DOD Business Systems Modernization: Air Force Business System Schedule and Cost Estimates
Published: 2014-02-07T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Defense (DOD) has stated that the development and implementation of DEAMS is critical to the department's goal of producing auditable financial statements by September 2017. In October 2010, GAO reported that although the Air Force had developed a cost estimate that met best practices, it had not developed a schedule that met best practices for implementing DEAMS. GAO has published guides that identify the characteristics and associated best practices for developing reliable schedule and cost estimates. GAO was asked to review the schedule and cost estimates for selected DOD systems. This report addresses the extent to which the current schedule and cost estimates for DEAMS were prepared in accordance with GAO's Schedule and Cost Guides.
Specifically, GAO's review focused on the schedule and cost estimates that supported DOD's February 2012 Milestone B decision, which determined that investment in DEAMS was justified. GAO assessed the schedule and cost estimates and supporting documentation. GAO also assessed an updated schedule dated October 2012. GAO interviewed DEAMS program officials, lead schedulers, and cost estimators.
section_title: What GAO Found
paragraphs: The Air Force's schedule that supported the February 2012 Milestone B decision for the Defense Enterprise Accounting and Management System (DEAMS) did not meet best practices. The cost estimate did meet best practices, but the issues associated with the schedule could negatively affect the cost estimate. GAO found that the schedule supporting the Air Force's decision to invest in DEAMS partially or minimally met the four characteristics for developing a high-quality and reliable schedule. For example, the schedule did not reflect all government and contractor activities, and resources were not assigned to specific activities. The schedule also lacked a valid critical path, preventing management from focusing on the activities most likely to cause critical program delays if they are not completed as planned. In addition, a schedule risk analysis was not conducted to predict a level of confidence in meeting the program's completion date.
GAO found that the October 2012 updated schedule estimate was not comprehensive, well-constructed, and credible, and contained weaknesses similar to those found in the previous schedule. In May 2013, program officials provided a third schedule that they said contained some improvements but acknowledged that issues remained that prevented the schedule from meeting best practices.
GAO found that the DEAMS cost estimate fully or substantially met the four 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 and provided for an independent assessment and reconciliation. Because the cost estimate relies on dates derived from the schedule and GAO is questioning the reliability of the schedule, the credibility of the cost estimate could be affected.
section_title: What GAO Recommends
paragraphs: GAO recommends that the Secretary of the Air Force update the cost estimate as necessary after implementing GAO's prior recommendation to adopt scheduling best practices. DOD concurred with the recommendation.

section_title: Letter
paragraphs: The Department of Defense (DOD) invests billions of dollars 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 has stated that the development and implementation of the Air  Force’s Defense Enterprise Accounting and Management System  (DEAMS) is critical to the department’s goal of producing auditable  financial statements by September 2017, as called for by the National  Defense Authorization Act for Fiscal Year 2010.
In October 2010, we reported that although the Air Force met best  practices in developing a cost estimate, it did not meet best practices in  developing the schedule estimate for implementing DEAMS. Having  such a schedule is crucial to the Air Force’s ability to reliably estimate the  program completion date.
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 current schedule and  cost estimates for DEAMS were prepared in accordance with GAO’s  Schedule and Cost Guides. We reviewed the most current schedule and  cost estimates that supported DOD’s February 2012 Milestone B  decision, which determined that investment in DEAMS was justified.
subsections: section_title: Scope and Methodology
paragraphs: We assessed the DEAMS schedule 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 and work breakdown  structure. In assessing the program’s cost estimate, we used the GAO  Cost Guide to evaluate the DEAMS 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 interviewed key program  officials, such as the Program Manager, lead schedulers, and cost  estimators, to obtain information, such as explanations to resolve  identified discrepancies.
After we briefed DEAMS program officials on the results of our  assessment, they provided an updated schedule dated October 2012. For  this updated schedule, we determined the extent to which it met certain  best practices for the comprehensive, well-constructed, and credible  characteristics, because not implementing these best practices would  affect the reliability of the entire schedule. In May 2013, program  management officials provided another updated DEAMS schedule, which  they acknowledged contained issues that prevented the schedule from  meeting best practices. Although we did not independently assess the  May 2013 schedule, we did confirm that it included certain information  needed for long-term planning.
We conducted this performance audit from May 2012 to February 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: DEAMS was initiated in August 2003 and is intended to provide the Air  Force with the entire spectrum of financial management capabilities,  including collections, commitments and obligations, cost accounting,  general ledger, funds control, receipt and acceptance, accounts payable  and disbursement, billing, and financial reporting for the general fund. In  February 2012, the DOD Deputy Chief Management Officer granted  Milestone B approval for DEAMS to enter the Engineering Development  Phase of the acquisition life cycle, which is considered the official start of  the program. DEAMS program functionality is intended to be implemented  across the Air Force in a series of releases in two increments—Increment  1 will include six releases and Increment 2 will include two releases.  DOD has approved the funding for the Air Force to proceed with the  acquisition of the functionality for the first increment of DEAMS. This  funding is approximately $1.6 billion, with deployment scheduled to occur  during the fourth quarter of fiscal year 2016. The Air Force reported that it  had spent about $427.5 million as of September 30, 2013, on the  program.
As stated earlier, in October 2010, we reported that although the Air  Force met best practices in developing a cost estimate, it did not meet  best practices in developing the schedule estimate for implementing  DEAMS. In particular, the Air Force had not developed a fully integrated  master schedule that reflected all government and contractor activities.  We recommended that the Air Force 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, identifying float  between activities, conducting a schedule risk analysis, and updating  the schedule using logic and durations to determine dates. DOD  concurred with our recommendation, and we discuss later in this report  the status of DOD’s efforts to address this recommendation.
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 for  ensuring 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 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.
A well-planned schedule is a fundamental management tool that can help  government programs use public funds effectively by specifying when  work will be performed in the future and measuring program performance  against an approved plan. Moreover, as a model of time, an integrated  and reliable schedule can show when major events are expected to occur  as well as the completion dates for all activities leading up to them, which  can help determine if the program’s parameters are realistic and  achievable. A program’s success depends in part on the quality of its  schedule.
section_title: DEAMS Program Schedule Did Not Meet Best Practices, but the Cost Estimate Did Meet Best Practices
paragraphs: We found that the schedule for the DEAMS program did not meet best  practices. The cost estimate did meet best practices, but the issues  associated with the schedule could negatively affect the cost estimate.  Specifically, the DEAMS schedule supporting the February 2012  Milestone B decision partially or minimally met the four characteristics for  developing a high-quality and reliable schedule—it was not  comprehensive, well-constructed, credible, or controlled. In addition, our  assessment of the October 2012 updated schedule found that it was not  comprehensive, well-constructed, and credible and thus was also not  reliable. In contrast, the DEAMS cost estimate fully or substantially met  the four characteristics of a high-quality and reliable cost estimate—it was  comprehensive, well-documented, accurate, and credible. However,  because the cost estimate is based on the schedule, the unreliability of  the schedule could affect the cost estimate. For example, if there are  schedule slippages, the costs for the program could be greater than  currently estimated.
subsections: section_title: Program Schedule Was Not Developed in Accordance with Best Practices
paragraphs: Our analysis found that the DEAMS program partially met three and  minimally met one of the characteristics of a reliable schedule estimate  and therefore did not provide the information needed to support the  February 2012 Milestone B decision (see table 1). Appendix I contains  our detailed analysis of the DEAMS 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 roadmap 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 do the work; and how long each  activity will take.
We found that the schedule used to support the Milestone B decision  included the activities to be performed by both the government and  contractor for Releases 1 through 3 of Increment 1. However, the  schedule did not reflect activities to be performed for Releases 4 through  6 of Increment 1 and for Releases 1 and 2 of Increment 2. The DEAMS  Program Manager stated that a comprehensive schedule for Increment 1  that included the activities for all six releases would not be completed until  mid-2014. The Program Manager also stated that Increment 2 had not  been included because program officials did not know the detailed  activities to be performed that far in advance. To address this issue, the  DEAMS program office developed a roadmap depicting Releases 1  through 6 of Increment 1 and Releases 1 and 2 of Increment 2 with a full  deployment date of fiscal year 2017. However, the program office did  not provide a schedule that supported the estimated dates in the  roadmap.
A comprehensive schedule should reflect all of a program’s activities and  recognize that uncertainties and unknown factors in schedule estimates  can stem from, among other things, data limitations. As such, a schedule  incorporates different levels of detail depending on the information  available at any point in time. That is, near-term effort will be planned in  greater detail than long-term effort. Effort beyond the near term that is  less well defined is represented within the schedule as long-term planning  packages. Planning packages are a summarization of the work to be  performed in the distant future with less specificity. Planning packages  are planned at higher levels such that a single activity may represent  several months of effort, generic work to be accomplished, or even a  future contract or phase. Planning packages can be used as long as they  are defined and estimated as well as possible. By not including all work  for all deliverables for both increments and all releases, the DEAMS  program could incur difficulties resulting from an incomplete  understanding of the plan and what constitutes a successful conclusion  for the program. DEAMS program officials provided a draft of the  Schedule Management Plan that documented their intent to use a  planning package approach when updating the DEAMS schedule in the  future.
Resources were identified in the schedule; however, the resources were  not assigned to specific activities in the schedule. Although our analysis  determined that activity durations were manageable and reasonably  estimated, resource availability affects estimates of work and its duration,  as well as resources that will be available for subsequent activities.  DEAMS program management officials told us that government resource  allocations are determined by management as needed. These officials  told us that management does not necessarily take into consideration the  resource information captured in the schedule when determining resource  allocations. However, DEAMS officials did not provide any documentation  that specific resources were being mapped to the schedule. As  mentioned above, the estimates of work required and duration for an  activity are tied to the availability of resources; therefore, the lack of such  information could hinder management’s ability to compute total labor and  equipment hours, calculate total project and per-period cost, resolve  resource conflicts, and establish the reasonableness of the plan.
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 establishment of a  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 majority of logic used to sequence the activities within  the schedule was generally error-free with a minimal use of lags, clearly  indicating to program management the order of activities that must be  accomplished. Although we found few missing logic relationships for  Release 3 of Increment 1, approximately 25 percent of the remaining  activities for Releases 1 and 2 of Increment 1 were missing logic  relationships. Because interdependencies among activities were not  identified, the DEAMS program management officials’ ability to properly  calculate dates and predict changes in the future is impaired. We found a  significant number of constraints for activities throughout the schedule.  A schedule is intended to be a dynamic, proactive planning and risk  mitigation tool that models the program and can be used to track progress  toward important milestones. Schedules with constrained dates can  portray an artificial or unrealistic view of the project. Constraints should be  minimized because they can create false dates in a schedule.
Further, the schedule did not have a valid critical path and identified  critical activities more by their constraints than by logic. Rather than  relying on 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 done. Without a valid  critical path, management cannot focus on activities that will have  detrimental effects on the key project milestones and deliveries if they  slip.
We found that total float was not reasonable, and that in some instances  unreasonable float was a direct result of improper sequencing or missing  logic. Releases 1 and 2 of Increment 1 showed that 25 percent of  program activities had total float equal to or greater than 392 working  days, meaning that those activities could slip almost 2 working years and  not affect the end date of the program. Without knowledge of the reason  float exists 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. 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. 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 Release 3 of Increment 1 exhibited horizontal integration,  but Releases 1 and 2 of Increment 1 did not because date constraints  prevented forecasted dates from being calculated realistically for future  activities. If the schedule lacks horizontal integration, activities whose  durations are greatly extended will have no effect on key milestones  reflected in the schedule. We further found that Releases 1 and 2 of  Increment 1 did not demonstrate vertical integration. For example, we  found instances where the start dates for the same activities differed by 1  day, 1 week, and 1 month between the government and contractor  schedules. Unless the schedule is vertically integrated, lower-level  schedules will not be consistent with upper-level schedule milestones,  affecting the integrity of the entire schedule and the ability of different  teams to work to the same schedule expectations.
DEAMS program management officials stated that a schedule risk  analysis had not been conducted because the schedule had not been  approved to be used as a baseline schedule—the target schedule against  which program performance can be measured, monitored, and reported.  These officials stated that although this analysis had not been conducted,  they were collecting best-case and worst-case durations from the  contractor with their periodic schedule delivery. These data can be used  by program management to calculate more reliable estimates of durations  for future activities. However, we found that the schedule did not contain  best- or worst-case duration data for 600 of 605 detailed activities. For the  five instances where duration data were contained in the schedule, we  determined that four were questionable because two activities were  already completed and two had already exceeded the worst-case  estimate. If a schedule risk analysis is not conducted, program  management cannot determine the likelihood of the project’s completion  date, how much schedule risk contingency is needed to provide an  acceptable level of certainty for completion by a specific date, risks most  likely to delay the project, how much contingency reserve each risk  requires, and the paths or activities that are most likely to delay the  project. As discussed later, the lack of a schedule risk analysis can affect  the credibility of the cost estimate.
Controlled. A schedule should be continuously 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  continuously 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 DEAMS program management met weekly to discuss  proposed schedule changes and updated the schedule’s progress.  However, a schedule narrative was not prepared by DEAMS program  management. In addition, we found a number of date anomalies  throughout the schedule, including activities with planned start dates  scheduled to occur in the past and activities with actual finish dates  scheduled to occur in the future. We also found a number of out-of- sequence activities in the schedule—activities that started before their  predecessors finished, in contradiction to the planned sequence. If the  schedule is not continually monitored to determine when forecasted  completion dates differ from planned dates, then it cannot be used to  determine whether schedule variances will affect work needed to be  accomplished at a future date.
We also found that there was no baseline schedule that could be used to  measure program performance. DEAMS program management officials  did maintain a schedule narrative document that contained a list of  custom fields and assumptions; however, the document did not explain  ground rules and assumptions, justifications for logic, and other unique  features of the schedule. These officials stated that other process  documents were being developed. Without a formally established  baseline schedule to measure performance against, management cannot  identify or mitigate the effect of unfavorable performance.
section_title: Updated Schedule Also Did Not Follow Best Practices
paragraphs: Our assessment of the updated schedule dated October 2012 found that  it was not comprehensive, well-constructed and credible. Although the  DEAMS Program Manager stated that the government and contractor  activities for Releases 1 through 3 of Increment 1 had been integrated in  the October 2012 schedule, this schedule was not comprehensive.  Specifically, it excluded activities for both the government and contractor  related to Releases 4 through 6 of Increment 1 and Releases 1 and 2 of  Increment 2. If activities are missing from the schedule, then other best  practices will not be met. The schedule was also missing relationships for  a significant number of the remaining milestones and activities. In  addition, the October 2012 schedule included a significant number of date  constraints with little or no justification for their use in the schedule.  Similar to the previous schedule, the updated schedule presented  unreasonable float throughout and did not include a schedule risk  analysis. As a result of these shortcomings, the updated schedule was  not reliable. Further, program officials could not rely on this schedule as a  baseline to effectively manage and monitor program performance.
In May 2013, program management officials provided another updated  DEAMS schedule that they stated included some improvements, but they  acknowledged that it contained issues that prevented the schedule from  meeting best practices. For example, these officials stated that the May  2013 schedule included long-term planning packages for activities related  to Releases 4 through 6 of Increment 1 and Releases 1 and 2 of  Increment 2, integrated government and contractor activities, and  reduced the number of constraints and out-of-sequence activities in the  schedule. However, the officials acknowledged that several outstanding  issues remained related to, for example, vertical and horizontal  integration, missing logic relationships, and the lack of a schedule risk  analysis. Although we did not independently assess the May 2013  schedule to determine whether it met the four schedule characteristics,  we did confirm that it included long-term planning packages, which are  needed to create a complete picture of the program from start to finish  and to allow the monitoring of a program’s critical path. The results of our  analyses of the schedule that supported the February 2012 Milestone B  decision and October 2012 DEAMS schedule reflect similar weaknesses  to those we reported in October 2010. Therefore, given the findings of  this review, our prior recommendation for improving the DEAMS schedule  remains valid.
section_title: Program Cost Estimate Met Best Practices
paragraphs: We found that the DEAMS program fully or substantially met the four  characteristics of a reliable cost estimate to support the Milestone B  decision, as shown in table 2. However, because the cost estimate relies  on dates derived from the schedule and we are questioning the reliability  of the forecasted program dates, the credibility of the cost estimate can  be affected. Appendix II contains our detailed analysis of the DEAMS cost  estimate. A reliable cost estimate is critical to the success of any  program. 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 DEAMS was 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—as  outlined in the roadmap prepared by program officials. As stated earlier,  the roadmap provided an overall summary of the program’s key phases  (increments and releases) and the expected milestones for completion.  The cost estimate also included an appropriate level of detail, which  provided assurance that cost elements were neither omitted nor  duplicated, 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. Therefore, 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.
We found that the cost estimate for DEAMS was well-documented. The  cost estimate captured such things as the source data used, the  calculations performed and the results of the calculations, and the  rationale for choosing a particular estimating methodology. This  information was captured in such a way that the data used to derive the  estimate can be traced back to, and verified against, the sources so that  the estimate can be easily replicated. However, there was no discussion  of efforts taken, if any, to ensure the reliability of the data used. The  DEAMS Program Management Office presented evidence of receiving  approval of the estimate through briefings to management.
Accurate. 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.
We found that the cost estimate for DEAMS was accurate. The cost  estimate provided results that were substantially unbiased, and the cost  model detailed the calculations and inflation indexes underlying the  estimate. Calculations within the model could be traced back to  supporting documentation. The cost estimate was updated regularly to  reflect significant changes in the program and updated annually to  incorporate actual costs expended in prior fiscal years. Further, the cost  estimate was based on historical data. However, the cost estimate did not  discuss variances between planned and actual costs, which would enable  estimators to assess how well they are estimating program costs and to  identify lessons learned.
Credible. A cost estimate should discuss any limitations of the analysis  because of uncertainty or biases surrounding data or assumptions. 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 credible. The DEAMS Program  Management Office conducted a risk and uncertainty analysis by  identifying the cost elements with the greatest degree of uncertainty,  determining the cost drivers for the program, and identifying the impact of  changing major ground rules and cost driver assumptions. An  independent cost estimate developed by the Air Force Cost Analysis  Agency was reconciled to the program’s estimate. However, a sensitivity  analysis was not completed for each of the major cost drivers. As a result,  the 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  scenario most affects the cost estimate. Further, as discussed previously,  because a schedule risk analysis was not performed as required by best  practices, the cost estimate does not include a contingency amount to  account for any schedule slippage that could occur. To the extent that a  schedule slippage does occur, there could ultimately be an impact on the  cost estimate.
section_title: Conclusions
paragraphs: The Air Force did not meet best practices in developing a schedule for the  DEAMS program. As a result, this raises questions about the credibility of  the deadline for acquiring and implementing DEAMS to provide needed  functionality for financial improvement and audit readiness. Because of  these questions, the cost estimate, while following best practices, may not  fully capture all costs associated with the program, particularly if there is  significant schedule slippage. Moreover, Air Force management did not  have a reliable schedule estimate when making its decision to invest in  the DEAMS program. It is critical to correct the deficiencies identified with  the schedule estimate to help ensure that the projected spending for this  program is being used in the most efficient and effective manner.
section_title: Recommendation for Executive Action
paragraphs: To help provide for the successful implementation of DEAMS, we  recommend that the Secretary of the Air Force direct the Under Secretary  of the Air Force, in his capacity as the Chief Management Officer, to  consider and make any necessary adjustments to the DEAMS cost  estimate after addressing our prior recommendation to adopt scheduling  best practices.
section_title: Agency Comments
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. DOD also provided a technical comment, which we  incorporated.
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  Air Force; the Assistant Secretary of Defense (Acquisition); the Deputy  Chief Management Officer; the Under Secretary of Defense (Comptroller);  the Under Secretary of the Air Force, in his capacity as the Chief  Management Officer of the Air Force; and the Program Manager for  DEAMS. 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 Defense Enterprise Accounting and Management System Program’s Schedule Estimate
paragraphs: This appendix provides the results of our analysis of the extent to which  the Defense Enterprise Accounting and Management System (DEAMS)  schedule estimate supporting the February 2012 Milestone B 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 Defense Enterprise Accounting and Management System Program’s Cost Estimate
paragraphs: This appendix provides the results of our analysis of the extent to which  the Defense Enterprise Accounting and Management System (DEAMS)  cost estimate supporting the February 2012 Milestone B 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, Cynthia Jackson (Director),  Karen Richey (Assistant Director), Beatrice Alff, Jennifer Echard, Patrick  Frey, and Jason Lee made key contributions to this report.