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Reports: Air Force's troubled technology projects cost millions

The termination of a contract with a local company to modernize Air Force computer systems cost 500 jobs and is the latest in a pattern of similarly troubled projects for the Air Force and other Defense Department agencies.

The Air Force, sister agencies and the Defense Department itself have spent hundreds of millions of dollars on massive information technology upgrade projects that repeatedly missed deadlines and required expensive corrections, according to a series of U.S. Government Accountability Office reports from this and prior decades. In other cases, projects were merged into new programs or entirely abandoned for new approaches.

The Dayton Daily News reviewed the GAO reports, which were done at the request of Congress.

The Air Force stopped work last September on the Expeditionary Combat Support System (ECSS) program, a global computer logistics management improvement project on which $1 billion has already been spent. Computer Sciences Corp., the prime contractor that had led the project from Beavercreek, has said it is no longer associated with ECSS. The Air Force said it stopped the project because of problems with Computer Sciences’ management of it.

When the project was halted, about 500 local jobs of either CSC or subcontractor employees were eliminated. Many in the Dayton community are concerned about whether some or any of those jobs will return after the Air Force announces its restructuring plan.

The Air Force said its order to stop work on ECSS was done to protect the taxpayers’ investment while the project is re-evaluated for restart.

Lack of proper preparation, oversight and administration for these kinds of projects, coupled with the complexities of the military services and the tasks involved, have combined to cost the taxpayers, said Asif A. Khan, who has overseen the GAO’s audits of the computer modernization projects.

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“This problem has not just occurred, or cropped up. It goes back decades,” said Khan, director of financial management and assurance for GAO, the investigative and auditing arm of Congress. “They are really not following best practices.

“It’s really been very fragmented. If something happens in one area of the Navy, those lessons have not been learned in the Army or the Air Force,” Khan said in an interview last week. “They are beginning to realize that they cannot operate in silos, either by agencies or departments within them.”

Four Air Force and Army computer modernization projects, all begun about a decade ago to account for and control billions of dollars in equipment and parts inventories, have had problems with data quality, data conversion, system interfaces and training, the GAO reported in February.

“We’re now approaching seven years since funds were first expended on this system,” Jamie Morin, the Air Force’s chief financial officer, told a subcommittee of the U.S. Senate Armed Services Committee in April, referring to the ECSS project. “The total cost is now over $1 billion. I’m personally appalled at the limited capabilities that program has produced, relative to that amount of investment.”

Wright-Patterson Air Force Base is a focus of the IT improvement efforts because it is the Air Force’s hub of acquisition, logistics, research and development.

Delays in completing modernization projects run the risk that the technology will be out of date by the time it is deployed, outside experts said.

The Air Force says the Expeditionary Combat Support System would make it possible to more efficiently manage equipment and parts inventories, parts movement and ordering, financial administration and contracting, maintenance, personnel assignments and relocations with one system that would serve more than 600 locations across the Air Force. It would replace about 240 outdated computer networks that don’t communicate with each other, enabling better and more up-to-date knowledge and control of inventories, according to the Air Force.

It is estimated to cost $5.2 billion over its life cycle and, when fully operational, will control and account for $122 billion of inventory, according to the Air Force. The service needs the system to better account for its assets and reduce waste in ordering and distribution, outside observers said.

Air Force officials are to present a plan to Congress in August on how to overcome the problems and restart the ECSS project, already years behind schedule and exceeding its early cost estimates.

The report is to state a new ECSS completion date. The originally hoped-for completion in 2013 has been scrapped, as has a more recent 2016 finish date.

Even the Air Force’s restart plan is delayed; officials had previously hoped to have it ready for Congress last month.

The Defense Department and the Air Force’s sister services have had plenty of problems during the years with their own efforts to develop and install comprehensive, new computerized business systems, known as enterprise resource planning (ERP) systems, the GAO has reported. Those systems are critical because a 2010 federal law requires the Defense Department to be able to validate that its financial statements are audit-ready by Sept. 30, 2014, federal officials have said.

“The Department of Defense’s business systems modernization program has been on GAO’s high-risk list since 1995 because of the size and complexity of DOD, the large and complex systems to be developed, and the significant efforts needed to establish effective and efficient business systems department-wide,” the GAO stated in its February report to Congress. “Over the years, we have frequently reported that the department has not effectively employed acquisition management controls to help ensure that ERPs deliver the promised capabilities on time and within budget.”

The GAO study found that the Army’s General Fund Enterprise Business System (financial management and accounting) and Global Combat Support System (logistics management), and the Air Force’s ECSS and Defense Enterprise and Accounting Management System (financial management and accounting) projects all had significant problems.

The GAO has repeatedly recommended improvements including more stringent up-front requirements for software and hardware performance; stricter milestone deadlines for measuring progress, and performance testing of each phase of development before advancing to the next one. Auditors have also urged that the military attempt smaller-scale development programs.

ECSS has undergone repeated restructurings to correct problems, officials have said. The older computer networks that it would replace cost about $30 million per month to operate, according to the Air Force.

The Air Force said it wanted commercial off-the-shelf technology for ECSS, which would be cheaper than developing customized technology. The project’s software provider, Oracle Corp., has built an international business providing standardized software, but such generic software often cannot satisfy the military’s unique needs, said Loren Thompson, a defense industry analyst with the Lexington Institute in Arlington, Va.

“The challenge with ERP systems is that the application developer ... sets up the system with generic business processes,” said Ann Gallaher, chief operating officer of Technology First, the Dayton region’s IT trade organization.

Oracle had no comment about the ECSS project, company spokeswoman Kimberly Pineda said.

Prior IT projects overseen from Wright-Patterson, home to the Air Force Materiel Command, went by names including Material Management and Information System, and Depot Maintenance Management Information System.

In 1992, the GAO reported that the Air Force Materiel Command (formerly the Air Force Logistics Command) had spent about $1 billion during the prior 10 years on a modernization effort to replace 108 outdated logistics systems with 14 new ones. “Of these 14, according to the Air Force, six are still under development, one has been canceled and seven have been delivered,” the GAO reported then. “We previously reported that one system, delivered in 1987 at a cost of $21 million ... was ineffective and should be discontinued. The Air Force itself has not thoroughly evaluated the benefits of any of the delivered systems and ... has not established adequate performance measures.”

In 1987, the GAO reported that an ongoing Air Force project to replace logistics management systems designed in the 1950s and 1960s had included a program called the Advanced Logistics System. It ran into “major development problems” and Congress terminated it in 1975 after $250 million had been spent, the GAO reported. In 1979, the GAO concluded that a $4 billion Air Force program to acquire new computer business systems for 118 locations worldwide project “a minimal savings of only $10 million” over the estimated cost of continuing to run existing systems.

The Air Force said IT improvement projects from the 1970s forward cannot be compared with the ECSS project, because it is designed to be a more comprehensive system than its predecessors, and because the technology has improved.

“The Air Force has a long history of information technology improvement efforts ... . Some achieved their objectives; some did not,” the Air Force said in response to questions from the Dayton Daily News. “None of them were designed to provide ERP-based, integrated system support ... That, combined with the challenge of relating 1979 to 2011 dollars, makes any comparison of their intended outcomes or costs with those of ECSS impractical.”

 

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