United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Military Readiness, Committee on

National Security, House of

Representatives

July 1995 DEFENSE

MANAGEMENT

Selection of Depot

Maintenance Standard

System Not Based on

Sufficient Analyses

GAO/AIMD-95-110

GAO United States

General Accounting Office

Washington, D.C. 20548

Accounting and Information

Management Division

B-259429 

July 13, 1995

The Honorable Herbert H. Bateman

Chairman, Subcommittee on Military Readiness

Committee on National Security

House of Representatives

Dear Mr. Chairman:

This report responds to the Committee’s request that we evaluate the

Department of Defense’s (DOD) justification for developing and deploying

the Depot Maintenance Standard System (DMSS). DOD is developing DMSS to

support its efforts to streamline depot maintenance operations and

manage resources more efficiently at its repair depots. Annually, the

Department spends about $13 billion to manufacture, overhaul, and repair

equipment, such as airplanes, ships, and tanks and reparable parts of this

equipment, such as radios and engines.

DMSS is being developed and deployed as a migratory information system1

under the Department’s Corporate Information Management (CIM)

initiative. DOD expects to spend more than $1 billion to develop and deploy

DMSS over 10 years from fiscal years 1993 through 2003. In its report on the

National Defense Authorization Act for Fiscal Year 1995, the Committee

expressed concern that despite spending billions of dollars for information

technology over the last few years, DOD had not achieved significant

quality improvements, cost savings, and productivity gains in service

operations. The Committee directed the Secretary of Defense to conduct a

study to determine the best prototype depot maintenance system and

directed GAO to assess the soundness of the study’s conclusions.

The Department, however, has not done a study in response to this

requirement. DOD officials stated that, in their opinion, two studies done by

the Logistics Management Institute during 1994 comparing the services

depot maintenance automated systems would meet the legislative

requirement. These studies, however, focused on only one of the eight

system components of DMSS and did not address reengineering alternatives

for improving depot maintenance operations. Therefore, in response to the

Committee’s concerns, our objectives were to determine whether DOD had

(1) based its selection of DMSS on convincing analyses of costs and benefits

1

A migratory system is an existing information system or systems designated to replace each of the

many service-unique systems now supporting similar business functions.

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as well as economic and technical risks and (2) selected a strategy that

would dramatically improve depot maintenance operations.

Results in Brief Defense has little real assurance that it can achieve even the relatively

modest projected improvements and cost savings in depot maintenance

operations from DMSS. The Department did not base its decision to develop

and implement DMSS on sufficient analyses of costs and benefits or on

detailed assessments of economic and technical risks. Also, Defense did

not obtain project milestone reviews by Defense’s Major Automated

Information System Review Council (MAISRC) and approvals from the

Milestone Decision Authority (MDA). These reviews and approvals are

designed to ensure that system development and implementation

decisions are consistent with sound business practices and to better

manage risks inherent in large information system projects.

Even if successfully implemented as envisioned, DMSS will not dramatically

improve depot maintenance in DOD. Defense did not reengineer its

business processes, which could provide dramatic improvement and cost

savings. Instead, it is currently making a major investment, totaling more

than $1 billion, to develop and deploy DMSS, designed to incrementally

improve depot maintenance processes while migrating from

service-unique supporting information systems toward a DOD-wide

integrated corporate system. These improvements are intended to reduce

depot maintenance operational costs by $2.6 billion or less than

2.3 percent over a 10-year period. Defense has achieved incremental

improvements through initial implementation of DMSS system components.

However, by focusing first on developing and deploying a standard depot

maintenance information system designed to incrementally improve depot

maintenance processes, DOD will not achieve any immediate dramatic cost

reductions and may make future reengineering efforts more difficult by

entrenching inefficient and ineffective work processes.

Scope and

Methodology

We based our review on an assessment of DOD’s implementation of its own

directives and instructions for new automated information systems or the

selection and implementation of standard migratory systems under the CIM

initiative, as these projects relate to the depot maintenance business area.

These directives, referred to as Life-Cycle Management,2

 contain the same

2

Defense Directive 8000.1, Defense Information Management (IM) Program; Defense Directive 8120.1,

Life-Cycle Management (LCM) of Automated Information Systems (AISs); and Defense Manual

8020.1-M, Functional Process Improvement (Functional Management Process for Implementing the

Information Management Program of the Department of Defense).

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B-259429 

steps and milestones as GAO’s own methodology for reviewing large

automated information systems/projects.

Our audit was performed between April 1994 and March 1995 in

accordance with generally accepted government auditing standards. We

performed our work primarily at the offices of the Deputy Under Secretary

of Defense for Logistics in Washington, D.C., and the Joint Logistics

Systems Center, Wright-Patterson Air Force Base, Ohio. Appendix I details

our scope and methodology. The Deputy Under Secretary of Defense for

Logistics provided written comments on a draft of this report. These

comments are discussed at the end of this report and presented, along

with our evaluation, in appendix II.

Significant Problems

in DOD Depot

Maintenance

Each year DOD spends about $13 billion to manufacture, overhaul, and

repair more than 2 million items at its more than 27 maintenance depots.

The depots have primary responsibility for the maintenance, overhaul, and

repair of large items, such as tanks, ships, and airplanes, and small and

intricate ones, such as communications and electronic components. Depot

maintenance consists of three basic business processes: project

management (maintenance of major-end items, such as airplanes, ships,

and tanks), reparables management (maintenance of items, such as

engines, transmissions, and radios), and specialized support (various

individual functions, such as tracking hazardous materials, tools, and test

samples).

For years, GAO and DOD have reported on major problems facing the depot

maintenance area, principally that DOD’s depot management structure has

not resulted in substantial competition, interservicing, or reduction of

excess capacity and duplication of effort. For example:

• In 1983, GAO testified3 that DOD had not moved quickly to eliminate

duplicate capability and excess capacity within depot maintenance

because of (1) parochial interests, (2) lack of central authority, and

(3) absence of DOD-wide planning.

• In 1993, the Joint Chiefs of Staff reported that closing a significant number

of depots was needed to reduce excess capacity and that significant

savings could come from consolidating depot workload across service

boundaries. In May 1993, we testified,4

 that the Joint Chiefs of Staff

3

Depot Maintenance: Issues in Management and Restructuring To Support a Downsized Military

(GAO/T-NSIAD-93-13, May 6, 1993).

4

See footnote 3.

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identified 25 to 50 percent more depot capacity than will be needed in the

future and that this problem had been exacerbated by (1) the end of the

cold war, (2) reduction of defense systems and equipment, (3) retirement

of less reliable and more maintenance-intensive systems, and (4) the

private sector’s push for a greater share of the depot maintenance

workload.

• In 1993,5 we reported that internal controls at Army depots did not

adequately safeguard millions of dollars of weapons and equipment during

the maintenance processes. Specifically, we reported that poor storage

practices increased maintenance costs, depot inventory records were not

accurate, and the Army’s depot cost accounting system did not capture

actual job costs.

• In 1995, DOD reported to the Congress that its financial systems and

databases were inadequate to provide the type of information to determine

the cost-effectiveness of greater public-private competition for providing

depot maintenance services.

Over the last several years, DOD has taken a number of actions to correct

these problems. One of these actions is its Corporate Information

Management initiative, which was established to prepare DOD for future

budget reductions and post-cold war readiness requirements through

(1) streamlining business processes, (2) integrating essential data systems,

and (3) eliminating duplicate or redundant information systems across the

Department. The DMSS project was undertaken as part of this effort.

Strategy for Addressing

Depot Maintenance

Problems

To improve its depot maintenance operations and manage its resources

more efficiently, the Principal Staff Assistant (PSA)6

 for logistics,7 in

November 1991, established the Joint Logistics System Center (JLSC). JLSC

is to facilitate the improvement of depot maintenance processes by

identifying business process improvements and managing the

development and deployment of a standard depot maintenance system to

replace service-unique systems currently used.

5

Financial Management: Poor Internal Control Has Led to Increased Maintenance Costs and

Deterioration of Equipment (GAO/AFMD-93-8, January 25, 1993).

6

PSAs include the Under Secretaries, Assistant Secretaries, General Counsel, Inspector General,

Comptroller, Assistants to the Secretary of Defense, and the Office of the Secretary of Defense

Directors or equivalents, including the Chairman of the Joint Chiefs of Staff, who report directly to the

Secretary or Deputy Secretary of Defense.

7

When JLSC was created, the PSA for logistics was the Assistant Secretary of Defense for Production

and Logistics. Following a reorganization in the Office of the Secretary of Defense, the PSA for

logistics is now the Deputy Under Secretary of Defense for Logistics.

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In January 1994, JLSC prepared an economic analysis recommending

development and deployment of a standard depot maintenance

information system—called the Depot Maintenance Resource Planning

(DMRP) system, which consisted of four system components.8

 Currently,

the standard information system consists of eight components and is

called DMSS. The following table identifies the core depot maintenance

business processes and the eight system components selected to support

them.

Table 1: Depot Maintenance Core

Business Processes and Their

Supporting DMSS System

Components

Business Process Supporting System Component

Project management

planning and allocating labor, material,

and capital resources for repairing

major-end items, such as airplanes, ships,

and tanks

•Baseline Advanced Industrial

Management System

Reparables management

activities for making labor and equipment

more productive on the shop floor

•Depot Maintenance Management

Information System

•Interservice Material

Accounting and Control System

Specialized support

various individual functions, such as

tracking hazardous materials, tools, and

test samples

•Enterprise Information System

•Facilities and Equipment Maintenance

•Depot Maintenance Hazardous Material

Maintenance System

•Laboratory Information Management

System

•Tool Inventory Management Application

Note: See appendix III for brief descriptions of each of these eight system components.

By implementing DMRP, DOD expected a return on its investment of

$2.6 billion through business process improvements and savings derived

from replacing more than 60 service-unique automated depot maintenance

information systems. Specifically, these benefits are to be derived from

(1) reduced direct and indirect labor costs, (2) reduced direct and indirect

material costs, (3) reduced costs associated with shutting down old

information technology (legacy) systems, (4) shorter cycle time for certain

types of maintenance and inspections, and (5) automation of many

currently paper-based work processes.

Our concerns with this strategy are twofold. First, DOD did not base its

decision to develop and deploy DMSS on convincing analyses of expected

system development and deployment costs or detailed assessments of

8

One DMRP system component, the Programmed Depot Maintenance Scheduling System, is a module

of the DMSS system component called Baseline Advanced Industrial Management System.

Page 5 GAO/AIMD-95-110 Depot Maintenance Standard System
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DMSS’s economic and technical risks. Further, Defense did not obtain the

independent reviews by the MAISRC and approvals by the MDA of the

project’s milestones, which are designed to ensure the decision was

consistent with sound business practice. Second, we believe that DOD

needs to consider reengineering entire processes before implementing

system changes if it is to achieve the dramatic reductions in operational

support costs called for by CIM.

DUSD(L) Did Not Use

Sufficient Analyses in

Selecting DMSS

In selecting DMSS as DOD’s initial step toward improving defense

maintenance depot operations, the Deputy Under Secretary of Defense for

Logistics (DUSD(L)) did not base its decision on sufficient analyses of

expected system development and deployment costs or detailed

assessments of DMSS’s economic and technical risks. Further, DUSD(L) did

not obtain independent milestone reviews and approvals which are

designed to ensure (1) decisions are consistent with sound business

principles and (2) risks inherent in large information systems projects are

adequately managed. Thus, even the marginal improvements Defense

expects from DMSS may never be achieved.

Defense directives9

 require that decisions to develop and deploy

information systems be based on convincing, well-supported estimates of

project costs, benefits, and risks. These directives establish a disciplined

process for selecting the best projects based on comparisons of competing

alternatives.

Defense’s principal means for comparing various alternatives is a

functional economic analysis. For each alternative, it identifies resource,

schedule, and other critical project characteristics and presents estimates

of the costs, benefits, and risks. The Office of the Assistant Secretary of

Defense for Program Analysis and Evaluation is required to validate these

estimates to help ensure that the economic analysis presents compelling

quantitative data for each of the alternatives being evaluated. Once an

alternative is chosen, the analysis becomes the basis for project approval.

Any significant change in the project’s expected costs, benefits, or risks

requires that the project selection and direction be reevaluated.

Also, DOD directives established the Major Automated Information System

Review Council (MAISRC) to provide oversight of individual major

9

See footnote 2.

Page 6 GAO/AIMD-95-110 Depot Maintenance Standard System
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information system projects.10 At each development milestone11 for

proposed information system projects, MAISRC reviews these projects to

determine if they are consistent with DOD policies and directives. MAISRC

then recommends continuation, redirection, or termination of each project

to the project’s Milestone Decision Authority (MDA). DOD’s current policy is

to ensure that funds are not obligated for any automated information

system until the MAISRC milestone review and MDA approval are complete.

In January 1994, following the logistics CIM migration strategy, the JLSC

evaluated three alternatives for improving the core Defense depot

maintenance functions. The alternatives considered involved

(1) maintaining status quo by allowing each service to continue to operate

its own information system with some new development under JLSC’s

purview, (2) choosing a corporate information system from among the

services and establishing it as the DOD-wide standard system—deploying it

either immediately and then enhancing it over a 3-year period or deploying

it after enhancements, and (3) developing a new system.

In selecting an alternative, DUSD(L) did not evaluate sufficiently accurate

cost data and detailed assessment of risks, nor did it obtain milestone

reviews and approvals designed to ensure automated information systems

are selected consistent with sound business practices.

DUSD(L) Selected DMSS

Without Sufficient Cost

Data

DUSD(L) selected DMSS without analyzing the system’s full development and

deployment costs. Instead, it relied on a functional economic analysis of a

previously proposed project—the Depot Maintenance Resource Planning

(DMRP) system. This analysis significantly understated DMSS costs by

including costs for only some components, and it understated costs for the

components it did include. In early 1994, the JLSC Commander recognized

that the DMRP economic analysis did not reflect DMSS as defined.

According to JLSC officials, DUSD(L) used the DMRP functional economic

analysis as a basis for selecting DMSS because it was the best available at

the time. The DMRP analysis estimated project costs at

$988 million—$582 million to develop and deploy and $406 million to

operate and support over a 10-year period. These officials stated that the

DMRP analysis fairly represented the DMSS project. However, the Office of

10Major information system projects are those with estimated development and deployment costs in

excess of $25 million in any 1 year, $100 million in total, or are designated as being of special interest.

11Under DOD’s life-cycle management process, system development projects are divided into five

phases with corresponding decision points, called milestones, where project progress is assessed and

documented.

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the Assistant Secretary of Defense for Program Analysis and Evaluation

reviewed this analysis and found its level of detail insufficient to validate

either cost or benefit estimates.

Although we also found insufficient details supporting cost and benefit

estimates, we believe that DMSS will cost significantly more than the DMRP.

As shown in table 2, the DMRP economic analysis included costs for only

three of the eight DMSS system components. Therefore, the analysis

understated DMSS costs by the amount necessary to develop and deploy the

five additional system components. As of February 1995, JLSC had not

completed a cost estimate for these five additional components.

Table 2: Comparison of DMRP and

DMSS System Components System Components DMRP DMSS

Baseline Advanced Industrial Management √

Depot Maintenance Hazardous Material Management

System

√ √

Depot Maintenance Management Information System √ √

Enterprise Information System √

Facilities and Equipment Maintenance √

Interservice Material Accounting and Control System √

Laboratory Information Management System √

Programmed Depot Maintenance Scheduling System √ √a

Tool Inventory Management Application √ √

a Under DMSS, this system is a module of the Baseline Advanced Industrial Management System.

In addition, the DMRP economic analysis underestimated costs for system

components common to both DMRP and DMSS projects. Specifically, it

underestimated licensing costs for using commercially owned software,

costs to exchange data with other information systems, and costs to install

the system.

One example of underestimated licensing costs is in a key DMSS

component—the Air Force’s Depot Maintenance Management Information

System (DMMIS). Over the last 10 years, the Air Force spent over

$200 million to develop DMMIS for use in its maintenance depots. Originally

designed around a core of commercially available application and

database software, the Air Force chose to extensively modify this

proprietary software to better meet its unique depot maintenance

requirements. However, all software versions remain the sole property of

Page 8 GAO/AIMD-95-110 Depot Maintenance Standard System
B-259429 

the commercial developers. As a result, to use the DMMIS system, DOD will

have to pay license fees to several commercial software developers.

Although the DMRP economic analysis did not specify DMMIS license fee

costs, JLSC officials stated that $1.6 million per site was included in the

deployment cost totals. In February 1995, JLSC estimated that DMMIS license

fees for just the development facility and two operational sites would

exceed $13 million, including a one-time payment of over $5 million and

nearly $850,000 each year over the system’s life. As of April 1995, JLSC

expected to run DMMIS at three additional sites. Licensing agreements had

yet to be negotiated for these sites.

The DMRP analysis also underestimated costs to develop interfaces needed

to allow system components to exchange data with the information

systems currently used by the services to accomplish their missions. While

the analysis recognized that system components must interface with other

systems, it did not include the full cost of these interfaces. According to

JLSC officials, some costs to interface the DMMIS and Programmed Depot

Maintenance Scheduling System were included in the $37.7 million

estimate for developing the system’s software applications. However, they

did not specify these costs.

Although JLSC has yet to identify them, DMSS will require numerous system

interfaces if it is to be the corporate depot maintenance system. For

example, prior work done by the Air Force to deploy DMMIS, before it was

selected as a DMSS component, identified 73 required interfaces just to

meet Air Force requirements. As a DMSS system component, additional

DMMIS interfaces will be needed to meet Army, Navy, and Marine Corps

requirements. Further, interfaces for the remaining seven DMSS system

components must be identified and developed. In February 1995, JLSC’s

Deputy Director for Depot Maintenance estimated that $70 million not

included in the DMRP economic analysis would be needed to develop the

DMSS interfaces.

Finally, the DMRP economic analysis underestimated costs for deploying

the system. The analysis estimates $497 million for system deployment.

This estimate includes nonrecurring costs of $17 million to install the

system at each operational site. Since DMSS was initiated, JLSC has

identified that an additional $60 million would be needed to deploy the

system.

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In May 1994, the JLSC Commander told the DOD Comptroller about the DMRP

economic analysis. The Commander stated that the economic analysis

briefed to DUSD(L) in December 1993 and submitted for the DOD

Comptroller’s review in early 1994 did not reflect DMSS as it was then

defined. Further, he stated that to accommodate changes requested by the

Comptroller and the office of Program Analysis and Evaluation and to

reflect the current DMSS, JLSC was developing a new analysis. According to

JLSC officials, the final economic analysis is expected to be completed in

July 1995. However, by this time Defense will have spent more than

$200 million to develop and deploy DMSS.

DUSD(L) Selected DMSS

Without Fully Assessing

Risks

Although any large automated information system development project is

inherently a high-risk venture, DUSD(L) decided to develop and deploy DMSS

without first fully assessing the risks to the project’s success. Without a

detailed risk assessment, DOD has no assurance that DUSD(L) selected the

best information system alternative for improving defense depot

maintenance operations, nor can it plan actions designed to avoid or

lessen the potential for project delay, overspending, or failure.

DOD has long recognized that project success relies on its ability to manage

risk. The Defense Systems Management College guide on risk management

states that, as a minimum, a prudent manager should attempt to

understand system specific risks and quantify their potential impact for

each alternative. While the earlier DMRP analysis identified several

potential risks associated with each alternative being considered, it did not

quantitatively or qualitatively compare these risks. Additionally, it did not

contain any plans to mitigate potential project risks.

After DUSD(L) selected DMSS, JLSC convened a customer advisory team in

April 1994 to identify and generate ideas on how to mitigate DMSS risks.

This team, with membership from all the military services, identified a

number of risks facing DMSS, such as (1) incomplete design and testing of

the two core DMSS systems—Depot Maintenance Management Information

System and the Baseline Advanced Industrial Management System, (2) not

enough personnel to implement and maintain the system, (3) inability to

obtain service cooperation needed to successfully build and deploy the

system, (4) numerous external and internal interface issues, and (5) depot

maintenance workers’ reluctance to work with an entirely new system.

JLSC requested another high-level risk analysis of the depot maintenance

standard system strategy from the Defense Information Systems Agency’s

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Center For Integration & Interoperability (CFI&I). In a July 1994 briefing to

JLSC, CFI&I said that program management posed the greatest risks to DMSS

success. CFI&I said the project lacked (1) integrated detailed planning

specifying the activities and milestones to be achieved at each depot and

(2) coordination of events necessary to implement the system, and that, as

a result, there was no assurance that DMSS could meet cost, schedule, and

performance expectations.

In addition, CFI&I identified a number of technical risks to DMSS

implementation, including (1) no encompassing data migration strategy,

(2) incomplete and inadequate understanding of the requirement to

interface DMSS with other current service systems, (3) difficulties

associated with maintaining modified commercially owned software, and

(4) incomplete development and testing of two of the system components.

In October 1994, JLSC began an iterative detailed assessment of DMSS to

quantify risks, identify possible mitigation or avoidance steps, and develop

a risk management plan. As of April 1995, JLSC was continuing this

assessment.

Project Milestone Reviews

and Approvals Not

Obtained

Although Defense directives establish MAISRC review and MDA approval

procedures to ensure that decisions to develop major automated

information systems are based on sound business principles, as of

February 1995, DUSD(L) had not scheduled a date for an initial milestone

review of the entire DMSS project. Under MAISRC guidelines, a project should

be reviewed and approved at each of five decision milestones12 before

substantial funds are obligated. Despite this DOD policy, DUSD(L) spent

nearly $180 million in fiscal years 1993 and 1994 on DMSS, and budgeted

$111.2 million in fiscal year 1995 and $95.1 million in fiscal year 1996.

These budgeted amounts are for the development and deployment of DMSS

and do not include amounts to maintain and operate the current systems.

According to the director of logistics systems development within DUSD(L),

DMSS will be submitted for MAISRC review and MDA approval during 1995.

However, we found that as of February 1995, DMSS was on the MAISRC

review schedule for 1995 but no date for the review had been established.

The director also indicated that continued implementation of DMSS at

selected prototype sites is justified based on past MAISRC reviews and MDA

12DOD Instruction 8120.2, Automated Information System (AIS) Life-Cycle Management (LCM)

Process, Review, and Milestone Approval Procedures, describes five milestone decision points:

Concept Studies Decision, Concept Demonstration Decision, Development Decision, Production

Decision, and Major Modification Decision.

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approvals of the DMMIS component of the project. However, Defense

directives13 require programs which consist of a number of component

systems to be reviewed by MAISRC and approved by MDA as a single project.

Without these reviews and approvals, DOD has less assurance that the

decision to select DMSS was consistent with sound business practices. Also,

DOD did not have an opportunity afforded by the MAISRC review and MDA

approval to redirect or terminate DMSS before investing significant amounts

of money.

DUSD(L) Did Not

Consider

Reengineering Depot

Maintenance

Processes Before

Selecting DMSS

In evaluating alternatives to improve depot maintenance operations,

DUSD(L) did not consider reengineering alternatives which offer

opportunities to dramatically improve depot maintenance business

processes and greatly reduce the costs of operations. Even if successful,

DOD’s strategy to develop and deploy an information system designed to

incrementally improve depot maintenance processes will only provide

marginal cost reductions and productivity increases rather than the

fundamental and dramatic changes needed to meet the challenges of

maintaining military readiness in the 1990s.

Reengineering of Business

Processes Can Offer

Dramatic Improvement

DOD recognizes that business process reengineering holds the greatest

potential for meeting the demands of a changing Defense environment

with dramatic increases in effectiveness and efficiency. In the DOD

Enterprise Model,14 the Assistant Secretary of Defense for Command,

Control, Communications, and Intelligence stated:

The defense community must make fundamental changes in the way it performs its

activities if it is to provide the nation with the defense it requires and demands. ...

Incremental improvements...will not shift the Department to a higher plateau of

performance. Breakthrough innovation and change—a new paradigm for defense

activities—is needed to meet the challenges of the 1990’s.

In January 1991, the Deputy Secretary of Defense endorsed a CIM

implementation plan in which DOD would “reengineer,” or thoroughly study

and redesign, its business processes before it standardized its information

systems. The Deputy Secretary understood that DOD would have to

13Defense Directive 8120.1, Life-Cycle Management (LCM) of Automated Information Systems (AISs)

and Defense Instruction 8120.2 Automated Information System (AIS) Life-Cycle Management (LCM)

Process, Review, and Milestone Approval Procedures.

14The DOD Enterprise Model, Volume II: Using the DOD Enterprise Model - A Strategic View of Change

In DOD - A White Paper, January 1994, Office of the Secretary of Defense, Assistant Secretary of

Defense for Command, Control, Communications, and Intelligence.

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improve the way it does business to achieve dramatic cost reductions and

productivity increases and that it could not merely standardize old,

inefficient processes and systems. Simply stated, doing the same thing

faster will not provide dramatic improvement.

Though reengineering efforts in DOD have been limited in scope and

represent a small portion of operations, significant improvements have

been achieved through reengineering specific logistics business areas. For

example,15 in 1980, the Defense Construction Supply Center established a

contractor-operated parts depot program that reduced order and delivery

time from 70 to 35 days—a 50-percent reduction.

In addition, the private sector, which also has major industrial centers that

use similar maintenance and repair supplies for regularly scheduled

maintenance of equipment, has undergone successful reengineering efforts

when faced with increasing costs associated with acquiring supplies, spare

parts, and raw materials. For example,16 since 1986, through customized

agreements with suppliers and the use of new inventory management

practices, an Ohio steel firm, Timken Company, reduced maintenance and

repair inventories by $4 million (32 percent). The company also eliminated

six inventory storerooms, improved inventory availability, and increased

the accuracy of physical inventories.

We have also reported that by adopting certain commercial practices,

Defense could similarly dramatically improve depot maintenance. In 1993,

for example, we found17 that a number of private firms provide third-party

logistics transportation services, such as freight bill processing,

pre-auditing, verifying, and generating management reports with freight

payment. Two of these firms proposed to perform transportation services

for DOD at a cost ranging to $.75 to $1.25 per government bill of lading. DOD

spends about $5.70 per freight bill to provide these same services. If DOD

used these firms or changed its process to obtain similar performance, it

could reduce costs for these services by more than 75 percent.

15Commercial Practices: DOD Could Save Millions by Reducing Maintenance and Repair Inventories

(GAO/NSIAD-93-155, June 7, 1993).

16See footnote 12.

17Defense Transportation: Commercial Practices Offer Improvement Opportunities (GAO/NSIAD-94-26,

November 26, 1993).

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Reengineering Not

Considered for Improving

Depot Maintenance

Instead of first considering opportunities to reengineer business

processes, DUSD(L) chose a strategy that focuses on the development and

deployment of a DOD standard depot maintenance information system.

Under this strategy, business processes are to be incrementally improved

as DMSS is deployed. Reengineering of these processes will be considered

only after system deployment. Currently, DMSS deployment is expected to

be completed by fiscal year 1999. Accordingly, fundamental and dramatic

changes to the depot maintenance processes will be delayed for years.

According to DOD officials, the vast number of different logistics processes

and supporting information systems across the Department must be

reduced before significant improvements can be made. These officials

further stated that, once fully deployed, the Defense standard information

systems will form the foundation upon which significant improvements to

current depot maintenance practices can be made. This foundation will

eliminate the need to implement major changes across a multitude of

information systems and business processes that exist throughout the

services.

Additionally, JLSC officials emphasized that improvements are being made

to depot maintenance processes as DMSS is being deployed. According to

these officials, benefits being achieved from these improvements include

(1) cost reductions of $7 million in shop floor material recovered at the Air

Logistics Center in Ogden, Utah, and a $8 million reduction in purchase of

hazardous material at Hill Air Force Base and (2) performance increases

from a 30-percent reduction in labor hours for overhauls of the Los

Angeles class submarine, and two additional B-1 bombers processed

through the Oklahoma City Air Logistics Center.

While these examples show that incremental improvements are being

made, JLSC estimated that, overall, the DMSS project would reduce depot

operational costs by $2.6 billion over a 10-year period ending in fiscal year

2003 from $112.9 billion to $110.3 billion over this period—a net cost

reduction of about 2.3 percent.

We believe that standardizing existing information systems and

incrementally improving business processes will not position DOD for

reengineering its processes or dramatically improve their operations.

Government and private industry have learned that initial focus on

information system deployment may make future reengineering efforts

more difficult by entrenching inefficient and ineffective work processes.

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B-259429 

Accomplishing order-of-magnitude improvements in both government and

private organizations requires reengineering—fundamental redesign—of

critical work processes. Information system initiatives that do not first

reengineer business processes typically fail or attain only a fraction of

their potential. In addition, case studies of private organizations presented

in Reengineering The Corporation - A Manifesto For Business Revolution,

18

revealed that companies often commit a fundamental error in viewing

automation as the answer to enhancing or streamlining their business

operations. They spend billions of dollars to automate existing processes

so they can perform the same work faster. Companies that initially

focused on information technology managed only to entrench inefficient

processes and made future change to these processes more difficult.

Additionally, our case studies of government organizations show that

simply automating existing processes will not likely provide significant

cost reductions or productivity increases. For example, in February 1995,

the Comptroller General of the United States testified19 that this has been a

hard lesson for federal agencies to learn. Specifically addressing the

efforts of the Department of Defense, the Comptroller General also stated:

...Defense has focused on trying to pick the best of its hundreds of existing automated

systems and standardizing their use across the military components without thoroughly

analyzing the technical, cost, and performance risks of this approach. As a result, Defense

may lock itself into automated ways of doing business that do not service its goals for the

future and cannot provide promised benefits and cost savings.

Our review of DUSD(L)’s depot maintenance standard system strategy

confirms this. The benefits it expects from implementing DMSS are

relatively meager when compared with results other organizations are

achieving through reengineering.

Conclusion We agree with DOD’s concern over depot maintenance operations. Further,

we agree that accurate information on depot operations and costs is

critical to improving this important readiness-related support process.

However, the decision to develop DMSS was based on insufficient cost data

and with little consideration of identified risks. Efficient, cost-effective

depot maintenance operations are important to supporting the

18Reengineering The Corporation - A Manifesto For Business Revolution, Michael Hammer and James

Champy, 1994.

19Testimony before the Senate Committee on Governmental Affairs, Government Reform: Using

Reengineering and Technology to Improve Government Performance (GAO/T-OGC-95-2, February 2,

1995).

Page 15 GAO/AIMD-95-110 Depot Maintenance Standard System
B-259429 

Department’s military operations. Major investment decisions—such as

DMSS—represent significant opportunities to make dramatic improvements

in core business processes. Further, DOD’s proposed solution was made

without due consideration of reengineering alternatives which offer

dramatic improvements and greatly reduce costs of depot operations.

DOD’s failure to consider reengineering alternatives and to fully consider

the costs and risks associated with DMSS will likely limit those

opportunities.

Recommendations To achieve the dramatic improvements in effectiveness and efficiency of

its depot maintenance operations that Defense has stated are critical to

meet the challenges of the 1990s and beyond, we recommend that the

Secretary of Defense direct the Deputy Under Secretary of Defense for

Logistics to complete the following actions.

• Prepare a full set of project documentation that describes the project and

validates that it is the best alternative for improving depot operations. At a

minimum, this documentation should include the following.

• A final functional economic analysis containing a comprehensive

evaluation of information system alternatives. This analysis should

formulate and compare estimates of the total costs and benefits of each

alternative.

• Identification of economic and technical risks associated with success

of each project alternative and development of a plan to avoid or

mitigate these risks.

• A comprehensive implementation plan that identifies actions to be

taken, schedules, and milestones for these actions, and performance

measures to be used to manage the system deployment.

• Obtain the Major Automated Information Systems Review Council review

and Milestone Decision Authority approval of the project documentation

prior to spending any fiscal year 1996 funds on DMSS development and

deployment.

• Conduct a thorough study of opportunities to reengineer the depot

maintenance business processes. Reengineering alternatives identified by

this study should be analyzed as part of the final functional economic

analysis and submitted for MAISRC review and MDA approval.

Agency Comments

and Our Evaluation

The Department of Defense provided written comments on a draft of this

report. The Deputy Under Secretary of Defense for Logistics generally

disagreed with our findings, but partially concurred with our

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B-259429 

recommendations. Defense’s specific comments are summarized below

and presented, along with our rebuttals, in appendix II.

In its comments, Defense took the following positions.

• The DMSS functional economic analyses of March 1993 and January 1994

provided sufficient cost, benefit, and risk information to select the best

alternative for improving depot maintenance business processes.

• DMSS is not one system requiring MAISRC oversight and that the individual

system components meeting MAISRC oversight criteria have been reviewed

and approved.

• Process reengineering is being accomplished concurrently with DMSS

development and deployment. Defense asserts that by following this

strategy, it has achieved substantial depot maintenance improvements

yielding significant cost reductions. Defense expects even more dramatic

improvements and savings in the future.

We disagree with Defense’s positions on these matters. Specifically:

• The March 1993 and January 1994 FEAs were insufficient because they did

not include cost and benefit estimates for the DMSS, contained cost

estimates of questionable accuracy, and did not include cost and benefit

estimates for five of the DMSS system components.

• Defense CIM guidance specifically directs that information system projects

be reviewed and approved in accordance with Defense life-cycle

management directives. Under these directives DMSS is required to be

reviewed by MAISRC and approved by the MDA at five milestone decision

points before any funds are spent to develop the system. Further, these

directives state that projects consisting of several components shall be

considered as a single automated system.

• Defense’s approach to improving depot maintenance business processes

focuses on the selection of the best currently operating information

systems and implementation of these selected systems across all Defense

components. While this approach may improve overall DOD business

processes and may provide incremental benefits, it cannot be construed as

reengineering. DMSS is designed to provide only incremental improvements

to existing business processes and it is clear from Defense’s own benefit

projections that it will not result in the dramatic improvements that are

possible by considering reengineering-based solutions. While it claims that

DMSS has improved depot maintenance processes and resulted in some

reductions in operational costs, DUSD(L)’s focus on information system

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B-259429 

selection and implementation may inhibit reengineering efforts by

entrenching current work processes.

Although Defense disagreed with our findings, it agreed with our

recommendation to prepare a full set of project documentation that

describes DMSS and validates that it is the best alternative to improve depot

maintenance. It partially concurred with our recommendation on

obtaining MAISRC review but specifically disagreed with our

recommendation concerning thoroughly studying opportunities to

reengineer depot maintenance business processes. Our recommendation

for MAISRC review is consistent with review requirements established in

Defense life-cycle management directives. Further, because reengineering

offers order-of-magnitude improvement and cost reductions, Defense

cannot afford to deploy DMSS beyond the first five prototype sites until it

has fully assessed reengineering alternatives.

We are sending copies of this report to the Ranking Minority Member of

the Subcommittee, the Chairmen and Ranking Minority Members of the

Senate and House Committees on Appropriations, the Senate Committee

on Armed Services, the Senate Committee on Governmental Affairs, and

the House Committee on Government Reform and Oversight; the

Secretaries of Defense, the Army, the Navy, and the Air Force; the Director

of the Office of Management and Budget; and other interested parties.

Copies will be made available to others on request.

If you have any questions about this report, please call me at

(202) 512-6240 or Carl M. Urie, Assistant Director, at (202) 512-6231. Major

contributors to this report are listed in appendix IV.

Sincerely yours,

Jack L. Brock, Jr.

Director, Information Resources Management/

 National Security and International Affairs

Page 18 GAO/AIMD-95-110 Depot Maintenance Standard System
Page 19 GAO/AIMD-95-110 Depot Maintenance Standard System
Contents

Letter 1

Appendix I 

Objectives, Scope,

and Methodology

22

Appendix II 

Comments From the

Department of

Defense

24

Appendix III 

Description of DMSS

Component Systems

44

Appendix IV 

Major Contributors to

This Report

46

Related GAO Reports 47

Tables Table 1: Depot Maintenance Core Business Processes and Their

Supporting DMSS System Components

5

Table 2: Comparison of DMRP and DMSS System Components 8

Page 20 GAO/AIMD-95-110 Depot Maintenance Standard System
Contents

Abbreviations

AIS automated information system

CFI&I Center For Integration & Interoperability

CIM Corporate Information Management

DMMIS Depot Maintenance Management Information System

DMRP Depot Maintenance Repair Planning System

DMSS Depot Maintenance Standard System

DOD Department of Defense

DUSD(L) Deputy Under Secretary of Defense for Logistics

FEA functional economic analysis

IM information management

IPR in-process review

JLSC Joint Logistics System Center

LCM life-cycle management

MAISRC Major Automated Information System Review Council

MDA Milestone Decision Authority

OSD Office of the Secretary of Defense

PSA Principal Staff Assistant

SDP system decision paper

Page 21 GAO/AIMD-95-110 Depot Maintenance Standard System
Appendix I 

Objectives, Scope, and Methodology

We based our review on an assessment of DOD’s implementation of its own

directives and instructions for new automated information systems or the

selection and implementation of standard migratory systems under the CIM

initiative, as such projects relate to the depot maintenance business area.

These directives, referred to as Life Cycle Management, contain the same

steps and milestones as GAO’s own methodology for reviewing large

automated information systems/projects.

Specifically, to determine whether the Department based its selection of

DMSS on convincing analyses of costs and benefits, we reviewed policies,

procedures, directives, and memoranda establishing criteria for the

successful acquisition of automated information systems under the CIM

initiative. We compared the Department’s actions and plans for selecting

and implementing DMSS with these criteria. To further assess the adequacy

of the selection, we examined the cost and benefit data available to senior

Defense officials responsible for selecting DMSS. Because the level of detail

was insufficient, we did not evaluate these cost and benefit data. Also, we

interviewed Defense logistics officials to obtain the rationale behind the

DMSS selection. To identify expected DMSS costs and benefits, we analyzed

available functional economic analyses (FEA). We did not validate the costs

and benefits presented in the FEA used to justify DMSS since (1) our

objective was to examine DOD’s decision given the cost and benefit

information available to it at the time and (2) the FEA was based on a

different project—the DMRP. We interviewed JLSC officials to determine

changes made to project scope, costs, or benefits occurring since early

1994 and any additional analyses currently being done. We also met with

numerous program and functional officials, including JLSC managers

responsible for implementing the eight DMSS system components, and

depot officials at the Air Force’s repair depot in Ogden, Utah, and the

Army’s depot in Tobyhanna, Pennsylvania.

To determine whether the Department had fully assessed economic and

technical risks threatening the successful implementation of DMSS and

identified actions to avoid or mitigate these risks, we reviewed risk

assessments available when DUSD(L) decided to develop and deploy DMSS.

Additionally, we examined risk analyses conducted by the Joint Logistics

Systems Center, other Defense organizations, and industry experts

completed since the DMSS selection was made. We interviewed program

and technical officials to obtain opinions on the potential impact of risks

identified by these analyses on project success and to identify actions for

avoiding or mitigating those risks most likely to result in project failure,

delay, and overspending.

Page 22 GAO/AIMD-95-110 Depot Maintenance Standard System
Appendix I 

Objectives, Scope, and Methodology

To determine whether the Department selected a strategy that would

dramatically improve depot maintenance processes, we reviewed DOD

documents detailing challenges of meeting the defense mission in the

post-cold war environment, CIM goals and objectives to meet these

challenges, and the plans and strategies for implementing CIM across the

Department. We compared these DOD strategies and plans to the Logistics

Migration Approach established to implement the CIM initiative in the

logistics business area. We then compared the level of improvement

expected from a standard depot maintenance information system to the

DOD stated requirement to meet the challenges of the future defense

environment. To identify alternatives to information system approaches,

we reviewed private industry studies and past GAO reports of lessons

learned by private and public organizations that have successfully

improved their business processes. We compared these lessons learned

and case studies with the approach being implemented through the

development and deployment of DMSS.

Our work was performed between April 1994 and March 1995 primarily at

the offices of the Deputy Under Secretary of Defense for Logistics in the

Pentagon, Washington D.C., and the Joint Logistics Systems Center,

Wright-Patterson Air Force Base, Ohio. We also performed work at the

offices of the Assistant Secretary of Defense for Command, Control,

Communications, and Intelligence in Washington D.C.; the Center for

Integration & Interoperability, Defense Information Systems Agency,

Blacklick, Ohio; the Air Force Air Logistics Center, Hill Air Force Base,

Utah; and the Tobyhanna Army Depot, Tobyhanna, Pennsylvania.

Page 23 GAO/AIMD-95-110 Depot Maintenance Standard System
Appendix II 

Comments From the Department of Defense

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

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Appendix II 

Comments From the Department of Defense

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Appendix II 

Comments From the Department of Defense

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Appendix II 

Comments From the Department of Defense

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Comments From the Department of Defense

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Comments From the Department of Defense

See comment 1.

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Appendix II 

Comments From the Department of Defense

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Comments From the Department of Defense

See comment 2.

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Appendix II 

Comments From the Department of Defense

See comment 3.

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Appendix II 

Comments From the Department of Defense

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Appendix II 

Comments From the Department of Defense

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Comments From the Department of Defense

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Comments From the Department of Defense

See comment 2.

See comment 4.

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Appendix II 

Comments From the Department of Defense

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Appendix II 

Comments From the Department of Defense

Page 38 GAO/AIMD-95-110 Depot Maintenance Standard System
Appendix II 

Comments From the Department of Defense

The following are GAO’s comments on the Department of Defense’s letter

dated May 30, 1995.

GAO Comments 1. The March 1993 Phase I Functional Economic Analysis (FEA) and

January 1994 Phase II FEA for the DMRP processes did not provide

well-supported estimates of project costs, benefits, and risks upon which

to approve the Depot Maintenance Standard System (DMSS). As stated in

our report, there are three reasons why these FEAs did not sufficiently

support the DMSS selection.

First, these FEAs did not include cost and benefit estimates for the DMSS.

The DMSS was not defined as a project until March 1994—more than a year

after the Phase I FEA was completed and 2 months after the Phase II FEA

was submitted for review. The Commander of Joint Logistics Systems

Center told the DOD Comptroller that the functional economic analysis

briefed to DUSD(L) and submitted for the Comptroller’s review in early 1994

did not include DMSS. The Commander also stated that JLSC was developing

a new economic analysis to (1) accommodate changes requested by the

Comptroller and the Office of Program Analysis and Evaluation and

(2) reflect the current DMSS.

Secondly, the analyses contained estimates of questionable accuracy. The

Office of the Assistant Secretary of Defense for Program Analysis and

Evaluation, which is required to validate automated information system

project estimates to help ensure that the economic analyses present

compelling quantitative data for project selection, found that the level of

detail was insufficient to validate either cost or benefit estimates. Even

with this limitation, we determined that the Phase II FEA underestimated

the cost to develop and deploy the three system components that later

became part of DMSS by at least $100 million.

Finally, the Phase I and II FEAs were incomplete. They included cost and

benefit estimates for only three of the eight system components forming

the DMSS. DUSD(L)’s contention that the larger DMSS does not represent a

significantly larger cost than the smaller suite of systems identified in the

Phase I FEA is unfounded. The scope of the projects differ significantly.

The DUSD(L) improperly equates expected costs and benefits of the DMRP

project to develop and deploy a suite of three system components at 27

maintenance depots over a 7-year period to the DMSS project to develop

and deploy eight system components at no more than 20 depots over a

3-year period, including 5 prototype sites over the next 2 years.

Page 39 GAO/AIMD-95-110 Depot Maintenance Standard System
Appendix II 

Comments From the Department of Defense

2. Contrary to DUSD(L)’s position, the Major Automated Information System

Review Council (MAISRC) is chartered to approve selection of migratory

systems, but has not reviewed the DMSS initiative from a life-cycle

management and implementation strategy perspective. DOD 8020.1-M,

Functional Management Process for Implementing the Information

Management Program of the Department of Defense, which DUSD(L) states

it is following to implement its DMSS initiative, states:

Information system options and opportunities that support the functional management

strategy and process improvement efforts are evaluated based on technical feasibility, cost,

schedule, performance, risk, and conformance to architectural guidelines and standards.

Information system development/modernization must comply with life cycle management

policy...The SDP [System Decision Paper] will be part of the approval decision package

supporting the designation of the AIS [Automated Information System] as a migration

system by the OSD Principal Staff Assistant. The SDP will also support an in-process review

(IPR) or milestone review, as appropriate, by the designated milestone decision authority

(MDA)...When AIS changes are part of the process improvement alternative(s) selected for

more detailed analysis, the Functional Activity Program Manager’s evaluation decision is a

filter that precedes other reviews required by DoDD 8120.1...The Functional Activity

Program Manager is responsible for ensuring that the AIS-related aspects of the process

improvement proposal are reviewed and approved in accordance with DoDD 8120.1, in

addition to being reviewed and approved by the OSD Principal Staff Assistant as part of the

complete process improvement proposal.

As stated in our report, Defense Directive 8120.1, Life-Cycle Management

(LCM) of Automated Information Systems (AISs); and Defense Instruction,

8120.2, Automated Information System (AIS) Life-Cycle Management (LCM)

Process, Review, and Milestone Approval Procedures, establish MAISRC

review and MDA approval procedures to ensure that decisions to develop or

modernize major automated information systems are based on sound

business principles. Under these procedures, a project should be reviewed

and approved at each of five decision milestones before substantial funds

are obligated. Despite this policy, DUSD(L) spent over $200 million to

implement the DMSS initiative without receiving approval for even the

initial milestone decision point.

Also, DUSD(L)’s claim that the MAISRC did review the DMSS initiative on

March 16, 1993, is not accurate. On this date the MAISRC completed an

In-Process Review (IPR) of the overall Logistics CIM strategy. An IPR is

defined as “An LCM review between LCM milestones to determine the

current program status, progress since the last LCM review, program risks

and risk-reduction measures, and potential program problems.” Further, as

Page 40 GAO/AIMD-95-110 Depot Maintenance Standard System
Appendix II 

Comments From the Department of Defense

admitted by DUSD(L), the DMSS initiative was not approved until early

1994—more than a year after this review.

Finally, DUSD(L)’s contention that the MAISRC milestone reviews of the Depot

Maintenance Management Information System (DMMIS) or any other single

system component of the DMSS initiative satisfies the Defense life-cycle

management review and approval requirements is inaccurate. Defense’s

life-cycle management directives define an automated information system

program as “A directed and funded AIS effort, to include all migration

systems, that is designated to provide a new or improved capability in

response to a validated need.” Further, the directives state:

For the purpose of determining whether an AIS is major, the separate AISs that constitute a

multi-element program, or that make up an evolutionary or incremental development

program, or make up a multi-component AIS program, shall be aggregated and considered a

single AIS.

Based on these directives, DUSD(L) is required to obtain MAISRC review and

approval for the entire DMSS initiative at each of five milestone decision

points before any additional funds are spent.

3. DUSD(L) officials contend that reengineering of depot maintenance

processes is occurring concurrently with the deployment of the DMSS.

Further, they assert that these reengineering efforts will provide dramatic

economic benefits, and cite cost savings and productivity increases

accrued from initial implementation of four DMSS system components as

support. DUSD(L)’s approach focuses on the selection of the best currently

operating information systems and implementation of these selected

system across all Defense components. While this approach may improve

overall DOD business processes and may provide incremental benefits, it is

not the fundamental rethinking and radical redesign of depot maintenance

processes and will not provide the dramatic cost reductions and

productivity gains available from process reengineering. At best, it will

allow DOD to accomplish current depot maintenance processes faster and

more efficiently. At worst, DUSD(L)’s focus on information system selection

and implementation will make future reengineering efforts more difficult

by entrenching current work processes.

In January 1991, the Deputy Secretary of Defense endorsed a Corporate

Information Management initiative implementation plan that directed

business processes be reengineered before information systems are

standardized. However, DUSD(L) did not consider reengineering

Page 41 GAO/AIMD-95-110 Depot Maintenance Standard System
Appendix II 

Comments From the Department of Defense

opportunities as alternatives to the DMSS initiative. As discussed in the

report, the functional economic analysis used by DUSD(L) to approve the

DMSS initiative compared only three alternatives. All three of these

alternatives focused on using automated information systems to improve

current depot maintenance functions.

Further, as stated in DMSS documentation, the initiative is designed to

provide only incremental improvements to existing business processes. It

is clear from Defense’s own benefit projections that DMSS will not result in

dramatic improvements possible from consideration of

reengineering-based solutions. DUSD(L) projected DMSS would reduce the

costs to DOD depot maintenance operational costs over a 10-year period

from $112.9 billion to $110.3 billion. A cost reduction of $2.6 billion or only

2.3 percent over this period does not constitute a dramatic increase in

efficiency.

In late 1994, the Office of the Secretary of Defense for Command, Control,

Communications, and Intelligence, responsible for CIM initiatives across

DOD, found major flaws in the overall implementation. It concluded that, as

opposed to the private sector which uses a very different approach, “DOD

has virtually no chance of making high impact/quantum changes using the

current approach.” Further, the Commission on Roles and Missions of the

Armed Forces, charged by the Congress to provide an independent review

of the roles and missions of the armed services, has found that “[r]ather

than reengineering its processes, DOD has spent its energies in closing

excess capacity (base and facilities) and in standardizing its management

information systems” and concluded that DOD will achieve a more

compact, more standardized version of its traditional logistics approach.1

The Commission confirmed that DOD must radically reengineer its logistics

processes to achieve meaningful improvements.

4. While information technology is critical to any reengineering effort

because it provides a tool for breaking old rules and creating new ways of

working, it should not be the driver of the reengineering effort. Such an

approach may make future reengineering efforts more difficult by

entrenching inefficient and ineffective work processes. Reengineering

offers order-of-magnitude improvement compared to the incremental

improvements DMSS is designed to provide. DUSD(L) can not afford to deploy

DMSS departmentwide beyond the first five prototype sites until it has first

determined which old rules need to be broken and what new ways of

1

Logistics Issues Case Studies for the Roles and Missions Commission of the Armed Forces,

February 8, 1995.

Page 42 GAO/AIMD-95-110 Depot Maintenance Standard System
Appendix II 

Comments From the Department of Defense

accomplishing depot maintenance are most efficient and effective. The

Commission on Roles and Missions of the Armed Forces has identified a

number of alternatives for changing the way DOD conducts its depot

maintenance. These alternatives could serve as a starting point for a

thorough study by DUSD(L) of its reengineering opportunities.

Page 43 GAO/AIMD-95-110 Depot Maintenance Standard System
Appendix III 

Description of DMSS Component Systems

This appendix provides brief descriptions of the eight information systems

selected as Depot Maintenance Standard System components to support

the DOD-wide depot maintenance function.

Baseline Advanced Industrial Management System: Supports allocation

decisions on resource application, schedules, and job management of

maintenance projects. It allows timely review of cost and schedule

performance at any level of the work breakdown structure. One of this

system’s major modules, Programmed Depot Maintenance Scheduling

System, provides project schedules of individual maintenance operations

and critical path of work requirements for maintenance of major end

items.

Depot Maintenance Management Information System (DMMIS): Provides

depot maintenance managers with an automated capability to forecast

workloads; schedule repair activities; track and control inventories;

program staffing, materials, and other resources; and track and manage

production costs.

Enterprise Information System: Provides the ability to interface to existing

data sources, extract relevant data, and package the information to

support decisionmakers with timely summary information.

Facilities and Equipment Maintenance: Provides an integrated tracking

and control system for equipment and facility maintenance, preventive

maintenance, and calibration of precision measurement equipment.

Depot Maintenance Hazardous Materiel Maintenance System: Records the

receipt and issue of all hazardous material within a maintenance depot.

Provides inventory visibility of all hazardous material to control the issue

of hazardous material to authorized users.

Interservice Material Accounting and Control System: Provides the

tracking of Depot Maintenance Interservice Support agreements and

visibility and control for interservice workloads.

Laboratory Information Management System: Provides the monitoring and

control of laboratory data such as sample order status, order tracking,

backlog, scheduling, location tracking, workload prediction, pricing, and

invoicing. Automates tracking and archiving for depot material samples

and test results.

Page 44 GAO/AIMD-95-110 Depot Maintenance Standard System
Appendix III 

Description of DMSS Component Systems

Tool Inventory Management Application: Provides total inventory tracking

and accountability of both hard and perishable (consumable) tools and

tooling assets. Tracks issues and receipts of assets to both individuals and

in tool kits.

Page 45 GAO/AIMD-95-110 Depot Maintenance Standard System
Appendix IV 

Major Contributors to This Report

Accounting and

Information

Management Division,

Washington, D.C.

Carl M. Urie, Assistant Director

David B. Shumate, Staff Evaluator

Cristina T. Chaplain, Communications Analyst

Cincinnati Regional

Office

Sanford F. Reigle, Evaluator-In-Charge

Roberto Rivera, Staff Evaluator

Thomas C. Hewlett, Staff Evaluator

Page 46 GAO/AIMD-95-110 Depot Maintenance Standard System
Related GAO Reports

Government Reform: Using Reengineering and Technology to Improve

Government Performance (GAO/T-OGC-95-2, Feb. 2, 1995).

Defense Management: Impediments Jeopardize Logistics Corporate

Information Management (GAO/NSIAD-95-28, Oct. 21, 1994).

Commercial Practices: DOD Could Reduce Electronic Inventories by Using

Private Sector Techniques (GAO/NSIAD-94-110, Jun. 29, 1994).

Executive Guide: Improving Mission Performance Through Strategic

Information Management and Technology (GAO/AIMD-94-115, May 1994).

Commercial Practices: Leading Edge Practices Can Help DOD Better

Manage Clothing and Textile Stocks (GAO/NSIAD-94-64, Apr. 13, 1994).

Defense Management: Stronger Support Needed for Corporate

Information Management Initiative To Succeed (GAO/AIMD/NSIAD-94-101,

Apr. 12, 1994).

Defense IRM: Business Strategy Needed for Electronic Data Interchange

Program (GAO/AIMD-94-17, Dec. 9, 1993).

Defense Transportation: Commercial Practices Offer Improvement

Opportunities (GAO/NSIAD-94-26, Nov. 26, 1993).

Defense Inventory: Applying Commercial Purchasing Practices Should

Help Reduce Supply Costs (GAO/NSIAD-93-112, Aug. 6, 1993).

Commercial Practices: DOD Could Save Millions by Reducing Maintenance

and Repair Inventories (GAO/NSIAD-93-155, Jun. 7, 1993).

DOD Food Inventory: Using Private Sector Practices Can Reduce Costs and

Eliminate Problems (GAO/NSIAD-93-110, Jun. 4, 1993).

Defense ADP: Corporate Information Management Must Overcome Major

Problems (GAO/IMTEC-92-77, Sep. 14, 1992).

DOD Medical Inventory: Reductions Can Be Made Through the Use of

Commercial Practices (GAO/NSIAD-92-58, Dec. 5, 1991).

Commercial Practices: Opportunities Exist to Reduce Aircraft Engine

Support Costs (GAO/NSIAD-91-240, Jun. 28, 1991).

Page 47 GAO/AIMD-95-110 Depot Maintenance Standard System
Related GAO Reports

Defense Logistics: Observations on Private Sector Efforts to Improve

Operations (GAO/NSIAD-91-240, Jun. 13, 1991).

(511276) Page 48 GAO/AIMD-95-110 Depot Maintenance Standard System
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