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US Defense Dept tech crisis leaves Our Boys unpaid

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They say that slow and steady wins the race, but that's clearly not the case at the US Department of Defense (DoD) where years of big funding and bigger talk have done nothing to cure a computing crisis.

A report from the General Accounting Office has chided the DoD for being big, slow, dumb and negligent - just not in such polite terms. For years, the DoD has failed to modernize its organizational structure to deal better with military basics such as paying soldiers and keeping contractors honest. The sum total of the DoD's poor business process, according to the watchdog GAO, has resulted in an inability to keep track of much of anything or to function on a level anywhere near that of a sound organization.

"Our two case study projects ... are examples of how DoD's lack of control and accountability over business systems investments continues to result in the department spending hundreds of millions of dollars on systems that will not result in integrated corporate solutions to some of its long-standing inventory and related financial management problems. For example, neither (case study) will provide total asset visibility over DoD's billions of dollars of inventory, such as repair parts and chemical and biological protective clothing. The lack of total asset visibility is a key gap in the department's ability to track and locate inventory," the General Accounting Office says.

Add to this the $19bn request by the Pentagon in 2004 to run these operations, and you have a not so pretty picture.

In 2003, the DoD reported operations involving $1.1 trillion in assets, more than $1.5 trillion in liabilities and close to 3.3m military and civilian personnel. To handle the sum total of this machine, the DoD uses 2,274 accounting, logistics and personnel systems. The problem is that few of these systems can share information or provide solid information on what the DoD is doing.

And the DoD's failures have had serious consequences. A case study involving 481 soldiers revealed that 450 of them had at least one problem receiving their pay on time. "DoD's inability to provide timely and accurate payments to these soldiers, many of whom risked their lives in recent Iraq or Afghanistan missions, distracted them from their missions, imposed financial hardships on the soldiers and their families, and has had a negative impact on retention," the GAO reports.

In addition, DoD contractors have massaged the federal tax system "with little or no consequence." The DoD's failure to track contractors has likely led to massive losses under current laws. As of Sept. 2003, the DoD had collected only $678,000 in unpaid taxes. The GAO estimates this total could be raised to $100m per year, if a more effective debt collection program were in place. The DoD is also missing out on tens of millions of dollars every year because of poor policies when dealing with third-party insurers.

These are just a fraction of the tragic DoD policies. It has also spent hundreds of millions on modernization projects only to kill the projects without completing them. It has done a miserable job of tracking inventory, funds and using eBay. A military outfit designed to protect soldiers against biological warfare is currently up for sale on the Internet for $3 a pop versus the $200 each the DoD pays for the same outfit.

"DoD has acknowledged that these garments should have been restricted to DoD use only and therefore should not have been available to the public," according to the report.

Too late.

And what can the DoD to improve? Well, emulate Sears and Wal-Mart, of course.

"Unlike DOD, which has a proliferation of nonintegrated systems using nonstandard data, Sears and Wal-Mart require all components and subsidiaries to operate within a standard systems framework that results in an integrated system and do not allow individual systems development," GAO said in the report.

So despite years of modernization funding, our Defense Department is being outdone by a pair of retailers. Shocking? Hardly. ®

Related link

GAO Report [PDF]

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