DOD Business Systems Modernization: Additional Enhancements Are Needed for Army Business System Schedule and Cost Estimates to Fully Meet Best Practices
Published: 2014-09-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: DOD officials have stated that the implementation of enterprise resource planning systems, such as GCSS-Army, is critical to the department's goal of correcting financial management deficiencies and ensuring that its financial statements are validated as audit ready by September 30, 2017, as called for by the National Defense Authorization Act for Fiscal Year 2010.
GAO was asked to review the schedule and cost estimates for selected DOD systems. This report addresses the extent to which the schedule and cost estimates for GCSS-Army were prepared consistent with GAO's Schedule and Cost Guides. The schedule and cost estimates are designed to cover GCSS-Army implementation through 2017.
GAO assessed the schedule and cost estimates that supported DOD's December 2012 full deployment decision, which granted approval for GCSS-Army to be deployed for operational use to all remaining locations. GAO also met with GCSS-Army program officials, including lead schedulers and cost estimators.
section_title: What GAO Found
paragraphs: The Army made some improvements to its schedule and cost estimates that supported the December 2012 full deployment decision for the Global Combat Support System-Army (GCSS-Army); however, the schedule and cost estimates did not fully meet best practices. GAO found that the schedule substantially met the credibility and control characteristics for developing a high-quality and reliable schedule. For example, the schedule was horizontally integrated, which means that it links products and outcomes with other associated sequenced activities. In addition, the GCSS-Army program management officials followed general guidelines for updating the schedule on a regular basis. GAO found that the schedule partially met the comprehensiveness and construction characteristics for a reliable schedule. Specifically, resources were not assigned to specific activities, and the schedule lacked a valid critical path, preventing management from focusing on the activities most likely to have detrimental effects on key program milestones if not completed as planned. By incorporating best practices for developing a reliable schedule, the Department of Defense (DOD) would increase the probability of completing the GCSS-Army program by the projected date.
GAO found that the GCSS-Army cost estimate fully or substantially met the comprehensiveness, documentation, and accuracy characteristics of a high-quality and reliable cost estimate. For example, the cost estimate included both government and contractor costs for the program over its life cycle, provided documentation that substantially described detailed calculations used to derive each element's cost, and was adjusted for inflation. In addition, GAO found that the cost estimate partially met the credibility characteristic of a reliable cost estimate. Although program management officials provided a cost model that discussed a limited risk analysis, the results of the risk and uncertainty analysis were not documented. Incorporating best practices would help ensure that DOD has a reliable cost estimate that provides the basis for effective resource allocation, proactive course correction when warranted, and accountability for results.
section_title: What GAO Recommends
paragraphs: GAO is making two recommendations aimed at improving the Army's implementation of schedule and cost best practices for GCSS-Army. DOD concurred, but the completed actions it described related to the cost estimate were not fully responsive to GAO's recommendation. GAO continues to believe that fully incorporating best practices in the cost estimate would help improve its reliability.

section_title: Letter
paragraphs: The Department of Defense (DOD) invests billions of dollars annually to  develop and implement enterprise resource planning (ERP) systems,  which it considers critical to transforming the department’s business  operations and addressing some of its long-standing weaknesses,  including those related to financial management and business systems  modernization. DOD officials have stated that the implementation of the  ERPs, such as the Global Combat Support System-Army (GCSS-Army),  is a key component to the department’s goal of correcting financial  management deficiencies and ensuring that its financial statements are  validated as audit ready by September 30, 2017, as called for by the  National Defense Authorization Act for Fiscal Year 2010. DOD’s  business systems modernization program has been on GAO’s high-risk  list since 1995 because of the size, complexity, and significance of the  related efforts.
In October 2010, we reported that the Army did not fully follow best  practices in developing a reliable schedule or cost estimate for GCSS- Army. Specifically, the Army had not developed a fully integrated master  schedule that reflected all activities, including government and contractor  activities. Having such a schedule is crucial to the Army’s ability to reliably  estimate the program completion date. Also, the Army did not perform a  sensitivity analysis for the cost estimate, which would have helped  decision makers in determining how changes to assumptions or key cost  drivers could affect the credibility of the cost estimate.
To support Congress’s continuing oversight of DOD’s progress in  implementing its ERP systems, you asked us to review the schedule and  cost estimates for selected DOD ERP systems. The objective of this  review was to determine the extent to which the schedule and cost  estimates for GCSS-Army were prepared consistent with GAO’s  Schedule and Cost Guides. We reviewed the most current GCSS-Army  schedule and cost estimates available at the time of our review, which  supported DOD’s December 2012 full deployment decision.
subsections: section_title: Scope and Methodology
paragraphs: We assessed the GCSS-Army schedule that supported DOD’s  December 2012 full deployment decision using the GAO Schedule Guide  to determine whether it was comprehensive, well-constructed, credible,  and controlled. To assess the schedule, we obtained and reviewed  documentation, including the integrated master plan, work breakdown  structure, and statement of work. To assess the program’s cost  estimate, we used the GAO Cost Guide to evaluate the GCSS-Army  Program Management Office’s estimating methodologies, assumptions,  and results to determine whether the cost estimate was comprehensive,  well-documented, accurate, and credible. We obtained and reviewed  documentation, including the program office estimate, software cost  model, independent cost estimate, and risk and uncertainty analysis.  We also met with key program officials, such as the program manager,  lead schedulers, and cost estimators to present the preliminary results of  our assessment of the program’s schedule and cost estimates best  practices and obtained explanations and clarifications.
We conducted this performance audit from October 2011 to September  2014 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit  to obtain sufficient, appropriate evidence to provide a reasonable basis  for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
section_title: Background
paragraphs: GCSS-Army was initiated in December 2003 and is intended to provide  all active Army, National Guard, and Army Reserve tactical units with the  capability to track supplies, spare parts, and organizational equipment.  The system is also intended to track unit maintenance, total cost of  ownership, and other financial transactions related to logistics for all Army  units—about 160,000 users. GCSS-Army is intended to integrate  approximately 40,000 local supply and logistics databases into a single,  enterprise-wide system. In December 2012, the Under Secretary of  Defense for Acquisition, Technology and Logistics granted full  deployment decision approval for GCSS-Army to be deployed to all  remaining locations beyond the limited fielding locations of the life-cycle  acquisition process. DOD officials reported that the GCSS-Army full  deployment will be completed by the fourth quarter of fiscal year 2017.  GCSS-Army program functionality is intended to be implemented across  the Army in two waves—the first is to include two releases and is to  provide supply (warehouse) and financial reporting capabilities, and the  second is to include one release, which is to provide property book and  maintenance capabilities. DOD has approved the funding for the Army to  proceed with the deployment of the GCSS-Army functionality to all  intended locations. This funding is approximately $3.7 billion. The Army  reported that it had spent about $1.6 billion as of June 30, 2014.
In October 2010, we reported that the Army did not fully follow best  practices in developing a reliable schedule and cost estimate for  implementing GCSS-Army. In particular, the Army had not developed a  fully integrated master schedule that reflected all government and  contractor activities and had not performed a sensitivity analysis for the  cost estimate. We recommended that the Army develop an integrated  master schedule that fully incorporated best practices, such as capturing  all activities, sequencing all activities, integrating activities horizontally  and vertically, establishing the critical path for all activities, and  conducting a schedule risk analysis. In addition, we recommended that  the Army update the cost estimate by using actual costs and preparing a  sensitivity analysis. DOD concurred with our recommendations, and this  report provides the status of the department’s efforts to address our prior  recommendations.
subsections: section_title: GAO’s Cost and Schedule Guides
paragraphs: In March 2009, we published the Cost Guide to address a gap in federal  guidance about processes, procedures, and practices needed to ensure  reliable cost estimates. The Cost Guide provides a consistent  methodology based on best practices that can be used across the federal  government to develop, manage, and evaluate capital program cost  estimates. The methodology is a compilation of characteristics and  associated best practices that federal cost estimating organizations and  industry use to develop and maintain reliable cost estimates throughout  the life of an acquisition program.
In May 2012, we issued an exposure draft of the Schedule Guide as a  companion to the Cost Guide. A consistent methodology for developing,  managing, and evaluating capital program cost estimates includes the  concept of scheduling the necessary work to a timeline, as discussed in  the Cost Guide. Simply put, schedule variances are usually followed by  cost variances. Because some program costs, such as labor, supervision,  rented equipment, and facilities, cost more if the program takes longer, a  reliable schedule can contribute to an understanding of the cost impact if  the program does not finish on time. In addition, management tends to  respond to schedule delays by adding more resources or authorizing  overtime. Further, a schedule risk analysis allows for program  management to account for the cost effects of schedule slippage when  developing the life-cycle cost estimate. A cost estimate cannot be  considered fully credible if it does not account for the cost effects of  schedule slippage.
section_title: GCSS-Army Program Schedule and Cost Estimates Did Not Fully Meet Best Practices
paragraphs: We found that the program schedule and cost estimates for the GCSS- Army did not fully meet best practices. Specifically, the GCSS-Army  schedule supporting the December 2012 full deployment decision partially  met the comprehensiveness and construction characteristics and  substantially met the credibility and control characteristics for developing  a high-quality and reliable schedule. In addition, the cost estimate fully  met the comprehensiveness characteristic, substantially met the  documentation and accuracy characteristics, and partially met the  credibility characteristic for developing a high-quality and reliable cost  estimate. It is important that the schedule and cost estimates are  continually updated throughout the program’s life cycle so that  management has the best information available to make decisions. By  incorporating best practices for developing reliable schedule and cost  estimates, DOD would increase the probability of GCSS-Army  successfully achieving full deployment by the fourth quarter of fiscal year  2017 to provide needed functionality for financial improvement and audit  readiness.
subsections: section_title: Program Schedule Did Not Fully Meet Best Practices
paragraphs: Our analysis found that the GCSS-Army program substantially met two  and partially met the other two characteristics of a reliable schedule  estimate and therefore did not provide the information needed to support  the December 2012 full deployment decision (see table 1). Appendix I  contains our detailed analysis of the GCSS-Army schedule estimate. The  success of any program depends on having a reliable schedule of the  program’s work activities that will occur, how long they will take, and how  the activities are related to one another. As such, the schedule not only  provides a road map for systematic execution of a program, but also  provides the means by which to gauge progress, identify and address  potential problems, and promote accountability.
Comprehensive. A schedule should reflect all activities as defined in the  program’s work breakdown structure, including activities to be performed  by the government and the contractor; the resources (e.g., labor,  materials, and overhead) needed to complete each activity; and how long  each activity will take.
We found that the GCSS-Army schedule partially met the comprehensive  characteristic. The schedule used to support the full deployment decision  reflected all activities to be performed by both the government and  contractor for the program. However, resources were not loaded into the  schedule software and were not assigned to specific activities in the  schedule. GCSS-Army program management officials told us that the  contractor used a separate system outside the schedule to manage the  resources needed for the program. Information on resource needs and  availability in each work period assists the program office in forecasting  the likelihood that activities will be completed as scheduled. If the current  schedule does not allow insight into the current or projected allocation of  resources, the risk of the program’s schedule slipping is significantly  increased. Our analysis also determined that activity durations were not  manageable and reasonably estimated in the schedule. We found that 30  percent of the remaining activities in the schedule exceeded the standard  best practice for activity duration, which should be shorter than  approximately 44 working days, or 2 working months. For example, audit  support activities had durations over 100 working days. Durations should  be as short as possible to facilitate the objective measurement of  accomplished effort. If activities are too long, the schedule may not have  enough detail for effective progress measurement and reporting.
Well-constructed. A schedule should be planned so that critical project  dates can be met. To meet this objective, all activities should be logically  sequenced—that is, listed in the order in which they are to be carried out.  In particular, activities that must finish prior to the start of other activities  (i.e., predecessor activities), as well as activities that cannot begin until  other activities are completed (i.e., successor activities), should be  identified and their relationships established. The schedule should identify  the project’s critical path. Establishing a valid critical path is necessary  for examining the effects of any activity slipping along this path. The  calculation of a critical path determines which activities drive the project’s  earliest completion date. The schedule should also identify total float so  that the schedule’s flexibility can be accurately determined.
We found that the GCSS-Army schedule was partially well-constructed.  The majority of logic used to sequence the activities within the schedule  was generally error free, clearly indicating to program management the  order of activities that must be accomplished. However, the schedule’s  critical path was not valid because it included level of effort activities and  date constraints. Level of effort activities, such as program  management, should not define the critical path because they are  nondiscrete support activities that do not produce a definite end product;  therefore, level of effort activities cannot determine the length of the  project. In addition, date constraints prevent the critical path from being a  continuous sequence of events from the current to finish dates of the  project. Rather than relying on such constraints, the schedule should use  logic and durations in order to reflect realistic start and completion dates  for activities. Successfully identifying the critical path relies on several  factors, such as capturing all activities; properly sequencing activities; and  assigning resources, which, as noted earlier, had not been completely  done. Without a valid critical path, management cannot focus on activities  that will have detrimental effects on the key project milestones and  deliverables if they slip. Further, our analysis found that 28 percent of  remaining schedule activities had more than 100 working days of total  float, meaning that those activities could slip almost 5 working months  and not affect the estimated finish date of the program. Based on the  remaining duration of the program, 100 working days of float would not  appear to be reasonable. The GCSS-Army Program Management Office  stated that total float was not reliable at the time of the full deployment  decision because the schedule was being updated to reflect a  modification to the system. Without accurate values of total float for a  program activity, management cannot determine the flexibility of tasks  and therefore cannot properly reallocate resources from tasks that can  safely slip to tasks that cannot slip without adversely affecting the  estimated program completion date.
Credible. A schedule should be horizontally and vertically integrated. A  horizontally integrated schedule links products and outcomes with other  associated sequenced activities, which helps verify that activities are  arranged in the right order to achieve aggregated products or outcomes.  A vertically integrated schedule ensures that the start and completion  dates for activities are aligned with such dates on subsidiary schedules  supporting tasks and subtasks. A schedule risk analysis should also be  performed using statistical techniques to predict the level of confidence in  meeting a program’s completion date.
We found that the GCSS-Army schedule was substantially credible. The  schedule was substantially horizontally integrated, which means that  outcomes were aligned with sequenced activities. The schedule was also  substantially vertically integrated; we were able to trace varying levels of  activities and supporting subactivities. Such mapping or alignment among  subsidiary schedules enables different groups—such as government  teams and contractors—to work to the same master schedule, and  provides assurance that the representation of the schedule to different  audiences is consistent and accurate. However, our analysis found that a  schedule risk analysis had not been fully conducted. GCSS-Army  program management officials provided documentation for a schedule  risk analysis, but we noted that risk analyses were not performed for all  supporting activities because program management officials stated that  the program fielding schedule was not finalized at the time of the full  deployment decision. If a schedule risk analysis is not conducted,  program management cannot determine (1) the likelihood that the project  completion date will occur, (2) how much schedule risk contingency is  needed to provide an acceptable level of certainty for completion by a  specific date, (3) risks most likely to delay the project, (4) how much  contingency reserve each risk requires, and (5) the activities that are  most likely to delay the project.
Controlled. A schedule should be continually updated using logic,  durations, and actual progress to realistically forecast dates for program  activities. A schedule narrative should accompany the updated schedule  to provide decision makers and auditors a log of changes and their effect,  if any, on the schedule time frame. The schedule should be analyzed  continually for variances to determine when forecasted completion dates  differ from planned dates. This analysis is especially important for those  variations that affect activities identified as being in a program’s critical  path and that can affect a scheduled completion date. A baseline  schedule should be used to manage the program scope, the time period  for accomplishing it, and the required resources.
We found that the GCSS-Army schedule was substantially controlled.  GCSS-Army program management officials stated that they met weekly  to discuss proposed schedule changes and update the schedule’s  progress, and management also prepared a schedule narrative document  that contained a list of custom fields and assumptions. In addition, we  found no anomalies throughout the schedule (e.g., activities with planned  start dates scheduled to occur in the past and activities with actual finish  dates scheduled to occur in the future). However, we found that there was  not a documented baseline schedule to measure program performance  against, which would allow management to monitor any schedule  variances that affect the completion of work. Without a formally  established baseline schedule to measure performance against,  management cannot identify or mitigate the effect of unfavorable  performance.
In our October 2010 report, we recommended that the Army develop an  integrated master schedule that fully incorporated best practices, such as  capturing all activities, sequencing all activities, integrating activities  horizontally and vertically, establishing the critical path for all activities,  and conducting a schedule risk analysis. The Army’s December 2012  GCSS-Army schedule used to support the full deployment decision  addressed several of the best practices that were an issue in our prior  report, including capturing all activities, sequencing all activities, and  integrating activities horizontally and vertically. However, as discussed,  we continued to identify several best practices that were not yet fully  addressed and also identified several new areas where the 2012  schedule did not incorporate best practices, such as activity durations and  baseline schedule. Although GCSS-Army is in full deployment, without  fully addressing best practices for scheduling, program managers will not  have the best information available to make decisions related to issues  such as the sequencing of activities and the flexibility of the schedule  according to available resources.
section_title: Program Cost Estimate Did Not Fully Meet Best Practices
paragraphs: We found that the GCSS-Army program fully met one, substantially met  two, and partially met one of the characteristics of a reliable cost estimate  and therefore did not provide the information needed to support the full  deployment decision, as shown in table 2. Appendix II contains our  detailed analysis of the GCSS-Army cost estimate. A reliable cost  estimate is critical to the success of any program and is updated  continually throughout its life cycle. Such an estimate provides the basis  for informed investment decision making, realistic budget formulation and  program resourcing, meaningful progress measurement, proactive course  correction when warranted, and accountability for results.
Comprehensive. A cost estimate should include costs of the program over  its full life cycle, provide a level of detail appropriate to ensure that cost  elements are neither omitted nor double-counted, and document all cost- influencing ground rules and assumptions. The cost estimate should also  completely define the program and be technically reasonable.
We found that the cost estimate for GCSS-Army was fully  comprehensive. The cost estimate included both government and  contractor costs of the program over its life cycle—from the inception of  the program through design, development, deployment, and operation  and maintenance. The cost estimate also included an appropriate level of  detail, which provided assurance that cost elements were neither omitted  nor double-counted, and included documentation of all cost-influencing  ground rules and assumptions. The cost estimate documentation included  the purpose of the cost estimate, a technical description of the program,  and technical risks (e.g., the resolution for any identified deficiencies).
Well-documented. A cost estimate should be supported by detailed  documentation that describes how it was derived and how the expected  funding will be spent in order to achieve a given objective. The  documentation should capture such things as the source data used, the  calculations performed, the results of the calculations, the estimating  methodology used to derive each work breakdown structure element’s  cost, and evidence that the estimate was approved by management. The  documentation should discuss the technical baseline description, and the  data in the technical baseline should be consistent with the cost estimate.
We found that the cost estimate for GCSS-Army was substantially well- documented. The cost estimate captured such things as the calculations  performed to derive each element’s cost and the results of the  calculations. The documentation also included a technical baseline  description that provided data consistent with the cost estimate. Further,  the GCSS-Army Program Management Office presented evidence of  receiving approval of the estimate through briefings to management.  Although program management officials did not provide us with written  documentation of the source data, the Office of the Deputy Assistant  Secretary of the Army for Cost and Economics (DASA-CE) did provide us  with a full deployment decision briefing, which showed each major cost  element and listed the methodology and sources of the data. However,  the briefing documents included a limited amount of the actual source  data, and we could not determine their reliability. Without sufficient  background information about the source data and reliability of the data,  the GCSS-Army cost estimator cannot know with any confidence whether  the data collected can be used directly or need to be modified before use  in the cost estimate.
Accurate. A cost estimate should provide for results that are unbiased,  are not overly conservative or optimistic, and contain no major mistakes.  A cost estimate should be based on an assessment of most likely costs  (adjusted properly for inflation), updated to reflect significant changes and  grounded in a historical record of cost estimating and actual experiences  on other comparable programs. In addition, variances between planned  and actual costs should be documented, explained, and reviewed, and  estimating techniques for each cost element should be used  appropriately.
We found that the cost estimate for GCSS-Army was substantially  accurate. The GCSS-Army cost model detailed the inflation indexes and  properly applied the indexes to each relevant cost element and included  time phasing of the costs. The GCSS-Army cost model did not include  any major mistakes, and all its cost elements summed up properly and  were consistent with the cost estimate. In addition, the estimating  techniques (i.e., engineering build-up) used to create the estimate were  used appropriately. The cost model documentation did not explain  whether the cost estimate was updated to reflect changes in technical or  program assumptions. The program management officials provided  documentation that reflected the technical changes for the major  deployment decisions, but the documentation did not include details on  how the costs were updated. Unless such documentation is available to  verify that the cost estimate is properly updated on a regular basis,  management will not have reasonable assurance that the cost estimate  provides accurate information to make informed decisions about the  program.
Credible. A cost estimate should discuss any limitations of the analysis  because of uncertainty or biases surrounding data or assumptions. The  cost estimate should include a sensitivity analysis that identifies a range  of possible costs based on varying major assumptions and data. A risk  and uncertainty analysis should be conducted to determine the level of  risk associated with the cost estimate and identify the effects of changing  key cost driver assumptions and factors. In addition, the estimate’s results  should be cross-checked and reconciled to an independent cost estimate  to determine whether other estimating methods produce similar results.
We found that the cost estimate was partially credible. The Army Cost  Review Board developed an independent cost estimate that was  reconciled to the program management officials’ cost estimate. The  program management officials’ cost estimate mentioned results of a risk  analysis; however the risk and uncertainty analysis was not documented.  Further, since the cost estimate that was provided discussed risk only at a  summary level, it is unclear how management considered risk related to  the program. Without a fully documented risk and uncertainty analysis,  the estimate will lose credibility and management’s decision-making  ability will be impaired because it will not know the level of confidence  associated with achieving the cost estimate. In addition, program  management officials provided a cost estimate that identified major cost  drivers, including system deployment and training. The cost estimate  documentation contained a reference that a sensitivity analysis was  completed on these cost drivers, but results of this analysis were not  documented. As a result, the GCSS-Army cost estimator will not have a  clear understanding of how each major cost driver is affected by a change  in a single assumption and thus which cost driver most affects the cost  estimate. Further, GCSS-Army program officials provided us with one  example of evidence that indicated that some cross-checking was  performed using cost models; however, the results of this cross-checking  were not documented. The purpose of cross-checking is to determine  whether alternative methods would produce similar results, which would  increase the credibility of the estimate.
In our October 2010 report, we recommended that the Army update the  GCSS-Army cost estimate by using actual costs and preparing a  sensitivity analysis. For the 2012 cost estimate, we found that the Army  had made progress, but we continued to identify deficiencies in  documentation related to the sensitivity analysis, risk and uncertainty  analysis, and cross-checking of major cost elements for reasonableness.
section_title: Conclusions
paragraphs: While the Army made some improvements to the schedule and cost  estimates that supported the full deployment decision, the Army did not  fully meet best practices in developing schedule and cost estimates for  the GCSS-Army program. The Army made progress in incorporating  schedule best practices, such as capturing and sequencing all activities  and integrating activities horizontally and vertically, but we identified other  deficiencies in schedule and cost best practices. For example, GCSS- Army did not meet best practices related to schedule durations, a valid  critical path, and a cost sensitivity analysis. It is critical to correct the  deficiencies identified with the schedule and cost estimates to help  ensure that the projected spending for this program is being used in the  most efficient and effective manner. By incorporating best practices for  developing reliable schedule and cost estimates, DOD would increase the  probability of GCSS-Army successfully achieving full deployment by the  fourth quarter of fiscal year 2017 to provide needed functionality for  financial improvement and audit readiness.
section_title: Recommendations for Executive Action
paragraphs: To help improve the implementation of GCSS-Army, we recommend that  the Secretary of the Army take the following two actions:
Ensure that the Under Secretary of the Army, in his capacity as the  Chief Management Officer, directs the GCSS-Army Program  Management Office to develop an updated schedule that fully  incorporates best practices, including assigning resources to all activities, establishing durations of all activities, confirming that the critical path is valid, and ensuring reasonable total float.
Ensure that the Under Secretary of the Army, in his capacity as the  Chief Management Officer, directs the GCSS-Army Program  Management Office to update the cost estimate to fully incorporate  best practices by documenting the results of a risk and uncertainty analysis, the cross-checking of major cost elements to see if results are  similar, and a sensitivity analysis.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOD for review and comment. In its  written comments, reprinted in appendix III, DOD concurred with our  recommendation to update the schedule to fully incorporate best  practices and described planned and ongoing actions that the department  is taking to address the recommendation. In particular, DOD indicated  that the Army has taken steps to help ensure that (1) all activities are  assigned resources in the schedule software, (2) all schedule activities  with long durations have been detailed, (3) level of effort activities and  date constraints have been removed from the schedule so that they do  not define the critical path, and (4) the majority of the schedule activities  associated with high total float have been removed. If effectively  implemented, these actions should address the intent of our  recommendation.
DOD also concurred with our recommendation to update the cost  estimate to fully incorporate best practices by documenting the results of  a risk and uncertainty analysis, the cross-checking of major cost elements  to see if results are similar, and a sensitivity analysis. DOD described  completed actions that the department has taken to address the  recommendation. DOD stated that GCSS-Army achieved Milestone C in  August 2011 and a full deployment decision in December 2012, and that  it prepared a cost estimate per DOD acquisition rules and guidelines.  DOD also stated that the Army (1) followed all Army directed best  practices and approvals from the Office of the Deputy Assistant Secretary  of the Army for Cost and Economics and (2) prepared a sensitivity  analysis, a risk analysis, and cross-checked major cost elements for  similar results, but that those documented analyses and results were not  included in the formal cost estimates as directed by the Army. DOD  commented that these documented analyses and results are part of the  formal working papers and were provided to GAO in February 2013.
However, these actions do not fully address the intent of our  recommendation. As stated in our report, we focused on the extent to  which GCSS-Army’s schedule and cost estimates were prepared  consistent with GAO’s Schedule and Cost Guides. We reviewed the cost  estimate documentation provided by the Army in February 2013 and  additional information provided in February 2014 and determined that the  documentation did not fully meet best practices for a risk and uncertainty  analysis, a sensitivity analysis, and cross-checking of major cost  elements for similar results. As stated in our report, GCSS-Army program  management officials provided a cost estimate that mentioned the results  of a risk and uncertainty analysis, and contained a reference that a  sensitivity analysis was completed.  Also, GCSS-Army program  management officials provided us with one example of evidence that  indicated some cross-checking was performed using cost models.  However, the results of the risk and uncertainty and sensitivity analyses,  as well as the cross-checking were not documented consistent with best  practices. As stated in our report, incorporating best practices for a  reliable cost estimate would help ensure that DOD has a reliable cost  estimate that provides the basis for effective resource allocation,  proactive course correction when warranted, and accountability for  results.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees; the Secretary of Defense; the Secretary of the  Army; the Assistant Secretary of Defense (Acquisition); the Acting Deputy  Chief Management Officer; the Under Secretary of Defense (Comptroller);  the Under Secretary of the Army, in his capacity as the Chief  Management Officer of the Army; and the Program Manager for GCSS- Army. In addition, the report will be available at no charge on the GAO  website at http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  Asif A. Khan at (202) 512-9869 or khana@gao.gov or Nabajyoti Barkakati  at (202) 512-4499 or barkakatin@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff members who made key contributions to  this report are listed in appendix IV.
section_title: Appendix I: Assessment of the Global Combat Support System-Army Program’s Schedule Estimate
paragraphs: This appendix provides the results of our analysis of the extent to which  the Global Combat Support System-Army schedule supporting the  December 2012 full deployment decision met the characteristics of a  high-quality, reliable schedule. Table 3 provides the detailed results of our  analysis.
GAO’s methodology includes five levels of compliance with its best  practices. “Not met” means the program provided no evidence that  satisfies any of the criterion. “Minimally met” means the program provided  evidence that satisfies a small portion of the criterion. “Partially met”  means the program provided evidence that satisfies about half of the  criterion. “Substantially met” means the program provided evidence that  satisfies a large portion of the criterion. “Fully met” means the program  provided evidence that completely satisfies the criterion.
section_title: Appendix II: Assessment of the Global Combat Support System-Army Program’s Cost Estimate
paragraphs: This appendix provides the results of our analysis of the extent to which  the Global Combat Support System-Army cost estimate supporting the  December 2012 full deployment decision met the characteristics of a  high-quality cost estimate. Table 4 provides the detailed results of our  analysis.
GAO’s methodology includes five levels of compliance with its best  practices. “Not met” means the program provided no evidence that  satisfies any of the criterion. “Minimally met” means the program provided  evidence that satisfies a small portion of the criterion. “Partially met”  means the program provided evidence that satisfies about half of the  criterion. “Substantially met” means the program provided evidence that  satisfies a large portion of the criterion. “Fully met” means the program  provided evidence that completely satisfies the criterion.
section_title: Appendix III: Comments from the Department of Defense
section_title: Appendix IV: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: In addition to the contacts named above, Arkelga Braxton (Assistant  Director), Karen Richey (Assistant Director), Beatrice Alff, Tisha  Derricotte, Jennifer Echard, Emile Ettedgui, Patrick Frey, and Jason Lee  made key contributions to this report.