DOD Has a Rigorous Process to Select Corrosion Prevention Projects, but Would Benefit from Clearer Guidance and Validation of Returns on Investment
GAO-11-84: Published: Dec 8, 2010. Publicly Released: Dec 8, 2010.
Corrosion costs DOD over $23 billion annually, affects both equipment and facilities, and threatens personnel safety. DOD has taken steps to improve its corrosion prevention and control (CPC) efforts. These efforts include reorganizing the DOD-wide Corrosion Office and instituting Corrosion Executive positions in each of the military departments. In response to the Senate Appropriations Committee Report accompanying the fiscal year 2010 DOD appropriations bill, GAO evaluated to what extent (1) the Corrosion Executives are involved in preparing CPC project proposals for submission, (2) the Corrosion Office has created a process to review and select projects for funding, and (3) the military departments have validated the return on investment (ROI) for funded projects. GAO also reviewed the process the Corrosion Office uses to determine the CPC activities that it will fund. To carry out this study, GAO observed project selection panel meetings, interviewed corrosion officials, and reviewed documents and project proposals.
The acceptance of the military departments' CPC proposals varied relative to the types of projects and nature of review that the military Corrosion Executives required before the proposals were submitted to the Corrosion Office for funding consideration. DOD guidance provides that Corrosion Executives coordinate CPC actions, including submitting corrosion project opportunities. Prior to submitting the proposals for a preliminary evaluation by the Corrosion Office's project selection panel, Army and Navy Corrosion Executives and staffs reviewed proposal summaries and provided feedback to the authors. The Air Force did not perform a review that included pre-submission feedback. Later, during a preliminary evaluation, the Corrosion Office's project selection panel determined that a much higher percentage of Army and Navy proposals were acceptable than those submitted by the Air Force. A selection panel member told us that because the Air Force did not perform a pre-submission review of proposals, deficiencies in those proposals were not corrected prior to the panel's evaluation. DOD has criteria and a rigorous multistep procedure for evaluating proposals, but some military department stakeholders indicated that this information is not communicated clearly. Previously, GAO noted involving stakeholders helps agencies target resources to the highest priorities. Criteria used for the project selection panel to evaluate proposed projects are not clearly identified in DOD's Corrosion Prevention and Mitigation Strategic Plan, and some project managers said that they were unfamiliar with how projects were evaluated. While the Corrosion Office already takes actions, such as providing in-depth feedback to proposals' authors and assembling corrosion experts to participate on the selection panel, unclear communications on some issues could adversely affect authors' abilities to prepare effective project proposals. The military departments are late in validating ROIs for some completed projects. The Strategic Plan suggests that follow-on reviews with validated ROIs are required for completed projects within 3 years after full project implementation. Project managers have completed these reviews for 10 of the 28 implemented projects funded in fiscal year 2005, with 8 of the 10 completed reviews performed by one Army command. Corrosion Executives told GAO that because CPC funding is awarded only for the 2-year project implementation period, they typically do not have funds remaining for validating ROIs after projects are completed. If the ROI validations of completed projects are not performed, the Corrosion Office will not have needed data to adjust project selection criteria in order to invest limited CPC funds in the types of projects with the greatest potential benefits. The Corrosion Office created Product Teams to implement DOD-wide CPC activities in seven areas. Using volunteers and a budget averaging around $4.5 million per year, the Teams propose activities, such as determining the costs of corrosion and DOD-wide specifications for CPC products, which are then selected for funding by the Director of the Corrosion Office. The Corrosion Executives are becoming more involved in Team activities. GAO is making recommendations to: 1) improve the oversight of proposals submitted for funding consideration, 2) communicate more clearly the criteria used to select which projects will be funded, and 3) fund and complete ROI validations. In written comments on this report, DOD disagreed with the first two recommendations and agreed with the third, citing alternatives or differing views. GAO believes the recommendations remain valid.
Recommendations for Executive Action
Comments: DOD has not updated DOD Instruction 5000.67 - Prevention and Mitigation of Corrosion on DOD Military Equipment and Infrastructure, the DOD Corrosion Prevention and Mitigation Strategic Plan, or other applicable guidance since the publication of our report. DOD officials stated that all three Military Departments have processes in place regarding oversight and review of the project proposals before and during the selection process.
Recommendation: To ensure that the Department of Defense is taking full advantage of the cost savings that can be achieved by implementing CPC projects, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology and Logistics) to update applicable guidance, such as DOD Instruction 5000.67, Prevention and Mitigation of Corrosion on DOD Military Equipment and Infrastructure or the DOD Corrosion Prevention and Mitigation Strategic Plan to further define the responsibilities of the military departments' Corrosion Executives, to include more specific oversight and review of the project proposals before and during the project selection process.
Agency Affected: Department of Defense
Comments: DOD has not specified in the February 2011 DOD Corrosion Prevention and Mitigation Strategic Plan the criteria used by the project selection panel to evaluate CPC projects for funding consideration. DOD's Corrosion Office has issued a document titled Project Plan Evaluation Factors, which describes the entire evaluation process. It provides details of the initial evaluation for project acceptability, repeats the qualitative criteria in the body of the project plan, and describes the use of the quantitative criteria in the project evaluation process. DOD officials have stated that they expect to issue an updated Strategic Plan in late 2013.
Recommendation: To ensure that the Department of Defense is taking full advantage of the cost savings that can be achieved by implementing CPC projects, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology and Logistics) to modify the DOD Corrosion Prevention and Mitigation Strategic Plan to clearly specify and communicate the criteria used by the panel in evaluating CPC projects for funding consideration. This action should include listing and describing each criterion used by the panel in the preliminary and final project evaluation decisions and discussing how the criteria are to be used by the panel to decide on project acceptability.
Agency Affected: Department of Defense
Comments: DOD has not developed and implemented a formal plan to reassess project returns-on-investment. DOD has taken steps to improve the timeliness and efficiency of the reassessment process by offering funding and manpower to the Military Departments for this purpose; however, several project return-on-investment reassessments are still overdue from fiscal years 2005-2008.
Recommendation: To ensure that the Department of Defense is taking full advantage of the cost savings that can be achieved by implementing CPC projects, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology and Logistics) to develop and implement a plan to ensure that return on investment validations are completed as scheduled. This plan should be completed in coordination with the military department Corrosion Executives and include information on the time frame and source of funding required to complete the validations.
Agency Affected: Department of Defense