Defense Transportation:

DOD Needs a Comprehensive Approach to Planning for Implementing Its New Personal Property Program

GAO-07-671: Published: May 31, 2007. Publicly Released: May 31, 2007.

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The Department of Defense (DOD) has been working to improve its personal property program since the mid-1990s to fix long-standing problems, such as excessive loss or damage to servicemembers' property and poor quality of service from moving companies. DOD plans to replace its current program with Families First, a program that promises to offer servicemembers an improved claims process and quality of service. GAO was mandated to (1) assess the steps DOD has taken to achieve the goals and benefits of the Families First program; (2) evaluate the growth in costs of the program, including the costs for a new information management system, since GAO's last assessment in 2003; and (3) assess the extent to which DOD faces management challenges--such as staffing--in implementing Families First. To address these objectives, GAO analyzed DOD's program, funding and staffing data, and interviewed personal property officials and stakeholders.

DOD has taken some initial steps to achieve the goals and benefits of Families First, but delays in developing a new information management system have put the overall goals of improving the quality of service from moving companies and streamlining the claims process at risk. The information management system, the Defense Personal Property System (DPS), is now more than 2 years behind schedule. DOD has missed DPS milestones because of software development issues and is now working to address issues identified in recent software testing. Since DPS has been delayed, DOD is in the process of implementing a backup plan to meet a statutory mandate to provide servicemembers with the full replacement value of goods lost or damaged during a move by March 1, 2008. However, there are risks and costs associated with DOD's backup plan because it relies on an increasingly unreliable legacy computer system; also, DOD's plan may not cover all moves by March 1, 2008. The Families First program could increase costs to DOD by $1.4 billion over current program costs through fiscal year 2011 for two main reasons: (1) DOD estimates the program will increase costs to the services' household goods budgets by 13 percent and (2) DOD has significantly increased the cost estimate for a new information management system since GAO's last assessment. While DOD's estimate that the Families First program will increase costs by 13 percent has not changed since 2005, all of the services have not yet fully budgeted for this cost increase, which GAO analysis shows could be about $1.2 billion. Additionally, DOD has increased its estimate for an information management system for Families First because it decided to develop DPS rather than upgrade the legacy system. DOD estimated that the upgrade would cost $4 million to $6 million, and the program office estimated that DPS will cost about $180 million through fiscal year 2011. DOD's personal property program faces many management challenges--especially staffing, in addition to program requirements and funding problems--because it has not employed comprehensive planning. Sound management practices require a comprehensive approach that includes plans to assemble a qualified, trained, and well-led team; gain stakeholders' agreement about key program elements, such as business rules to define how the moving industry will serve military members; and estimate and plan for adequate resources. DOD has developed several draft plans to address individual portions of Families First and DPS, such as the draft transition plan for moving the DPS program office as part of a base realignment and closure move from Virginia to Illinois, but there is no overall plan that addresses how DOD will (1) fill significant staffing shortfalls in the newly formed DPS program office, (2) gain agreement from stakeholders, and (3) fund the significant and growing costs associated with the program. For example, DOD has not identified sources to fully fund DPS development and operations. Without a comprehensive plan, achieving the goals of the Families First program will likely remain difficult.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In response our recommendation the Commander expedited the evaluation of the report mandated in the John Warner National Defense Authorization Act for Fiscal Year 2007. The U.S. Transportation Command issued the report "DOD Certifications to Congress on the Families First Program and the Defense Personal Property System" on June 18, 2007. These actions met the intent of our recommendation.

    Recommendation: To address long-standing problems in DOD's personal property program the Secretary of Defense should direct the Commander, U.S. Transportation Command, to expedite the evaluation of the Families First program the John Warner National Defense Authorization Act for Fiscal Year 2007 mandated the department conduct. This act mandates that the report contain the certifications of the Secretary of Defense on the following matters with respect to the Families First program: (1) whether there is an alternative to the system under the program that would provide equal or greater capability at a lower cost; (2) whether the estimates on costs, and the anticipated schedule and performance parameters, for the program and system are reasonable; and (3) whether the management structure for the program is adequate to manage and control program costs.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: The Surface Deployment and Distribution Command Personal Property Division and the Defense Property System Program Office took specific steps to hire and train personnel in order to have the human capital needed to develop and implement the program. As of 7/1/2008 the office was at over 905 staffing with all necessary personnel actions having been processed for two remaining positions. These actions meet the intent of our recommendation.

    Recommendation: DOD should employ comprehensive planning to implement the Families First program and its associated system. At a minimum, this planning should address specific steps to hire and train personnel so that the Surface Deployment and Distribution Command personal property division and the DPS program office have the human capital needed to develop and implement DPS.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: US Transportation Command (TRANSCOM) implemented a planning process to reach agreement with stakeholders on essential requirements and implementation priorities. In addition, a Configuration Control Board was established by August 2007 to evaluate change requests against against programmatic constraints, and to manage costing, funding, and implementation of the program and its associated system.

    Recommendation: DOD should employ comprehensive planning to implement the Families First program and its associated system. At a minimum, this planning should reach agreement with stakeholders on the essential requirements for DPS and their priority to facilitate the development of DPS. In addition, this comprehensive plan should include an investment strategy that reflects the full cost of accomplishing the goals of Families First and milestones for implementation.

    Agency Affected: Department of Defense

 

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