Summary
In fiscal years 1999, 2000, and 2003, the Congress authorized pilot programs to help the Department of Defense (DOD) laboratories and test centers explore innovative business partnerships and human capital strategies. Congressional concerns about DOD's implementation of the pilot programs have been growing. The Congress mandated that GAO review pilot program implementation. GAO (1) identified the pilot initiatives proposed and their current status, (2) examined factors that affected implementation, and (3) assessed implementation challenges the 2003 pilot program faces.
The 1999 and 2000 pilot programs have not worked as intended. Since their inception, 178 initiatives have been proposed by the participating laboratories and test centers but only 4--or 2 percent--were implemented under the pilot programs. Participants proposed initiatives covering a variety of areas, including business-like practices, partnerships, and human capital innovations. The pilot programs were not effective because DOD lacked an effective implementation process and proposed human capital initiatives were not consistent with statutory provisions. First, DOD did not provide standardized guidance on proposal requirements, coordinate proposals, or clarify decision-making authority for proposal review and approval. Furthermore, DOD did not designate a strong focal point to provide assistance and advice to participants and advocate process improvements. The lack of a strong focal point exacerbated other process gaps. Second, DOD attorneys advised that the pilot programs did not provide authority to make most of the proposed human capital changes. Implementation of the new 2003 pilot program faces several challenges. First, DOD has not addressed implementation problems. For example, clear guidance is still lacking and decision-making authority is still unclear. Second, the 2003 pilot program provides no change in authority concerning human capital initiatives. Finally, laboratories and test centers may be reluctant to participate. Many participants in the earlier pilots told us they were discouraged by their experience and consequently unwilling to repeat it.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change
from "In process" to "Implemented" or "Not implemented" based on our follow up work.
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No director on record
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Recommendations for Executive Action
Recommendation: By March 31, 2004, the Secretary of Defense should inform the Congress of DOD's objectives regarding human capital and business operations in the laboratories and test centers, how it plans to meet these objectives, and what vehicles it will use to meet them.
Agency Affected: Department of Defense
Status: Not Implemented
Comments: DOD did not concur with GAO's recommendation. It cited various high-level, agencywide initiatives that it has undertaken, and noted that Congress is aware of these initiatives. Since GAO's report was published, Congress enacted legislation authorizing DOD to revamp its human capital process. DOD established a new organization to implement and manage this new personnel system. Also, DOD has made the Business Initiative Council the forum for improving business operations. The council considers a variety of areas, including logistics/readiness, corporate operations, and acquisition management. While neither organization singles out the laboratories and test centers exclusively, they do provide a vehicle for improving human capital and business processes throughout DOD, which includes the laboratories and test centers. As a result, GAO is closing this recommendation.
Recommendation: By March 31, 2004, the Secretary of Defense should develop a process for proposing, evaluating, and implementing human capital, business, and partnership initiatives for the laboratories and test centers, regardless whether by the pilot authority or by some other vehicle. Such a process should include (1) clear decision-making authority, (2) instructions for proposal requirements such as linking to overall goals and measurable objectives and the need for a business case, and (3) specification of procedures for proposal submission and review and providing feedback on proposal quality and scope.
Agency Affected: Department of Defense
Status: Not Implemented
Comments: DOD did not concur with this recommendation. It stated that it had already introduced new agencywide management processes to address human capital and business issues in general. At the time, GAO questioned the effectiveness of these processes. However, with the recent passage of the National Security Personnel System (November 2003), DOD now has authority to design and implement a more flexible personnel system. The new organization, headed by a PEO, has clear decision-making authority. It has also established an interactive web site for employee input. Similarly, the DOD Business Initiative Council also has clear authority to approve operational improvements; it too has a web site for employee input. The laboratories and test centers are covered by both programs. Finally, the new Defense Test Resource Management Center--mandated by Congress--has now been established to better manage test centers. As a result, GAO is closing this recommendation.
Recommendation: The Secretary of Defense should designate a strong focal point to (1) receive, evaluate, and prioritize all proposals; and (2) work with laboratory and test center directors, legal counsel, personnel and other specialists to develop sound and well-developed business cases and strategies to obtain needed changes.
Agency Affected: Department of Defense
Status: Not Implemented
Comments: DOD did not concur with this recommendation. It stated that the recently created position of Undersecretary for Laboratories and Basic Science has oversight responsibility for all laboratory initiatives. It is also establishing a new Defense Test Resources Management Center, as directed by Congress, to oversee test centers. DOD did not explain how these organizations will fulfill this role. However, with the subsequent passage of the National Security Personnel System, DOD established a new organization, headed by a PEO, to manage the new personnel system. Similarly, the Business Initiative Council, chaired by the Under Secretary of Defense for AT&L, provides strong leadership to address business and operational problems cited in GAO's report. The laboratories and test centers are covered by both organizations. As a result, GAO is closing this recommendation.
