United States General, Accounting Office .. Report to the Chairman, Subcommittee i m Transportation and Related Agencies, Committee on Appropriations, House of Representatives ___~- -~ ,I utw 1990 COAST GUARD ACQUISITIONS Formal Criteria Needed to Ensure Project Manager Qualifications GAO,‘RC,ED-90-178 GAO Unfted States General Accounting Of’fice Washin@ton, D.C. 20648 Resources, Community, and Economic Development Division B-239866 June 19,199O The Honorable William Lehman Chairman, Subcommitteeon Transportation and Related Agencies Committee on Appropriations Houseof Representatives Dear Mr. Chairman: In responseto your letter dated December6, 1989, and subsequent agreementsreached with your office, we assessedthe Coast Guard’s actions to increase the qualifications and the tour of duty, or tenure, of personnel selectedas managers responsible for acquiring its major sys- tems.’ Currently, nine project managers are each responsible for one or more of these systems. We focused our review on the status and effec- tiveness of Coast Guard actions to addressrecommendations, made in 1986 studies by the Coast Guard and the Logistics ManagementInstitute (MI), concerning the managers’ qualifications-acquisition experience and training- and their length of tenure. These two studies (see Background) recommended,among other things, that acquisition experience be a prerequisite for selection as a project manager, acquisition training be required if needed,and the Coast Guard designate the position of project manager as a career specialty for its officers to ensure that acquisition experience acquired as project manager is fully utilized. Results in Brief The Coast Guard has increased the experience and training of its project managers by establishing a screeningpanel to select qualified officers to serve as project managers and sending many of the selectedofficers to a 20-week acquisition managementtraining course. However, becausethe experience and training criteria used by the screening panel are only “desirable,” officers are not required to possessacquisition experience or certain training to be selected.Further, no formal procedures exist to ensure that officers who have little or no acquisition experience when selected attend the acquisition training course or other specialized training as neededprior to beginning their project manager assignment. ‘A mJor system is defined as one that will exceed $60 million in research and development costs, exceed $160 million in total acquisition costs, or involve the allocation of relatively large amounts of resources and warrant special management attention. Page 1 GAO/RCED-90-178 Coast Guard Project Manager QualUications The Coast Guard did not agree with the 1986 recommendation that pro- ject managementshould be a career specialty. The Coast Guard’s cur- rent guidelines provide that headquarters assignmentsshould be 4 years in duration, including assignmentsfor officers in the grades who cur- rently serve as project managers. However, the average tenure of the current project managers expected to transfer to new assignmentsin fiscal year 1990 is 3 years. Becauseproject management requires an extensive knowledge of procurement practices, retaining these man- agers longer would better enable the Coast Guard to effectively utilize their experience and training. The Coast Guard buys ships, aircraft, and other major systems to carry Background out its wide-ranging missions. These missions include enforcing drug, fishery, and other federal laws on the high seasand US. waters; main- taining aids to maritime navigation; protecting the marine environment; icebreaking; search and rescue;and military readiness. The Coast Guard is currently procuring 14 major systems whose combined cost is over $4 billion. Someof these projects involve items that are unique to the Coast Guard (such as a proposed polar ice-breaker), use a new design (such as the motor lifeboat, which features a hull of aluminum rather than steel), or incorporate high technology (such as aerostats-helium balloons- supporting a radar system to provide sea and air radar surveillance of approximately 11,000 square miles). These systems are expected to help the Coast Guard support its missions, reduce maintenance costs, and improve working and living conditions for its personnel. Acquiring Major Systems According to the Coast Guard’s Systems Acquisition Manual, acquiring a major system typically takes 8 to 16 years, from project initiation to receipt of the last product. For each major system, an officer, assigned to the headquarters’ Office of Acquisition, serves as the project man- ager. Since 1987, the Coast Guard has selectedonly captains for project manager positions, Currently, two project managers,selectedbefore 1987 and completing their assignmentsin fiscal year 1990, are a lieu- tenant commander and a commander. The project manager is typically assisted by a dedicated headquarters staff, which can include logistics support, planning and control, and other specialists. Currently, 36 professionals are assignedto the 9 project staffs. Ninety- two percent are military personnel, subject to periodic rotations; the other 8 percent are civilians. According to the Coast Guard personnel Page 2 GAO/WED-90-178 Coast Guard Project Manager Quelifications B.239856 manual, the length of a tour of duty for officers, at the lieutenant grade level and higher, assignedto headquarters positions is 4 years.2 Previous Studies of Coast In 1986, the Department of Transportation’s Office of the Inspector Gen- Guard Acquisitions eral issued a report on Coast Guard acquisition processes.It concluded, among other things, that the Coast Guard neededto begin the processof determining requirements and specifications for major acquisitions sooner, make greater use of available standard and “off-the-shelf” designsfor equipment and systems, and streamline the review and approval processwithin the Coast Guard. In responseto that study and concernsexpressedby the SenateCom- mittee on Appropriations, the Coast Guard Chief of Staff’s Office issued a report, also in 1986, entitled Coast Guard Acquisition ProcessStudy. In the sameyear, LMI issued a report, entitled Improving Acquisition Managementin the Coast Guard.3Both studies’ findings and conclusions were basedon a broad management assessmentof the Coast Guard acquisition program and did not link the program weaknessesidentified to the results of individual acquisition projects. Together, these studies contained 43 recommendations for improving the timeliness and effec- tiveness of the Coast Guard’s acquisition process,The recommendations touched on policy and planning, managementinformation, personnel qualifications, and other areas. In 1986, we reported on the implementation of these recommendations.* We stated that the Coast Guard had taken several actions to improve its management of the acquisition process,such as establishing an Office of Acquisition in January 1986. However, at that time, it had made little progress in improving the experience, training, and tenure of acquisition personnel. “The tour of duty for ensigns and lieutenants Cjunior grade) assigned to headquarters positions is 3 years. ‘IThe study was prepared pursuant to a Department of Defense contract *Coast Guard Acquisitions: Status of Reform Actions (GAO/RCED-86-161BR, June 11, 1986). Page 3 GAO/RCEB90-178 Coast Guard Project Manager QuaRfications B239855 More Assurance Federal managers are responsible for establishing and maintaining internal controls over the resourcesentrusted to them.6These controls Needed That Project are intended to provide reasonableassurancethat, among other things, Managers Have resourcesare used for proper purposes and are safeguarded against waste, loss, and misuse. In the area of personnel competence,managers Needed Experience and employeesare required, among other things, to maintain a level of And/Or Training skill necessaryto help ensure effective performance. Having competent personnel is but one of five general standards that define the minimum level of quality acceptablefor internal control systems in operation. Therefore, personnel competencecannot be expected, by itself, to ensure that agency objectives will be accomplished.Rather, together with the other standards, it helps provide reasonableassurancethat these objec- tives will be achieved. The project manager’s role is a challenging one becausethe processof acquiring a major system is technically complex and time consuming. As described by the Coast Guard, the project manager bears ultimate responsibility for meeting project objectives throughout the acquisition process.Therefore, the project manager must understand the relation- ship between the project’s acquisition strategy and the more specific applications of procurement procedures required by federal law in con- tracting for design, development, and testing of new systems. In addi- tion, the project manager will be deeply involved in such diverse activities as forming a contracting team, selecting sourcesfor systems, negotiating contracts, fostering competition, and administering contracts after they are awarded. The Coast Guard recognizesthe project manager’s importance. Its pro- gram description for the Office of Acquisition states, “The quality of project management can ultimately determine the successor failure of an acquisition project.... An increasingly important part of the focus on the acqui- sition process is the concern for the professional competenceof those who direct and operate the process.” In a 1986 report on the capabilities of the Department of Defense’s acquisition work force, we noted that experts and other data sources emphasizedthat substantial acquisition experience and training-that “See U.S. General Accounting Office, Standards for Internal Controb in the Federal Government, 1983. Page 4 GAO/RCED-90-178 Coast Guard Project Manager Qualiflcation~ c 5239866 developed technical, management,and leadership skills-were neces- sary to produce a highly qualified program manager.6Although the Coast Guard has taken steps since 1986 to improve its managers’ experi- ence and training, it still cannot be assuredthat its project managers possessthe necessaryskills to successfully manage a major acquisition. Selection Criteria for The 1986 Chief of Staff study concluded that, to capitalize on the Project Managers Not training and development of personnel, individuals with acquisition experience should be assignedto the major acquisition program. The Formalized study recommendedthat prior acquisition experience be a prerequisite to be selectedas a project manager. In response,in 1986, the Coast Guard established the Major Acquisition Project ManagersScreeningPanel, which meets annually, to select pro- ject managers,According to the Coast Guard, the panel’s goals are to (1) maintain high standards of acquisition professionalism, (2) ensure that top performers receive the challenge of major acquisition project man- agement, and (3) enhancethe prestige of major acquisition project managers. In selecting project managers,the Coast Guard uses a list of experience and educational criteria that are desirable but not required. This list includes acquisition or program managementexperience,prior attend- ance at the DefenseSystemsManagementCollege’s(DSMC)20-week pro- gram managementcourse, attendance at the Industrial Collegeof the Armed Forces,and/or completion of graduate or postgraduate work in a variety of subjects. When asked about the relative importance of the factors, a senior civilian official in the Office of Acquisition, who had participated in a screeningpanel, ranked the factors in the following order: (1) manage- rial/leadership capability, (2) educational background, and (3) acquisi- tion experience. This ranking of the factors was confirmed by the Deputy Chief of the Office of Acquisition. We found that six of the nine current managers had not had acquisition experience when they were selected.The other three possessedfrom 1 to 8 years of acquisition experience.(Seeapp. I.) However, acquisition experience is becoming more prevalent. Of the five captains who are sDOD Acquisition: Strengthening Capabilities of Key Personnel in Systems Acquisition (GAO/ _86 -45, May1986). Page 5 GAO/RCED9@178 Coaet Guard Project Manager Qudiflcations I-- i ? 5239865 scheduledto becomeproject managersthis summer, three had had acquisition experience when selected,while two had not. Thus, whereas the proportion of the current managers who had had prior acquisition experience when they were selectedis one in three, by the end of fiscal year 1990, the proportion will increase to one in two. In relation to the desired educational background, none of the nine cur- rent project managers had, prior to selection, attended either DSMC'S pro- gram managementcourse or the Industrial Collegeof the Armed Forces. However, six of the nine current project managers had obtained grad- uate or postgraduate training in subjects that the Coast Guard considers desirable. These include businessadministration, management science, naval engineering, and public administration. (Seeapp. I.) No Formal Training The 1986 LMI study concluded that, for the most part, project managers Requirements had received little or no training in program managementor contracting before their assignment. In addition, they were usually unfamiliar with Coast Guard and Department of Transportation methods of doing busi- ness and lacked a working knowledge of the statutes, regulations, poli- cies, and procedures for government contracting. Similarly, the 1986 Chief of Staff study concluded that project managers were not provided the requisite formal training necessaryto ensure effective project management.It stated that a training program would promote organizational goals by providing standardized and approved methods to reach those goals. The study also recommendedthat the Coast Guard provide a comprehensivetraining program by scheduling DSMGprO@WtI management coursesfor inC0IIk-g project managers con- sistent with their educational background and experience. In response,the Coast Guard stated that DSMC'S 20-week program man- agement course would be the cornerstone of training for all project man- agers. As a matter of practice, the Coast Guard now attempts to send all project managers to this course before or soon after they begin their assignment. The first project manager completed the course in June 1987, and five of the nine current managers have attended the 20-week course. (Seeapp. I.) According to Coast Guard officials, four managers had not attended the program management course becauseobtaining slots had been difficult, the incoming project managers could not be releasedto attend the Page 6 GAO/RCED-90-178 Coast Guard Project Manager Qudfications B-222256 course, or, in one case,the selecteehad had relevant experience. How- ever, the officials also said that, if these officers were selectedtoday as project managers,they would probably be sent to the course before they began their assignments. The proportion of managerswho have had this training is likely to increase. This will occur becausefour of the five captains who are scheduled to becomeproject managersin fiscal year 1990 are expected to have completed the course either before or soon after reporting to duty. Of these four captains, as of May 1990, two have completed the course; one is currently taking the 20-week course; and the remaining captain has not been scheduled yet to attend the course. The fifth cap- tain will becomethe project manager for an automated data processing acquisition project. As a result, the Coast Guard is trying to determine the most appropriate training for him which, according to the Deputy Chief of the Office of Acquisition, could include a portion of the pro- gram management course,plus additional training related to data processing systems. Although the Coast Guard has generally adopted the practice of sending new project managersto training courseswhen they need the specialized training, it has not established a formal requirement to do so. Coast Guard officials did not know why it was not a written requirement, stating that whether project managers should attend such training was not in dispute. Both the Chief of Staff and LMI studies reported in 1986 that project Project Managers’ managers were normally subject to rotational assignmentsof 2 to 3 Tenure Does Not Meet years’ duration. The LMI study further noted that Coast Guard officers Coast Guard had no career path in project management and that little incentive existed for them to specialize in contracting becauseit offered limited Guidelines possibilities for career advancement.The acquisition-related knowledge, experience, and awarenessthat officers gained in project management positions was often lost to the Coast Guard when they were reassigned. The LMI study further noted several adverse consequencesof rapid turn- over-an atmosphere of constant turmoil existed, previously closed issueswere reopened, and institutional memory was lost. Moreover, new personnel required significant time for training before they could func- tion effectively. All these factors causedcostly delays. As a result, the study recommendedthat the Coast Guard establish a career specialty in project management for its officers. However, the Coast Guard declined Page 7 GAO/RCED-SO-178 Coast Guard Project Manager Qualificationa B.239855 to implement this recommendation. It stated that, while officers with requisite experience would be targeted for contracting and program management assignments,the Coast Guard’s small size prohibited devoting a career specialty to these areas. We found that the length of tenure has changed little since 1986, although the Coast Guard’s tour length guidelines provide that all head- quarters assignments,for officers above the grade level of lieutenant (junior grade), be for 4 years. The guidelines do not differentiate between project manager and other headquarters assignments.How- ever, project managers’ tours are generally considerably less than 4 years. To determine current tenure trends, we calculated the projected tour length for the four captains who are expected to transfer from project management to other assignmentsin fiscal year 1990. (For example, one will be the commanding officer of an air station, while another will be the liaison officer with a Navy training command.) Their tours as pro- ject managers will have run an averageof 36 months.7(Seeapp. II.) According to Coast Guard officials, the typical headquarters assignment for a captain is 24 months, and it is rare for a captain to stay 36 months in the sameheadquarters assignment. The relatively frequent turnover of project managers could be offset, to someextent, if other members of the project team remained longer and provided institutional memory. Specifically, the Coast Guard’s civilian employees,becausethey are not subject to rotation policies that govern the military, might help provide continuity. Currently, however, little opportunity exists for this becauseonly 8 percent of the project teams’ professionals (3 of 36) are civilians. Thus, only one project team includes two civilians and most teams include no civilians. However, the Deputy Chief of the Office of Acquisition told us that the Coast Guard is working to establish civilian deputy project manager positions for two ongoing projects. Project managers who are qualified-having adequate acquisition and Conclusions management experience and/or training-are an important factor in 7Two other project managers, a lieutenant commander and a commander, are also completing their tours in fiscal year 1990. Their tour lengths will be longer than the captains’. Therefore, when all six tours are averaged, the result is 40 months. However, because the Coast Guard has been selecting only captains as project managers, we believe the captains’ average tour length is a better indicator of trends. Page 8 GAO/RCED-f@178 Coast Guard Project Manager Qualiflcationa ensuring that major systems are acquired on time, within budget, and in accordancewith procurement regulations. In responseto the two 1986 studies, the Coast Guard has taken someactions to improve the level of experience and training of its project managers.However, further steps to formalize selection criteria and establish procedures for training would help to ensure that the candidates it choosesin the future will be fully qualified when they begin their tours as project managers. Formal selection criteria would help ensure that all project managers selectedhave pertinent education and have past acquisition experience or attend DSMC'S 20-week acquisition managementcourse. Also, estab- lishing training procedures would ensure that candidates needing the acquisition course or other specialized training, such as data processing, to satisfy the criteria are scheduledprior to their assignment as a pro- ject manager. These two actions would institutionalize the requirements so that they are part of the Coast Guard’s operating structure, even after the officials currently in place have moved on. This is particularly important becauseall Coast Guard military personnel, including man- agers, are subject to periodic rotations. Finally, the Coast Guard’s current reassignment practices do not fully capitalize on the knowledge acquired by project managersthrough acquisition experience and training. Although the Coast Guard’s current guidelines provide a 4-year duration for headquarters assignments,cur- rent project managers’ average expected tenure is 3 years. Thus, each year the Coast Guard replaces about one-third of the project managers and the knowledge and experience they have gained. The longer tenures provided by the Coast Guard’s current guidelines would increase the institutional memory and the overall experience level of the project manager work force and allow the Coast Guard to capitalize on the formal and on-the-job training invested in them. Additionally, we believe that the Coast Guard’s current effort to try to establish two civilian deputy project manager positions is a promising development. Unlike military project managers,civilian deputies are not subject to periodic rotations and will have the potential to develop con- siderable knowledge and experience, both general and project-specific, about major system acquisitions. If the deputy project managers fulfill this potential, their institutional memory can complement and strengthen the tenure of the military managers. Page 9 GAO/RCED-90-178 Coast Guard Project Manager Qualifications 5239866 We recommendthat the Secretary of Transportation direct the Comman- Recommendations dant of the Coast Guard to l formalize the selection criteria regarding prior experience and education to ensure that, along with managementskills necessaryto ensure effec- tive performance, all future project managersselectedhave acquisition experience or acquisition training and . institute a formal requirement that, once selected,all project managers have relevant training, consistent with their educational background and acquisition experience, before their tours begin. To addressthe issuesdiscussedin this report, we reviewed previous studies on the Coast Guard’s acquisition process.We also interviewed and obtained data from officials in the Coast Guard’s Offices of Acquisi- tion, Chief of Staff, and Personnel and Training. We discussedthe information contained in this report with Coast Guard officials, who generally agreed with the facts presented. However, as requested, we did not obtain agency comments on a draft of this report. Our review was conducted between August 1989 and May 1990 in accor- dance with generally acceptedgovernment auditing standards. As arranged with your office, unless you publicly announceits contents earlier, we plan no further distribution of this report until 30 days from the date of this letter. At that time we will send copies to the Secretary of Transportation, the Commandant of the Coast Guard, and other inter- ested parties. We will also make copies available to others upon request. This report was prepared under the direction of Kenneth M. Mead, Director of Transportation Issues.He may be reached at (202) 276-1000. Other major contributors to this report are listed in appendix III. Sincerely yours, J. Dexter Peich Assistant Comptroller General Page 10 GAO/&cEIMM-178 Coast Guard Project Manager QuaJifhtio~ Page 11 GAO/RCED-90-178 Coast Guard Project Manager QuaWlcatio~ Contints Letter Appendix I Acquisition Experience and Training Background of the Coast Guard’s Current Project Managers Appendix II 16 Length of Tenure of the Coast Guard’s Project Managers Who Are Completing Their Assignments in Fiscal Year 1990 Appendix III 16 Major Contributors to This Report Abbreviations DSMC DefenseSystems ManagementCollege GAO General Accounting Office LMI Logistics ManagementInstitute Page 12 GAO/RCED-90-178 Coast Guard Project Manager Qualifications 1 h Page 13 GAO/RCED-90-178 Coast Guard Project Manager Qualifications I 1’ Appendix I C’3 Acquisition Experience and Training .*-- Background of the CoastGuard’s Current Project Managers DSMC’o 20-week program management course Before Year8 of previous selection a8 After selection Graduate/ lndU8trial acquisition project as project postgraduate College of the Prolect manasaep experience manaaer manager traintnab Armed Force8 1 0 No Yes No No 2--- 1 No No Yes No 3 3 No Yes Yes No 4 0 No Yes Yes No 5 0 No No Yes No 6~-.l...“---- 0 No Yes Yes No 7 0 No Yes No No 8 8 No No Yes No 9 0 No No No No aAs of April 30, 1990. bTraining in one of the following Coast Guard-desired graduate/postgraduate areas (1) naval engineering (2) electrical engineering/information technology (3) operations research (4) aviation engineering/administration (5) contracting/procurement (6) logistics management (7) project management (6) general management Page 14 GAO/WED-SO-178 Coast Guard Project Manager Qualification Appendix II Length of Tenure of the CoastGuard’s Project ManagersWho Are CompletingTheir Assignmentsin Fiscal Year 1990 Expected length of tenure at completion Project manager of tour a8 project manager (in months) 28 25 5a 34 6a 37 7a 48 Qa 52 aThe project manager is transferring to a new assignment during fiscal year 1990. bThe project manager is retiring from the Coast Guard during fiscal year 1990 Page 16 GAO/RCED-SO-178 Coast Guard Project Manager Qualitkation~ . 1\.r Appendix III ‘d Major Contributors to This Report John Hill, Associate Director Resources, David Marwick, Assistant Director Community, and Allen C. Lomax, Evaluator-in-Charge Economic M. Jane Hunt, Reports Analyst Development Division, Washington, DC. (844449) Page 16 GAO/RCED-SO-178 Coast Guard Project Manager Qualification I --- - i~c~quests for wpicw of (;A() reports should be sent. to: 17%. Genwal Awouut~ing Office Post Office Hox 6015 Gait.hersburg, Maryland 20877 Orders must, be prepaid by cash or by check or money ordw made out. to the Supt~rint,endent. of Docunwnts.
Coast Guard Acquisitions: Formal Criteria Needed to Ensure Project Manager Qualifications
Published by the Government Accountability Office on 1990-06-19.
Below is a raw (and likely hideous) rendition of the original report. (PDF)