GAO blasts Pentagon on SPS management

Continued Investment in the Standard Procurement System Has Not Been Justified

Defense Department officials could face tough questions from a congressional panel this week in the wake of an unusually harsh General Accounting Office report criticizing management of the Pentagon's $326 million Standard Procurement System.

The House Government Reform Committee's National Security, Veterans Affairs and International Relations Subcommittee convenes Sept. 11 to judge the status of the beleaguered SPS system. The hearing follows a Sept. 4 release of GAO's report, which stated, "DOD's management of SPS is a lesson in how not to justify, make and monitor the implementation of [information technology] investment decisions.... Currently, DOD is not effectively performing any of these basic tenets of effective investment management on SPS and, as a result, DOD lacks the basic information to make informed decisions about how to proceed with the project."

SPS is meant to automate the often- complex process that Pentagon procurement shops use to buy $130 billion in goods and services yearly. American Management Systems Inc. won the SPS contract in 1997. The system was scheduled to be rolled out in March 2000, but has been plagued by delays and is likely to slip further, GAO officials said.

So far, SPS is used by about half the armed service's 42,000 contracting officers. A DOD inspector general report in March found that about 60 percent of users were dissatisfied with the system. GAO recommended that the Defense secretary base decisions about future SPS funding on demonstrated benefits "that exceed costs" and on "complete and reliable economic justifications."

DOD acting deputy chief information officer Margaret Myers, in a letter included in the report, said that though DOD concurs with parts of the report, "we disagree with the report's fundamental finding that the Standard Procurement System has not been justified."

"Requiring separate cost/benefit analysis and performance measures before each new software release or enhancement would increase the costs and increase the time needed to implement SPS," DOD said in its response.