oversight

Defense Logistics: Army Should Assess Cost and Benefits of the Workload Performance System Expansion

Published by the Government Accountability Office on 1999-11-12.

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

                  United States General Accounting Office

GAO               Report to the Chairman and Ranking
                  Minority Member, Committee on Armed
                  Services, House of Representatives


November 1999
                  DEFENSE LOGISTICS

                  Army Should Assess
                  Cost and Benefits of
                  the Workload
                  Performance System
                  Expansion




GAO/NSIAD-00-16
Contents



Letter                                                                                3


Appendixes   Appendix I:  Army Workload Performance System Application
               for Depot Maintenance                                                 20
             Appendix II:   AWPS Application for Ammunition Logistics                21
             Appendix III: AWPS Application for Ammunition Manufacturing             22
             Appendix IV: AWPS Application for Base Operations                       23
             Appendix V:    Future AWPS Applications                                 24
             Appendix VI: Comments From the Department of Defense                    26


Tables       Table 1: Examples of Tasks Associated With AWPS Depot
               Maintenance Application as of August 1999                              7
             Table 2: AWPS Schedule                                                  11
             Table 3: AWPS Project Office Budget Summary for Fiscal
               Years 1996-2002                                                       14




             Abbreviations

             AWPS      Army Workload Performance System
             DOD       Department of Defense



             Page 1                                    GAO/NSIAD-00-16 Defense Logistics
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United States General Accounting Office                                                        National Security and
Washington, D.C. 20548                                                                  International Affairs Division



                                    B-283492                                                                             Leter




                                    November 12, 1999

                                    The Honorable Floyd Spence
                                    Chairman
                                    The Honorable Ike Skelton
                                    Ranking Minority Member
                                    Committee on Armed Services
                                    House of Representatives

                                    Accurate and consistent estimates of future workloads are essential to
                                    determine personnel requirements. The Congress included a requirement
                                    in the National Defense Authorization Act for Fiscal Year 1998 (P.L. 105-85)
                                    that the Secretary of the Army certify that the Army’s new system for
                                    estimating personnel requirementsthe Army Workload Performance
                                    Systemwas fully operational before any reduction-in-force actions could
                                    be made at any of the Army’s five maintenance depots.1 To this end in 1998,
                                    the House Committee on National Security2 directed the Army to conduct a
                                    study and provide the Committee with its master plan for implementing the
                                    Army’s Workload Performance System, including future applications and
                                    total funding for implementation.3 The Committee also required that we
                                    provide it a report on the Army’s study. Specifically, as agreed with your
                                    offices, we assessed (1) the Army’s progress in developing and
                                    implementing the workload performance system and (2) the extent to
                                    which the Army’s April 1999 report addresses an overall master plan for
                                    implementing the system, including the system’s future applications and
                                    funding requirements.



Results in Brief                    The Army has implemented and certified a basic automated workload and
                                    performance system to evaluate personnel requirements in its five
                                    maintenance depots. While the system appears to be adequate for this
                                    purpose, additional work is under way or planned to achieve improved

                                    1
                                     Previously approved reductions resulting from recommendations approved under the
                                    Defense Base Closure and Realignment Act were not affected by P.L. 105-85.
                                    2
                                        Now known as the House Committee on Armed Services.
                                    3
                                     Report 105-532 of the House Committee on National Security regarding the National
                                    Defense Authorization Act for Fiscal Year 1999.




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             performance. These additional improvements include applications to
             identify the number of personnel excesses or shortages by type of skill, the
             ability to assign personnel based on skill qualifications to the most
             appropriate jobs, and the impact of material shortages on planned work.
             Additionally, development work is under way or planned to apply the
             workload performance system to several other functional areas, even
             though some questions exist about how cost-effective the system may be in
             some instances.

             The Army’s report on its congressionally required master plan provided
             limited and incomplete information on future development plans and did
             not provide requested funding information. Thus far, the Army has used
             working capital funds4 for system development, even though the
             Committee’s report language directed that Army working capital funds not
             be used for this purpose.

             This report makes recommendations to develop a more comprehensive
             master plan and strengthen the management control and oversight of
             system development efforts.



Background   Several audit reports in recent years have highlighted the Army’s inability
             to support its personnel requirements using analytically based workload
             forecasts. In the Department of Defense’s (DOD) fiscal years 1997 and 1998
             Annual Statements of Assurance, DOD noted difficulties in relating
             personnel requirements to workload and budget as a material weakness in
             the Army’s manpower requirements determination system. In 1998 we
             reported on the Army’s progress in taking corrective action.5

             To resolve deficiencies in its civilian manpower requirements
             determination process, the Army initiated development of an automated
             system intended to capture workload data and link it to manpower
             requirements. In March 1996 the Army provided initial funding to its
             support contractor and the Navy to develop and implement a modified


             4
              Under this industrial funding arrangement, the Army sells goods and services to the
             military services based on predetermined rates designed to recoup operating costs. Working
             capital fund customers pay for the goods and services, primarily with operations and
             maintenance funds appropriated by the Congress.
             5
              Force Structure: Army’s Efforts to Improve Efficiency of Institutional Forces Have
             Produced Few Results (GAO/NSIAD-98-65, Feb. 26, 1998).




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                      version of a Navy-developed automated workload performance system for
                      use at Army maintenance depots. In June 1996, a preliminary version of
                      what is now part of the Army Workload and Performance System (AWPS)
                      was implemented on a test basis at Corpus Christi Army Depot, one of the
                      Army’s five maintenance depots.

                      The AWPS depot maintenance application extracts data from several
                      computerized Army support systems. The data are obtained electronically,
                      and no new or unique data are collected specifically for the workload
                      system. It provides project status and labor-hour information data collected
                      from the depots, planned workload data from the Army Materiel Command,
                      and workload data obtained from the Army’s major customers.

                      A combination of Navy civilian and contractor employees is developing
                      AWPS, with program oversight provided by Headquarters, Department of
                      the Army, and day-to-day management oversight by the system project
                      office under the Industrial Operations Command at Rock Island, Illinois.6 A
                      working group, comprised of representatives from a variety of Army
                      Materiel Command activities, provides input to the project office regarding
                      system requirements and outputs. It develops system acceptance criteria,
                      consulting as needed with the Army Audit Agency, which acts in an
                      advisory capacity.



Army Met Original     The Army has completed initial implementation of AWPS for depot
                      maintenance, and it recently certified the basic system as operational at
Goals for AWPS, but   five maintenance depot locations. At the same time, the magnitude of the
Additional            AWPS project has grown to a point where additional management oversight
                      and coordination may be warranted. Numerous additional tasks have been
Development           identified and initiated to enhance the depot maintenance application, and
Continues             AWPS is being expanded to four other functional areas—ammunition
                      logistics, ammunition manufacturing, base operations support, and
                      arsenals. Further, headquarters Army officials have identified still more
                      functional areas for potential long-term development.




                      6
                          The Industrial Operations Command reports to the Army Materiel Command.




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Basic AWPS Application for   On June 28, 1999, the Assistant Secretary of the Army for Manpower and
Depot Maintenance            Reserve Affairs certified that work on the basic workload performance
                             system had been completed and was operational at its five maintenance
Implemented and Certified    depots.7 The initial operating capability focused on a basic workload and
                             planning system to facilitate management of depot workloads and the
                             ability to identify workload/workforce imbalances at the five depots.

                             Overall, the depot maintenance application of AWPS takes workload and
                             workforce information and presents it in a manner that allows shop
                             supervisors to better manage the work flowing through their shops and
                             permits depot managers to better manage the size and composition of their
                             workforce. Work in developing this application included (1) gathering
                             project data, labor expenditures, performance data, and scheduling
                             information to support workload forecasting and personnel staffing
                             studies; (2) capturing various personnel data, such as leave and attrition, to
                             support analysis of alternative employment strategies; and (3) providing
                             daily production support by comparing actual resource expenditures
                             against production plans.



Further Enhancements of      Although the basic depot maintenance application has been certified as
Depot Maintenance            operational, the Army continues to develop this application to enhance its
                             capabilities. The AWPS application for depot maintenance is evolving from
Application Under            a basic system that captures workload data and links it to manpower
Development                  requirements to a more robust system that is expected to provide more
                             refined information about individual skill levels. The Army’s April 1999
                             report to the Committee identified four of these enhancements, but it
                             excluded several tasks that were previously planned by the system project
                             office. For example, the AWPS maintenance application is being enhanced
                             to identify the number of needed employees by skill type and to facilitate
                             the assignment of the most appropriate personnel to each job to maximize
                             depot productivity over a 3-year period. Table 1 outlines the completed and
                             certified tasks noted above as well as examples of additional tasks now
                             under development or planned for the future to enhance the depot
                             maintenance application.




                             7
                               Section 364 of the 1998 Defense Authorization Act prohibited the Army from initiating a
                             reduction in force at the five Army maintenance depots until after the Secretary of the Army
                             certified to the Committee that the workload and performance system is fully operational.




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Table 1: Examples of Tasks Associated With AWPS Depot Maintenance Application as of August 1999

Task                                  Objectives
Completed and certified
Develop and implement basic          Facilitate management of depot workload by identifying workload and personnel data and
workload and planning system at five generating job planning information.
depots
Develop workload and resources        Given workload and personnel resources in each depot work area, generate a report identifying
reporting process at five depots      net workforce imbalances.
Completed
Integrate system with depot budget    Clarify the relationship between workload and workforce on the budget.
preparation and train industrial
activity personnel in its use
Under development
Support management of contractor      Incorporate planning, scheduling, and performance of contractor personnel working in Army
labor within the depots               depots to provide visibility of contractor production within the depot system. Completion expected
                                      in November 1999.
Implement programming language        Accomplish conversion of system from FoxPro to the Oracle language.
conversion
Planned but work not begun
Develop resource, scheduling, and     Implement coding system to refine workforce analysis by focusing on specific employee skills
control skill codes                   rather than aggregating personnel information by work area. Completion expected in March 2001.
Design and implement resource,        Size the workforce and assign the most appropriate personnel to maximize depot productivity and
scheduling, and control system at     size the workforce using previously developed coding system. Completion expected in January
five depots                           2003.
Develop and implement material        Support comparisons of material requirements and supply availability data to determine whether
systema                               material will be available to perform planned maintenance and to facilitate make or buy decisions
                                      for parts and components. Completion expected in September 2002, but additional requirements
                                      being considered.
Implement capability to compare       Support analysis of impact of potential resource or workload changes on depot production and
personnel and cost impact resulting   costs.
from unforeseen changes


                                              a
                                               Project office officials stated that the use of commercial off-the-shelf software might be a more cost-
                                              effective alternative for this and other similar material tasks.
                                              Source: Army Workload Performance System Project Office.


                                              The tasks under development were expected to be completed between now
                                              and 2000; others not yet started are expected to be completed by 2005.
                                              However, as discussed more fully in a later section, the program has
                                              encountered a variety of schedule slippages due to funding problems and
                                              programmatic changes. Appendix I provides additional summary
                                              information regarding the individual tasks for the depot maintenance
                                              application, including projected completion dates as of August 1999.



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Expansion of Workload   While the Navy system from which AWPS evolved was used only for depot
Performance System to   maintenance, the Army’s system will include applications for other
                        functional areas. System modifications are under way or planned to
Other Applications      support eventual system implementation in the areas of ammunition
                        logistics,8 ammunition manufacturing, and base operations support. The
                        basic system for the ammunition, base operations support, and other
                        follow-on applications is expected to meet the same objectives as are
                        currently met for the depot maintenance application: scheduling workloads
                        and identifying workforce imbalances based on an analysis of planned
                        workload and available personnel. In commenting on a draft of this report,
                        DOD officials stated that the Army is proceeding with limited prototype
                        development and testing of these applications to determine the operational
                        costs and benefits of each application and system enhancement. Officials
                        further stated that the Army would not implement applications that do not
                        adequately demonstrate cost-effectiveness.

                        Project office officials are not aware of any plans for certifying the
                        operational effectiveness of these other system applications for the
                        Congress.9 Current plans provide that the operational effectiveness of each
                        of the new applications and all major enhancements will be reviewed and
                        validated by the Army Audit Agency using acceptance criteria developed by
                        a configuration control board comprised of representatives from a variety
                        of Army Materiel Command activities. The Industrial Operations Command
                        will send written confirmation to the Army Materiel Command to report
                        completion of this validation.

Ammunition Logistics    The basic system for implementing the AWPS ammunition logistics
                        application has been installed and has undergone system testing at selected
                        locations. The Army Audit Agency evaluated this work and found it
                        acceptable. Subsequently, the Industrial Operations Command informed
                        the Army Materiel Command that the basic ammunition system had been
                        successfully installed. Development efforts are under way or planned to
                        enhance this application. Appendix II identifies 10 tasks and other
                        summary information associated with this application. The follow-on tasks
                        have projected completion dates in 2005.


                        8
                          Ammunition logistics includes such functions as storage, issuance, demilitarization,
                        maintenance, stock rotation, and minor modifications to previously manufactured items.
                        9
                         The 1998 Defense Authorization Act certification requirement applies only to AWPS
                        implementation at the five Army maintenance depots.




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                           Differing opinions exist regarding the usefulness of AWPS in ammunition
                           logistics facilities. On one hand, Army officials at using organizations
                           questioned the usefulness of automated systems and procedures for
                           identifying temporary staff shortages and excesses given the day-to-day
                           fluctuations in workload forecasts and the relatively short production
                           projects generally experienced. On the other hand, Army headquarters
                           officials stated that while workload forecasts change frequently,
                           implementation of the planned system would enable facility managers to
                           more effectively utilize employees. While we did not examine the
                           ammunition logistics module sufficiently to determine the cost-
                           effectiveness of this application, it is clear that these disparate positions
                           need to be resolved. As discussed later, greater involvement of
                           organizations likely to be affected by AWPS implementation may be needed
                           in designing future applications to better ensure continued program
                           viability and evaluate cost-effectiveness.

                           In commenting on a draft of this report, DOD officials stated that the Army
                           established a configuration control board comprised of system users and
                           developers to identify and solve various technical and programmatic
                           issues. Further, DOD officials stated that user acceptance of the system has
                           improved and that users have already recognized and implemented
                           improved business practices.

Ammunition Manufacturing   An AWPS ammunition manufacturing application is in a preliminary
                           planning phase and the Army has not yet initiated development work. As
                           currently planned, this application will identify workload and personnel
                           requirements and provide plant managers with information on individual
                           project status. Appendix III lists three tasks and summary information
                           associated with the ammunition manufacturing application. Although work
                           has not yet begun on these tasks, the Army currently projects completion
                           between December 2001 and December 2005. According to Army officials
                           at using organizations, questions exist about the cost-effectiveness of an
                           AWPS ammunition manufacturing application given the availability of
                           commercial off-the-shelf software and declining workload forecasts.
                           However, Army headquarters officials stated that the use of AWPS will
                           enable them to implement a rational personnel downsizing plan and to
                           clearly articulate the impact of declining workloads.

Base Operations Support    AWPS development efforts for the base operations support application are
                           under way and have progressed to the prototyping phase. A basic system
                           prototype is being installed at the Anniston Army Depot to be used for
                           relating projected workload for various support functions to the personnel



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                              required to support these functions. Project office plans call for installing
                              the system at the other four maintenance depots by February 2001, using a
                              system testing procedure similar to that used during the early development
                              of the depot maintenance application. The completion date for this effort
                              has slipped several times, and it is unclear when this system application
                              will be evaluated and tested. It is also unclear how beneficial this
                              application would be, given that the Army is considering the use of public
                              and private competitions for many of its base operations support functions.
                              Appendix IV summarizes some of the key tasks and other information
                              associated with the base operations support application; individual tasks
                              are currently projected to be completed between October 1999 and
                              December 2005.



Possible Expansion to Other   The Army has identified several activities such as field-level maintenance,
Functional Areas              arsenals, research and development, testing and evaluation, and training as
                              possible areas for long-term expansion of the workload performance
                              system. Development work has not been initiated in any of these areas.
                              Further, projected completion dates have been established only for tasks
                              associated with the arsenal application. In general, these areas involve
                              different Army organizations and chains of command, as well as a different
                              mix of personnel skills than are supported by the applications currently
                              under development. It is uncertain how project management would be
                              handled for these applications. Although the Army’s recent mandated
                              report on AWPS cited plans to develop these additional applications, AWPS
                              project office officials told us that the project office was not consulted
                              about inclusion of these applications in the Army’s report. From their
                              perspective, these applications have not been planned, scheduled,
                              budgeted, or funded. Further, they stated that it is unclear how beneficial
                              the arsenal application would be, given that the Army is considering the use
                              of public and private sector competition for operation of some arsenal
                              activities. See appendix V for a summary of the individual applications and
                              selected tasks.

                              Although not a functional application, development is planned for a
                              “Decision Support System,” which would be deployed to Headquarters,
                              Department of the Army, to facilitate funding and resource allocations
                              based on Army priorities. The Decision Support System would aggregate
                              workload and performance data from a variety of Army installations to
                              enable headquarters commands to identify areas where performance could
                              be improved through reengineering or setting specific performance
                              measures and goals. While the Committee directed the Army to move



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                                                  forward with development of this module as quickly as possible,
                                                  development work has not yet begun in this area, and target dates for
                                                  initiating and completing this action have not been established. 10


Program Expansion and                             As shown in table 2, completion dates for the remaining workload
Slippage of Program                               performance system tasks have slipped several times in recent months and
                                                  completion milestones have yet to be established for some long-term
Milestones May Warrant                            system applications.11 Army officials stated that untimely and inadequate
Improved Program                                  funding are key contributing factors to these delays.
Management and Oversight


Table 2: AWPS Schedule

                                                         Completion date as             Completion date as            Completion date as
Modules                                                  reported Feb. 9, 1999          reported May 4, 1999          reported Aug. 18, 1999
Short term
Depot maintenance a                                      Jan. 3, 2000                   Sept. 30, 2002                Dec. 26, 2005
Ammunition logistics                                     Sept. 28, 2000                 Dec. 31, 2004                 Dec. 22, 2005
Ammunition manufacturing                                 Nov. 30, 2000                  Nov. 30, 2000                 Dec. 12, 2005
Base operations                                          June 29, 2001                  June 29, 2001                 Dec. 8, 2005
Long term
Field-level maintenance                                  Not shown                      Not shown                     Not shown
Manufacturing arsenals                                   June 11, 2004                  Oct. 13, 2005                 Dec. 29, 2005
Base operations                                          Not shown                      Not shown                     Not shown
Training, testing, and evaluation, and research and Not shown                           Not shown                     Not shown
development activities
Decision support systems                                 Not shown                      Not shown                     Not shown
Other tasks in project plan, but not explicitly          Sept. 22, 2000                 Dec. 1, 2000                  Aug. 19, 2003
identified in Army report


                                                  a
                                                      Includes enhancements supporting resource scheduling and material support.
                                                  Source: Army Workload Performance System Project Office.




                                                  10
                                                       Report 105-532 of the Committee on National Security.
                                                  11
                                                   The reference to applications as short- or long-term reflects the descriptions used in the
                                                  Army’s report to the Committee.




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                       While the current management team has implemented the basic workload
                       and performance system at Army maintenance depots, the potential scope
                       of the AWPS system development has expanded to other functional areas,
                       some of which are outside the command and control of the Army Materiel
                       Command. Further, Army officials stated that current sources of funding
                       may be inadequate for timely completion of these future applications.
                       Therefore, an improved management oversight structure to include
                       representatives from organizations responsible for each of the potential
                       functional users would appear to be necessary. For example, input from
                       these organizations would likely be important in assessing the cost-
                       effectiveness of developing or enhancing system applications. Additionally,
                       in our opinion, without the involvement of responsible organizations, it is
                       unlikely that required funding will become available.



Army’s Report on       The Army’s report to the Committee on a long-range master plan for the
                       workload performance system has some important limitations. While the
AWPS Master Plan Did   Committee directed the Army to report on its long-range master plan for
Not Provide Complete   implementing AWPS, including future applications and funding
                       requirements, the Army’s report did not include some key information that
Information About      might normally be expected. For example, it provided no descriptive
Programs, Costs, and   information other than the task titles—no objectives, no expected costs or
Schedules              benefits, no system development and implementation schedules, and no list
                       of priorities.12 While the Army’s report provided a partial list of tasks to be
                       completed in developing AWPS applications for depot maintenance,
                       ammunition logistics, ammunition manufacturing, and base operations
                       support functions at Army industrial facilities, our work shows that the
                       report omitted several tasks that were in a project plan prepared and
                       maintained by the system project office. Further, we found that projected
                       completion dates have been established for some but not all of the tasks
                       associated with these applications.

                       Appendix I highlights the tasks the Army report listed for the AWPS depot
                       maintenance application. As previously noted, it also includes some depot
                       maintenance tasks on which officials in the system project office have
                       initiated work, but which were not listed in the Army report. According to
                       Army officials, some of the tasks not listed in the Army’s report will likely
                       require as many resources as some tasks that were listed. Appendixes II

                       12
                         While the Army’s report contained no discussion of objectives, we discussed applications
                       and tasks with project officials to obtain some information on task objectives.




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                          through IV summarize various tasks associated with ammunition logistics,
                          ammunition manufacturing, and base operations support, and they also
                          include several planned developmental tasks that were omitted from the
                          Army’s report to the Committee.

                          The Army report provided limited information with regard to four potential
                          long-term system applications—manufacturing arsenals; field-level
                          maintenance organizations; training, research and development, test and
                          evaluation activities; and base operations support for nondepot
                          maintenance activities. Our work shows that the Army project has
                          established expected completion dates for the arsenal application, but
                          completion milestones for the other long-term applications have not yet
                          been established. In discussing a draft of this report, Army officials
                          explained they currently have no firm plans or schedules for implementing
                          AWPS to applications they had described as long term. Further, while the
                          Army’s report provided general descriptive information about the Decision
                          Support System for use by Army headquarters, it did not identify associated
                          tasks, cost estimates, development and testing schedules, or information
                          about the relative importance or priority of the Decision Support System to
                          the other planned system components. Appendix V provides a summary of
                          available information for each of the potential long-term applications.


Army Report Provided No   The Army’s report to the Committee provided no funding information even
System Cost Information   though congressional committee direction required it. We identified
                          estimated costs totaling $45 million for (1) the development and testing and
                          (2) supporting studies of the following system applications: depot
                          maintenance, ammunition logistics, ammunition manufacturing, base
                          operations support at some Army industrial activities, and arsenals. This
                          estimate does not include potential long-term costs for expanding the
                          AWPS system to other functional areas and is based upon completion dates
                          that are subject to continuing slippage.

                          Table 3 provides the estimated AWPS system program office funding for
                          fiscal years 1996 through 2002.




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Table 3: AWPS Project Office Budget Summary for Fiscal Years 1996-2002

Dollars in thousands
                                                                                    1999         2000          2001         2002         Estimated
                                                      1996 and         1998       budget       budget        budget       budget              total
                                                     1997 costs       costs         plan         plan          plan         plan         spending
Short term
Depot maintenance                                        $2,746      $3,493         $612          $240         $675        $2,110             $9,876
Ammunition logistics                                                    748         1,995          190           575          810              4,318
Ammunition manufacturing                                                              200          759           700          810              2,469
Base operations for Army Materiel
Command activities                                                      230         1,599        1,161           750        1,145              4,885
Long term
Field-level maintenance
Manufacturing arsenals                                                                           1,610           700          750              3,060
Base operations for field-level maintenance
activities
Training, testing, research and development
Decision Support System
Configuration control and integrated logistics
supporta                                                                            2,062        3,468         4,873        1,140             11,543
Total                                                    $2,746      $4,471       $6,467        $7,428       $8,273        $6,765           $36,149


                                                 a
                                                  Funds shown in this line are mostly for system operation and maintenance costs after a module is
                                                 implemented.
                                                 Note: Some totals may appear not to add due to rounding.
                                                 Source: Army Workload Performance System Project Office.


                                                 In addition to the projected $36.1 million estimated by the Army Workload
                                                 Performance System Project Office, Army headquarters spent an additional
                                                 $3.6 million in fiscal years 1995 through 1998 for various contractor-
                                                 provided studies. Additionally, costs for the system project office, which
                                                 are estimated at over $5 million for fiscal years 1996 through 2002, are not
                                                 included in these estimates. Moreover, the $36.1 million also does not
                                                 include any costs for the planned Decision Support System or for potential
                                                 system development and implementation for the other long-term workload
                                                 performance system applications such as field-level maintenance, research
                                                 and development, testing and evaluation, or training, which were listed as
                                                 potential system applications in the Army report. Further, costs are
                                                 expected to grow because system milestones have slipped, and they are
                                                 likely to slip even further in the future.



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Working Capital Fund Is   Despite committee direction that working capital funds not be used for the
Primary Funding Source    workload performance system, they have been used as the primary funding
                          source. According to Army officials there is no approved budget for the
                          system’s development and implementation, and as a result an irregular
                          funding stream has evolved to include working capital funds as the primary
                          source and, to a lesser extent, the reprogramming of other available end-of-
                          year funding. These officials believe that this funding approach has
                          hampered efficient management and operations. In addition, officials from
                          the Army Materiel Command stated that reliance on working capital
                          funding increases the hourly cost of various industrially funded operations,
                          which some believe are already unaffordable. According to these officials,
                          the reimbursement of working capital funds for the costs of AWPS system
                          development and implementation is being spread over 10 or more years,
                          adding an estimated 21 cents to each direct depot maintenance work hour
                          and about 34 cents to each direct ordnance work hour.



Conclusions               The Army’s report to the Committee on a master plan for the workload
                          performance system has some important limitations in providing complete
                          information on the scope of work, completion milestones, and cost
                          information. Our assessment of the Army’s report also indicates that
                          improved program planning and management are essential if the Army is to
                          cost-effectively complete the system implementation in a timely manner—
                          including planned program expansion. Further, some questions exist
                          concerning the cost benefit of developing and implementing additional
                          applications outside the depot maintenance function. Adoption of an
                          improved master plan and management structure could also be important
                          to the Army’s ability to achieve the objectives of the Army Workload
                          Performance System. Such steps could be important in validating system
                          applications, documenting the cost and benefits of proposed new system
                          applications and enhancements, establishing system priorities, improving
                          system management, and obtaining required funding.



Recommendations           To improve program management and provide a baseline for future
                          program evaluation, we recommend that the Secretary of Defense require
                          the Secretary of the Army to assess the cost-effectiveness of using the
                          Army Workload Performance System for nondepot maintenance
                          applications before proceeding with development and implementation.
                          Based on the completed assessment, we further recommend that the
                          Secretary of the Army:



                          Page 15                                      GAO/NSIAD-00-16 Defense Logistics
                      B-283492




                      • Develop a more substantive master plan that incorporates all
                        applications for which the system is to be implemented. This master
                        plan should include priorities, cost and benefits, and proposed
                        schedules.
                      • Assess the adequacy of existing program management and oversight
                        structures in light of (1) additional functional applications and overall
                        funding requirements and (2) the potential for extending the workload
                        and performance system to users outside the Army Materiel Command.



Agency Comments and   DOD provided written comments that are included as appendix VI. DOD
                      officials also provided a number of suggested technical changes that have
Our Evaluation        been incorporated into the report body as appropriate. DOD officials
                      agreed that the cost and benefits of each expanded system application
                      should be analyzed, but did not agree with our draft report’s
                      recommendation to delay approval of additional funding for system
                      development until after the cost benefits of each application are fully
                      documented and analyzed. DOD concurred with our recommendations to
                      develop a more substantive Army Workload Performance System master
                      plan (including cost, benefits, and schedules for developing each
                      application) and to assess the adequacy of program management and
                      oversight in view of the expanded range of system applications and
                      increased funding requirements.

                      In commenting on our recommendation to postpone additional funding,
                      DOD officials stated that the Army is currently developing prototype
                      systems for several functional applications, including ammunition storage,
                      ammunition manufacturing, and base operations. According to these
                      officials, ongoing prototype development and tests are designed to
                      demonstrate the usefulness of each application and provide a baseline for
                      assessing costs and benefits. DOD officials stated that postponing
                      additional funding for completing this work would unnecessarily hinder
                      progress and delay efforts to correct previously reported weaknesses in the
                      Army’s ability to link personnel requirements to workload estimates.

                      We agree that DOD has made substantial progress in its efforts to correct
                      material weaknesses in its ability to match personnel authorizations to
                      forecasted workloads at its major maintenance depots. While the Army has
                      already initiated efforts to achieve similar goals at other activities, we
                      continue to believe that approval of funding for full-scale development and
                      implementation of expanded applications should be postponed until costs
                      and benefits are analyzed. However, we modified our draft report



                      Page 16                                      GAO/NSIAD-00-16 Defense Logistics
              B-283492




              recommendation to enable completion of ongoing prototype testing in
              order to demonstrate and document the financial benefits of each
              expanded application before proceeding with system development and
              implementation of the applications. DOD officials stated that they
              concurred with our modified recommendation.

              With regard to our recommendation to develop a more substantive master
              plan for implementation of performance system applications at nondepot
              maintenance facilities, DOD stated that such a plan would be completed by
              July 2000. They stated that the plan would include information on
              priorities, cost and benefits, and milestones for all anticipated Army
              Workload Performance System applications, including maintenance,
              ammunition, and base operations.

              With regard to our recommendation to assess the adequacy of existing
              program management and oversight structures, DOD concurred, but gave
              no time frame for completing the assessment. We continue to believe that
              such an assessment should be done as soon as possible, in light of (1) the
              potential for expanding the workload and performance system to activities
              outside the Army Materiel Command and (2) system development costs,
              which exceed the criteria for managing the Army Workload Performance
              System program as a major automated information system acquisition.



Scope and     To assess the status of the Army Workload Performance System, we read
              the Army’s April 1999 report to the Committee and discussed its contents
Methodology   with senior officials in the offices of the Assistant Secretary of the Army
              (Manpower and Reserve Affairs) and Army Deputy Chief of Staff for
              Logistics, Washington, D.C.; the Army Workload Performance System
              Project Office at Rock Island, Illinois; and the Naval Sea Logistics Center,
              Pacific, Concord, California. We also discussed supplemental project
              planning and budgeting information with these same officials. We
              compared those portions of the Army report dealing with system depot
              maintenance with comparable portions of Army budget and schedule
              documents. We also reviewed the major blocks of work to be done and
              discussed their cost and benefits. During our visit to the Navy facility, we
              attended a workload performance system training course with managers
              from depots and with a professional staff member from the organization
              that developed the system of evaluating depot overhead personnel
              requirements. We met with Army Audit Agency officials regarding their
              review of the workload performance system. Finally, we interviewed senior




              Page 17                                       GAO/NSIAD-00-16 Defense Logistics
B-283492




officials from some of the five maintenance depots that implemented the
system.

To assess the status of the other workload performance system
applications, including their cost, we visited and interviewed a wide variety
of personnel. We discussed task status, possible cost and benefits, and
other relevant issues with the system program manager, the Navy program
manager, support contractor personnel, and senior Army officials in Army
Materiel Command and Headquarters, Department of the Army. We
discussed the issues with senior managers of the two manufacturing
arsenals. We also visited the senior manager of one of the ammunition
depots and spoke with senior officials at five others, sending written
questions to all six. We also talked with officials from the Army’s Industrial
Operations Command’s Army Workload Performance System Project
Office at Rock Island, Illinois; the Naval Sea Logistics Center, at Concord,
California; and the Army’s support contractor at Washington, D.C. During
our Rock Island visit and numerous follow-on conversations, we discussed
the project plan, including program schedules and budgets. We also
reviewed the major blocks of work to be done, discussed their cost and
benefits and discussed our concerns and some of the organizations slated
to receive parts of the system. We also talked at length with the Navy
workload performance system program manager about plans to export the
system, and its use for other applications. During our meetings with the
support contractor, our primary focus was on tasks and modules other than
depot maintenance.

We conducted our review from February 1999 through September 1999 in
accordance with generally accepted government auditing standards.


We are sending copies of this report to Senator John W. Warner, Chairman,
and Senator Carl Levin, Ranking Minority Member, Senate Committee on
Armed Services; the Honorable William S. Cohen, the Secretary of Defense;
the Honorable Louis Caldera, Secretary of the Army; the Honorable William
J. Lynn, Under Secretary of Defense (Comptroller); and the Honorable
Jacob Lew, Director, Office of Management and Budget. Copies will also be
available to others upon request.




Page 18                                        GAO/NSIAD-00-16 Defense Logistics
B-283492




If you or your staff have any questions concerning this report, please call
me or Barry Holman at (202) 512-8412. Key contributors to this report were
Julia Denman, David Epstein, and Glenn Knoepfle.




David R. Warren, Director
Defense Management Issues




Page 19                                      GAO/NSIAD-00-16 Defense Logistics
Appendix I

Army Workload Performance System
Application for Depot Maintenance                                                                                                               Appendx
                                                                                                                                                      Ii




                                       Estimated
Task name                              completion date              Objectives and expected results
Completed and certified
Develop and implement basic workload March 1998                     Facilitate management of depot workload by identifying workload and
and planning system at five depots                                  personnel data and generating job planning information
Develop workload and resources         March 1998                   Given workload and personnel resources in each depot work area,
reporting process at five depots                                    generates a report identifying net workforce imbalances and displaying
                                                                    monthly depot workforce excesses or shortages over a 3-year horizon
Completed
Integrate workload performance system February 26, 1999             Link workload, workforce, and budget
with depot budget preparation and train
industrial activity personnel in its usea
Under development
Develop contractor labor application for November 30, 1999          Incorporate planning, scheduling, and performance of contractor
depot maintenance                                                   personnel working in Army depots to provide visibility of contractor
                                                                    production within the depot system
                                                                    Completion of this task should improve 50-50 report preparation and
                                                                    provide a link between contractor labor capabilities, job scheduling, and
                                                                    capacity utilization
Implement programming language         July 31, 2000                Convert programs to state-of-the-art computer language; the Army
conversiona                                                         plans to convert the programming language from FoxPro to Oracle
                                                                    Conversion of computer programs should simplify software
                                                                    maintenance, improve data distribution and processing time, and
                                                                    facilitate use of web pages
Planned but work not begun
Develop resource scheduling and        March 30, 2001               Design coding system to refine workforce analysis by focusing on
control skill codes methodology                                     specific employee skills rather than aggregating personnel information
                                                                    by work area
                                                                    Completion of this and the next task should facilitate assigning
                                                                    appropriate personnel to each job to maximize depot productivity and
                                                                    identify skills that should be acquired, whether through retraining or
                                                                    hiring
Implement resource, scheduling, and    January 24, 2003             Implement system to assign the most appropriate personnel to
control system at five depots                                       maximize depot productivity and size the workforce through the use of
                                                                    previously developed coding system to support comparisons over a 3-
                                                                    year period
Develop and implement material         September 16, 2002           Determine whether material will be available to perform planned
system                                                              maintenance
                                                                    Facilitate make or buy decisions by collecting labor and material costs
Implement automated comparison of      August 30, 1999              Provide support in analyzing the impact of headquarters-directed
headquarters-directed changesa                                      changes concerning personnel hiring practices, workload changes, and
                                                                    other unforeseen changes


                                            a
                                                Included in project office plan, but not in Army’s report to the Committee.
                                            Source: Army Workload Performance System (AWPS) Project Office.



                                            Page 20                                                           GAO/NSIAD-00-16 Defense Logistics
Appendix II

AWPS Application for Ammunition Logistics                                                                                                            Appendx
                                                                                                                                                           Ii




                                          Estimated
Task name                                 completion date               Objectives and expected results
Completed
Prototype ammunition logistics        May 31, 1999                      Facilitate scheduling of ammunition logistics workload by identifying
application at Letterkenny Army Depot                                   monthly ammunition logistics facility workforce excesses or shortages
                                                                        over a 3-year period
Install basic ammunition logistics        June 29, 1999                 Facilitate scheduling of ammunition logistics workload by displaying
application at Anniston and Red River                                   monthly ammunition logistics workforce excesses or shortages over a
Army Depots (basic system develops                                      3-year period
same information as generated in first
two tasks of depot maintenance                                          Organizational relocation of some ammunition facilities will likely lead
application)                                                            to additional programming requirements and possible slippage of this
                                                                        and other tasks
Under development
Install basic ammunition logistics    June 30, 2000                     Facilitate scheduling of ammunition logistics workload by displaying
application at Blue Grass Army Depot,                                   monthly ammunition logistics workforce excesses or shortages over a
Tooele Army Depot, Sierra Army                                          3-year period
Depot, Crane Army Ammunition
Activity, McAlester Army Ammunition
Plant, and Pine Bluff Arsenal
Provide training and technical supporta March 30, 2000                  Train personnel in workload performance system use, particularly
                                                                        supervisors and managers and provide support to answer questions
Implement programming language            September 28, 2001            Convert programs to state-of-the-art computer language (the Army
conversiona                                                             plans to convert the programming language from FoxPro to Oracle)
Planned but work not begun
Develop contractor labor application for June 30, 2000                  Incorporate planning, scheduling, and performance of contractor
ammunition                                                              personnel working in ammunition logistics facilities to provide visibility
                                                                        of contractor production within the ammunition logistics system
Design and implement resource             December 30, 2003             Implement system to assign the most appropriate personnel to
scheduling and control system for                                       maximize ammunition logistics facility productivity and size the
ammunition logistics                                                    workforce through the use of previously developed coding system to
                                                                        support comparisons over a 3-year period
Develop “What happens if . . . .” study   May 31, 2000                  Facilitate decision-making by management in addressing questions
capabilitya                                                             such as “what if”
Develop automated comparison of           August 31, 2001               Assists analysis of impact of headquarters-directed changes
headquarters directed changesa
Develop ammunition logistics material     March 29, 2002                Determine whether material will be available to perform planned
systema                                                                 maintenance
                                                                        Facilitate make or buy decisions by collecting labor and material costs


                                               a
                                                   Included in project office plan, but not in Army’s report to the Committee.
                                               Source: Army Workload Performance System Project Office.




                                               Page 21                                                           GAO/NSIAD-00-16 Defense Logistics
Appendix III

AWPS Application for Ammunition
Manufacturing                                                                                                                                AppendxIi




                                      Estimated
Task name                             completion date                    Objectives and expected results
Planned but work not begun
Design and install workload           December 31, 2001                  Facilitate management of ammunition manufacturing plants by
performance system for ammunition                                        identifying workload and personnel data and generating job
manufacturing                                                            planning information
Implement resource scheduling and     December 31, 2003                  Implement system to assign the most appropriate personnel to
control system design and                                                maximize depot productivity and size the workforce through the
implementation for ammunition                                            use of a previously developed coding system to support
manufacturing                                                            comparisons over a 3-year period
Install enhancements for ammunition   December 31, 2003                  Provide “what if” study capability
manufacturinga
                                                                         Provide automated comparison of headquarters directed changes

                                                                         Complete basic system with workload and resources reporting
                                                                         process


                                           a
                                               Included in project office plan, but not in Army’s report to the Committee.
                                           Source: Army Workload Performance System Project Office.




                                           Page 22                                                           GAO/NSIAD-00-16 Defense Logistics
Appendix IV

AWPS Application for Base Operations                                                                                                                Appendx
                                                                                                                                                          iIV




                                      Estimated
Task name                             completion date              Objectives and expected results
Completed
Complete preliminary planning and     January 14, 1999             Facilitate management of base operations activities by identifying
design of application a                                            workload and personnel requirements data
Under development
Complete prototype testing at         October 31, 1999             Test prototype system for base operation support at a selected
Anniston Army Depot                                                maintenance depot
Provide training and technical        December 4, 2002             Train personnel in workload performance system use, particularly
supporta                                                           supervisors and managers, and provide support to answer questions
Implement programming language        June 29, 2001                Convert programs to state-of-the-art computer language (the Army plans
conversiona                                                        to convert the programming language from FoxPro to Oracle)
Planned but work not begun
Install application at four other     February 20, 2001            Expand testing of basic workload performance system base operations
maintenance depots                                                 support system, similar to first task of depot maintenance application
Install base operations support       December 30, 2002            Expand use of basic workload performance system base operations
application at remaining workload                                  support system, similar to first task of depot maintenance application
performance system installations
Design and implement resource        February 3, 2004              Implement system to assign the most appropriate personnel to maximize
scheduling and control system design                               base operations support productivity and size the workforce through the
for base operations support system                                 use of previously developed coding system to support comparisons over
                                                                   a 3-year period
Material application for base         January 15, 2003             Determine whether material will be available to perform planned
operations support system                                          maintenance
                                                                   Facilitate make or buy decisions by collecting labor and material costs
                           a
Contractor labor in model             May 21, 2001                 Incorporate planning, scheduling, and performance of contractor
                                                                   personnel working in industrial facilities to provide visibility of contractor
                                                                   production within the base support function
“What-if” study capabilitya           September 2, 2002            Facilitate decision-making by management in addressing questions such
                                                                   as “what if”
Implement workload and resources      June 7, 2002                 Implement system to assign the most appropriate personnel to maximize
reporting process and resource                                     productivity and size the workforce through the use of previously
scheduling and control code systema                                developed coding system to support comparisons over a 3-year period
                                                                   Given workload and personnel resources in each base operations
                                                                   support work area, generate a report identifying net workforce
                                                                   imbalances and displaying monthly workforce excesses or shortages
                                                                   over a 3-year horizon
                                                                   Implement workload and resource scheduling reporting system
Implement automated comparison of     October 16, 2002             Provide support in analyzing the impact of headquarters-directed
headquarters directed changesa                                     changes concerning personnel hiring practices, workload changes, and
                                                                   other unforeseen changes


                                            a
                                                Included in project office plan, but not in Army’s report to the Committee.
                                            Source: Army Workload Performance System Project Office.



                                            Page 23                                                           GAO/NSIAD-00-16 Defense Logistics
Appendix V

Future AWPS Applications                                                                                                                  Appenx
                                                                                                                                               dV
                                                                                                                                                i




                                           Estimated
Task name                                  completion date            Objectives and expected results
Manufacturing arsenal application (planned but work not begun)
Design and implement AWPS prototype June 6, 2002                      Develop and test prototype of workload performance system for
at one manufacturing arsenal                                          arsenals
Install workload performance system at     June 13, 2003              Develop and test prototype at remaining arsenals
two remaining arsenals
Design and implement miscellaneous         October 3, 2003            Implement “what if” capability, contractor labor, and snapshot
enhancements to arsenal application to                                enhancements (all previously described)
include “what if” capability, contractor
labor, and automated comparison of
headquarters-directed changesa
Design and implement material system       May 11, 2004               Determine whether material will be available to perform planned
for arsenalsa                                                         maintenance
                                                                      Facilitate make or buy decisions by collecting labor and material
                                                                      costs
Design and implement resource              February 19, 2004          Implement system to assign the most appropriate personnel to
scheduling and control systema                                        maximize arsenal productivity and size the workforce through the
                                                                      use of previously developed coding system to support
                                                                      comparisons over a 3-year period
Field-level maintenance organization application (not planned, no work done)
Design and install AWPS at field-level   Not planned or scheduled     Not yet determined
maintenance facilities performing depot- by system project office
type maintenance workloads
Design and install workload and            Not planned or scheduled   Not yet determined
performance system at all general          by system project office
support maintenance facilities
Other incomplete tasks not in Army         Not planned or scheduled   Not yet determined
study, but in AWPS project plan            by system project office
Base operations applications for non depot maintenance facilities (not planned, no work done)
Design and install AWPS to support         Not planned or scheduled   Not yet determined
base operations at non depot               by system project office
maintenance facilities
Design and install AWPS to support         Not planned or scheduled   Not yet determined
base operations at all general support     by system project office
maintenance facilities




                                                                                                                               (continued)




                                               Page 24                                               GAO/NSIAD-00-16 Defense Logistics
                                               Appendix V
                                               Future AWPS Applications




                                          Estimated
Task name                                 completion date                    Objectives and expected results
Training, testing and evaluation, and research and development activity applications (Not planned, no work done)
Study prototype system demonstrations Not planned or scheduled               Not yet determined
for classroom training activities, testing, by system project office
organizations, war reserve management
and maintenance organizations, and
research and development laboratories
Other incomplete tasks not in Army        Not planned or scheduled           Not yet determined
study, but in AWPS Project Plan           by system project office


                                               a
                                                   Included in project office plan, but not in Army’s report to the Committee.
                                               Source: Army Workload Performance System Project Office.




                                               Page 25                                                           GAO/NSIAD-00-16 Defense Logistics
Appendix VI

Comments From the Department of Defense                       Appendx
                                                                    iVI




              Page 26         GAO/NSIAD-00-16 Defense Logistics
Appendix VI
Comments From the Department of Defense




Page 27                                   GAO/NSIAD-00-16 Defense Logistics
                Appendix VI
                Comments From the Department of Defense




Now on p. 15.




                Page 28                                   GAO/NSIAD-00-16 Defense Logistics
                        Appendix VI
                        Comments From the Department of Defense




Now on p. 16.




Now on p. 16.




(709410)        Leter   Page 29                                   GAO/NSIAD-00-16 Defense Logistics
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