DOD promises to follow the rules on business modernization approval

The Government Accountability Office has put the Defense Department’s problematic Business Management Modernization Program on its high-risk list for the last 10 years partly because of Defense agencies’ reluctance to ensure projects abide by DOD’s Business Enterprise Architecture.

Even though Defense policy states that the office in charge of BMMP must approve any project worth more than $1 million, it clearly was not happening enough.

In fact, GAO found that over the last two years DOD spent $651 million on 50 programs that were not reviewed.

But that is all about to change, according to two senior DOD officials.

$1 million threshold

Thomas Modly, deputy undersecretary for Defense financial management, told lawmakers earlier this month the undersecretary of Defense for acquisition, technology and logistics would review every project worth more than $1 million.

Modly testified before the House Government Reform Subcommittee on Government Management, Finance and Accountability that DOD now has the infrastructure in place to perform the reviews and is building a repository to track the projects.

Paul Brinkley, special assistant to the undersecretary of Defense, acquisition, technology and logistics for business transformation, said DOD is developing an automated tool to determine who obligates money for systems and who is to be held accountable.

“We set firm dates for an inventory to be finished,” he said, but didn’t expound on when the inventory would be completed.

The assurances come after GAO auditors found a pervasive problem among all Defense agencies. In 2003, they spent $408 million and in 2004 they spent $243 million, respectively, on unreviewed sign-offs.

The Defense Logistics Agency was the biggest culprit in 2003, spending $168 million without approval, while the Navy pushed $93 million through in 2004 without approval.

Some of the unauthorized programs in 2004 included $57 million for the Navy’s Tactical Command Support System, $25 million for the Air Force’s Integrated Maintenance Data System and $34 million for the Army’s Logistics Modernization Program.

But DOD officials promised the subcommittee that it will correct t
hese problems by Sept. 30.

Congress got tough last year by adding the Anti-Deficiency Act provision to the 2005 National Defense Authorization law. The provision required the head of the BMMP—under threat of a $5,000 fine and jail time for violations—to review all projects worth more than $1 million to make sure the initiatives are aligned with the Business Enterprise Architecture.

Brinkley said the Anti-Deficiency Act provision is a motivating factor.

“We didn’t have the infrastructure to discover the systems and then how to report them,” Modly said. “Now we have a standard set of questions and a standard way to determine whether the programs should be funded. We will do much better.”

Gregory Kutz, GAO’s director of financial management and assurance, said DOD must work with an investment review board for each of BMMP’s five domains—human resource management, weapon system lifecycle management, materiel supply and service management, real property and installation lifecycle management, and financial management—and should review the inventories so systems are defined correctly as part of the BMMP.

GAO also said DOD should develop a plan that addresses implementation of previous recommendations related to the BEA and the control and accountability over business system investments. At a minimum, auditors said the plans should assign responsibility and time frames for completion.

“The Anti-Deficiency Act puts teeth [into enforcement], but DOD has had a lot of issues over the years,” Kutz said. “We do a lot of work looking at fraud, waste and abuse where no one is held accountable, and that is an issue with this program.”

Brinkley also promised lawmakers that Version 3 of the BEA and a detailed transition plan are in final development. DOD will submit both documents to Congress by Sept. 30, as required by law.

“BMMP has made slow, though steady, progress, earning its share of criticism along the way,” said Todd Platts (R-Pa.), subcommittee chairman. “We want to make sure errors are corrected and we are learning from the mistakes.”

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