oversight

Computer Procurement: Information on Defense Department's CAD/CAM Acquisitions

Published by the Government Accountability Office on 1989-01-19.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

COMPUTER
PROCUREMENT
Information on
Defer&e DeDartment’s
CAD/CAM L
Acquisitions
                       United States
GAO                    General Accounting Of’fice
                       Washington, D.C. 20648

                       Information Management and
                       Technology Division

                       B-224148

                       January 19,1989

                       The Honorable John P. Murtha
                       Chairman, Subcommittee on Defense
                       Committee on Appropriations
                       House of Representatives

                       Dear Mr. Chairman:

                       In a June 1, 1988, letter, your predecessor expressed interest in the
                       extent to which the Defense Department is procuring Computer Aided
                       Design/Computer Aided Manufacturing (CAD/CAM) equipment and
                       whether these procurements are being properly planned and coordi-
                       nated. Also, he requested that we review the Defense Department’s
                       efforts to acquire this technology. During a subsequent discussion with
                       your office, we agreed to provide information on (1) Defense CAD/CAM
                       procurements underway, including the procurement approaches being
                       used; (2) Defense initiatives to consolidate procurements either within
                       or between components, including use of the Navy’s planned CAD/CAM
                       contracts; and (3) the Office of the Secretary of Defense’s (OSD) efforts
                       to guide and coordinate the components’ CAD/CAM procurements.


S$opeand Methodology   We focused our review on three Defense components-the        Army, Air
 I                     Force, and Defense Logistics Agency (r&A)-because OSD records indi-
                       cate that the services and DLA are the principal users of CAD/CAM, apart
                       from the Navy. We excluded the Navy from our review because we
                       recently reported on the Navy’s CAD/CAM acquisition1 Within OSD, we
                       focused on the Office of the Assistant Secretary of Defense (Production
                       and Logistics) and the Comptroller of the Department of Defense, the
                       only offices we identified as involved in Defense activity to acquire CAD/
                       CAMequipment. Our work included interviews with officials in planning,
                       procurement, and review functions. It also included analyses of relevant
                       CAD/CAMplanning and contracting documentation as well as applicable
                       Defense directives and instructions. A detailed explanation of our scope
                       and methodology is contained in appendix I.




                       ‘Corn uter Procurement: Issues Concerning Technical Specification for Navy’s CAD/CAM Acquisition
                       (&-88-U%*,             Mar. 3,lQ88), and Computer Procurement: Navy CAD/CAM Acquisition Has
                       Merit but Management Improvements Needed (GAO---22,                May 11, 1988).



                       Page 1                                   GAO/IMTEG89-3Fs      Defends   CAD/CAM     Acquisitione
                     B-224148




Background           CAD/CAM   is a tool for automating the engineering functions used in
                     designing, manufacturing, and maintaining items such as ships, subma-
                     rines, aircraft, and buildings. With CAD/CAM,a product or item is quickly
                     drawn and easily modified on a computer screen, and the computer can
                     model each drawing before production begins. Following product design,
                     CAD/CAM allows for automated product manufacture and provides a com-
                     puterized record of the product. Using this technology, the cost and time
                     to develop and maintain products can be reduced while product quality
                     and reliability can be enhanced. The Defense Department is a major user
                     of this technology.


Plaqned/Ongoing      The Army, Air Force, and DLA currently use CAD/CAM equipment, and are
Profxrements Serve   buying or planning to buy more. None of the three, however, has ongo-
                     ing or planned procurements as large as the Navy’s
Mogtly Local Needs
                     The Navy is in the midst of a large CAD/CAM procurement and is planning
                     to award five indefinite-quantity contracts sometime in 1990. Although
                     the Navy has yet to officially specify a dollar estimate for the contracts,
                     commercial estimates are as high as $600 million, The five contracts,
                     one for each of the Navy’s five system commands,2 are intended to pro-
                     vide state-of-the-art, off-the-shelf hardware and software to meet differ-
                     ent users’ needs while also providing standard system features for all
                     commands.
                     The Army had 12 ongoing procurements as of September 30,1988, total-
                     ing about $120 million, including one requirements contract that has a
                     $101 million delegation of procurement authority. Under this contract,
                     the Corps of Engineers is authorized to acquire up to $51 million worth
                     of equipment. Other defense agencies, and the National Security Agency,
                     are authorized to spend up to $50 million in support of architecture,                            b
                     engineering, or construction functions similar to those of the Corps of
                     Engineers.

                     The Air Force is now in the early stages of defining its long-term CAD/
                     CAMrequirements. Its ongoing procurements total about $11 million, not
                     including an indefinite-quantity contract with a $114 million delegation
                     of procurement authority to purchase hardware for scientific and engi-
                     neering applications. Some of this hardware will run CAD/CAM software;

                     2The five system commands are the Naval Sea Systems Command, Naval Air Systems Command,
                     Naval Facilities Engineering Command, Naval Supply Systems Command, and Space and Naval War-
                     fare Systems Command.



                     Page 2                                  GAO/IMTEG893lT3     Defense’s   CAD/CAM   Acquisitions
                        E-324148




                        however, Air Force officials could not specify what portion of the $114
                        million relates specifically to cAu/cAM applications. DM is a small user
                        with past and planned purchases totaling about $600,000.

                        The components’ procurement approaches vary. Generally, most
                        procurements are being conducted by individual field activities to sat-
                        isfy localized needs. However, the Army and the Air Force each have
                        one centrally managed procurement that can be used by multiple field
                        activities. Additionally, the Air Force and a number of Army commands
                        are examining the technical specification for the Navy’s planned CAD/
                        CAMcontracts to see if it can be used to satisfy their respective require-
                        ments. (Apps. II, III, and IV contain additional information on Army, Air
                        Force, and DLA procurements, respectively.)


SDInvolvement Minimal   OSD  has encouraged Defense components to use the Navy’s planned CAD/
                        CAM  contracts as a means of satisfying their respective needs. However,
                        according to officials in the Office of the Assistant Secretary of Defense
                        (Production and Logistics), no further OSD involvement is planned. Fur-
                        ther, they do not see a role for OSD in Defense efforts to acquire CAD/CAM,
                        except when a given procurement requires OSD’S approval. Procurements
                        requiring OSD’S approval are those that have total estimated program
                        costs in excess of $100 million, have estimated program costs in excess
                        of $26 million in any single year, or are designated as special interest by
                        CHD. (App. V contains additional information on OSD’S role in Defense
                        actions to acquire this equipment).



                        We discussed the contents of this report with Army, Air Force, DLA,
                        Navy, and 06~ officials, and have incorporated their views where appro-                 A
                        priate. Our work was performed in accordance with generally accepted
                        government auditing standards.

                        We are providing copies of this report to the Secretaries of Defense,
                        Army, Air Force, and Navy, and to the Director, DLA. We are also provid-
                        ing copies to the House and Senate Armed Services Committees, the
                        House Government Operations Committee, the Senate Governmental
                        Affairs Committee, and the House and Senate Appropriations Commit-
                        tees. We will make copies available to other interested parties upon




                        Page 3                          GAO/IMTEC-39-3FS   Defense’s   CAD/CAM   Acquisitions




                                          ‘,
5224143




request. This report was prepared under the direction of William S.
Franklin, Associate Director. Other major contributors are listed in
appendix VI.

Sincerely yours,




Ralph V. Carlone
Assistant Comptroller General




Page 4                          GAO/JMTEG39-3F’S   Defense’s   CAD/CAM   Acquisitions




                      ‘,
Page 6   GAO/IMTM239-3FS   Defense’s   CAD/CAM   Acquisitions
Contents


Getter
Appendix I                                                                               8
dbjectives, Scope,and
Methodology
Appendix II
hmy CAD/CAM
Procurements
Appendix III
&r Force CAD/CAM
flrocurements
 ’ ppendix IV
3
                                                                                        16
  IA CAD/CAM
  rocurements
 I



Appendix V
@D Role in Defense
CIA-D/CAM
I+-ocurements
                                                                                        18   b




                        Page 0   GAO/IMTEG89-3FS   Defense’s   CAD/CAM   Acquisitions
Tables   Table II. 1: Army Materiel Command CAD/CAM                                            11
             Procurements as of September 30,1988
         Table 11.2:Corps of Engineers CAD/CAM Procurements as                                 12
             of September 30,1988
         Table III. 1: Air Force Systems Command CAD/CAM                                       14
             Procurements as of September 30,1988
         Table 111.2:Other Air Force CAD/CAM Procurements as of                                14
             September 30,1988




         Abbreviations

         CAD/CAM Computer Aided Design/Computer Aided Manufacturing
         DLL4    Defense Logistics Agency
         GAO     General Accounting Office
         IMTEC   Information Management and Technology Division
         OSD     Office of the Secretary of Defense


         Page 7                       GAO/IMTEC&MFS   Defense’s   CAD/CAM           Acquisition8




                         L;,.‘   :                                          .‘,_I
                          ,,         ‘/
Appendix I

Objectives, Scope, and Methodology


                    Interest in the Defense Department’s acquisition of CAD/CAM equipment
                    prompted the former Chairman, Subcommittee on Defense, House Com-
                    mittee on Appropriations, to request that we review Defense efforts to
                    acquire this technology. On the basis of the former Chairman’s request
                    and subsequent discussions with his office, we agreed to provide infor-
                  . mation on
              l    CAD/CAMprocurements that are occurring within Defense components,
                including the procurement approaches being used;
              . Defense efforts to consolidate CAD/CAM procurements either within or
                between components, including the use of the Navy’s planned contracts;
                and
              . 0s~‘~ efforts to guide and coordinate the components’ CAD/CAM
                procurements.

                   In developing this information, we focused on three Defense compo-
                   nents-the Army, Air Force, and DLA. We selected these for two reasons.
                   First, OSD records indicated the services and DLA to be the primary
                   Defense users of CAD/CAM equipment. Second, we recently reported on
                   the Navy’s efforts to acquire this type of equipment.’ Also, in developing
                   this report, we focused on two OSD offices-the Office of the Assistant
                   Secretary of Defense (Production and Logistics) and the Office of the
                   Comptroller of the Department of Defense-because they are the only
                   OSD offices that we identified as having potential involvement in Defense
                   efforts to acquire CAD/CAM equipment.

                   Our review approach included interviews with Army, Air Force, and DLA
                   officials who perform functions relevant to the procurement of these
                   systems, including requirements determination, contracting and contract
                   management, and acquisition oversight. It also included examination of
                   applicable documentation such as studies of components’ current uses                         L
                   and plans for future acquisitions, contracts, and solicitation documents
                   for procurements currently underway; Defense reports on contract
                   expenditures; and Defense directives and instructions governing the
                   procurement of computer systems such as CAD/CAM. Additionally, our
                   approach included interviews with OSD officials and examination of doc-
                   UmentatiOn germane to OSD’s role in Defense’s procurement of CAD/CAM.

                   Finally, our review included an automated search of the Commerce
                   Business Daily for reference to Defense CAD/CAM procurements, either


                   1GAO/IMTEC-88-16BR, Mar. 3, 1988; and GAO/IMTEC-88-22, May 11, 1988.



                   Page 8                               GAO/IMTEC-39-3F%   Defense’s   C&D/CAM   Acquisitions
    APP@n-1
    Objectivea,   Scope, and Methodology




    requests for proposals or contract awards, announced from February
    1986 through September 1988.

    We performed our work from July 1988 through September 1988, pri-
    marily at (1) component headquarters offices and OSDoffices in Wash-
    ington, DC., and (2) selected component field activities. The principal
    headquarters offices contacted were:

. Army: Office of the Director of Information Systems for Command, Con-
  trol, Communications, and Computers.
9 Air Force: Deputy Chief of Staff for Logistics and Engineering; Deputy
  Chief of Staff for Command, Control, Communications and Computers.
l Defense Logistics Agency: Technical and Logistics Data Division.
. Office of the Secretary of Defense: Office of the Assistant Secretary of
  Defense (Production and Logistics); the Office of the Comptroller of the
  Department of Defense.

    We discussed the contents of this report with Army, Air Force, DIA,
    Navy, and OSDofficials and have incorporated their views where appro-
    priate. Our work was performed in accordance with generally accepted
    government auditing standards.




    Page 9                                 GAO/IMTEG89SF!S   Defense’s   CAD/CAM   Acquisitions
Appendix II

Army CAD/CAM Procurements


                         The Army has used CAD/CAMsince the 1970s and is buying more of the
                         technology. As of September 30,1988, it had 12 ongoing procurements,
                         totaling about $120 million, including one requirements contract that
                         has a $101 million delegation of procurement authority and that can be
                         used by the Army and other agencies. The Army’s acquisition approach
                         for its procurements includes both large-scale, centrally managed con-
                         tracts as well as smaller, locally awarded and managed contracts. A
                         number of Army commands are considering whether their future needs
                         can be satisfied by the Navy’s planned CAD/CAMcontracts.


The iArmy as CAD/CAM     The Army first introduced CAD/CAMto its arsenals and research and
                         development laboratories to aid in the design and development of weap-
Useq                     ons systems. Since then it has employed robotics at depots and ammuni-
                         tion plants as a substitute for humans in potentially hazardous
                         positions, and it has begun using CAM to produce small-caliber
                         ammunition.

                         The Army has two primary CAD/CAMusers-the Army Materiel Com-
                         mand and the Corps of Engineers. The Army Materiel Command, which
                         operates Army arsenals, depots, and other facilities, is the Army’s larg-
                         est user. An Army Materiel Command survey dated April 1988 shows
                         that the Command has invested about $430 million in a wide range of
                         CAD/CAMtechnology.

                         The Army’s other primary user is the Corps of Engineers, which uses
                         CAD for architecture, engineering, and construction functions. Unlike
                         the Army Materiel Command, the Corps does not manufacture equip-
                         ment, machinery, or spare parts, and thus its investment is limited to
                         design and drafting equipment.


Ar y Materiel Comrnand   Our review identified 10 CAD/CAMprocurements in the Army Materiel
                         Command-6 contracts and 4 requests for proposals (see table II. 1). The
Pro1 urements            6 contracts total about $14 million, and the requests for proposals total
                         about $5.5 million. Each of these procurements is being conducted
                         locally by Army Materiel Command field activities. According to the
                         April 1988 Army Materiel Command study, planned investments
    ~                    between 1989 and 1992 will total about $20 million.




                         Page 10                         GAO/IMTEC39SFS   Defense’s   CAD/CAM   Acquisitions
                                        Appendix II
                                        Army CAD/CAM       Procurements




Tdble 11.1:Army Materiel Command CAD/
C&k! Procurements as of September 30,   Dollars in thousands
1988                                                                                                          Contract
 /                                      Location                                             co%z            Awarded?          Expenditures’
                                        Watervliet Arsenal                                      $4,653                  yes               $4,395
                                        Tank and Automotive Command                              3,488                  yes                   86
                                        Redstone Arsenal                                         4,897                  yes                3,076
                                        Redstone Arsenal                                           503                  yes                none
                                        Redstone Arsenal                                           233                  yes                 none
                                        Redstone Arsenal                                           114                  yes                none
                                        -_____ Army Depot
                                        Anniston                                                   200b,C                no                 none
                                        Rock Island Arsenal                                      2,500c                  no                none
                                        Corpus Christi Depot                                       791G                  no                none
                                        Tobvhanna Deoot
                                            a
                                                                                                 2.oooc                  no                none
                                        Total                                                 919,379
                                                                                                 ,                                       $7.559
                                                                                                                                            I~~.
                                        nAs of June 30,1988.
                                        bEstimated costs of l-year lease. The contract is planned to have a purchase option.
                                        cValues of contracts not yet awarded estimated by activity contracting officials.



    orps of Engineers                   Our review identified two Corps of Engineers procurements as of Sep-
    rocurements                         tember 30, 1988 (see table 11.2). One of the two is a requirements con-
                                        tract with a $101 million procurement limit, intended to fulfill the
/                                       design and drafting requirements of all Corps districts. Although a total
                                        dollar value is not specified in the contract, the delegation of procure-
                                        ment authority limits Corps purchases against the contract to $51 mil-
                                        lion, and Corps officials told us that this limit would likely be reached.
                                        As of September 1988, 24 of the 39 Corps district offices had submitted
                                        purchase orders against the contract totaling $12.1 million. Addition-
                                        ally, this contract has a $60 million delegation of procurement authority,                                 h
                                        which is available to other defense agencies and the National Security
                                        Agency. The other Corps contract is a local procurement for microcom-
                                        puter drafting software, which is not available from the requirements
                                        contract.




                                        Page 11                                      GAO/IMTEG395J?S        Defense’s    CAD/CAM   Acquisitions
                                          Appendix II
                                          Army CAD/CAM      Procurements




Tabldj 11.2:Corpr of Englneere CAD/CAM
Procr/remento
      /
                ee of September 30,1988   Dollars in thousands
     /                                                                                                                               .-..-.
                                                                                              Contract     Contract
     I                                    Location                                              Value     Awarded?               Expenditures’
                                                                                                                                    --____
                                          Corps of Engineers                                  $101,000b               yes                     $6,662
                                          Corps of Engineers, Sacramento
                                            District                              -                 43                yes                       none
                                          Total                                              $101,043                                         $6,662

                                          aAsof June30,1988.
                                          bTotal delegation of procurement authority



Ar~$y Efforts to                          The Army is involved in a large-scale, centrally managed CAD/CAM acqui-
colqsolidate Procurements                 sition, and is considering the use of the Navy procurements. The Corps’
                                          requirements contract is available to its 39 district offices, as well as to
                                          other defense agencies, and the National Security Agency, with a need
                                          the contract can satisfy. Additionally, the Office of the Director of Infor-
                                          mation Systems for Command, Control, Communications, and Com-
                                          puters has solicited Army commands for interest in participating in the
                                          Navy’s planned CAD/CAM contracts. As of September 1988, 11 Army
                                          activities had expressed interest in reviewing the Navy’s Request for
                                          Proposals when it is available.




                                          Page 12                                      GAO/IMTEC89-3F’S   Defense’s    CAD/CAM     Acquisitions
                         /CAM Procurements


                          The Air Force began using CAD/CAM technology in the 1970s and has con-
                          tinued to acquire the technology. As of September 30, 1988, the Air
                          Force had seven ongoing procurements totaling about $11 million. The
                          Air Force also had an indefinite-quantity contract with a $114 million
                          delegation of procurement authority for scientific and engineering com-
                          puters, which may be used for CAD/CAM. Air Force acquisition strategies
                          include large, centrally managed contracts as well as small, locally
                          awarded contracts managed by field activities, The Air Force is explor-
                          ing opportunities for CAD/CAM procurement consolidation within the Air
                          Force itself and between the Air Force and the Navy.


?ihe Air Force as CAD/    Two Air Force commands acquire the majority of CAD/CAM technology
                          used by the service: the Air Force Systems Command and the Air Force
C)lM User                 Logistics Command. According to a November 1988 Air Force survey,
                          the acquisition cost of the Systems Command’s current CAD/CAMinven-
                          tory is about $9 million, while the Logistics Command’s totals about
                          $43 million. The Strategic Air Command and the Tactical Air Command
                          also use and are acquiring this type of equipment.

                          The Air Force uses CAD/CAM technology for a variety of applications. The
                          Air Force Systems Command’s research laboratories and test centers use
                          it for designing and developing weapons systems. The Air Force Logis-
                          tics Command uses this technology at its five Air Logistics Centers for
                          maintaining aircraft and developing procurement specifications for
                          existing equipment. As of September 30, 1988, the Air Force Logistics
                          Command was not conducting any CAD~ZAM procurements. The Strategic
                          Air Command and the Tactical Air Command use the technology for
                          such applications as reproducing old technical drawings and designing
                          printed circuit boards.                                                                       b

 ,ir Force Systems        The Air Force Systems Command is conducting one centrally managed
 ommand Procurenzents     procurement, plus several localized procurements (see table 111.1).The
                          centrally managed procurement is an Air Force-wide, scientific and engi-
                          neering workstations, indefinite-quantity contract with a $114 million
                          delegation of procurement authority. This contract provides for the pur-
                          chase of hardware that can be used for a number of applications, includ-
                          ing CAD/CAM. However, according to a Systems Command contracting
                          official, it is not known how many of these workstations will be used for
                          CAD/CAMapplications. The contract is expected to reach its dollar limit in
                          1989.



                          Page 13                                 GAO/lMTEG895FS   Defense’s   CAD/CAM   Acquisitions



                                             ‘,,!:/,F:’ ,,
                                             s’.!.::.        .,    ..
                                         Appendix III
                                         Air Force CAD/CAM      Procurements




Table ill.1: Air Force Syatemr Command
CAD/ AM Procurements as of               Dollars in thousands
Septe ber 30,1988                                                                          Contract     Contract
     1
      /                                  Location                                            Value     Awarded?               Expenditures’
                                         Aeronautical Systems Division, Wright-
                                             Patterson Air Force Base                      $114,30Ob               yes                $49,401
                                         4950th Test Wing, Wright-Patterson Air
                                             Force Base            ---                         6,924       --      yes                    none
                                         Aeronautical Propulsion and Flight
                                             Dynamic Laboratory, Wright-
                                             Patterson Air Force Base                       _--2,465               yes                   none
                                         6585
                                         -.-    Test   GroupyEglin Air Force Base
                                                   ----I__~-___                                 228                yes                   none
                                         Total                                            $123,917                                   $49,401
                                         aAs of June 30,1988.
                                         ‘)Delegation of procurement authority



0th’ r Air Force CAD/CAM                 The Strategic Air Command and the Electronic Security Command are
Pro urements                             each conducting one CAD/CAMprocurement, and the Tactical Air Com-
                                         mand is conducting two (see table 111.2).They are all being conducted at
                                         field activities within the two commands to satisfy local needs.
    :
Table 111.2:Other Air Force CAD/CAM
Proc rements as of September 30,1988     Dollars in thousands
                                                                                          Contract      Contract
                                         Location                                           Value      Awarded?           Expenditures0
    1
                                         Tactical Air Command, Luke Air Force
                                            Base                                             $1,224                yes                   none
                                         Electronic Security Command, Kelly Air
                                            Force Base                                          150                yes                   none
                                         Strategic Air Command, Whiteman Air
                                            Force Base                                           97                yes                   none
                                         Tactical Air Command, Shaw Air Force
                                            Base
                                         -~-_-----                                               56                 no                   none
                                         Total                                              $1,527
                                         aAs of June 30,1988.



CL&CAM Procurement                       The Air Force is exploring ways to consolidate its CAD/CAMprocure-
                                         ments. For example, it has established a policy group to formulate a
Co@lidation Efforts                      long-term Air Force acquisition strategy, taking into account the ser-
                                         vice’s need for data exchange among users. The policy group plans to
                                         issue guidance to ensure that systems acquired will meet certain com-
                                         mon standards. The group also plans to evaluate the feasibility of using
                                         the Navy’s planned contracts to meet Air Force requirements. Initially,


                                         Page 14                                    GAO/IMTEcS9-3F!3   Defense’s    CAD/CAM     Acquisitions
    Appendix ill
    Air Force CAD/CAM   Procurement8




-
    the Air Force will provide the Navy’s technical specification to its major
    commands, including the Logistics Command and Systems Command.
    Those commands will determine,how well their requirements would be
    met by the Navy contracts.

    Additionally, the Air Force Logistics Command has a CAD/CAMsteering
    committee that is surveying the command’s need for a single, command-
    wide acquisition. The steering committee is evaluating alternative CAD/
    CAMacquisition options, including the possibility of using the planned
    Navy contracts.

    According to an Air Force Systems Command official, the command has
    established a steering committee to address CAD/CAM requirements on a
    command-wide basis. The official added that the committee will be simi-
    lar to that of the Air Force Logistics Command. The Systems Command
    does have one representative on the Logistics Command’s CAD/CAM steer-
    ing committee to informally coordinate between the two commands.
    Additionally, the Systems Command has an informal review underway
    to evaluate whether the hardware specifications of the Navy’s planned
    contracts will satisfy its scientific and engineering workstations require-
    ments when the command’s current indefinite-quantity workstations
    contract expires.




    Page 16                            GAO/lMTECX39-9FS   Defense’s   CAD/CAM   Acquisitions
Appendix IV        *

DI& CAD/CAM Fbcurements


                         DLA  uses CAD/CAMto a much lesser extent than do the services. Our
                         review identified three DIA facilities that use CAD systems, but identi-
                         fied no ongoing and just one planned procurement of the technology.
                         Because of its small CAD requirements, DL4 is not planning to partici-
                         pate in the Navy’s planned CAD/W contracts, according to the director
                         of DLA’S Technical and Logistics Data Division.


DLA +SCAD/CAM User       Unlike the services that design and build weapon systems, DLA'S mission
      /                  is to supply the services with common items or spare parts. As a result,
                         DLA’S principal need for CAD/CAM  is limited to drafting applications used
                         in preparing drawings of the parts it supplies. One DLA user of the equip-
                         ment is the Defense Logistics Service Center, which has a single CAD
                         workstation to incorporate parts drawings in DLA’S catalog of standard
                         parts. Another user, the Defense Electronics Supply Center, uses CAD to
                         explore opportunities for standardizing electronic systems’ components.
                         The third DLA user is a depot in Ogden, Utah, that uses a CAD system in
                         designing and maintaining its buildings.


       rocurements and   DLA’S one planned procurement is for three workstations and has an esti-

       idation Efforts   mated contract value of $117,000. DLA is not planning to participate in
                         the Navy’s CAD&-%M     contracts. According to the director of DLA'S Techni-
                         cal and Logistics Data Division, DLA does not need CAD/W equipment as
                         sophisticated as that required by the services. The director cited DLA’S
                         limited CAD needs as justifying DLA’S plans to not participate in the
                         Navy’s procurement. DLA has, however, used the Army Corps of Engi-
                         neers’ contract to acquire $400,000 worth of CAD equipment for the
                         Ogden depot. According to the staff director of DLA'S Office of Installa-
                         tion Services and Environmental Protection, the Ogden depot is serving
                         as a pilot site for testing the use of CAD equipment. Other DLA depots
                         may acquire similar equipment in the future.




                         Page 16                            GAO/IMTEG99SFS   Defense’s   MD/CAM   Acquisitions




                                                     I I,
 PpeI
ij!i5vRole in Defense CAD/CAM Procurements


              Unless a given CAD/CAM procurement within the Defense Department
              qualifies as a major System requiring OSD’s a.‘pprOVa&’ OSD does not get
              involved in the procurement. According to officials in the Office of the
              Assistant Secretary of Defense (Production and Logistics), apart from
              the Navy’s acquisition, OSD has not been involved in any Defense
              procurements specifically for CAD/CAM.In addition, OSD does not have
              instructions or directives strictly for CAD/CAMprocurements. These offi-
              cials expressed confidence that the existing regulations governing com-
              puter system acquisitions are sufficient to guide actions to acquire CAD/
              CAM.

              OSD has  encouraged Defense components to use the Navy’s planned con-
              tracts. In an April 11, 1988, letter, the Assistant Secretary of Defense
              (Production and Logistics) promoted the idea of using the planned Navy
              contracts to satisfy CAD/CAM needs of the Army, Air Force, and DLA to the
              maximum extent possible. Officials in the Office of the Assistant Secre-
              tary of Defense (Production and Logistics) stated that this letter
              responded to a perceived opportunity for the services to save time and
              money by using the Navy contracts instead of developing their own
              specifications and awarding their own contracts. They foresaw no fur-
              ther OSD involvement in determining whether the components should
              buy CAD/CAM, separately or jointly.




              ‘According to Department of Defense Directive 7920.1, a major automated information system is one
              that has total estimated program costs in excess of $100 million, has estimated program costs in
              excess of $26 million in any single year, or is designated as special interest by OSD. OSD exercises its
              approval authority over these major systems through its Major Automated Information System
              Review Council.



              Page 17                                     GAO/IMTJK%93J?!3       Defense’s   CAD/CAM     Acquisitions
Appendix VI

Major Contributors to This &port


Inf&-mation Management     William S. Franklin, Associate Director, (202) 276-3188
and Technology Division,   John B. Stephenson, Group Director
                           Randolph C. Hite, Evaluator-in-Charge
Washington, D.C.           David R. Turner, Evaluator
                           Gwendolyn A. Dittmer, Evaluator
                           Lisa T. Pittelkau, Evaluator




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