Defense Management: DOD Needs to Demonstrate That Performance-Based Logistics Contracts Are Achieving Expected Benefits

DOD concurred with this recommendation and agreed to work with the military services to develop tracking procedures. While DOD took steps to improve sustainment metrics, which could produce improved performance and cost data for updating business case analyses following implementation of a performance-based logistics arrangement, the department did not develop procedures to track whether program offices that enter into these arrangements validate their business case decisions consistent with DOD guidance. During audit work performed for a follow-up review, we found that only the Army had developed a tracking system and a centralized oversight process to monitor the status of PBL arrangements, including dates for initial and subsequent business case analyses. The remaining services had not established oversight responsibilities to ensure that business case decisions were validated. As a result, in December 2008 we again reported that many of the performance-based logistics arrangements we reviewed had not updated their business case analyses to validate the approach taken and to support future plans in accordance with DOD and service policies and guidance (GAO-09-41). The report included recommendations for DOD to issue guidance clarifying when business case analyses should be updated and for the services to revise guidance to implement internal controls to ensure that business case analyses are prepared and updated.