Summary: The Pentagon is attempting to modernize materiel management business operations by developing a standard suite of nine separate materiel management systems that will comprise the Materiel Management Standard System. At the end of 1995, the Defense Department (DOD) concluded that this effort would cost much more than the $5.3 billion originally estimated. DOD abandoned its plan to deploy all nine systems as an integrated suite across all inventory controls points and now plans to introduce each system individually as it is developed at a selected site. DOD has also embarked on an accelerated deployment schedule to deliver these systems between now and 1999. GAO cautions that DOD is embarking on the new strategy before taking steps needed to ensure that the additional hundreds of millions of dollars to be spent on materiel management systems, as well as the appropriated funds already being invested, yield positive results. Moreover, DOD is proceeding with deployments under the new strategy without allocating the time needed to thoroughly test the new systems. This greatly increases the risk that DOD will experience problems arising from shifting testing to system users and curtailing normal levels of testing. The upshot is that DOD will likely incur substantial additional costs to operate legacy systems and to correct deficiencies that surface because of delayed testing.
