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Senate report blasts AF for $1.2B logistics system failure

Jul. 9, 2014 - 06:00AM   |  
Sen. John McCain, R-Ariz. called the Air Force handling of the ECSS contract 'the most egregious example of mismanagement at the Department of Defense in recent memory' (Saul Loeb / Getty Images)
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A Senate report lambastes the Air Force for poorly managing the acquisition of a logistics management system the service canceled after spending $1.2 billion.

The report also warns the Defense Department faces similar problems with the procurement of a system intended to improve financial management in the Air Force and other DoD agencies.

The logistics management system, the Expeditionary Combat Support System, aimed to overhaul hundreds of computer systems to better manage global logistics and supply chain networks. Procurement, in the works from 2004 to 2012, was canceled after the Air Force admitted that continuing would cost another $1 billion and the system would not be capable enough to field until 2020.

“The Air Force’s billion-dollar ECSS failure is the most egregious example of mismanagement at the Department of Defense in recent memory,” Sen. John McCain, R-Ariz., said in a statement. “The Air Force did not have a clear idea of what it wanted ECSS to accomplish, and the lack of strong leadership, coupled with the Air Force’s cultural resistance to change, only exacerbated the program’s problems.”

McCain and Sen. Carl Levin, D-Mich, directed the Senate Permanent Subcommittee on Investigations report, released Monday.

Throughout the procurement process, the Air Force’s cultural resistance to change blocked implementation of new business practices, the report found. The Air Force also admitted that it did not understand what it had to do to implement the new system, which violated congressional mandates.

During the eight years the ECSS procurement process was active, the Air Force transitioned through six program managers and five program executive officers, which effectively left no one accountable for the system’s failure.

The report calls the failure a “cautionary tale on the need for business process re-engineering and complying with acquisition best practices.”

“The Air Force failed in its procurement of the Expeditionary Combat Support System between 2004 and 2012 because it lacked a clear objective and the organizational will to implement changes to its internal business practices vital to integrating ECSS into the organization,” the report states. “In doing so, the Air Force violated many crucial guidelines and best practice for information technology acquisition.”

The Defense Department is in the middle of a similar mess with the procurement of the new financial management system, the Defense Enterprise Accounting and Management System, the report warns. This system is behind schedule and over budget by $1.7 billion, according to the report. It is not operational, and while the service has asked for changes in the commercial software, it has not provided enough training for lower-level personnel to operate the system.

In response to problems with both systems, the committee recommends that the Air Force:

■ Improve similar procurement process outcomes by implementing proven best practices earlier in the process.

■ Improve oversight to ensure the Defense Department understands the business processes.

■ Integrate new review boards in the beginning of the budget process.

■ Reduce duplicative reporting requirements through a single set of rules governing the acquisition of enterprise systems.

■ Improve accountability by aligning the tenure of executives with decision points.

■ Better resource the verifications of best business practice certification from department program offices.

“The Air Force has acknowledged the poor decisions and unsound management practices that led to the waste of taxpayer money in the ECSS program,” Levin said in a statement. “We must do all we can to make sure that these mistakes are not repeated in future programs.”

In response to the report, the Air Force said it has learned lessons from the ECSS cancellation and is taking corrective actions. It has revamped its modernization plans to focus on smaller, manageable capabilities.

DEAMS has been successfully fielded to 2,600 users at 13 bases and is on track for complete Air Force deployment by October 2016, according to the Air Force.

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