Detailed Information on the
Defense Contract Management Agency Assessment

Tracking the performance of the annual and long-term performance measures with quarterly performance status checks on each goal and taking corrective actions, as necessary, to ensure success.

Monitoring, quarterly, overarching electronic-government output performance measures. Engage with contractors, as necessary, to ensure electronic processing of invoices and source acceptance documents.

Comparing the Agency with at least one other program (government or private) with similar purposes and goals in order to incorporate other efficiencies.

Measure: Contract Closeout Timeliness

Explanation:Defense Contract Management Agency's (DCMA) contract management mission provides acquisition life-cycle support to our military services worldwide. Contract closeout reflects the successful completion of all processes required by the Federal Acquisition Regulation and Defense Federal Acquisition Regulation during contract administration. Therefore, this measure tracks DCMA's ability to complete its assigned mission. DCMA's goal is to maintain a high percentage of closed contracts, while remaining compliant with acquisition regulations. In support of the Global War on Terrorism the Defense Contract Management Agency's Workload has been significantly increasing, and at the same time, its personnel staffing has been significantly reduced. In addition, the Military Services and the Defense Logistics Agency have adopted procurement strategies that result in larger, longer term, and more complex contracts that require more time to close. In this constrained resource environment, achieving a 90% or better contract closeout rate is an ambitious target for DCMA.

Measure: Customer Satisfaction

Explanation:Defense Contract Management Agency's (DCMA) goal is to provide the customer with unparalleled contract management and acquisition support wherever and whenever needed. The customer satisfaction measure provides insight into the customers' satisfaction with the services provided. It provides DCMA with the customers' feedback concerning timeliness, accuracy, professionalism of DCMA's personnel, as well as overall satisfaction of the product and service provided. DCMA's goal is to maintain 90-percent of customer satisfaction responses at 5 or greater on a 6-point scale.

Measure: Electronic Source Acceptance Document Processing

Explanation:DCMA was established to help drive effectiveness and efficiency into the contract administration process. Increasing electronic processing of key contract actions increases responsiveness, reduces processing time and cost, and facilitates timely closeout of contracts. In short, the electronic processing of documents places critical customer information in the hands of DCMA faster compared to a manual system and allows DCMA to reduce errors while speeding processing time. This measure tracks the increase in the percentage of Product Acceptance Documents processed electronically for DCMA-administered contracts. One item under the President's Management Agenda is to expand electronic government (e-govt), utilizing technology to improve how the Federal Government serves it's citizens, businesses and agencies alike. This metric supports the President's Management Agenda.

Measure: Electronic Invoice Processing

Explanation:Defense Contract Management Agency (DCMA) was established to help drive effectiveness and efficiency into the contract administration process. Increasing electronic processing of key contract actions increases responsiveness, reduces processing time and cost, and facilitates timely closeout of contracts. . In short, the electronic processing of documents places critical customer information in the hands of DCMA and partner agencies faster compared to a manual system and allows a quicker close-out of the contract. This measure tracks the increase in the percentage of Electronic Invoices processed for DCMA-administered contracts. One item under the President's Management Agenda is to expand electronic government (e-govt), utilizing technology to improve how the Federal Government serves it's citizens, businesses and agencies alike. This metric supports the President's Management Agenda.

Measure: Unit Cost Productivity

Explanation:The Defense Contract Management Agency's (DCMA) mission is to perform Contract Administration Services (CAS) for the Department of Defense (DOD) and other Federal Agencies in accordance with Federal and Defense acquisition regulations in an effective and efficient manner. The Agency unit cost metric relates DCMA's labor and non-labor costs to the dollar value of open contracts. DCMA's goal is to reduce the unit cost of accomplishing contract administration functions by at least 3-percent annually. This measure assesses the Agency's progress in reducing the expense of accomplishing contract administration functions, thus measuring efficiency at the Agency level.

Is the program purpose clear?

Explanation: The Defense Contract Management Agency's (DCMA) mission is to perform Contract Administration Services (CAS) for the Department of Defense (DoD), other Federal Agencies, foreign governments, and authorized international organizations. The DCMA consolidates the DoD's contract management functions in order to improve the program's performance effectiveness and efficiency. As the eyes and ears of the warfighter in contractor facilities and as a Combat Support Agency, DCMA is responsible for ensuring the integrity of the government contracting process and providing a broad range of acquisition management services. DCMA's contract management mission provides acquisition life-cycle support to our military services worldwide, as well as contingency contract support in Iraq and Afghanistan. DCMA's responsibilities require performance of CAS functions in accordance with the Federal Acquisition Regulations (FAR) and the Defense Federal Acquisition Regulations Supplement (DFARS).

Evidence: Title 10, United States Code, grants the Secretary of Defense (SECDEF) authority to provide for common performance of supply or service by establishing Defense Agencies. Department of Defense Directive (DoDD) Directive No. 5105.64 dated Sep 27, 2000 (and certified current as of Nov 21, 2003) and Deputy Secretary of Defense (DEPSECDEF) memo, dated March 27, 2000, established the DCMA as a Combat Support Agency that performs CAS functions in accordance with the FAR and the DFARS. Prior to DCMA becoming an Agency, the Defense Management Report Decision (DMRD) No. 916, dated November 8, 1989, directed consolidation of CAS functions in order to streamline existing CAS organizations, promote uniform procurement policy, and upgrade the quality of the CAS work force while eliminating overhead and reducing payroll costs. As a result the Defense Contract Management Command (DCMC) was established by the memo of DEPSECDEF dated February 6, 1990. In order to further streamline and reduce personnel requirements the Command was disestablished and the Defense Contract Management Agency was established. This created a leaner more effective and efficient CAS organization. Additional confirming evidence is available from a DOD Inspector General Report (# 94-INS-12) that concluded the Defense Contract Management Command: (a) implemented DMRD #916, (b) consolidated, streamlined, and standardized the contract administration services functions, and, (c) established a customer satisfaction program designed to obtain continuous customer feedback and identify important customer services.

Does the program address a specific and existing problem, interest, or need?

Explanation: The Defense Contract Management Agency (DCMA) was established to address problems in Department of Defense (DoD) Contract Administration Services (CAS) such as: (a) differing procedures for managing contracts in each of the Services and the need for uniform policy and procedures, (b) the need to provide a single face to industry on contract administration, (c) the need to provide for greater professionalism in contract administration, (d) the need to focus on contract administration as a single activity in a single agency, so that it will receive the attention and focus it needs, and (e) the need to reduce the overhead associated with contract administration, and to reassess the need for the numbers of government officials who are present in contractor facilities. Prior to 1989, each service within the DoD had its own agency or organization to perform its contract administration services. Having multiple organizations providing essentially the same service was neither effective nor efficient. As a result, DCMA was established to consolidate contract administration services and promote uniform procurement policy for the entire DoD. DCMA continues to provide acquisition life-cycle support to DoD. Currently, DCMA manages over 305,000 active contracts with an obligated value of over $1 trillion. DCMA performs its mission world-wide to include providing contingency contract support in Iraq and Afghanistan. The DCMA's program purpose and design continue to be relevant as it is DoD's only organization dedicated to contract management.

Evidence: Prior to DCMA becoming an Agency, the Defense Management Report Decision #916, dated November 8, 1989, directed consolidation of CAS functions. This consolidation was done to streamline existing CAS organizations, promote uniform procurement policy, and upgrade the quality of the CAS work force while eliminating overhead and reducing personnel. As a result the Defense Contract Management Command (DCMD) was established by memo of Deputy Secretary of Defense, dated February 6, 1990. In order to further streamline and reduce personnel requirements, DCMD was disestablished and DCMA was established. This created a leaner more effective and efficient CAS organization. Confirming evidence is available from a DoD Inspector General Report (# 94-INS-12) that concluded the DCMC: (a) implemented DMRD #916, (b) consolidated, streamlined, and standardized the contract administration services functions, and, (c) established a customer satisfaction program designed to obtain continuous customer feedback and identify important customer services.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The Defense Contract Management Agency (DCMA) does not overlap with other government or private efforts. It is the Department of Defense's (DoD) contract manager and is the exclusive manager of contracts assigned to it for administration. In rare instances, Military Service and DCMA personnel are co-located at a contractor facility. In those cases, DCMA coordinates with the program office to ensure there is no redundancy in performance of functions.

Evidence: DOD Inspector General Report (#94-INS-12) concluded the Defense Contract Management Command, which was later disestablished and reestablished as DCMA, achieved the following: (a) implemented Defense Management Report Decision #916, which directed consolidation of Contract Administration Services functions (b) consolidated, streamlined, and standardized the contract administration services functions, and, (c) established a customer satisfaction program designed to obtain continuous customer feedback and identify important customer services.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The Defense Contract Management Agency (DCMA) is effectively designed and free of major flaws that would limit the program's effectiveness and efficiency and there is no evidence to indicate that another approach to contract management would be more effective or efficient. DCMA, was created to reduce inefficiencies and duplication of efforts between the Department of Defense's (DoD) Contract Administration Components. DCMA continues to seek increased productivity through unit cost improvement measures, while improving customer services through its ongoing performance-based management implementation efforts. To ensure DCMA remains on track, the agency has an assessment architecture strategy that requires the Senior Leadership Team (SLT) to review performance at all levels.

Evidence: DCMA was designed to consolidate the Department of Defense (DoD) Contract Administration Services (CAS) functions in order to improve the program's performance, effectiveness and efficiency. The 2003-2004 Biennial Review of the Agency, done by Office of the Secretary of Defense (Administration and Management), commended DCMA and reported a high level of satisfaction with its effectiveness, efficiency and economy. In performance of its mission, DCMA constantly collaborates with its customers (the Military Services), reviews its processes, makes necessary improvements and monitors its effectiveness and efficiency. DCMA's Senior Leadership Team (SLT) constantly monitors its Contract Management Offices' performance through various reviews and local metrics. The SLT established the Executive Board, which assesses performance related to policy, program and budget issues. DCMA's SLT meets annually to re-evaluate the Strategic Plan and modify it, as necessary, to ensure DCMA is on track to successfully attain its strategic goals and overarching performance measures. The SLT also reviews relevancy of the program goals and updates/revises them, as necessary. In addition, the DoD Inspector General Report (# 94-INS-12) concluded the organization (a) consolidated, streamlined, and standardized the contract administration services functions, (b) consolidated, streamlined, and standardized the contract administration services functions, and, (c) established a customer satisfaction program designed to obtain continuous customer feedback and identify important customer services. The Agency has been periodically recognized for its management effectiveness. In both 2004 and 2005, DCMA received a DOD Government-Industry Data Exchange Program (GIDEP) Achievement Award. In 1999 DCMA won the David Packard Excellence in Acquisition Award. The President's Quality Award Program recognized the Agency in 1998, 1999, and 2000. The nation's top award for quality in the Federal Government was given to the Agency in 1998. The Agency was awarded nine Vice-Presidential Hammer Awards between 1994 and 1997.

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The Defense Contract Management Agency's (DCMA) uses an Integrated Management System (IMS) that incorporates planning, programming, resourcing, budget execution and assessment processes. This system ensures DCMA's limited resources support the mission purpose and reach the intended beneficiaries. There are no unintended subsidies. In order to properly target resources, DCMA coordinates with its customers and establishes mutual commitments via Memorandums of Agreement (MOAs). The resources required to support DCMA's customers are loaded into Enterprise Planner (EP), DCMA's resource requirements planning tool. Agency managers oversee this process and make resource adjustments to ensure the right level of resources reach the intended beneficiaries. During budget execution, the Agency collects and analyzes the actual cost of supporting customers through DCMA's Performance Labor Accounting System (PLAS).

Evidence: The IMS system allows DCMA's Senior Leadership Team (SLT) to provide mission oversight and make decisions, which, in a changing environment, ensure the right beneficiaries are targeted. The SLT monitors both cost and performance. Adjustments are made to ensure the optimal allocation of DCMA's resources. At all levels of the organization, resource needs and customer priorities are analyzed and resources are aligned to ensure DCMA meets its customers' most critical requirements. DCMA collects its customer requirements through engagement with Office of the Secretary of Defense (OSD) Acquisition Technology and Logistic staff, the Military Service Senior Acquisition Executives, Program Executive Officers, Program Managers, as well as Customer Liaison Representatives (CLRs) at the major Procurement Commands and Program Integrators at most Major Defense Acquisition Programs. In addition, DCMA has a customer engagement strategy which requires meeting with customers to ensure that the Agency captures their needs and priorities. Each of DCMA's six Divisions conducts regular meetings with their respective contract management offices. The intent is to meet their customer's most critical requirements by properly allocating resources and making necessary adjustments throughout the execution year. The divisions brief resourcing strategies, justification for resource decisions and budget allocations to the SLT. The divisions also present their budget execution status and year-of-execution resourcing issues during Executive Resources Board (ERB) meetings. There are no intended subsidies.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The Defense Contract Management Agency (DCMA) has five overarching, long-term performance measures that assess its ability to provide contract administration services to the Department of Defense (DoD). These measures meaningfully reflect the purpose of the Agency - improving the program's effectiveness and efficiency in performing contract management for DoD. The most important of these measures is the customer satisfaction measure, which provides feedback from the customers concerning their satisfaction with DCMA's contract administration services. The three output measures include a contract closeout measure, which reflects the successful completion of all processes required during contract administration, as well as two electronic processing measures that track the reduction of paperwork processing thus supporting the President's Management Agenda (PMA) in increasing efficiency while reducing cost. The fifth measure is the unit cost efficiency metric. This efficiency measure determines how effective DCMA is reducing the expense of accomplishing basic contract administration functions.

Evidence: The assessment of DCMA's performance is accomplished through periodic reviews and monitoring of the overarching long-term performance measures as listed in the performance measures section above and posted on the Agency's "DCMA-FBP Management Review" website. DCMA is continuing to implement Performance Based Management and developing comprehensive Performance Commitments with its numerous customers to enhance its performance measurement.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The Defense Contract Management Agency (DCMA) has ambitious targets and timeframes for its long-term measures. The three output measures include a contract closeout measure and two electronic processing measures. The fifth measure is the unit cost efficiency metric. Each of the overarching performance measures has targets for improvement, or maintenance of exemplary targets, through FY2014, as displayed in the Program Performance Measures Section. Baselines for the measures of contract closeout timeliness, customer satisfaction and unit cost were developed using historical data and track back to FY2001. Even though performance results in prior years have exceeded projected targets for these measures, the static targets for FY2007 through FY2014 are considered ambitious because the Agency's workforce is projected to shrink while the workload is projected to increase. The baseline for electronic source acceptance document processing and electronic invoice processing were established in FY2003. These two electronic processing measures have highly-ambitious targets, which promote usage of the Wide Area Workflow. Wide Area Workflow (WAWF) is the DoDs standard system that enables contractors to electronically submit invoices and receiving reports and allows the government to electronically process them.

Evidence: Results on DCMA's overarching mission and goals are displayed in the Program Performance Measures Section and on its website. Both the annual and long-term timeframes are listed for each measure. The long term goals are considered ambitious because the Agency expects to achieve published targets, as workload is expected to increase while the number of personnel assigned to DCMA is forecasted to decrease. As reflected in the FY08 President's Budget, the personnel full-time equivalents (FTEs) are expected to decrease from 10,013 in FY07 to 9,456 in FY12, a 5.6% decrease. DCMA's workload, which is driven by the Service's Procurement Budgets, is expected to increase for the foreseeable future. Supporting this projection is the information from the DoD Green Book Tables 1-9 and 5-1, Service Procurement Budget Authority. Procurement budgets reflect increases from $84,197M in FY07 to $106,758M in FY11, a growth of 26.7% in constant FY2007 dollars.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The Defense Contract Management Agency (DCMA) has five overarching, long-term performance measures that assess its ability to provide contract administration services to the Department of Defense. These measures meaningfully reflect the purpose of the Agency - improving the program's effectiveness and efficiency in performing contract management for the Department. The most important of these measures is the customer satisfaction measure, which provides feedback from the customers concerning their satisfaction with DCMA's contract administration services. The three output measures include a contract closeout measure, which reflects the successful completion of all processes required during contract administration, as well as two electronic processing measures that track the reduction of paperwork processing thus supporting the President's Management Agenda (PMA) in increasing efficiency while reducing cost. The fifth measure is the unit cost efficiency metric. This efficiency measure determines how effective DCMA is reducing the expense of accomplishing basic contract administration functions. All of these measures have annual targets that help the agency meet its long-term goals. They are discrete, quantifiable and measurable. The outcome and output measures are regularly tracked and reflect progress towards the long-term targets.

Evidence: Achieving the annual targets ensures that DCMA is on track to achieve the long-tem goal and ensure that DCMA is providing efficient and effective contract administration services to its customers. The annual targets are periodically evaluated to determine accomplishment, problems in accomplishment, and whether adjustments to the annual and long-term targets are required. A determination is also made, during the annual Strategic Planning Meeting, as to whether the overarching measure is relevant, whether it demonstrates progress towards the long-term target (FY2014), whether additional efficiencies can be obtained or whether the measure should be in a "maintenance" mode, etc. DCMA's performance is accomplished through periodic review and monitoring of the overarching long-term performance measures as listed in the performance measures section above and posted on the Agency's "DCMA-FBP Management Review" website. DCMA is continuing its implementation of Performance Based Management (PBM). DCMA is developing comprehensive Performance Commitments with its numerous customers to enhance its performance measurement.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The Defense Contract Management Agency (DCMA) has ambitious targets for its annual measures. These measures are tracked annually to demonstrate progress towards the longer-term goals and ensure that DCMA is providing efficient and effective contract administration services to its customers. Each of the overarching performance measures has annual targets for improvement, or maintenance of exemplary targets, through FY2014, as displayed in the Program Performance Measures Section. Baselines for the measures of contract closeout timeliness, customer satisfaction and unit cost were developed using historical data and track back to FY2001. Even though performance results in prior years have exceeded projected targets for these measures, the static targets for 2007 through 2014 are considered ambitious because the Agency's workforce is projected to shrink while the workload is projected to increase. The baselines for electronic source acceptance document processing and electronic invoice processing were established in FY2003. These two electronic processing measures have highly-ambitious targets, that promote usage of the Wide Area Workflow. Wide Area Workflow (WAWF) is DoD's standard system that enables contractors to electronically submit invoices and receiving reports and allows the government to electronically process them.

Evidence: DCMA's results in its overarching measures have been periodically reported in Part IV, Performance Criteria and Evaluation Summary, of the DCMA Operation and Maintenance, Budget Estimates (part of the OP-5 Summary). These Budget exhibits are included in the Presidents Budget Submission. Progress against each goal is also posted on the Agency's "DCMA-FBP Management Review" website. The annual goals are considered ambitious because the Agency expects to achieve published targets even though personnel are expected to drop and workload is expected to increase. As reflected in the FY08 President's Budget, the personnel full-time equivalents (FTEs) are expected to decrease from 10,013 in FY07 to 9,456 in FY12, a 5.6% decrease. However, history has shown that DCMA's FTE annual reductions typically exceed the projections due to factors such as Defense-Wide budget marks and revised pay increase assumptions. DCMA's workload, which is driven by the Service's Procurement Budgets, is expected to increase for the foreseeable future. Supporting this projection is the information from the DOD Green Book Tables 1-9 and 5-1, Service Procurement Budget Authority. Procurement budgets reflect increases from $84,197M in FY07 to $106,758M in FY11, a growth of 26.7% in constant FY2007 dollars.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The Defense Contract Management Agency (DCMA) coordinates its annual and long-term goals with its sponsor, the Undersecretary of Defense for Acquisition, Technology, and Logistics (AT&L), and its customers, the Military Services, to set and monitor its progress toward the Agency's goals. Memorandums of Agreement (MOA) have been signed between the Acting Director of DCMA and components of the Army and the Defense Logistics Agency. These three MOAs outline mutual understanding between the customer and the Agency via the established performance commitments. For example, the customer outcomes include proactive delay notification; achievement of specified on-time delivery rates; and reduction in product deficiency reports.

Evidence: Memorandums of Agreement (MOA) have been signed between the Acting Director, DCMA and various components of the services: (1) James H. Pillsbury, Major General, USA, Commanding, of the U.S. Army Aviation Missile Life Cycle Management Command (AMCOM) in July 2006; and, (2) William M. Lenaers, Major General, USA, Commanding, Acting, US Army TACOM Life Cycle Management Command (LCMC) in March 2007. A MOA was signed by the Executive Director, Contract Management Operations, DCMA and Deputy Director, Logistics Operations, Defense Logistics Agency in Sep 2006. These three MOAs outline mutual understanding between the customer and the Agency via the established performance commitments. For example, the customer outcomes include proactive delay notification; achievement of specified on-time delivery rates; and reduction in product deficiency reports.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: Independent internal and external evaluations of sufficient scope and high-quality are conducted on a regular, as well as on an ad hoc, basis to evaluate the Defense Contract Management Agency's (DCMA) functions. DCMA established an internal organization, the Office of Independent Assessment, to perform independent, Agency-wide mission reviews, including performance and customer support. To ensure its independence, the office reports directly to the Agency Director. This organization sends management review teams to all DCMA offices on a regularly-scheduled basis. The teams are scheduled to review each Contract Management Office during FY07. The teams are then scheduled to review each DCMA office on an 18-month cycle, starting in FY08. DCMA's Office of Independent Assessment also performs other special internal reviews and assessments on an ad hoc basis as directed by the Agency Director and/or Senior Leadership Team (SLT). This office is also responsible for facilitating and coordinating audits and audit requests from external audit agencies. The Department of Defense (DoD) Combat Support Agency Review Team also performs a biannual review of the Agency's combat support mission. In addition auditors from the Government Accountability Office (GAO), the DoD Inspector General (DoDIG), the Air Force Audit Agency, the Naval Audit Service, the Army Audit Agency, etc. routinely conduct independent evaluations of the DCMA programs. While most of the external reviews do not look at the overall Agency, but focus on specific information concerning Agency practices, processes, or data specific to the subject area under review, taken as a whole, they provide a broad assessment of Agency management practices and serve to validate and focus internal review activity. Periodically (usually triennially) the Agency commissions a "customer satisfaction" study to determine the Agency's success in meeting customers' requirements. An independent evaluation of the Agency was performed by the Heifetz, Halle Consulting Group in July 2002. It comprised a 360-degree evaluation of both the internal workforce and external customers. Additionally, a follow-on assessment was performed in 2004. It also involved interviewing the Agency's primary customers, and assessing their satisfaction regarding support and services performed. DCMA has used these reports and findings to support program improvements. For example, a U.S. Government Accountability Office (GAO) report (GAO-04-919), Sep 2004, "Tools for Measuring and Managing Defense Agency Performance Could be Strengthened", indicated that "linkage between resource needs and performance outcomes was not clearly established." As a result the Agency designed its Performance Based Management (PBM) architecture to include linkages which cascade from Commanders down to employees. Customer outcomes are identified and performance commitments relating to DCMA support are being developed with the customers. These outcomes are communicated to the employees who execute the mission. The purpose is for the supervisor and employee to discuss and identify which things have the greatest impact on the customer outcome. The Agency's Performance Labor Accounting System allows employees to charge time against Performance Commitments (PC). When all PCs are in place, the organization will be able to specifically link resource needs to performance outcomes.

Evidence: The Office of Independent Assessment mission and functions statement, which shows the scope to assessment responsibilities, and the Mission Review Team Schedule, which shows the team is programmed to review each Contract Management Office during FY07. The following is a sample of external assessments and audits that demonstrates the breath of audit perspectives: Evidence of independent evaluation of sufficient scope and quality is the Office of Secretary of Defense (OSD) (Administration and Management) Biannual Review of the DCMA dated August 18, 2004. Various GAO and DOD IG reports: U.S. Army Audit Agency (#A-2007-011-ALL), subject: nontactical vehicle usage in the Iraq Area of operations, audit of logistics civil augmentation program operations in support of operation Iraqi Freedom. U.S. Naval Audit Service (Project N2007-NAA000-0010), subject: management of special tooling and special test equipment. GAO (Project #350877), started June 06, subject: DoD Critical Infrastructure identification, protection and availability. The audit was initiated at the request of the Readiness Subcommittee, House Committee on Armed Services. GAO (Project #195099), subject: DCAA audits of internal controls over contractors' significant cost-related systems. The audit was initiated in response to the Senate Committee on Homeland Security and Government Affairs. GAO (GAO-05-73), subject: DCMA activities associated with DOD oversight of DOD and prime contractors adherence to requirements in selected contracts for overseeing spare parts quality; DOD IG (Project No. D2005-DIPOAI-0252.000), subject: proposed report of DCMA Virginia Actions on incurred cost audit reports; U.S. Air Force Audit Agency (F2006-FB3000-0334), subject: Supply Management Activity Group, Accounts Payable, Air Force Working Capital Fund. DCMA (Project), Dec 06, subject: audit of the utilization of government owned vehicles. DOD IG (D2006-D000FP-0073), Dec 05, subject: audit of the FY2006 Civilian Payroll withholding data. This is an annual project audit required by the Chief Financial Officer's action (OMB Bulletin No. 01-02). DOD IG (D2006-D000AE-0049), subject: audit of acquisition of the objective individual combat weapon increments II and III. DOD IG (D2005-D000FB-0311), Oct 05, subject: congressional request to audit the defense travel system. DOD IG (94-INS-12), Sep 94, subject: Defense Contract Management Command Report. Support Agency, Reform and Assessment Office, "2004 Combat Support Agency Review Team (CSART) Assessment of the DCMA," chartered by the Chairman of Joint Chiefs of Staff, in accordance with Title 10, USC, Section 193, Support Agency Review Team. The Heifetz, Halle Consulting Group July 2002 Report and the follow on 2004 assessment.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The total Defense Contract Management Agency (DCMA) budget is tied to accomplishing overarching measures and their respective annual and long-term targets. The measures are monitored and used to focus on areas to indicate what is important and to make resource decisions. The long-term goals and overarching performance measures are addressed in the President's Budget Submission justification material. This justification material effectively ties the performance measures to resources. This material is presented to the Office of Management and Budget as well as Congress and is also publicly available on the web page of the Office of the Secretary of Defense, Comptroller. In this way, the material is presented in a clear and transparent manner while reflecting all direct and indirect costs. DCMA collaborates with Office of the Secretary of Defense (OSD) regarding policy direction, strategic goals and overarching performance measures. Agency senior management meets with the Agency sponsor regarding planning to support the OSD (Acquisition, Technology and Logistics) strategic goals. The Senior Leadership Team takes this guidance into consideration during its yearly update of the Agency's Strategic Plan. At that time, the multi-year strategic goals, which are contained in the Agency's multi-year strategic plan, are reviewed, updated and revised. These strategic goals are supported by the overarching performance measures and individual agreements negotiated with our customers. This information is incorporated in the process for developing DCMA's resource requirements through the Department of Defense's (DoD) Planning, Programming, Budgeting, and Execution System. Through this process, DCMA obtains updates to customer requirements and adjusts resource allocations accordingly. The overarching strategy shifts are briefed to OSD during its Program Objectives Memorandum (POM) briefings.

Evidence: The Part IV, Performance Criteria and Evaluation Summary, of the DCMA Operation and Maintenance, Defense-Wide Budget Estimates Exhibits (part of the OP-5), and the Performance Budget Plan (PBP) Budget exhibits provide DCMA's total budget (including direct and indirect costs), and, Performance Goals and Measures. These Budget exhibits are included in the Presidents Budget Submission. The OSD (AT&L) Strategic Plan (under Goal 6 - Improved Governance and Decision Process), cites DCMA as a supporter. The long-term goals and overarching performance measures are addressed in the President's Budget Submission justification material. This justification material effectively ties the performance measures to resources. This material is presented to the Office of Management and Budget as well as Congress and is also publicly available on the web page of the Office of the Secretary of Defense, Comptroller.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: Through the years, the Defense Contract Management Agency (DCMA) has improved its strategic planning process, organizational structure, risk assessments, performance measures, and internal and external communication. These changes have resulted in enhanced partnership and communication with the Agency's stakeholders, sponsors and Military customers. For example, a U.S. Government Accountability Office (GAO) report (GAO-04-919), September 2004, "Tools for Measuring and Managing Defense Agency Performance Could be Strengthened", indicated that "linkage between resource needs and performance outcomes was not clearly established." As a result the Agency designed its Performance Based Management (PBM) architecture to include linkages which cascade from Commanders down to employees. Customer outcomes are identified and performance commitments relating to DCMA support are being developed with the customers. These outcomes are communicated to the employees who execute the mission. The purpose is for the supervisor and employee to discuss and identify which things have the greatest impact on the customer outcome. The Agency's Performance Labor Accounting System allows employees to charge time against Performance Commitments (PC). When all PCs are in place, the organization will be able to specifically link resource needs to performance outcomes. Annually, the Senior Leadership Team (SLT) kicks off the strategic plan update by holding a multi-day senior leaders meeting, which focuses on long-term strategic planning. Over the past several years, new leadership has taken the "lessons learned" from executing previous plans to enhance the FY07 plan. The plan continuously evolves to maintain its relevancy and changes to the plan are also made, as necessary, due to current events and updated requirements and direction from the Office of Secretary of Defense (OSD), Acquisition, Technology and Logistics (AT&L).

Evidence: A U.S. Government Accountability Office (GAO) report (GAO-04-919), Sep 2004, "Tools for Measuring and Managing Defense Agency Performance Could be Strengthened", indicated that "linkage between resource needs and performance outcomes was not clearly established." Evidence of steps the Agency took to correct the deficiencies can be found in the development of customer agreements (addressed under 2.5). and in the development of Performance Based Management (PBM) policy which can be found on the Agency's website. The DCMA FY07 Strategic Plan focuses on PBM implementation and should increase AT&L and military customers' satisfaction and DCMA's effectiveness, and efficiency. The Agency's strategic plan is available on the Agency's website.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The Defense Contract Management Agency (DCMA) collects and monitors data on its over-arching performance metrics on a monthly basis. These data are used to set baselines and establish ambitious timeframes for the annual and long-term performance measures. As part of the Performance Based Management (PBM) implementation, the Agency continues to develop Performance Commitments with its key program partners. These commitments are documented in MOAs signed by both the respective partner and DCMA. Each measure is monitored monthly by a Headquarters Performance Advocate who analyzes the information for data validity, credibility and indications of potential issues which would impact overall Agency performance. Management reviews are accomplished by Contract Management Office (CMO) Commanders on a regular basis during which progress against Performance Commitments and other measures are reviewed. Each of the six Division Directors presents to the Agency's Senior Leadership Team (SLT) the status of the Performance Commitments during the Divisions' Performance Reviews on a semi-annual basis. During these meetings the SLT will make adjustments in strategy and/or resources, adjust processes, or develop a solution to an issue to assure good performance. Since the metrics are captured in the Metrics Manager System, leadership at all levels can monitor performance.

Evidence: The Agency's Metrics Manager application is used to collect timely performance data for DCMA's overarching performance measures and for performance commitments established with key program partners. The customer satisfaction measure is compiled from information furnished by the Military Customers. Additional information is collected during the Office of Secretary of Defense, Acquisition, Technology and Logistics meetings and DCMA/Program Manager meetings The performance on these metrics is the prime consideration in the resourcing process. DCMA's divisions support their resource requests in the Enterprise Planner system based on their performance on Agency goals and any Performance Commitments negotiated with customers. This data is used to make resourcing decisions at the Division level and at the Executive Resourcing Board, comprised of the Agency's Senior Leadership Team.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Memorandums of Agreement (MOAs) between Defense Contract Management Agency (DCMA) and program partners ensure all understand cost, schedule and performance goals and ensure results are tracked. Included among the Program Partners with whom DCMA has currently established MOAs are the Air Force Material Command-Air Logistics Centers, the Naval Inventory Control Point, and the Defense Logistics Agency. Managers at each level of DCMA are held accountable for achieving performance results. Performance related to customer commitments is a critical element on each manager's Individual Performance Plan (IPP). The Director's performance commitments are negotiated with, and held accountable by, the Office of Secretary of Defense (OSD), Acquisition and Technology (A&T), a partner organization. These commitments are flowed down to the DCMA managers. Managers approve performance commitments for their team that support the customer, and link them to both their employees and managers IPPs. In addition organizational performance is monitored and reported to OSD and Military Services Partners. OSD and Military Services Partners, through this monitoring and reporting process, are held accountable for cost, schedule and performance results.

Evidence: Formal MOAs have been signed between DCMA and its Military Service Partners. DCMA, as a member of the acquisition community (comprised of Military Services who are the DCMA customers, and Defense Agencies), participates in meetings to discuss potential problems or issues in achieving members' goals. Accountability of performance is also addressed at the Acquisition and Technology (A&T) community's weekly staff meeting. In addition quarterly off-site meetings are hosted by A&T to review progress in attaining goals. Management reviews are accomplished by the Contract Management Offices' (CMO) Commanders on a regular (usually monthly) basis to review progress against Performance Commitments and other measures. Additional evidence is provided in example Individual Performance Plans which demonstrates flow-down of customer performance commitments.

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: The Defense Contract Management Agency's (DCMA) funds are obligated in a timely manner, spent for intended purpose and accurately reported. DCMA's resources come from the Defense-Wide Operations and Maintenance appropriation, which is a one year appropriation. Program rewards are reported promptly and accurately. They are tracked in the Federal Procurement Database (Next Generation) System. DCMA's financial performance is assessed by numerous external and internal stakeholders to ensure the resources are used to support the agency's mission. Responsibility for the administrative control of funds has been delegated by the DCMA Comptroller to DCMA HQ Directorates, Center Directors, Division Directors, and Contract Management Offices (CMO). These personnel are responsible for complying with guidance contained in the Department of Defense's Financial Management Regulation (FMR). This regulation establishes policy and procedures for administrative control of DoD funds. As part of this responsibility, responsible DCMA employees are required to provide timely and accurate Monthly Obligation Plans (MOP) and Status of Funds (SOF) reports. In addition, the Office of Secretary of Defense (OSD) Comptroller monitors the DCMA budget execution on a monthly basis.

Evidence: DCMA tracks its budget execution and works budget issues through numerous internal forums. The DCMA Comptroller reviews the Divisions' obligation rates, conducts outlier analysis, and resolves resourcing issues in monthly Integrated Management System (IMS) Steering Group Meetings. Quarterly, the Executive Resources Board, composed of DCMA's Senior Leadership team, reviews the Agency-wide status of funds and updates resourcing priorities as required. DCMA is required to submit a monthly Execution Workbook to OSD Comptroller. The workbook displays the Monthly Obligation Plan and reflects data by line item accounts. On a monthly basis, Defense Finance Accounting Services (DFAS) requires DCMA to certify the costs associated with ongoing activities related to the Global War on Terror (GWOT), Contingency Operations (ConOps), and Disaster Relief Efforts. In support of OMB circular A-123, the Agency is aiming to receive an Unqualified Audit Opinion on its FY08 Financial Statements. The DoD Financial Management Regulation, Volume 3, Chapter 8 (Section 0804) requires the Agency to perform a review of commitments and obligations. The Agency Comptroller provides written confirmation statements, which attest to the completion of the tri-annual reviews, to the OSD Comptroller. These reviews are conducted to ensure the accuracy and timeliness of records as reported in the official accounting records. During the latest review, which was conducted for the period ending January 31, 2007, DCMA validated commitments, obligations, accrued expenditures, and reimbursements recorded in the accounting system against supporting hard copy or electronic data interchange (EDI) source documents. This Tri-Annual Review included specific attestation on all existing interagency agreements in accordance with DOD policies, as well as, the DOD Inspector General (IG) audit in relation to DOD purchases through General Services Administration and the Department of Treasury.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The Defense Contract Management Agency (DCMA) has successfully demonstrated improved efficiencies and cost effectiveness in achieving its program goals to date. DCMA's goal is to reduce the unit cost of accomplishing its contract administration functions by at least three-percent annually. DCMA has exceeded this goal by an average of nearly four-percent over the past six years, as displayed in the Program Performance Measures Section. In order to achieve these savings, DCMA and its predecessor organization - the Defense Contract Management Command (DCMC) - streamlined the consolidated contract administration services (CAS) organizations, promoted uniform procurement policy, re-engineered processes, implemented system improvements and upgraded the quality of the CAS work force while eliminating overhead and reducing personnel. Through its ongoing efficiency efforts the Agency has demonstrated improved efficiency through the unit cost measure.

Evidence: DCMA's unit cost measure tracks the expense of accomplishing basic contract administration functions over time. DCMA intends to improve unit cost productivity in the Basic Contract Administration Services, Services Support, and Organizational Support cost pools by 3% in the current fiscal year while maintaining or improving in all other cost pools. DCMA has exceeded this goal by an average of nearly four-percent over the past six years.

Does the program collaborate and coordinate effectively with related programs?

Explanation: The Defense Contract Management Agency's (DCMA) mission requires a substantial amount of coordination and collaboration with the Agency sponsor, Senior Acquisition Executives from the Military Services, and other Defense Agencies. The overarching performance measures were developed with various Office of Secretary of Defense (OSD) components. DCMA also coordinates with its customers to review expectations, establish MOAs, and monitor progress through various customer engagement processes. In order to accomplish this, the Agency has assigned Customer Liaison Representatives (CLRs) to the major Procurement Commands. In addition for most Major Defense Acquisition Programs DCMA assigns a Program Integrator to work performance issues and provide an interface between DCMA and the Program Office. To fulfill its role in the DOD Acquisition Lifecycle support, DCMA collaborates with numerous other Agencies. For example, in the contract management process DCMA must collaborate with Defense Contract Audit Agency (DCAA) on issues related to price or cost and final invoice audits. DCMA also collaborates with Defense Finance Accounting Services (DFAS) for payment processing problems.

Evidence: In order to collaborate on program issues, the DCMA Agency Director meets individually with Senior Acquisition Executives from the Military Services. As a member of the acquisition community, DCMA also participates in meetings to discuss potential problems or issues in achieving members' goals and coordinate action plans. Members of the Acquisition and Technology (A&T) community attend a weekly staff meeting to coordinate progress on issues. The Director also participates in monthly Defense Acquisition Executive Summary (DAES) meetings which serve as Acquisition, Technology and Logistics' (AT&L) review of all the Major Defense Acquisition Programs. This forum reviews performance, schedule cost and other parameters of major programs and provides feedback to relevant program managers and others in the DOD acquisition community. Additional evidence is exhibited in Memorandums of Agreement (MOA) that have been signed between the Acting Director, DCMA and various components of the services. These MOAs outline a mutual understanding between the customer and the Agency via the established performance commitments. For example, the customer outcomes include proactive delay notification; achievement specified on-time delivery rates; and reduction in product deficiency reports. DCMA serves as the Department of Defense (DOD) Lead Agent for Earned Value Management (EVM). In support of this responsibility, the Agency has developed programmatic tripwires that are used to inform DOD activities when their programs exceed cost or schedule tolerances. This information is used to collaborate on potential solutions. Another instance of collaboration was working with DFAS and coordinating with the Defense Acquisition Regulations Council to change regulations to enhance electronic processing of invoices and electronic process of acceptance documents for contracts DCMA administers. DCMA also collaborates with Defense Agencies in order to maximize efficiency and effectiveness in our internal support functions. DCAM has an agreement with DFAS, in which DFAS processes employee payroll and pays Agency bills. Another instance of collaboration is where DCMA has an agreement to receive support from the Army's Civilian Personnel Operations Center for the processing of personnel actions, maintenance of the employees' official personnel file, etc.

Does the program use strong financial management practices?

Explanation: The Defense Contract Management Agency (DCMA) adheres to strong financial management practices. While the Agency does not have an unqualified audit opinion, DCMA is currently taking action to attain one on its FY08 financial statements as reflected in the Agency's Annual Statement of Assurance (ASA). DCMA is free from material internal control weaknesses. The organization has processes in place to ensure that payments are made properly and for the intended purpose. Responsibility for the administrative control of funds has been delegated by the DCMA Comptroller to DCMA HQ Directorates, Center Directors, Division Directors, and Contract Management Offices (CMO). These personnel are responsible for complying with guidance contained in the Department of Defense Financial Management Regulation (FMR). This regulation outlines the policy and procedures for administrative control of DoD funds. This regulation establishes policy and procedures for administrative control of DoD funds. As part of this responsibility, responsible DCMA employees are required to provide timely and accurate Monthly Obligation Plans (MOP) and Status of Funds (SOF) reports. In addition, the Office of Secretary of Defense (OSD) Comptroller monitors the DCMA budget execution on a monthly basis. DCMA tracks budget execution and works budget issues through numerous internal forums. The DCMA Comptroller reviews the Divisions' obligation rates and execution. Issues are resolved in monthly Integrated Management System (IMS) Steering Group Meetings. Every other month, the Executive Resources Board, composed of the Agency's Senior Leadership team, reviews the Agency-wide status of funds and updates resourcing priorities as required. In addition, DCMA is required to submit a monthly Execution Workbook to the Office of the Under Secretary of Defense (Comptroller). The workbook displays monthly obligation data by line item accounts.

Evidence: DCMA conducts operations in line with the financial management practices delineated in applicable Department of Defense (DOD) regulations, policies and instructions. In support of OMB Circular A-123, Appendix A and in order to improve its financial practices, the Agency is pursuing an Unqualified Audit Opinion on the FY08 Financial Statements. DCMA has hired an independent contracting firm to prepare audit assertion packages and audit validation packages of its financial processes. DCMA has also established an Audit Committee as required by the A-123, Appendix A.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: Each year the Department of Defense (DoD) is required to submit a Performance and Accountability Report to describe its financial condition, performance status and annual statement of assurance. In order for DOD to issue that report, the Defense Contract Management Agency (DCMA) is required to submit an annual statement of assurance stating that it has internal controls in place, that those controls are operating effectively, and that they are being used for the overall programs' administrative and operational activities to include the effectiveness and efficiency of operations and compliance with applicable laws and regulations. As part of this report, DCMA must assess and report any material weaknesses and determine if there are deficiencies that do not warrant reporting as material weaknesses. In order to address management deficiencies, the Agency established an Office of Independent Assessment as an internal group that reports directly to the Agency Director. This office was established to perform independent Agency-wide mission reviews to determine whether there are management deficiencies or issues that concern both internal administrative functions and performance for customer support. It also performs other special reviews and assessments as directed by the Agency Director and/or Senior Leadership Team (SLT). The office is also responsible for facilitating and coordinating audits and audit requests from other audit agencies. Since DCMA performs contract administration services for its Military customers, auditors from the Government Accountability Office (GAO), the DOD Inspector General, the Air Force Audit Agency, the Naval Audit Service, the Army Audit Agency, etc. routinely conduct independent evaluations of the DCMA programs. A U.S. Government Accountability Office (GAO) report (GAO-04-919), Sep 2004, "Tools for Measuring and Managing Defense Agency Performance Could be Strengthened", indicated that "linkage between resource needs and performance outcomes was not clearly established." As a result the Agency designed its Performance Based Management (PBM) architecture to include linkages which cascade from Commanders down to employees. Customer outcomes are identified and performance commitments relating to DCMA support are being developed with the customers. These outcomes are communicated to the employees who execute the mission. The purpose is for the supervisor and employee to discuss and identify which things have the greatest impact on the customer outcome.

Evidence: DCMA is compliant with the "Federal Managers' Financial Integrity Act" (FMFIA) of 1982, and OMB Circular A-123, "Managers' Responsibility for Internal Control" through its implementation of the Agency Managers Internal Control process. Managers at all Agency levels are required, on an annual basis, to perform Managers Internal Control Reviews. This review entails analyses of a list of the Manager's assigned organizational functions, determination as to which functions are considered the highest risk, and a schedule for reviews. Each review's objective is to gauge whether the function is being effectively and efficiently performed, and when required, in compliance with applicable regulations. This information is then used by management to make improvements and report local findings and issues during Contract Management Office's Command Operations Briefs to their respective Division. During Division Performance Reviews to the SLT, issues are raised and the SLT determines whether problems are localized (and being resolved) or whether they potentially affect operations Agency-wide. Information from these meetings, and additional information from each of the Divisions, forms the basis of the DCMA Annual Statement of Assurance. The (GAO), DOD IG, the Air Force Audit Agency, the Naval Audit Service, the Army Audit Agency, etc. routinely conduct independent evaluations of the DCMA programs. The Agency Director responds to each report by stating what will be accomplished to resolve the issue.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The Defense Contract Management Agency (DCMA) has shown progress in its ability to meet three out of five of its long-term goals. Despite increasing workload and decreasing staff, DCMA has maintained adequate progress. The majority of the overarching performance measures have been achieved every year. It has exceeded it contract closeout timeliness goals by an average of 3% since FY01. It has exceeded its customer satisfaction goals by an average of 1.5% since FY03. Additionally, it has exceeded its unit cost productivity goal by an average of nearly four-percent over the past six years. However, while DCMA has made great strides in its two electronic-government measures, it has not met its goals. This data is reflected in the Performance Measures Section of the PART.

Evidence: While simultaneously experiencing increasing workload and personnel reductions, the Defense Contract Management Agency has been successful in attaining the majority of its overarching goals.

Does the program (including program partners) achieve its annual performance goals?

Explanation: he Defense Contract Management Agency (DCMA) coordinates its annual and long-term goals with its sponsor, the Undersecretary of Defense for Acquisition, Technology, and Logistics (AT&L), and its customers, the Military Services, to set and monitor its progress toward the Agency's goals. DCMA has shown progress in its ability to meet three out of five of its long-term goals. Despite increasing workload and decreasing staff, DCMA has maintained adequate progress. The majority of the overarching performance measures have been achieved every year. It has exceeded it contract closeout timeliness goals by an average of 3% since FY01. It has exceeded its customer satisfaction goals by an average of 1.5% since FY03. Additionally, it has exceeded its unit cost productivity goal by an average of nearly four-percent over the past six years. However, while DCMA has made great strides in its two electronic-government measures, it has not met its goals. This data is reflected in the Performance Measures Section of the PART.

Evidence: While simultaneously experiencing increasing workload and personnel reductions, the Defense Contract management Agency (DCMA) has been successful in attaining the majority of its overarching goals.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The Defense Contract Management Agency (DCMA) has successfully demonstrated improved efficiencies and cost effectiveness in achieving its program goals to date. DCMA's goal is to reduce the unit cost of accomplishing its contract administration functions by at least three-percent annually. DCMA has exceeded this goal by an average of nearly four-percent over the past six years, as displayed in the Program Performance Measures Section. In order to achieve these savings, DCMA and its predecessor organization - the Defense Contract Management Command (DCMC) - streamlined the consolidated contract administration services (CAS) organizations, promoted uniform procurement policy, re-engineered processes, implemented system improvements and upgraded the quality of the CAS work force while eliminating overhead and reducing personnel. Through its ongoing efficiency efforts the Agency has demonstrated improved efficiency through the unit cost measure.

Evidence: DCMA has managed to achieve its efficiency and cost effectiveness goals while simultaneously downsizing and achieving its unit cost goals.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: The Defense Contract Management Agency (DCMA) does not overlap with other government or private efforts. It is the Department of Defense's (DoD) primary contract manager and is the exclusive manager of contracts assigned to it for administration for major military systems and equipment. As evidence of DCMA being the principal provider of these services, DCMA is also a primary source of these services for NASA and other federal agencies when they procure similar systems and equipment. So making direct comparisons of DCMA's true mission performance as compared to other entities is difficult. The Defense Contract Management Command (DCMC), the predecessor organization to DCMA, was created to consolidate this service function (contract management) to improve effectiveness and efficiency. DCMC evolved into DCMA in order to align mission more closely with customers and stakeholders and to sharpen focus on improving life cycle acquisition support. The Department of Defense's (DOD) strategy of achieving efficiencies and economies by consolidation of "like functions" has resulted in the establishment of several agencies such as the Defense Contract Audit Agency, the Defense Finance and Accounting Service, the Defense Commissary Agency (DeCA), as well as DCMA. The commonality among all these agencies is the consolidation of functions in order to provide more effectively and efficiently a large variety of products and services, over a wide geographic dispersion, both within the continental United States and internationally. So, while comparison of direct mission is difficult, comparison with respect to international support for a diverse mix of services is appropriate and available. An indication of customers' perspective of an Agency's effectiveness and efficiency can be determined through the measure of "customer satisfaction." DCMA's performance compares favorably to other Programs in this respect. DeCA was selected for comparison with DCMA because they globally provide a diverse mix of services and products, as does DCMA, and their information was on the PARTWeb. DCMA's performance compares favorably to DeCA in terms of customer satisfaction and efficiency. For instance, DCMA has been successful in maintaining a 90% customer satisfaction rate of 5 or greater on a six point scale, while the DeCA has met their goal of achieving a customer satisfaction target of approximately 4.5 on a 5 point scale. DCMA has successfully reduced the cost of its Services in excess of 3% a year, which compares favorably to other similar agencies' efficiency improvements.

Evidence: The 2003-2004 Biennial Review of the Agency, done by OSD (Administration and Management) reported a high level of customer satisfaction. DCMA was identified in the Office of Secretary of Defense (OSD) Acquisition, Technology and Logistic (AT&L) Strategic Plan (under Goal 6 - Improved Governance and Decision Process), as a leading organization for implementing Performance Based Management (PBM). The Agency has annually made adequate progress in achieving its over-arching performance measures as shown in the Program Performance Measures Section. Agency comparability information was obtained from PARTWeb.

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: Evidence of independent evaluation of sufficient scope and quality is the Office of Secretary of Defense (OSD) (Administration and Management) Biannual Review of the DCMA dated August 18, 2004. The review indicated that the Agency is effective in performing its mission and is efficient in achieving results. The review resulted in high marks for the categories of effectiveness, efficiency and economy; responsiveness to customer organizations; coordination with customer organizations, and, satisfaction with specific products and services. However, while DCMA will be ready for audit in the next year, the agency does not have a clean audit opinion. A variety of external independent evaluations have been accomplished that indicate the Defense Contract management Agency (DCMA) is effective in achieving results. Following the establishment of the Defense Contract Management Command (DCMC), the Department of Defense Inspector General (DOD IG) issued a report indicating that the program had successfully implemented Defense Management Report Decision (DMRD) #916. Auditors from the General Accounting Office (GAO), the DOD IG, and from the various Services (because the Agency performs contract administration services for its Military customers) routinely conduct independent evaluations of the Defense Contract Management Agency (DCMA) programs. Although they may not look at the overall Agency, these auditors focus wholly or partially on information concerning Agency practices, processes, or data specific to the subject area under review. For example, a GAO report (GAO-04-919), Sep 2004, "Tools for Measuring and Managing Defense Agency Performance Could be Strengthened", indicated that "linkage between resource needs and performance outcomes was not clearly established." As a result the Agency designed its Performance Based Management (PBM) architecture to include linkages which cascade from Commanders down to employees. Additionally, DCMA is reviewed biennially by the DOD Combat Support Agency Review Team. This team includes auditors from the Support Agency, Reform and Assessment Office chartered by the Chairman of Joint Chiefs of Staff. DCMA uses the results of all these audits as an opportunity to improve operations. The Agency established an internal organization, the Office of Independent Assessment, to perform independent Agency-wide mission reviews to include performance and customer support. To ensure its independence the office reports directly to the Agency Director. It also performs other special internal reviews and assessments as directed by the Agency Director and/or SLT. The office is also responsible for facilitating and coordinating audits and audit requests from external audit agencies. DCMA has used these reports and findings to support program improvements.

Evidence: The following is a sample of external audits that demonstrates the program is achieving results: Office of Secretary of Defense (OSD) (Administration and Management) Biannual Review of the DCMA dated August 18, 2004; Support Agency, Reform and Assessment Office, "2004 Combat Support Agency Review Team (CSART) Assessment of the DCMA," chartered by the Chairman of Joint Chiefs of Staff; U.S. Army Audit Agency (#A-2007-011-ALL); U.S. Naval Audit Service (Project N2007-NAA000-0010); GAO (Project #350877); GAO (Project #195099); GAO (GAO-05-73); DOD IG (Project No. D2005-DIPOAI-0252.000); U.S. Air Force Audit Agency (F2006-FB3000-0334); DCMA (Project), Dec 06; DOD IG (D2006-D000FP-0073), Dec 05; DOD IG (D2006-D000AE-0049); DOD IG (D2005-D000FB-0311), Oct 05; and, DOD IG (94-INS-12), Sep 94; and, Heifetz, Halle Consulting Group studies - July 2002 and Summer 2004. The Mission Review Team schedule for FY2007, along with a sample report, provides evidence of that each DCMA office is reviewed.