Information Technology:

DOD Needs to Leverage Lessons Learned from Its Outsourcing Projects

GAO-03-371: Published: Apr 25, 2003. Publicly Released: Apr 25, 2003.

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Given the magnitude of its reported spending on information technology (IT) services--more than $6.2 billion in fiscal year 2001--it is critical that the Department of Defense (DOD) adopt effective practices for acquiring IT services. GAO researched leading commercial practices for the outsourcing of IT services, and, in November 2001, published a framework consisting of seven phases that span the full range of activities that are performed during the outsourcing of those services (this is an acquisition in which a client organization transfers responsibility for performing services to an external provider). GAO was asked to determine (1) the extent to which selected DOD projects for outsourcing IT services use leading commercial practices as specified in GAO's framework and (2) whether DOD is sharing lessons learned from its IT outsourcing projects across the department.

The projects in GAO's review substantially used leading commercial practices as specified in GAO's framework for outsourcing IT services. Specifically, the agencies fully implemented 88 percent of the practices (not including practices not applicable to a particular project). This framework consists of practices organized into seven phases: (I) determine sourcing strategy, (II) define operational model, (III) develop the contract, (IV) select the provider(s), (V) transition to provider(s), (VI) manage the performance of the provider(s), and (VII) ensure services are provided. Although DOD has acted on gathering and disseminating lessons learned and commercial leading practices related to general acquisition issues, its actions have generally not been focused on outsourcing or on sharing the lessons learned from IT services outsourcing across the department. By not systematically capturing and disseminating such information across the department, DOD is losing the opportunity to leverage the knowledge gained on IT services projects like those in GAO's review. Lessons learned that are pragmatic and easily accessible would give DOD managers a more informed understanding of important issues to be addressed when making outsourcing decisions, as well as the factors to be considered to help ensure the success of these endeavors.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: According to an official in the DOD Office of the Chief Information Officer who was designated as GAO's point of contact for this recommendation, the department has not taken action to implement the recommendation.

    Recommendation: To assist DOD organizations in planning and implementing outsourcing projects for IT services, the Secretary of Defense should direct the Undersecretary of Defense for Acquisition, Technology, and Logistics, working in conjunction with the Assistant Secretary of Defense for Command, Control, Communications, and Intelligence (C31), to provide senior management support and adequate resources to develop and implement an electronic tool to capture and disseminate examples and lessons learned from actual IT outsourcing projects. These examples and lessons learned, at a minimum, should include the results of our review of the five projects discussed in this report.

    Agency Affected: Department of Defense

  2. Status: Closed - Not Implemented

    Comments: According to an official in the Office of the Chief Information Officer who was designated as GAO's point of contact for this recommendation, the department has not taken action to implement the recommendation.

    Recommendation: The Secretary of Defense should direct the Undersecretary of Defense for Acquisition, Technology, and Logistics, working in conjunction with the Assistant Secretary of Defense for Command, Control, Communications, and Intelligence (C31), to ensure that the method used to gather information for this electronic tool incorporate the main elements of a lessons learned process--namely, collection, verification, storage, and dissemination.

    Agency Affected: Department of Defense

 

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