Senate report: Billions of dollars at risk from shaky Pentagon IT programs

Wednesday - 7/9/2014, 8:27am EDT

There's a new poster child for runaway failed IT projects.

A new bipartisan report from the Senate's Permanent Subcommittee on Investigations called the Air Force's now-canceled Expeditionary Combat Support System "one of the most egregious examples of mismanagement by the DoD in recent memory."

The Air Force began the ECSS procurement 10 years ago as part of an effort to overhaul or eliminate hundreds of legacy computer systems, in favor of better managing its global logistics and supply-chain network.

But the project floundered for years before officials finally canceled the program in 2012.

Despite spending more than $1 billion over eight years, the Air Force got no useable capability in return, leaving it with "the same old inadequate logistics system" it had to start with, according to the report.

But the failure of ECSS may not be an aberration, the report suggested. Other enterprise-resource planning programs in the department are at risk of falling victim to the same fate.

"It's important to recognize that what happened with ECSS was not an isolated case of incompetence," Sen. John McCain (R-Ariz.), ranking member of the subcommittee, said in a speech on the Senate floor Monday. "Unfortunately, it's one of the many examples that show how billions of dollars can be wasted if the intended acquisition is not started off right with a detailed plan that includes clear, stable requirements and achievable milestones supported by realistic, original cost estimates and reliable assessments of risk."

Lack of leadership, cultural resistance sank ECSS

The ECSS project was doomed to fail by a lack of strong planning about what exactly the new system needed to accomplish, absent leadership and a cultural resistance to following acquisition best practices, according to the report. .

Without a clear vision, acquisition managers "just ordered changes in configuration that, in effect, customized the commercial software on the fly rather than alter the Air Force's own culture," McCain said.

"That caused costs to skyrocket and delivery schedules to slip," he said.

Attempting to customize the commercial to fit the Navy's legacy systems — the proverbial square peg in a round hole — was a "root cause" of the project's failure, the report stated.

The push for piece-by-piece customization could have been avoided if the Air Force had followed "business-process reengineering techniques," the same process used by Fortune 500 companies to manage major changes in their organizations and a method for handling large-scale business transformations within DoD that has now been mandated by Congress.

The report also faulted a lack of leadership.

During the course of the procurement, the Air Force experienced a "significant turnover rate" of senior leaders. During the eight years ECSS was under development, six program managers and five program executive officers transitioned through the program, which contributed to a gradual drain on the institutional knowledge of the project and an accountability vacuum.

"In this case, no one within the Air Force or the Department of Defense has been held accountable for ESCC appalling mismanagement," McCain said. "No one has been fired. And not a single government employee has been held responsible for wasting over $1 billion in taxpayer funds."

Are too many IT projects too big to succeed?

The Senate report also widened its focus to other large business-transformation efforts within DoD.

The Air Force's Defense Enterprise Account and Management System (DEAMS), a revamp of its financial-management system that has been under development since 2003, has also seen its fair share of problems.

As of the end of fiscal 2013, the Air Force had received $427 million for the program and DoD has approved spending as much as $1.6 billion more. But the report said the Air Force is, again, failing to implement business-process reengineering best practices, such as mapping out exactly which parts of the legacy systems need to be updated and which should be scrapped, according to the report.

Large-scale acquisition programs make up a growing share of DoD's total IT investments.

In fiscal 2012, of the Pentagon's $35 billion in IT spending, at least $4.5 billion was spent on major automated-information systems, according to the Government Accountability Office.

But agencies across government also struggle with the same type of issues that sunk ECSS.

"I think stepping back, when we look at these large-scale acquisition programs, there is a common theme that we typically see, in that for the most part they've been broadly scoped in that they aim to deliver their capabilities roughly several years after initiation," said Carol Cha, director of IT acquisition management issues at the Government Accountability Office.