Defense Management: DOD Senior Leadership Has Not Fully Implemented Statutory Requirements to Promote Department-Wide Collaboration
Released: 2018-06-25T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: DOD continues to confront organizational challenges that hinder collaboration. To address these challenges, section 911 of the NDAA for FY 2017 directed the Secretary of Defense to issue an organizational strategy that identifies critical objectives that span multiple functional boundaries and would benefit from the use of cross-functional teams. Additionally, DOD is to establish cross-functional teams to support this strategy, issue guidance on these teams, and provide training to team members and civilian leaders in the Office of the Secretary of Defense.

The NDAA also included a provision for GAO to periodically assess DOD's actions in response to section 911. This is GAO's third report on the implementation of section 911. It assesses the status of DOD's efforts to (1) establish cross-functional teams, (2) issue an organizational strategy, and (3) issue guidance on cross-functional teams and provide training to team members and Office of the Secretary of Defense leaders.

GAO reviewed documentation on DOD's implementation of its cross-functional teams and DOD's draft organizational strategy, draft guidance on establishing cross-functional teams, and draft training curricula. GAO also interviewed DOD officials on efforts to implement section 911.

GAO is not making new recommendations in this report. DOD concurred and is taking actions to address GAO's previous recommendations on DOD's implementation of section 911. DOD also concurred with the findings in a draft of this report.

section_title: What GAO Found
paragraphs: The Department of Defense (DOD) has implemented some statutory requirements in section 911 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017, enacted in December 2016, to address organizational challenges. However, senior leadership has not implemented several requirements intended to support cross-functional teams and promote department-wide collaboration (see table).

DOD has established 10 cross-functional teams, which are in various stages of implementation. Specifically, DOD is in the early stages of establishing one cross-functional team to address the backlog of the department's personnel security clearance background investigations and has assigned an interim leader and seven members to this team. In addition, DOD established 9 cross-functional teams to implement reform initiatives intended to improve the efficiency of the department's business operations. DOD generally appointed senior department officials to lead these teams, and the size of the teams, as of May 2018, ranged from 5 to 12 members.

DOD has drafted, but not issued, an organizational strategy. DOD officials stated that they have not completed the strategy because they want to align it with two department-wide strategy documents—the National Defense Strategy, which was issued in January 2018, and the National Defense Business Operations Plan, which was issued in May 2018.

DOD also has not fulfilled three statutory requirements related to guidance and training for cross-functional teams and civilian leaders in the Office of the Secretary of Defense. Specifically, DOD has not (1) provided training to cross-functional team members, (2) issued guidance on cross-functional teams, or (3) provided training to presidential appointees in the Office of the Secretary of Defense. DOD officials stated that they plan to send the guidance and training curricula to the Secretary of Defense for review and approval after DOD issues the organizational strategy. Fully implementing these requirements and GAO's prior recommendations related to the organizational strategy, guidance, and training, will better position DOD to effectively implement its cross-functional teams and advance a collaborative culture as required by the NDAA.

section_title: Letter
paragraphs: The Department of Defense (DOD) maintains military forces with  unparalleled capabilities, but continues to confront organizational and  management challenges that hinder collaboration and integration across  the department. In particular, DOD’s military departments and functional  organizations have not always worked well together to accomplish  departmental objectives. For example, in our prior work, we found that  DOD’s efforts to implement a hierarchical, portfolio-based approach to  strategically acquire contracted services had not been successful. In part,  we found that the cultural barriers and military commanders’ reluctance to  give up certain responsibilities for determining how and which services  were needed to meet their missions hindered DOD’s efforts. We have  also highlighted these challenges in our High-Risk List, which calls  attention to agencies and program areas that are high risk because of  their vulnerabilities to fraud, waste, abuse, and mismanagement, or are  most in need of transformation. Our criteria for removal from the High- Risk List underscore the importance of a demonstrated strong  commitment and top leadership support to address the risks.

To help advance a more collaborative culture within the department,  section 911 of the National Defense Authorization Act (NDAA) for Fiscal  Year 2017 directs the Secretary of Defense to, among other things,  formulate and issue an organizational strategy for DOD. The  organizational strategy, the act states, should identify the critical  objectives and other organizational outputs that span multiple functional  boundaries and would benefit from the use of cross-functional teams to  ensure collaboration and integration across the department. The act also  requires DOD to establish cross-functional teams whose leaders report  directly to the Secretary of Defense and that, among other things,  address the critical objectives and outputs outlined in the department’s  organizational strategy. The act further requires DOD to issue guidance  on cross-functional teams and to provide training to members of those  established teams and their supervisors on elements of successful cross- functional teams. Under the act, DOD is also required to provide training  on leadership, modern organizational practice, collaboration, and the  operation of cross-functional teams to individuals—within 3 months of  their appointment—who have been appointed by the President and  confirmed by the Senate to a position within the Office of the Secretary of  Defense. DOD can request waivers from the President for this  requirement. The Chief Management Officer (CMO) is leading the  department’s efforts to implement section 911.

Section 911 of the NDAA for Fiscal Year 2017 also included a provision  for us—every 6 months after the date of enactment on December 23,  2016, through December 31, 2019—to submit to the defense committees  a report setting forth a comprehensive assessment of the actions that  DOD has taken pursuant to section 911 during each 6-month period and  cumulatively since the NDAA’s enactment. In June 2017, we issued our  first report and found that DOD had taken steps in several areas to begin  implementing the requirements of section 911. In February 2018, we  issued our second report and found that DOD had implemented some of  the statutory requirements outlined in section 911, but could do more to  promote department-wide collaboration, as required under the statute.  We recommended, and DOD concurred, that the CMO take four actions  to improve the department’s implementation of section 911. Appendix I  identifies the four recommendations from our February 2018 report and  the status of DOD’s implementation.

This is our third report on DOD’s implementation of section 911. In this  report, we assess the status of DOD’s efforts to (1) establish cross- functional teams, (2) issue an organizational strategy to advance a  collaborative culture, and (3) issue guidance on cross-functional teams  and provide training to cross-functional team members and senior civilian  leaders in the Office of the Secretary of Defense. Appendix II lists the  requirements of section 911 of the NDAA for Fiscal Year 2017, the  corresponding due date, and the date completed, if applicable, for each  requirement as of May 2018.

For the first objective, we reviewed documentation and interviewed Office  of the CMO (OCMO) officials and other DOD officials on the department’s  steps to establish cross-functional teams. Based on discussions with  OCMO officials, we included 10 cross-functional teams in the scope of  our review because the officials consider these teams to be responsive to  section 911.

For the second objective, we reviewed the most recent version of DOD’s  draft organizational strategy, dated February 2018. In addition, we  interviewed OCMO officials on their efforts to collaborate with key  stakeholders, such as the Secretary of Defense, the military departments,  the combatant commands, and defense agencies, during development of  the organizational strategy. We evaluated DOD’s efforts to issue an  organizational strategy against the requirements in section 911, as well  as leading practices from our prior work on mergers and organizational  transformations.

For the third objective, we reviewed DOD’s draft guidance on cross- functional teams and draft training curriculum for cross-functional team  members and their supervisors. Further, we reviewed documentation on  the number of individuals appointed by the President and confirmed by  the Senate to a position within the Office of the Secretary of Defense as  of May 2018—the latest month available at the time of our review—and  DOD’s efforts to provide the required training or to develop criteria for  requesting waivers for these individuals. Lastly, we interviewed OCMO  officials on DOD’s efforts to finalize the guidance and training required by  section 911.

We conducted this performance audit from December 2017 to June 2018  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.
subsections: section_title: DOD Has Established 10 Cross-Functional Teams That Are in Various Stages of Implementation
paragraphs: DOD has established 10 cross-functional teams that OCMO officials  consider responsive to section 911, and these teams are in various  stages of implementation. The Secretary of Defense established a cross- functional team to manage the transfer of background investigations for  DOD personnel security clearances from the Office of Personnel  Management to DOD. This team is required to report directly to the  Secretary. In addition, the Deputy Secretary of Defense established 9  additional cross-functional teams to implement reform initiatives for  improving DOD’s business operations. These teams report to the CMO.
subsections: section_title: DOD Is in the Early Stages of Establishing a Cross-Functional Team to Manage the Transfer of Background Investigations to DOD
paragraphs: In August 2017, the Secretary of Defense issued a memorandum  authorizing its first cross-functional team in response to section 911 to  address challenges with personnel vetting and background investigation  programs. The memorandum notes that a backlog of background  investigations affects DOD’s mission readiness, critical programs, and  operations. According to the memorandum, this cross-functional team will  conduct a full review of current personnel vetting processes to identify a  redesigned process for DOD’s security, suitability and fitness, and  credential vetting. The cross-functional team’s objectives are to develop  options and recommendations to mitigate shortcomings, ensure  necessary resourcing, and transform the personnel vetting enterprise.  The Office of the Under Secretary of Defense for Intelligence and the  Defense Security Service are leading the efforts to establish the team.

Since we last reported on DOD’s efforts to establish the team, DOD has  taken some steps, such as assigning some team members, but has not  completed other key steps to staff and establish a direction for the team.  In February 2018, we reported that DOD had selected an interim leader  for the team. As of May 2018, this person, a non-Senior Executive  Service individual from the Defense Security Service, was still serving as  the interim leader. Section 911 requires DOD to assign a senior qualified  and experienced individual as the leader of the team. According to Office  of the Under Secretary of Defense for Intelligence officials, the  department plans to seek nominations from DOD components for a  permanent leader from the Senior Executive Service, but does not have a  specific timeframe for doing so. DOD also assigned seven full-time  personnel to the team, who are now co-located, in accordance with  requirements under section 911. These personnel are from the Army,  Defense Civilian Personnel Advisory Service, DOD Consolidated  Adjudications Facility, OCMO, Office of the Under Secretary of Defense  for Intelligence, and MITRE Corporation. Office of the Under Secretary of  Defense for Intelligence officials estimated that the team may have 20  members when it is fully staffed, but they did not have an estimate of  when DOD will assign the remaining team members.

In addition, the Office of the Under Secretary of Defense for Intelligence  has established priorities for the cross-functional team. For example, the  team is required to prepare a project plan incorporating all key  components for a DOD enterprise vetting mission—including key  milestones, specific objectives, performance metrics, a resourcing plan,  and an action plan for tracking key initiatives—which are key steps for  establishing the team’s direction. According to Office of the Under  Secretary of Defense for Intelligence officials, as of May 2018, the interim  leader was outlining a project plan. Filling key leadership and staff  positions will be important for ensuring that the team has the knowledge  and expertise from components across the department to effectively  develop and implement the plan.

section_title: DOD Has Established 9 Cross-Functional Teams to Improve DOD’s Business Operations
paragraphs: The Deputy Secretary of Defense has established 9 additional cross- functional teams since October 2017 to implement reform initiatives  intended to improve the quality and productivity of the department’s  business operations, including moving toward more use of enterprise  services. According to the memoranda appointing the team leaders,  these teams support the Secretary of Defense’s focus on creating a more  lethal and effective force by allowing the department to reallocate  resources from business operations to readiness and to recapitalization of  the combat force. OCMO officials stated that they consider these teams  to be responsive to section 911 of the NDAA for Fiscal Year 2017.

Section 911 requires DOD to assign senior qualified and experienced  individuals to lead the teams, and the Deputy Secretary of Defense  generally appointed senior DOD officials as leaders. Seven leaders  were appointed in October 2017, one in November 2017, and one in  January 2018. According to OCMO officials, these leaders report to the  CMO. As of May 2018, the size of the teams ranged from 5 to 12  members; OCMO officials stated that the size of the teams can vary  based on the knowledge and expertise the team needs to implement its  initiatives. The teams include representatives from the military  departments, functional organizations relevant to the reform topic, and  external experts. According to OCMO officials, the team leaders chose  their team members from candidates proposed by the military  departments and functional organizations. In addition, the members may  be assigned on a full-time or part-time basis, and all of the teams have  co-located space. Figure 1 provides additional details on the structure of  these 9 teams.

OCMO officials stated that these 9 teams are in various stages of  implementing their initiatives. For example, the Human Resources team  was the most recent team to be established, and OCMO officials stated  the team is in the process of finalizing the identification and beginning the  implementation of its reform initiatives. Other teams, such as the  Financial Management and Information Technology and Business  Systems teams, have identified and are in the process of implementing  initiatives related to their reform areas.

DOD established the Reform Management Group to identify opportunities  for reform and provide support to these 9 cross-functional teams. Chaired  by the Deputy Secretary of Defense and facilitated by the CMO and  Director of Cost Assessment and Program Evaluation, the Reform  Management Group provides oversight and guidance, makes decisions  on team recommendations, and monitors the teams’ progress, according  to OCMO officials. These officials also told us that the Reform  Management Group holds weekly meetings to discuss the status of the  reform teams’ efforts and provides monthly comprehensive reports on  these efforts to the Secretary of Defense.

section_title: DOD Has Not Issued Its Organizational Strategy That Outlines Steps for Advancing a Collaborative Culture
paragraphs: OCMO has drafted an organizational strategy, but DOD has not issued  the strategy, which section 911 required to be completed by September 1,  2017. OCMO officials told us that they have not completed the strategy  because they want to align it with the National Defense Strategy, which  was issued in January 2018, and the National Defense Business  Operations Plan, which was issued in May 2018. OCMO officials told us  that, once the organizational strategy is reviewed internally to align with  the National Defense Strategy and the National Defense Business  Operations Plan, the CMO plans to coordinate the review and approval of  the strategy across components within the department. We previously  recommended, and DOD concurred, that the CMO should obtain input on  the development of the strategy from key stakeholders, such as the  military departments and defense agencies. The officials estimated that  DOD components would have about 2 to 3 weeks to provide input on the  strategy and that the strategy could be issued as early as July 2018.

We found that, consistent with our recent recommendations, a revised  version of the draft organizational strategy addresses the requirements in  section 911, including outlining steps for advancing a collaborative culture  within the department. In February 2018, we found that the August 2017  version of the draft organizational strategy that we reviewed addressed  the two required elements under section 911, but did not outline how it  would achieve several future outcomes that advance a collaborative  culture within the department, as required by the NDAA. We  recommended, and DOD concurred, that the CMO should revise the  organizational strategy to outline how it would achieve these outcomes  and, in doing so, should consider our nine leading practices on mergers  and organizational transformations.

Based on our review of a February 2018 version of the draft  organizational strategy, we found that OCMO officials have taken steps to  address our recommendation, including identifying potential action steps  for the department that align with each of the nine leading practices. For  example, consistent with the leading practice for establishing a coherent  mission and integrated strategic goals to guide the transformation, OCMO  officials revised the draft strategy to propose that the CMO, in  coordination with stakeholders, could develop an implementation plan  with detailed initiatives for increasing collaboration and information  sharing across the department. According to the draft strategy, this plan  could include goals and milestones for these initiatives, and the CMO  could report periodically on the achievement of the goals. Further,  consistent with the leading practice to involve employees to obtain their ideas and gain their ownership for the transformation, OCMO officials  proposed that a representative from OCMO could chair an action officer- level governance body to plan and share performance information related  to this effort. According to the draft strategy, this governance body would  solicit feedback about the related changes, propose changes to new  policies and procedures based on the feedback, and manage the  implementation and tracking of the established goals. Issuing the  organizational strategy—in accordance with section 911 and our prior  recommendation—will better position DOD to advance a collaborative  culture.

section_title: DOD Has Not Implemented Training or Issued Guidance for Its Cross- Functional Teams or Provided Training to Presidential Appointees
paragraphs: DOD has not fulfilled three related requirements of section 911 to guide  the implementation of its cross-functional teams, namely to (1) provide  training to cross-functional team members and their supervisors, (2) issue  guidance on cross-functional teams, and (3) provide training to  presidential appointees. OCMO officials stated that they plan to send the  guidance and training curricula to the Secretary of Defense for review and  approval after the organizational strategy is issued. Table 1 shows the  three requirements of section 911, the due dates, and the status of DOD  actions, if any, as of May 2018.
subsections: section_title: DOD Has Not Implemented Training or Issued Guidance for Its Cross-Functional Teams
paragraphs: As of May 2018, OCMO had developed a draft training curriculum for  cross-functional team members and their supervisors, but had not  provided the required training. In February 2018, we reported that the  draft training curriculum addressed all requirements in section 911.  OCMO officials stated that after the Secretary of Defense reviews and  approves the training curriculum, which will occur after the organizational  strategy is issued, they will provide training to the members of the cross- functional team on personnel vetting for background investigations and to  the 9 teams implementing reform initiatives.

OCMO has also drafted guidance on cross-functional teams, but DOD  has not issued the guidance and did not meet the statutorily-required date  of September 30, 2017. Section 911 requires the guidance to address  areas such as the decision-making authority of the teams and key  practices that senior leaders should follow with regard to leadership,  organizational practice, collaboration, and the functioning of cross- functional teams. In February 2018, we reported that OCMO had  developed draft guidance for cross-functional teams that addressed six of  seven statutorily-required elements and incorporated five of eight leading  practices for effective cross-functional teams that we identified in prior  work. We recommended, and DOD concurred, that the CMO should  fully address all requirements in section 911 and incorporate these  leading practices into the guidance. DOD has taken steps to address our  recommendation. For example, consistent with the practice for open and  regular communication, OCMO revised the guidance to state that the  cross-functional team leaders and OCMO will encourage and facilitate  continuous communication and information sharing. According to the  revised guidance, the team leaders and OCMO will accomplish this  through co-location of team members, management practices by cross- functional team leaders that promote a unified team culture and trust, and  use of collaborative information technology tools maintained by OCMO.  However, as of May 2018, DOD had not issued the guidance. As we  reported in February 2018, without initial guidance that fully addresses  the required statutory elements in section 911 and incorporates our  leading practices, DOD’s cross-functional teams may not be able to  consistently and effectively pursue the Secretary of Defense’s strategic  objectives or further promote a collaborative culture within the  department.

section_title: Over Two-Thirds of Presidential Appointees in the Office of the Secretary of Defense Have Been Appointed, but None Have Received Required Training or Waivers
paragraphs: OCMO has developed a draft training curriculum for individuals filling  presidentially-appointed, Senate-confirmed positions in the Office of the  Secretary of Defense. However, as of May 2018, DOD had filled 26 of 36  such positions, and none had received the training or been granted a  training waiver. Further, section 911 requires these individuals to  complete the training within 3 months of their appointment, but 22 have  been in their positions longer than 3 months, as shown in figure 2.

In February 2018, we reported that the draft curriculum addressed only  one of the four required elements in section 911. Specifically, we found  that the draft curriculum addressed the required statutory element for  training on the operation of cross-functional teams, but did not incorporate  the required statutory elements for leadership, modern organizational  practice, or collaboration. We recommended, and DOD concurred, that  the CMO should either (1) provide training that includes all of the required  elements in section 911 or (2) develop criteria for obtaining a waiver and  have the Secretary of Defense request such a waiver from the President  for these required elements if the individual possesses—through training  and experience—the skill and knowledge otherwise to be provided  through a course of instruction. Once the training curriculum is reviewed  and approved by the Secretary of Defense, which will occur after the  organizational strategy is issued, OCMO officials plan to provide the  training on the operation of cross-functional teams to the presidential  appointees. These officials stated that DOD plans to develop criteria for  presidential appointees who are eligible for a waiver from the training on  leadership, modern organizational practice, and collaboration, and to  recommend that the Secretary of Defense approve these waivers. Until  DOD finalizes actions on this recommendation, the department may have  difficulty advancing a collaborative culture, as top leadership commitment  is a key practice for a successful organizational transformation.

section_title: Agency Comments
paragraphs: We are not making recommendations in this report. We provided a draft  of this report to DOD for review and comment. DOD concurred with our  report. In addition, DOD provided technical comments, which we  incorporated as appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Secretary of Defense, and DOD’s Chief Management  Officer. In addition, the report is available at no charge on our website at  http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-2775 or FieldE1@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 who made key contributions to this report  are listed in appendix III.

section_title: Appendix I: Prior GAO Reports on the Department of Defense’s Implementation of Section 911 of the National Defense Authorization Act for Fiscal Year 2017
paragraphs: Section 911 of the National Defense Authorization Act (NDAA) for Fiscal  Year 2017 included a provision for us—every 6 months after the date of  enactment on December 23, 2016, through December 31, 2019—to  submit to the defense committees a report setting forth a comprehensive  assessment of the actions that DOD has taken pursuant to section 911  during each 6-month period and cumulatively since the NDAA’s  enactment. We issued our first report in June 2017, and did not make  recommendations. We issued our second report in February 2018, and  made four recommendations to improve DOD’s implementation of section  911. Table 2 identifies the two prior GAO reports on DOD’s  implementation of section 911 and the status of the four  recommendations from our February 2018 report.

section_title: Appendix II: Summary of Requirements in Section 911 of the National Defense Authorization Act for Fiscal Year 2017
paragraphs: Section 911 of the National Defense Authorization Act for Fiscal Year  2017 requires the Secretary of Defense to take several actions. Table 3  summarizes some of these requirements, the due date, and the date  completed, if applicable, as of May 2018.

section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact

section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Margaret Best (Assistant  Director), Tracy Barnes, Arkelga Braxton, William Carpluk, Adelle  Dantzler, Michael Holland, William Lamping, Amie Lesser, Ned Malone,  Judy McCloskey, Sheila Miller, Richard Powelson, Terry Richardson, Ron  Schwenn, Jared Sippel, Sarah Veale, and Tina Won Sherman made key  contributions to this report.


Question-summary annotations: questions: question: How does DOD plan to address the backlog of clearance investigations?
answer: Specifically, DOD is in the early stages of establishing one cross-functional team to address the backlog of the department's personnel security clearance background investigations and has assigned an interim leader and seven members to this team.

question: What do DOD's cross-functional teams address?
answer: In addition, DOD established 9 cross-functional teams to implement reform initiatives intended to improve the efficiency of the department's business operations.
child_questions: question: What is the personnel makeup of these teams?
answer: DOD generally appointed senior department officials to lead these teams, and the size of the teams, as of May 2018, ranged from 5 to 12 members.

questions: question: In what ways has DOD failed to fulfill statutory requirements?
answer: DOD also has not fulfilled three statutory requirements related to guidance and training for cross-functional teams and civilian leaders in the Office of the Secretary of Defense. Specifically, DOD has not (1) provided training to cross-functional team members, (2) issued guidance on cross-functional teams, or (3) provided training to presidential appointees in the Office of the Secretary of Defense.
child_questions: question: How have DOD officials responded to this failure?
answer: DOD officials stated that they plan to send the guidance and training curricula to the Secretary of Defense for review and approval after DOD issues the organizational strategy.

question: What will be the benefits of DOD's implementation of GAO's recommendations?
answer: Fully implementing these requirements and GAO's prior recommendations related to the organizational strategy, guidance, and training, will better position DOD to effectively implement its cross-functional teams and advance a collaborative culture as required by the NDAA.

questions: question: What organizational challenges does DOD face?
answer: DOD continues to confront organizational challenges that hinder collaboration.
child_questions: question: How has DOD addressed these concerns?
answer: To address these challenges, section 911 of the NDAA for FY 2017 directed the Secretary of Defense to issue an organizational strategy that identifies critical objectives that span multiple functional boundaries and would benefit from the use of cross-functional teams.
child_questions: question: What role will cross-functional teams play in this reform?
answer: Additionally, DOD is to establish cross-functional teams to support this strategy, issue guidance on these teams, and provide training to team members and civilian leaders in the Office of the Secretary of Defense.

questions: question: How did the NDAA support GAO's assessment of DOD?
answer: The NDAA also included a provision for GAO to periodically assess DOD's actions in response to section 911. This is GAO's third report on the implementation of section 911.

question: What does GAO assess with regards to DOD's efforts?
answer: It assesses the status of DOD's efforts to (1) establish cross-functional teams, (2) issue an organizational strategy, and (3) issue guidance on cross-functional teams and provide training to team members and Office of the Secretary of Defense leaders.