l~ll~lllll~llllllllllllllll~l~~lll LMO95448 21 7 Benefits From Centralized Management Of Leased Communications Services,.,,,,,, Department of Defense B UNITED STATES GENERAL ACCOUNTING OFFICE UNITED STATES GENERAL AG~~UNT~NG OFFICE WASHINGTON, D.C. 20548 DEFENSE DIVISION B- 169857 Dear Mr. Secretary: This is our report on the benefits from centralized management of leased communications services. We believe our review has revealed that centralized management of about 50,000 leases for minor communications services--those cost- ing less than $200,000 a year --is necessary and desirable, Therefore, we proposed that the Department of Defense make certain studies toward this objective. In response, the Acting Assistant to the Secretary of De- fense (Telecommunications) advised us that such studies were being initiated. Subsequently we were informed that responsibility for the conduct of these studies had been assigned to the Joint Chiefs of Staff. We plan to evaluate the results of the studies. This report contains a recommendation which is subject to the provisions of section 236 of the Legislative Reorganization Act of 1970. We shall appreciate receiving copies of the statements you furnish to the specified committees in accordance with these provisions. Copies of the report are being sent to the Director, Office of Management and Budget; the Secretaries of the Army, Navy, and Air Force; and the Director, Defense Communications Agency. Sincerely yours, PDF. Director, Defense Division The Honor able Secretary of Defense - 50TH ANNIVERSARY 1921- 1971 / i 5 1 GENiRflL ACCOUNTINGOFFICE [ BENEFITS TO THE DEPARTMENT OF DEFENSE FROM 1' REPORTTO THE - CENTRALIZED MANAGEMENT OF LEASED I SECRETARYOF DEFENSE COMMUNICATIONS SERVICES B-169857 ; ------ DIGEST 1 WHYTHE REUEW WASMADE I t The General Accounting Office (GAO) examined into the policies and proce- ; dures in the Department of Defense (DdU] for the use and control of minor I leased communications services within the Uriit2d States. I I Classified on a cost basis, a minor service is one which costs less than I $200,000 a year to lease. -Of the $236 million which DOD spends annually I I on leased communications services, about $187 million is for 50,000 minor I leases. More than 13,000 of these leases having a yearly lease cost of I I almost $74 million, about 30 percent of the total, are for services ded- I icated to a particular user, contrasted with common-user services. I I The leased services are used to carry out the command and control, logistics, and administrative functions of the Office of the Secretary of Defense, the I military departments, and the Defense agencies. I I 1 FINDINGS AND CONCLUSIONS I I Most leased services are approved within the military departments without I I review or approval by the Office of the Secretary of Defense. This is be- I cause they do not meet the criterion of costing more than $200,000 a year I I to lease, which is necessary to qualify for Office of the Secretary of De- l fense review. (See p. 9.) I I Often a separate service approved at the departmental or command level is I part of a large network which, if considered in its entirety, would meet I I the criterion for higher level review. (See p. 10.) The approval procedures for services which do not qualify for Office of the Secretary of Defense review differ among the military departments. Review and approval authority is at the departmental level in the Navy. In the other departments approval of services costing less than $100,000 a year has been redelegated to the major commands. (In August 1969 the Air Force withdrew this authority from the commands as an interim measure.) (See P* 9.1 No independent e-vuZuation or coordinated control DOD has established the Defense Communications System--a worldwide, long- distance, Government owned and leased system--and the Defense Communications 1 i Tear Sheet 1 BEC.22,1971 ; Agency to manage the system. DOD, however, has not established a complete c inventory of its communications resources. Usage information is not always available. What information exists is not always reliable. Users of com- munications systems do not always indicate the purpose of their require- ments. Because the offices responsible for reviewing new requirements do not have complete information on existing systems, they cannot evaluate new require- ments or existing resources from a comprehensive systemwide viewpoint. (See p. 14.) In each DOD component, a validating office is responsible for independent evaluation, including certain funding and technical considerations, of new requirements and existing sources of communications systems. These offices, however, are hampered in performing their reviews by a lack of sufficient data. Army and Air Force offices can only recommend disap- proval or alternative means of providing a service. Reevaluations of exist- ing services, if made, are performed by-the user of the service (See pp. 25 and 29.) Need for a central authority A central authority with adequate information on DOD communicati ons services would be in a position to prevent the start or continuation of uneconomical services. To illustrate the potential savings which could be achieved by a central authority: --Use data had not been developed for five of the 15 terminals of the Air Force Personnel Facsimile Network. Such data, obtained at GAO's request, showed that the average use for each terminal ranged from 18 minutes to 5 hours a day. On the basis of this information, the Air Force discon- tinued four terminals at savings estimated at $23,700 annually. (See p. 21.) --In 1967 the Army Provost Marshal General proposed to establish a voice- data network to tie together criminal investigation activities within the Army. GAO found that the objective of establishing an integrated system had not been achieved--segments of the system were being dis- continued while others were being installed, one of the military police groups never was brought into the system, and the groups did not use the system to communicate with each other or with certain centralized ac- tivities. Procedures for review of this requirement were ineffective, which illustrated the need for independent review. (See p. 25.) o RECOMMENDATIONS OR SUGGESTIONS I GAO proposed that the Secretary of Defense study: I 1 / --The feasibility of a centralized DOD activity having authority and respon- I sibility for selecting the means of providing new service after the ap- 1 propriate levels approve the need for the service. Consideration should I be given to the cost of a centralized validation office compared with 1 the costs of the dispersed functions as now performed. I I --Providing the centralized activity resources including a complete in- I I ventory of communications facilities (or, as an alternative, access to I such information) and data on their traffic volume and purposes. I --Assigning the activity responsibility and authority for controlling the I I scheduling and monitoring the qualitative aspects of the periodic reevalua- I tions of existing services and for determining whether such services could I be provided more economically, but with acceptable effectiveness, by other I 1 means, particularly where common-user facilities are available. i I --Whether the criteria for reviewing requirements at the Office of the i Secretary of Defense or military department levels should be redefined I as being applicable to total contemplated (or actual) network costs rather I I than to individual increments to networks. --Whether present criteria for reviewing at departmental level should be lowered. --The need for a directed requirement that requests for communications services provide information needed for selection of the most efficient and economical method of fulfilling the requests. --The need for the remaining parts of the Military Police Network that is discussed on pages 25 to 27. (See p. 35.) AGENCYACTIONS AND UNRESOLVEDISSUES In response, DOD advised GAO that studies, which were expected to take up to 6 months to complete, were being initiated to examine into each of the above proposals. DOD advised also that it would forward a response to the pro- posals upon completion of the studies. (See appendix.) Subsequently GAO was informed that responsibility for the conduct of these studies had been assigned to the Joint Chiefs of Staff. GAO plans to'evaluate the results of the studies. (See p. 37.) a I Tear Sheet 3 Contents Page DIGEST 1 CWTER 1 INTRODUCTION 4 Scope of review 7 MOST NEW COMMUNICATIONSREQUIREMENTSHAVE BEEN EXCLUDEDFROM HIGHER DEPARTMENTALRE- VIEW 8 Independent review by higher authority limited under current directives 9 Individual requirements not identifi- able in accounting systems or budget reviews 12 MINOR COMMUNICATIONSNOT SUBJECT TO INDEPEN- DENT EVALUATION AND COORDINATEDCONTROL 14 New minor communications requirements not coordinated with existing resources 16 No complete inventory of communica- tions resources 16 Data on use of resources not ade- quate for management purposes 20 Information incomplete on new re- quirements 23 Absence of independent evaluation of new requirements , 25 Reevaluations not made independently nor coordinated with resources data 29 Air Force and Army reevaluations not fully effective 29 Reevaluations not made in the Navy 34 4 CONCLUSIONS, RECOMMENDATION,AND AGENCYCOM- MENTS 35 Conclusions 35 Recommendation 35 Agency comments 37 APPENDIX Page Letter dated July 7, 1971, from the Acting Assistant to the Secretary of Defense (Telecommunications) to the General Ac- counting Office 39 ABBREVIATIONS AUTODIN Automatic Digital Network AUTOVON Automatic Voice Network CONUS Continental United States DCA Defense Communications Agency DOD Department of Defense GAO General Accounting Office Gl'?NERAL ACCOUNTINGOFFICE BENEFITS TO THE DEPARTMENT OF DEFENSE FROM REPORTTO THE CENTRALIZED MANAGEMENT OF LEASED SECRETARYOF DEFENSE COMMUNICATIONS SERVICES B-169857 DIGEST __---- WHYTHE REVIEW WASMADE The General Accounting Office (GAO) examined into the policies and proce- dures in the Department of Defense (DOD) for the use and control of minor leased communications services within the United States. Classified on a cost basis, a minor service is one which costs less than $200,000 a year to lease. Of the $236 million which DOD spends annually on leased communications services, about $187 million is for 50,000 minor leases. More than 13,000 of these leases having a yearly lease cost of almost $74 million, about 30 percent of the total, are for services ded- icated to a particular user, contrasted with common-user services. The leased services are used to carry out the command and control, logistics, and administrative functions of the Office of the Secretary of Defense, the military departments, and the Defense agencies. FMDINGS AND CONCLUSIONS Most leased services are approved within the military departments without review or approval by the Office of the Secretary of Defense. This is be- cause they do not meet the criterion of costing more than $200,000 a year to lease, which is necessary to qualify for Office of the Secretary of De- fense review. (See p. 9.) Often a separate service approved at the departmental or command level is part of a large network which, if considered in its entirety, would meet the criterion for higher level review. (See p. 10.) The approval procedures for services which do not qualify for Office of the Secretary of Defense review differ among the military departments. Review and approval authority is at the departmental level in the Navy. In the other departments approval of services costing less than $100,000 a year has been redelegated to the major commands. (In August 1969 the Air Force withdrew this authority from the commands as an interim measure.) (See P. 9.1 No independent evabation or coordinated con-ho2 DOD has established the Defense Communications System--a worldwide, long- distance, Government owned and leased system--and the Defense Communications Agency to manage the system. DOD, however, has not established a complete inventory of its communications resources. Usage information is not always ' available. What information exists is not always reliable. Users of com- munications systems do not always indicate the purpose of their require- ments. Because the offices responsible for reviewing new requirements do not have complete information on existing systems, they cannot evaluate new require- ments or existing resources from a comprehensive systemwide viewpoint. (See p. 14.) In each DOD component, a validating office is responsible for independent evaluation, including certain funding and technical considerations, of new requirements and existing sources of communications systems. These offices, however, are hampered in performing their reviews by a lack of sufficient data. Army and Air Force offices can only recommend disap- proval or alternative means of providing a service. Reevaluations of exist- ing services, if made, are performed by the user of the service. (See pp. 25 and 29.) Need for a centra2 authority A central authority with adequate information on DOD communications services would be in a position to prevent the start or continuation of uneconomical services. To illustrate the potential savings which could be achieved by a central authority: --Use data had not been developed for five of the 15 terminals of the Air Force Personnel Facsimile Network. Such data, obtained at GAO's request, showed that the average use for each terminal ranged from 18 minutes to 5 hours a day. On the basis of this information, the Air Force discon- tinued four terminals at savings estimated at $23,700 annually. (See p. 27.) -In 1967 the Army Provost Marshal General proposed to establish a voice- data network to tie together criminal investigation activities within the Army. GAO found that the objective of establishing an integrated system had not been achieved--segments of the system were being dis- continued while others were being installed, one of the military police groups never was brought into the system, and the groups did not use the system to communicate with each other or with certain centralized ac- tivities. Procedures for review of this requirement were ineffective, which illustrated the need for independent review. (See p. 25.) ~ECOMbkNDfiTIOIiSOR SUGGESTIONS GAO proposed that the Secretary of Defense study: --The feasibility of a centralized DOD activity having authority and respon- sibility for selecting the means of providing new service after the ap- propriate levels approve the need for the service. Consideration should be given to the cost of a centralized validation office comparedwith the costs of the dispersed functions as now performed. --Providing the centralized activity resources including a complete in- ventory of communications facilities (or, as an alternative, access to such information) and data on their traffic volume and purposes. --Assigning the activity responsibility and authority for controlling the scheduling and monitoring the qualitative aspects of the periodic reevalua- tions of existing services and for determining whether such services could be provided more economically, but with acceptable effectiveness, by other means, particularly where common-user facilities are available. --Whether the criteria for reviewing requirements at the Office of the Secretary of Defense or military department levels should be redefined as being applicable to total contemplated (or actual) network costs rather than to individual increments to networks. --Whether present criteria for reviewing at departmental level should be lowered. --The need for a directed requirement that requests for communications services provide information needed for selection of the most efficient and economical method of fulfilling the requests. --The need for the remaining parts of the Military Police Network that is discussed on pages 25 to 27. (See p. 35.) AGENCYACTIC'NSAND UNRESOLVED ISSUES In response, DOD advised GAO that studies, which were expected to take up to 6 months to complete, were being initiated to examine into each of the above proposals. DOD advised also that it would forward a response to the pro- posals upon completion of the studies. (See appendix.) Subsequently GAO was informed that responsibility for the conduct of these studies had been assigned to the Joint Chiefs of Staff. GAO plans to evaluate the results of the studies. (See p. 37.) INTRODUCTION A Department of Defense goal is to have a single, in- tegrated, long-distance communications system capable of supplying reliable, rapid, and, when necessary, secure means of exchanging information. In 1960 DOD established the Defense Communications System and the Defense Communi- cations Agency (DCA) to supervise this worldwide, long- distance, Government owned and leased system. As it has evolved, the system does not include all the communications services used within DOD. Principal exclusions are (1) post, camp, base, and station terminal facilities and (2) purely tactical facilities and those organic to weapon systems. The system, and hence the management purview of DCA, stops at the point of interface between the system and the connect- ing terminals of posts, camps, bases, and stations; which is considerably less than a total system on a user-to-user basis. Communications services, whether or not a part of DCA's system, are classified as major or minor on the basis of cost. DOD classifies as major those services it leases1 for $200,000 a year or more and as minor those that cost less. DOD requires that the military departments obtain ap- proval at the Office of the Secretary of Defense level be- fore implementing major communications services but has del- egated to the military departments authority for determining and approving their needs for minor communications services. After the need for a communications service has been approved, it must be validated; that is, determined to be technically feasible, compatible with other services, and capable of being funded. Validating offices are responsible for determining the most advantageous methods of fulfilling 1DCA's system in the continental United States (CONUS) in- cludes both Government owned and leased services, but mainly the latter. 4 new requirements, considering existing facilities and ser- vices. Each military department is responsible for designating a validation office to process its IzeqUirementS. The Army Strategic Communications Command and the Naval Communica- tions Command Headquarters are validation offices for the Army and the Navy, respectively. The Air Force Communica- tions Service validates most Air Force requirements. The Strategic Air Command and Aerospace Defense Command, however, approve and validate their own tactical requirements, and Headquarters, Air Force, approves and validates certain of its requirements and the tactical requirements of the Air University. Requests for services to be furnished by common-user networks1 in CONE--principally the Automatic Voice Network (AUTOVON) and the Automatic Digital Network (AUTODIN)--are forwarded to DCA's Western Hemisphere Area Office, Fort Carson, Colorado, for review. This is another examination for technical adequacy and compatibility with the networks. Validated or revalidated requests are submitted to the Defense Commercial Communications Office of DCA which is the DOD office responsible for leasing long-distance ser- vices. This office is responsible only for leasing the requested services and not for evaluating the need for the requested services, determining the availability of existing services that may satisfy the requests, or suggesting alter- native means of providing the services. Short-distance and local services are procured by the installations involved. After a service is installed, the user is responsible primarily for justifying its retention. Thus the user de- termines the initial need and also the need for retention of the service. With respect to minor communications ser- vices, these determinations are made without effective in- dependent review and coordinated control, as discussed in chapters 2 and 3. 1A network providing general-purpose services to a large number of subscribers for the transmission and receipt of various types of messages. 5 In a previous report, we recommended that the Secretary of Defense establish the position of Assistant to the Secre- tary of Defense (Communications) and give that position sufficient authority and funding overview to enforce policy decisions concerning all DOD communications matters. We recommended also that the Secretary consider removing DCA from the chain of command under the Joint Chiefs of Staff and making the position of Director of DCA a civilian post to provide a direct relationship between the Director of DCA and the new Assistant and to eliminate doubt concerning parochial interests. On May 21, 1970, DOD Directive 5'148.6 established the new position of Assistant to the Secretary of Defense (Tele- communications). One of his functions, as set forth in the directive, is to: "Review JCS [Joint Chiefs of Staff], Military De- partment and DOD component validated telecommuni- cations requirements to reaffirm the need thereof, including priorities for their fulfillment, and recommend alternatives as appropriate." This directive provided a focal point for communica- tions in DOD. We believe, however, that the effectiveness of this directive will be dependent upon the authority and resources provided by the Secretary of Defense and the de- gree of cooperation given by DOD elements to the new assis- tant. No further action was taken on our recommendations concerning the chain of command to DCA and the appointment of a civilian director. DOD informed us, however, that the chain of command to DCA remained an issue for active con- sideration. DOD is spending about $236 million a year for leased communications services in CONUS, This includes about $49 million for major services and about $187 million for approximately 50,000 leases for minor services. It does not include the costs of terminal facilities and such intra- installation services at posts, camps, and stations as base telephone systems, which are procured by the installations involved. More than 13,000 of these leases having a total yearly lease cost of almost $74 million, about 30 percent of the total, are for services dedicated to a particular user, contrasted with common-user services. 6 SCOPE OF REVIEW Our review included an examination into policies and procedures established within DOD for the use and control of communications services, primarily leased minor services, in CONUS. We made the review at the Office of the Secre- tary of Defense and at DCA's and the military departments' headquarters and various field offices and installations. We did not attempt a scientifically determined random selection of cases for the purposes of this limited review. The cases were selected with the objective of including ex- amples within each of the military departments and examples of various types of communications services. We examined into 21 selected communications services or requirements, eight of which we discuss in this report. (See p. 27.) We discuss also two additional examples where the Army was able to effect cost savings through improved procedures. (See p. 23.) CHAPTER2 --s-w MOST NEW COMMUNICATIONSREQUIREMEBTS HAVE BEEN EXCLUDEDFROM HIGHER DEPARTMENTALREVIEW Less than 1 percent of the total number of DOD's leased communications services in CONUSrequired approval at the Office of the Secretary of Defense level. In the Navy approval authority for all minor communica- tions requirements has been retained at the headquarters level. Since August 1969, as an interim measure, the Air Force has assumed authority at departmental level for ap- proval of all minor Air Force communications requirements. Authority for approving most services in the Army rests with the using major commands, because individual communications services usually cost less than the amounts established as criteria for obtaining approval at higher levels. This condition also prevailed in the Air Force prior to August 1969.. These services, although individually classified as minor, frequently are increments to communications networks having substantial annual leasing costs. We believe that it is appropriate, therefore, that the need for services be reviewed by a higher and an independent authority when the cost of the total system, of which the instant services often are only components, exceeds the established threshold. Communications costs also are reviewed in the Office of the Secretary of Defense during the budget process. In the case of minor communications requirements, however, the re- view focuses primarily on budget categories, and individual minor communications requirements are not identifiable. There has been more detailed reporting and thus improved visibility of communications costs during the past 2 years. Additional steps are being taken or are planned within DOD to improve this visibility. INDEPENDENTREVIEW SY HIGHER AUTHORITY LIMITED UNDER CURRENTDIRECTIVES In accordance with DOD Directive 4630.1, Programming of Major Telecommunications Requirements, dated April 24, 1968, the classification of a communications requirement de- te-rmines the-level of review and approval required. The au- thority to review and approve major requirements (for ser- vices having individual.leasing costs of $200,000 or more a year) is at the Office of the Secretary of Defense level. The authority to review and approve minor requirements (for services having indivi'dual leasing costs of less than $200,000) h as been delegated to the military departments. The Army redelegated,to major commands the authority to approve each minor requirement for services estimated to cost less than $100,000 a year. The same redelegation ,of authority existed in the Air Force until August 1969 when Headquarters, Air Force,'withd-ew it from the commands. This withdrawal was an interim measure to comply with a fis- cal year 1970 budget decision of the Secretary of Defense, and it is still in effect. In the Navy the Chief of Naval Operations has retained approval authority for all minor communications requirements. According to representatives of the Office of the As- sistant to the Secretary of Defense (Telecommunications), the $200,000 threshold was established in 1968 to reduce the volume of communications requests that were then being sub- mitted to the Office of the Secretary of Defense for ap- proval. Prior to the increased level established in 1968, the DOD directive set the lower limit for a major require- ment at $100,000. The representatives said that the present threshold was unrealistis and that efforts were being made to lower it. As df May 1970 records of leases for services, includ- ing those in the Defense Communications System and those not a part of the system, showed that only 55 (of approxi- mately 50,000) leases were classified as major requirements by applying the $200,000 threshold, This is about one tenth of 1 persent of the total number of leases and represents about 21 percent ($49 million) of the total annual leasing costs. This small number of leases may not be all of those 9 approved at the Office of the Secretary of Defense level, because some leases below the threshold may have been ap- proved as part of a subsystem or project plan. Records of such approvals, if any, however9 were not available. Excluding Navy leases, all of which receive depart- mental approval, only 108 CONLJSleases exceed the Army and permanent Air Force threshold of $100,000 each in annual cost e Including Navy leases, only 111 CONKS leases have annual costs in excess of $100,000 each. They constitute about two tenths of 1 percent of the number of leases and cost about $57 million, or about 24 percent of the total annual costs. This includes the one tenth of 1 percent of the number of leases which are over $200,000 each annually and which qualified for review at the Office of the Secre- tary of Defense level, The above indicates that most communications require- ments within CONUS are individually inexpensive, and this is due to the fact that requests prepared and approved with- in the commands involve, for the most part, leases for (1) circuitry from point to point and related terminal equipment, (2) circuitry from a switching center to a ser- vice point and related terminal equipment, or (3) terminal equipment only. Such services are often only a part of a network that is being established or an adjunct to an exist- ing network or service. We believe that the use of this incremental or piecemeal method of obtaining services ob- scures the total configuration, purpose, and cost of a net- work or service. Also it bypasses a more independent over- view which presumably could be performed at higher levels with the objective of achieving a single comications sys- tem within DOD, rather than a narrower, more parochial ob- jective. The following examples illustrate the type and size of conmnunications networks or services which have been acquired on an incremental basis and which did not meet the criterion for Office of the Secretary of Defense or military depart- ment review. 1. Air Force Personnel Facsimile Network This network is used to transmit reproductions of documents between Air Force elements at Randolph Air Q 10 Force Bases Texas; the Washington, D.C.$ area; Denver, Colorado; St, Louis, Missouri; and San Antonio, Texas. The network has 15 terminals, 13 of which are connected to a switching facility in Texas. The current lease cost of the network is about $110,000 annually under 28 leases9 the most expensive one costing about $9,400 a year. 2, Army Military Police (Criminal Investigation) Network This network was proposed in 1967 to provide voice-data communications services between the five military police groups, their principal detachments, and other investigative offices. As envisioned, the network was to have about 35 terminals located through- out corns, Although we inquired and searched, we could not find a cost estimate for the proposed network. As of July 1970, the network had 22 terminals and the leasing costs had reached $201,000 a year. The ser- vices were being provided under 22 leases9 the most expensive of which was about $16,600 a year. The net- work was approved in increments within the Department of the Army and was not submitted to the Office of the Secretary of Defense for approval, apparently on the basis that none of the increments exceeded the $200,000 threshold. 3, Military Airlift Command Logistics Readiness Network This is a voice network, established in 1966, to provide direct telephone communications between the command headquarters, Scott Air Force Base, Illinois; McGuire Air Force Bases New Jersey; Travis -Air Force Base, California; and 10 other Air Force locations. It has over 10,000 miles of leased circuitry, a switch- ing capability, a conferencing arrangement, and a two- digit dialing feature. These facilities are provided under 13 leaseso none of which exceed $12,500 a year; the total annual leasing cost is about $93,000. This extensive network, even if processed as a single entity, would not have required, under permanent Air Force reg- ulations, approval at departmental or Office of the Secretary of Defense level. 11 INDIVIDUAL REQUIREMENTSNOT IDENTIFIABLE - .-.- IN ACCOUNTING SYSTEMSOR -- BUDGETREVIEWS Our review of budgeting and accounting systems within DOD and our discussions with DOD officials showed that in- dividual minor communications requirements were not identi- fiable. Consequently the thousands of individual minor re- quirements which constituted the major part of the cost of communications leases discussed in this report are not re- viewed for need at Office of the Secretary of Defense or military departmental level during the budget process. Our review showed that there had been greater visibility of total DOD communications costs over the past 3 years due to a requirement imposed by the Deputy Secretary of Defense that this information be submitted in more detail as to us- ing organizations and cost categories and in a separate bud- get package. Visibility of individual minor communications requirements, however, is not provided. Furthermore the budget amounts are based on estimates rather than historical costs m As stated by one DOD official in March 1970 during congressional hearings on the fiscal year 1971 budget: *';t-k* there is no formal system to account for Defense Communications System costs in the De- partment of Defense. Therefore, the previous figures were estimates, as are the figures for this year." * * * * * I'*** there is no formal accounting system in the Department of Defense to account for communica- tions systems. Therefore, the estimates that we derive through our analysis are based upon infor- mation where we can go into the existing systems and draw out pieces and put them together ***." To correct this condition, DCA has attempted to estab- lish a functional category for communications costs so that more accurate information on communications expenditures could be accumulated. We were told that this attempt had 12 ‘5 . been unsuccessful. The Office of the Assistant Secretary of Defense (Comptroller), however, was performing a study of functional categories in general and was preparing a di- rective to establish a financial reporting system which, if approved, would require quarterly reporting of communica- tions expenditures in some detail for each installation. Also the Assistant to the Secretary of Defense (Telecommuni- cations) planned to consider the overall issue of visibility of telecommunications resources early in 1971. In view of these actions, we have no recommendations at this time con- cerning the identification of communications costs in ac- counting systems and for budgetary review purposes. 13 CHAPTER3 MINOR COMMUNICATIONSNOT SUBJECT TO INDEPENDENT EVALUATION AND COORDINATEDCONTROL Minor communications services are not subject to an ef- fective, independent evaluation and coordinated control. The absence of information with which to evaluate the aggre- gate of individual requirements from a DOD systemwide view- point precludes coordinated control of minor communications. DOD has not established a complete inventory of its communi- cations resources; information on use is often not available and, when available, is not always reliable; and users do not always indicate the purpose of their requirements. F'ur- thermore the incomplete information which-is available is available only in. part to the offices responsible for re- viewing or validating new requirements and existing resources. Without adequate information, a reviewer is not in a position to determine whether existing resources are ade- quate to satisfy new requests for services or, in reevalua- tions, whether existing resources should be retained, recon- figured, or eliminated. Thus new requirements and existing resources have not been evaluated from a comprehensive or coordinated DOD systemwide viewpoint. Also periodic reeval- uations of existing resources are not always made and, when made, are performed by the users themselves. Consequently we believe that the users generally have been able to obtain, subject to the availability of funds, the type of services wanted and that users generally can re- tain the services desired without comprehensive independent reevaluations. Although it might be argued that a using organization should have complete responsibility for the type of services provided within its operating budget, we believe that this philosophy conflicts with the stated objective of achieving a single communications system within DOD because such a sys- tem, in our opinion, requires strong central direction. The following sections of this chapter discuss the pro- cedures employed and some examples of the costly effects of 14 the lack of independent evaluation and coordinated control, from a systemwide viewpoint, of minor communications within DOD. We believe that the examples are illustrative of the potential benefits obtainable from evaluation by a central office having systemwide information and authority to im- plement the most efficient, effective, and economical method of fulfilling communications needs. 15 NEWMINOR COMMUNICATIONSREQUIREMENTS NOT COORDINATEDWITH EXISTING RESOURCES Validating offices' are responsible for determining the most advantageous means of fulfilling new requirements,con- sidering existing facilities and services. A validating of- fice has information identifying the services it validated but does not have information on services validated by other military departments and agencies. Also the Air Force Com- munications Service does not have information on services validated by the Aerospace Defense Command, Strategic Air Command, or Air Porte Headquarters. Furthermore a validat- ing office seldom has access to information on the use being made of services it has validated. Although DCA has certain information relating to assets of the Defense Communications System.,,the information is lo- cated at two DCA field offices--neither of which has complete data. Also DCA does not have information on resources which are not a part of the system, nor on the use being made of these services. Thus these is within DOD no central inventory of total DOD communications resources or central point of informa- tion on the uses being made of resources. Requests for new services often lack sufficient explanatory information to permit adequate consideration of alternative means of satis- fying the requirements. No cormlete inventory of communications resources DCA is responsible for maintaining a directory of fa- cilities and circuitry under its jurisdiction--the Defense Communications System. Although D&J's Western Hemisphere Area Office has cer- tain information relating to assets of the Defense Communi- cations System, it is not required to accumulate, and does not have, information on the resources which are not a part 1See p. 4 for identification and description of responsibil- ities. 16 of the system. These are generally self-contained facili- ties within commands or tactical organizations and intra- installation facilities. For system resources (Government owned and leased) DCA's Western Hemisphere Area Office pre- pares a data base directory which shows for each circuit the locations receiving service, points of interconnect, as- sociated circuits, service availability, speed and type of service, and other technical details, Government owned and leased resources which the user classifies as not being part of the system and related details are not included in the Western Hemisphere Area data base directory. DCA's Defense Commercial Communications Office, located at Scott Air Force Base, although not involved in the vali- dation process, does maintain a circuit inventory of ser- vices it has leased. Although this inventory includes cer- tain services not contained in the Western Hemisphere Area data base directory--i.e., leased resources which are not a part of the system but which are directly connected to the system-- it does not include technical information, such as interconnecting points, speed of service, and associated cirsuits nor does it include information on Government- owned resources. Furthermore certain leased services acquired at base level are not contained in either the Western Hemisphere Area data base directory or the Defense Commercial Communi- cations Office circuit inventory, and neither of these in- formation sources reflects the existence of unused multiplex channels. (See p. 18.) Also, with the exception of AUTOVON and AUTODIN, these DCA office? have only fragmentary infor- mation on traffic volume. At the time of our review, the Western Hemisphere Area was not receiving copies of periodic compilations of the circuit inventory of the DCA leasing of- fice. It should be noted that DCA is in the process of estab- lishing, in addition to its circuit inventory, a computer- ized file of communications resource data which will pro- vide additional data pertaining to the physical and opera- tional environment of the Defense Communications System. This inventory, however, will exclude those facilities which are neither part of nor required to support the system. Thus it will not constitute a complete inventory of DOD communi- cations facilities. 17 The two following situations illustrate the more pen- etrating reviews that could be performed and the management actions that could be taken by a DOD central office having adequate inventory and use information. 1. Multiplexing The Air Force has a number of leased multi- plexers, devices that divide a single communica- tions circuit into a number of data channels. A set of these devices, one at each end of a circuit, . can provide as many as 20 data channels for trans- mission over the circuit. We found that the Air Force was using only eight channels for time-shared computer services between Scott Air Force Base, and Griffiss Air Force Base, New York, leaving channels available for additional requirements. The Arw was leasing a circuit that nearly paralleled the Air Force circuit to obtain service from the same computer complex. Also the Army was processing a requirement for two additional circuits and'had re- ceived approval to connect to the computer. The Air Force was unaware of the Army require- ments and the Army was unaware of the available Air Force channels. Although the Air Force circuit was a Defense Communications System circuit, the data base directory of DCA's Western Hemisphere Area Office, the office responsible for cataloging sys- tem facilities in CONUS, did not contain the data on available, unused channels. Officials of that office advised us that the recording of use data in DCA9s data base directory was not required and that they therefore were unable to identify the avail- able, unused channels. We had informed the Army and the Air Force validating offices of this situation and were ad- vised that the Army's requirements (three circuits) would be met by using three of the unused Air Force channels. We estimated that such action would re- sult in savings of about $14,500 annually. Subse- quent to the completion of our fieldwork, we were advised also that this action was no longer possible 18 because of the loss of time-sharing capacity at the computer complex and that the savings would not be achieved in this case. We believe that a central authority, with total system information, would be in a position to coor- dinate the acquisition of such services and thus permit the achievement of economies. 2. Microwave system .I' Tr According to a DCA official, there are 12 spare channels in a Government-owned microwave system between the Pentagon and Andrews Air Farce Base, Maryland. Concurrently seven other circuits, at least one for each military department, were being leased at a total cost of about $6,000 a year to provide service bettieen these s&e locations. Sufficient information had not been assembled to permit us to obtain from DCA a tech- nical evaluation as to whether the spare microwave channels could be used in lieu of the leased circuits. Use of the alternative Government-owned facilities, however, had not been considered. DCA's Western Hemi- sphere Area ofeficials gave the following possible rea- sons for this. --It was impracticable to maintain an updated listing of resources for the use of the various validating offices because of the large number of daily actions. The only current data base for CONUSwas maintained by DCA's Western Hemisphere Area, and this was lim- ited to Defense Communications System facilities. --DCA's Western Hemisphere Area was not responsible for reviewing all requirements to ensure maximum use of available resources. In general,dt reviewed only Defense Communications System requirements and did not receive information on requirements which were not part of the system. --The military departments could unilaterally classify new minor communications facilities as non-Defense Communications System assets and, when they did, DCA's Western Hemisphere Area received no data on them. Data on use of resources not adequate for management purposes Insufficient or incorrect data on the use of services can result in the retention or addition of unneeded services. Therefore traffic studies are essential to efficient manage- ment of communications services, Data collected in such studies can be used to determine whether existing facilities (1) are adequate to satisfy new requests for additional services, (2) should be increased or decreased to provide an acceptable grade and level of service, (3) should be discontinued, or (4) should be reconfigured. We found instances where traffic studies had not been made but should have been made. We found also instances where study reports contained inaccurate data and conclu- . sions. Further we found instances where studies had been made by the user but the study reports had not been sub- mitted to the userss validating office or higher review levels. The military departments and DCA recognize that traffic studies are desirable and suggest that they be made, espe- cially of base administrative telephone services including general purpose AUTOVONaccess lines. Although traffic studies are made of administrative telephone services, we found that there were no policies, directives, or regula- tions requiring that studies be made of dedicated networks1 or other circuitry and facilities controlled by the commands. The more thorough review possible through the use of traffic data is illustrated by the following example. Air Force Personnel Facsimile Network--This net- work (described on pS lo), in existence since 1963, should have been evaluated a number of times under Air . Force procedures which required a semiannualreevaluation of the need for communications services. (See p. 29.) Although we did not examine into the complete history of reevaluations, the most recent was made in 1969. 1A service that is provided to a relatively limited number of subscribers for a particular function. 20 (See p. 31.) In such evaluations it seems evident that terminal traffic data should have been considered. We found that traffic data had been developed for only 10 of the 15 network terminals. At our request, traffic data were obtained for all the terminals. Analysis showed that average use, by location, ranged from 18 minutes to 5 hours a day. On the basis of this infor- mation, Air Force officials discontinued four terminals and related circuitry. We estimate that savings will be $23,700 annually. The remaining terminals are pro- viding the services, but the Air Force is studying these for possible further reductions. Our examination in two major Army commands showed that there were varying practices for making traffic studies. The Army Materiel Command has established a small group to make studies of its own installations, The studies include administrative lines and AUTOVONbut not other lines con- trolled by the command, such as command and control lines, and other dedicated services. With the exception of data on selected AUTOVONlines, the Strategic Communications Command (the Army validating office) does not receive the results of the Army Materiel Command studies. Headquarters, Continental Army Command, does not have a traffic study capability and has assigned the responsibil- ity for making such studies to its subordinate elements. One subordinate element was making extensive studies of all circuitry under its control. These studies, however, did not cover the services controlled by tenant organizations. Another subordinate element does not make traffic studies. Prior to July-1970 the Army validation office did not re- ceive traffic study data from this command, Thereafter, at the request of the validation office, selected AUTOVON studies were to be received from two of the four Armies of the Continental.Army Command. In the Air Force, traffic studies are made by a compo- nent of the Air Force Communications Service. These studies principally cover base services. They do not include dedi- cated lines controlled by the Air Force commands. The vali- dating office of the Air Force Connnunications Service does not receive traffic study data. 21 We found no evidence that traffic studies were made by the Navy, and a representative of the Navy validating office confirmed that the office did not receive traffic study data other than for AUTOVONand AUTODIN. Information on AUTODIN traffic is automatically gener- ated within the system and provided to users., Traffic studies of AUTOVONare made by the common carriers and are given to DC&, DCA, in turn, provides the military depart- ments with the traffic study data, The studies, along with other data, indicate the current level of service and the lines necessary to obtain a desired level of service. Officials of DCA and the military departments said that the carrier studies could be used only as trend indi- cators, because they contained errors and lacked required data. For example, the Navy validating office had traffic studies for AUTOVONbut used them only as guides. Also an Air Force official stated that experience had shown that AUTOVONstudies frequently contained errors. An analysis of the traffic studies of Air Force AUTOVONservice for 1 month revealed over 130 errors. The Army validating office, which received the traffice studies on AUTOVONand some other limited studies, complained that the AUTOVONstudies showed: --Incorrect circuit quantities serving locations. --Erroneous configuration of lines, --Exclusion of user locations from 0 studies, --Inclusion of non-Army locations. The benefits of using reliable traffic study data can be illustrated by the experience of the Army Strategic Com- munications Command. This command, as a part of its manage- ment function, makes traffic studies of selected Army AUTOVON access lines. Command officials said that their traffic studies were more accurate than those made by common carriers and resulted in significant cost reductions in Army AUTOVON service. They said that substantial savings could be achieved through studies of the AUTOVONaccess lines; for example, the deletion of a single line at each of its approximately 230 22 locations would re<ude-1-the system cost about $400,000 a year D They told-us.:,$hat the following examples were rep- resentative of the.results of their traffic analyses. : ;- ;1 1. Fort Campbell; Kentucky This,installation was being served by 17 AUTOVON access lines:: -Common-carrier studies showed 10 blocked inward calls for each 100 attempts. The carrier, on:the basis of studies over an &month period, recommended that additional lines be in- stalled-, and seven lines were added. Thereafter the Strategic Communications Command made a study which resulted in the removal of three of the lines with resu-lting cost savings of $5,400 a year. ,'. 2. Iowa Army Ammunition Plant, Burlington, Iowa Carrier-studies at this plant showed 10 blocked inward calls for'each 100 attempts and a need for three more lines; After a Strategic Communications Command study, only two lines were installed and an acceptable level of service was provided. The an- nual savings by not installing the one line approxi- mated $1,800.‘ ; Information incomplete on new recruirements Data needed to evaluate a requirement and to determine the best means of satisfying it include such performance data as volume of traffic to be handled, purpose of ser- vice, frequency of transmission, and timeliness of trans- mission required. This kind of data, however, frequently is excluded from the requests to a validation office for services. Such requests show only data needed to effect leasing, such as the specific circuitry and terminal equip- ment required. For example: AUTOVONaccess to Mukilteo,Air,Force Station--A request was submitted by the Air Force Logistics Com- mand to the Air Force Communications Service for vali- dation of a two-way circuit between Mukilteo.Air Force Station, Washington, and McChord Air Force Base, Wash- ington. The request described the servcee as follows: 23 ltInstall full period, 4 wire, two-way voice circuit between the above locations. Terminate circuits in switching equipment at McChord to allow direct dialing thru McChord exchange. Terminate circuit in three (3) desk sets and key equipment at Mukilteo, Circuit is to be configured to allow direct dialing thru the McChord PBX [private branch exchange] to and from McChord offices, AUTOVONand other leased circuits available to McChord.@' The requirement was validated as submitted, and a cir- cuit was leased to provide the service., Air Force policy is that where limited service, such as station access to AUTOVON, is required, such access be provided through the nearest DOD facility, if possible. Although Fort Lawton, Washington, is nearer to the station than is McChord, an Air Force Logistics Command representative stated that other DOD activities in the area were not considered as access points because the air base was to furnish, in addition to AUTOVONaccess, logistical support to the station. But AUTOVONaccess could have been provided through Fort Lawton, and the service could have been used also for logistical support from McChord. Because the re- quest did not show that the primary purpose of the requirement was to provide station access to AUTOVON, the validating office did not consider this alternative. 24 ABSENCE OF IJ!JDEPENDENT EVALUATION OF NEW REQUIREMENTS The authority of the Army and the Air Force validating offices is limited to suggesting alternative methods of meet- ing requirements, and the using commands can accept or re- ject their suggestions, The Navy validating office selects the facilities and services, Similar to the Army and the Air Force, DCA has little authority and can only suggest alternative methods of meeting requirements through Defense Communications System assets. The method of validation and approval in the example discussed below illustrates the need for a strengthened review process, Army Military Police Networkl--In December 1967 the Army Provost Marshal General proposed that his of-. fice and those of the Provost Marshal, Continental Army Command; five military police groups of the Armies; and the Crime Laboratory, Fort Cordon, Georgia, be con- nected by a voice-data teletypewriter network using AUTOVONfacilities. This was to be the initial incre- ment of a network that would eventually include the principal detachments and the field offices of the military police groups. In October 1967 the 1st Army Military Police Group, aware of the proposal, requested ADTOVONvoice-data service for the group headquarters' detachments. In October and November 1968, the service was installed. Service to the Continental Army Command Provost Mar- shal's Office was added a , year later, in September 1969. We were told that the requests had not been re- viewed at Headquarters, 1st Army, because it was as- sumed that the Army Provost Marshal had decided on the service needed and how it was to be fulfilled. Alter- native methods of providing.the service were not con- sidered. The requests were forwarded to the Continental Army Command, the next highest command level. The 1 See p. 11. 25 command requested additional justification and coordi- nation with the Army Intelligence Command which has a similar network. After receipt of some additional in- formation, but apparently without the coordination of the Army Intelligence Command, the requests were for- warded to the Army Assistant Chief of Staff for Communications-Electronics without approval or disap- proval. We were told by a command official that its communications office did not agree that the network should be created but that, because it had been con- sidered at higher levels and required further ap- proval, the requests were forwarded to the depart- mental level of the Army. At the departmental level, two alternative methods to fulfill the requests were considered: (1) teletype- writer exchange service and (2) leased dedicated cir- cuits and equipment; both were rejected. Two addi- tional methods--AUTODIN and the Army Intelligence Com- mand Network--did exist; however, we found no evidence that they were considered. The requests were approved as submitted and were forwarded to the Joint Chiefs of Staff. That office approved the requests, but it could not provide us with information on the nature of its review, The requests were then forwarded to the Army validating office, the Strategic Communications Command. At that office we were told that alternative methods had not been considered because higher levels had proposed and approved the method to be used. In January 1970, about 14 months after the 1st Army Police Group Network was installed, it was dis- connected, including the circuit serving the Continen- tal Army Command Provost Marshal's Office. The com- mander of the group told us that, in view of the esti- mated annual network costs--$54,000--it was too expen- sive to justify retention. Although records were not available showing the use of the network while in op- eration, we estimated, on the basis of discussions with the users, that the combined use of the five detachment terminals amounted to 7.5 hours a day. Also we were told that the network was not used to communicate with other police groups or with the Crime Laboratory. The commander commented that the loss of the network was 26 detrimental to the operations of the group; however, it is currently using telephone service for priority matters and mail for routine business. The 4th Army Police Group Network was installed in September and October 1969, about a year after the 1st Army Police Group Network was activated. In May 1970, 4 months after the 1st Army Police Group Network was disconnected, the 3d Army Police Group Network was in- stalled. Both networks were in operation at the time of our audit. The 5th Army Police Group Network was installed also in the latter part of 1969, but was dis- connected within a year, The 6th Army Police Group did not have a network as of June 1970 and had not re- quested such service. With the exception of the 1st Army Police Group Network, the requests for the other numbered Army Po- lice Group networks were not processed through the Continental Army CommandDs communications staff, The staff was unaware that the other networks had been in- stalled. It seems evident that the absence of a coordinated re- view by an independent authority had the following results: (1) the objective of the Army Provost Marshal General to establish a total system was not achieved, (2) segments of the system were being discontinued while others were being installed and two were in existence only a short time, (3) one of the groups never had a network, and (4) the system as it evolved was not used by,the groups to communicate ei- ther with each other or with certain centralized activities. We believe that the circumstances in this case indi- cate the need for an independent review of the remaining segments of the Army Military Police Network. Of the 20 other cases we examined into, four Air Force cases, six Army cases, and a joint Army-Air Force facility case were not reviewed at departmental level because of the $100,000 limitation for review at that level, In these 11 cases, our examination of the review process at lower levels frequently was hampered by the absence of documentation relating to the scope of review. Further, although all Navy 27 requirements were approved at departmental level, we were not able to determine the quality of any reviews made of the six Navy cases because no records of reviews were main- tained, Three Air Force cases were reviewed at departmental level because of special circumstances. We examined into the review made on one of the three and found it to have been adequate. The designation of a central manager, having respon- sibility and authority for an independent review of the justification for new requirements, could provide the focal point for review of requirements from the standpoint of sys- temwide effectiveness and methods to fulfill them. It would also be a step toward the objective of establishing a single communications system for DOD. 28 REEVALUATIONSNOT MADE INDEPENDENTLY NOR COORDINATEDWITH RESOURCESDATA We Selieve that our observations concerning the need for a rather complete inventory of DOD communications resources, traffic data on those resources, and better data on the pur- poses of required services, as discussed in the preceding sections of this chapter dealing with new requirements, also pertain to the reevaluation of existing resources, as dis- cussed in the remainder of this chapter. Furthermore reeval- uations are not always made and, when made, normally are per- formed by the users without guidance and effective review by higher authority. Air Force and Army reevaluations not fully effective We examined into the practices of two commands in the Army1 and two commands and a staff activity in the Air Force. Army procedures provide for an annual reevaluation and Air Force procedures provide for a semiannual reevaluation of the need for communications services. We observed that of- ten: --The periodic reevaluations were made without specific guidance, standards, or techniques provided by the military departments or their communications commands or staffs. --The commands that authorized and used the services determined whether they should be continued. --Rejustifications by the user (command or subordinate element of a command) of a service frequently were phrased in broad terms, such as "a review of our leased circuits/equipments reveals that all are re- quired." 1 In one of the Army commands, however, a small group had been established to analyze administrative communications circuits and recommend changes. Generally the group did not analyze dedicated command and control circuits. This command also had provided some guidance and standards to subordinate elements for use in these reviews. 29 --The military departments8 communications commands fur- nished technical assistance, if requested by the user of a service, but did not have the responsibility for evaluating the user's need or the authority to disap- prove the need. --No activity, apart from the using command, was respon- sible for an independent, critical, and objective ap- praisal of the technical and economic considerations necessary to ensure that service was being provided in the most efficient, effective, and economical man- ner from a systemwide point of view. That the reevaluations were not fully effective is il- lustrated, we believe, by the following examples. 1. Army emergency circuits Two dedicated circuits were installed in 1968 be- tween Fort Sheridan, Illinois, and Fort Carson, Colo- rado, to fulfill emergency communications requirements arising during periods of civil disorders. Periodic traffic studies had not been made. Discussions with the communications staffs during our review showed that the circuits were being used for administrative pur- poses. We estimated that AUTOVONwould have been a less costly means of providing this service. A Strategic Communications Command official agreed that AUTOVON service would meet the users' requirements, would be less costly, and should have been considered during the annual reviews. He also questioned whether the emergency conditions that justified the circuits in 1968 still existed. One official said that there was no evidence that these circuits were evaluated during the 1968 or 1969 reviews. During our review of the two circuits, we brought this matter to the attention of the Continental Army Command. The command requested that the user reevaluate the need, and after reevaluation both circuits were disconnected. We esti- mate the savings from these actions to be about $11,400 annu- ally. 30 2. Air Force Personnel Facsimile Network This network, described on page 10, was reviewed by the user for continuing need in 1969 but not in 1970. We were unable to identify the reason for the 1970 omis- sion. After completion of the 1969 review, the Air Force Communications Service was notified that the net- work would be retained. The notice contained no docu- mentation to support the decision, and the using offi- cials could not provide any. As stated on page 21, our analysis of network traffic data and disclosure of the results to Air Force officials resulted in the discontinuance of four terminals and related circuitry. We believe that, if an effective review and independent evaluation had been made of this network in May 1970, the scheduled time for the semiannual review, it is probable that the Air Force would have had sufficient basis to discontinue the circuits and terminals. 3. Air Force Logistics Readiness Network When the Military Airlift Command established this network (see pa 11) in 1966, the logistics managers of the command decided that AUTOVON, the common-user voice network, could not provide the required sermice (switch- ing, conferencing, and two-digit dialing). The manag- ers stated, however, that the dedicated network would be integrated into a common-user network when it could provide the service needed. From 1967 the logistics managers periodically re- viewed this network and concluded that it was needed. In 1967 a special review was made of the network and a written justification for its retention was submitted to the command communications organization. The justi- fication included a description of the network, the purpose for which it was used, the claimed benefits de- rived from its use, and a statement indicating that it was less costly and more efficient than AUTOVON. 31 DCA off3cials, in response to our inquiry, sug- gested a method of utilizing AUTOVONwhereby the tech- nical and operational requirements could be satisfied at less cost to the Government. The method suggested was to home all members of the dedicated network on a single AUTOVONswitch that was not being fully utilized. This would avoid the possible requirement for leasing any additional lines between switches and would use the capacity of the underutilized switch and thus reduce costs 0 Also the switching, conferencing, and two-digit dialing services would be provided under this method. The AUTOVON service suggested by the DCA officials has been available since 1966, except for the two-digit dialing feature. (The two-digit dialing feature is a refinement which permits connection by dialing two, rather than the normal seven, digits.) In June 1970, on the basis of the result of a spe- cial DOD project which had been established to make an independent determination of whether dedicated networks should be integrated into common-user systems, Headquar- ters, Air Force, directed that the Logistics Readiness Network be eliminated and the facilities of AUTOVONbe used. The broad and general statements which had been used to justify this network were not, in our opinion, susceptible to a sufficiently thorough analysis and evaluation, either from a technical or an economic standpoint. It appears to us that an effective semiannual review could have determined earlier that this network should have been terminated. 4. Continental Army Command Dedicated Voice Network The Continental Army Command has a dedicated voice network costing about $25,000 annually, which connects the command headquarters with its numbered armies and with other locations. The network was completed in October 1969 to provide a conferencing arrangement. At that time this arrangement could not be provided by AUTOVON. The request submitted to the validating office for the dedicated circuits stated that the service would be required until AUTOVON's conferencing arrangement was available. Although AUTOVON's service was available 32 from January 1970, the dedicated service still existed at the time of our review. No traffic analysis had been made of the dedicated service. Personnel of a subordinate element of the com- mand said that the dedicated service duplicated AUTOVON service. In response to our inquiry, an Army Strategic Communications Command official agreed that duplication existed. A review was made by the Continental Army Com- mand Staff communicat6rs in May 1970 and they recom- mended to the command the removal of the dedicated ser- vice. In rejecting the recommendation, the user (the command) stated that: "There is a demonstrated need for continuance of dedicated voice circuits which overshadows any potential cost savings accruable through discon- tinuance. Also, operational limitations associ- ated with AUTOVONmilitate against sole reliance on alternate means." We recognize that the user should have a voice in deci- sions affecting its operational capabilities. We believe, however, that decisions regarding the method of providing the required services should receive an independent review by higher authority, particularly when, as in this situation, the communications staff has evaluated the need for the ser- vice and recommended its removal. The Air Force recognized %hat there were inadequacies in its semiannual review procedures. A working group was formed in May 1970 to provide the users with additional guidance and information. At the time of our fieldwork in September 1970,the group had not made any changes to then- existing procedures. In the Army, it was determined that the requirement for the using commands to annually reevaluate circuits within a 2-month period was not conducive to meaningful and in-depth review and guidance was developed requiring the reviews to be made throughout the year. Also forms were developed for reporting the results of the review of each circuit. The 33 completed forms were to be submitted to the Army Strategic Communications Command, although this command had no author- ity to modify the decision as to retention of a circuit. Reevaluations ._ls not made in the Navy Periodic reviews of leased communications services were not being made in the Navy. A Navy inspection report issued in November 1969 stated that, as a result of a special fis- cal year 1970 review by Navy users, AUTOVONservices costing about $100,000 were identified as excess to requirements. The report stated that effective periodic reviews would have disclosed this condition and that the services would have been discontinued sooner. A Navy official told us that the Navy instructions on the processing and reporting of communications requirements were being revised to include procedures for making periodic reviews. Although the changes made or proposed to be made by the military departments in the periodic reevaluation of communi- cations requirements should result in improved procedures, we believe that such reviews cannot be effective from a DOD- wide standpoint unless adequate consideration is given to existing DOD systemwide facilities which could satisfy such requirements. As stated previously, users and validators do not have such information. We believe also that there should be an independent and authoritative review of reeval- uations at a level higher than that of the user. We recog- nize that the needs of the user must be given appropriate consideration in such determinations, but we believe that such assurance can be provided without sacrificing the ad- vantages of coordinated management of minor communications services. 34 CONCLUSIONS, RECOmNDATION, AND AGENCYCOMMENTS CONCLUSIONS Our review has shown that, although DOD has established DCA, which has a partial inventory of communications re- sources, no office at the Secretary of Defense level, Defense agencies, or military departments has a complete inventory or adequate data on the volume or nature of traffic through the resources. Therefore we believe that military depart- ment activities responsible for validating requests for ser- vices lack sufficient information on available resources and the use being made of them. Also they do not receive ade- quate descriptions of new services being requested. The Army and the Air Force communications staffs have little authority in the selection of facilities to service new communications requirements or to rearrange existing services. We believe that the designation of a central office hav- ing sufficient authority and information to independently re- view new leasing requests and to evaluate them periodically as to the best method of providing the required services would provide a basis for more economical utilization of com- munications resources. We believe also that the operating functions associated with these responsibilities could be performed within the existing DCA organizational structure. The establishment, reevaluation, and rejustification by the users are not, in our opinion, the most effective means to achieve the objective of establishing and perpetuating a single communications system. Although the number of cases examined during our review was too limited to permit an evaluation of the overall effec- tiveness of the management of minor communications within DOD, we believe that certain current policies and procedures require the attention of the Secretary of Defense. RECOMMENDATION Therefore in our draft report we proposed that the Sec- retary of Defense study: 35 --The feasibility of a centralized DOD activity having authority and responsibility for selecting the means of providing new service after the need for the ser- vice has been approved at the appropriate levels. Consideration should be given to the cost of a cen- tralized validation office compared with the costs of the dispersed functions as now performed. --Providing the centralized activity resources including a complete inventory of communications facilities (or, as an alternative, access to such information) and data on their traffic volume and purposes. --Assigning the activity responsibility and authority for controlling the scheduling and monitoring the qualitative aspects of the periodic reevaluations of existingservicesand for determinating whether such services could be provided more economically, but with acceptable effectiveness, by other means, particularly where common-user facilities are available. The moni- toring that we have in mind would include prescribing the types of data and pattern of services that should be jointly considered in reevaluations, making compli- ance reviews to determine that reevaluations are per- formed adequately and with appropriate use of traffic studies, reporting of deficiencies through command channels, and initiating corrective actions. --Whether the criteria for reviewing requirements at the Office of the Secretary of Defense or military depart- ment levels should be redefined as applicable to total contemplated (or actual) network costs rather than to individual increments to networks. --Whether present criteria for reviewing at departmental level should be lowered, particularly the Army and permanent Air Force criteria. --The need for a directed requirement that requests for communications services show details concerning the the purpose of the services; expected traffic volume; configuration of the related network and terminal equipment involved, if any; and such other data that 36 are needed for selection of the most efficient and economical method of fulfilling the requests. --The need for the remaining parts of the Military Po- lice Network that is discussed on pages 25 to 27. AGENCYCOMMENTS A draft of this report was furnished to DOD on April 23, 1971. The Acting Assistant to the Secretary of Defense (Telecommunications) advised us that DOD shared our desire to achieve improved communications management, wherever possible, and that studies were being initiated to examine into each proposal. He stated that DOD's response to our proposals would be forwarded to us upon completion of the studies, which studies were expected to take up to 6 months. (See app. I.> Subsequently we were informed that responsibility for the conduct of these studies had been assigned to the Joint Chiefs of Staff. We plan to evaluate the results of the studies. 37 APPENDIXI OFFICE OF THE SECRETARY OF DEFENSE WASHINGTON, OS. 20301 7 JUL 1971 Mr. Charles M. Bailey Director, Defense Division General Accounting Office 441 G Street, N. W. Washington,. D. C. 20548 Dear Mr. Bailey: The Secretary of Defense has asked me to respond to your GAO Draft Report, dated April 23, 1971, “Benefits from Centralized Management of Minor Communications Services” (OSD Case #3272). The Department of Defense shares your desire to achieve improved communications management wherever possible. To this end, studies are being initiated for the purpose of examining each recommendation or suggestion outlined on pages 5 and 6 of the subject report. A response to the recommendations/suggestions will be forwarded to you upon completion of the studies, which are expected to take up to six months to complete. Sincerely, D. L. “Solomon Acting Assistant to the Secretary of Defense (Telecommunications) Copies of this report are available from the U. S. General Accounting Office, Room 6417, 441 G Street, N W., Washington, D.C., 20548. Copies are provided without charge to Mem- bers of Congress, congressiona I committee staff members, Government officials, members of the press, college libraries, faculty mem- bers and students. The price to the general public is $1 .OOa copy. Orders should be ac- companied by cash or check.
Benefits From Centralized Management of Leased Communications Services
Published by the Government Accountability Office on 1971-12-22.
Below is a raw (and likely hideous) rendition of the original report. (PDF)