Services

SCOPE AND METHODOLOGY

Our objective was to describe the advisory and assistance and other services obtained by the

Office of the Secretary of Defense; the Secretariats of the Air Force, the Navy, and the Army; and

Headquarters, Defense Logistics Agency, with fiscal year 1999 obligations. At each of the five

Department of Defense (DOD) organizations, we interviewed budget officials to identify how

information on the advisory and assistance services and other services was accumulated and

categorized. A selection of 30 contracts from fiscal year 1999 obligations for these services was

taken from the 5 DOD organizations as discussed below. We then interviewed program officials

and reviewed supporting documentation to obtain information on the services procured.

For the Office of the Secretary of Defense, we selected 10 contracts from the Office of the

Secretary of Defense (Acquisition and Technology), the activity with the highest amount of

obligations for advisory and assistance services and other services. On the basis of committee

interest, we selected five contracts associated with the largest obligations by the Office of the

Secretary of Defense’s Study Program, which provides funding for contract advisory and

assistance services by various staff offices, and the five contracts associated with the largest

obligations for advisory and assistance and other services by the Deputy Under Secretary of

Defense (Acquisition Reform).

For the Secretariats of the Air Force and the Army, we selected 10 contracts from the activities

with the highest amount of obligations for advisory and assistance services and other services.

We selected five contracts associated with the largest obligations for these services from the

Office of the Assistant Secretary of the Air Force (Acquisition) and from the Army’s Office of the

Director of Information Systems for Command, Control, Communications, and Computers.

For the Secretary of the Navy, we selected five contracts from the Office of the Assistant

Secretary of the Navy (Research, Development, and Acquisition), the activity with the highest

amount of obligations for advisory and assistance services and other services. Because of Navy

concerns that selecting the five largest obligations would cover only efforts to support the

Standard Procurement System and paperless initiative, we selected the two largest obligations

associated with the Standard Procurement System and the three largest obligations from other

contract support services.

For Headquarters, Defense Logistics Agency, we selected five contracts associated with the

largest obligations for advisory and assistance and other services.

(707438)
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