Case Studies 2 and 10: From DOD Business Systems Modernization, GAO-14-152, February 7, 2014

The Air Force’s Defense Enterprise Accounting and Management System (DEAMS) was initiated in August 2003 and is intended to provide the Air Force with the entire spectrum of financial management capabilities, including collections, commitments and obligations, cost accounting, general ledger, funds control, receipt and acceptance, accounts payable and disbursement, billing, and financial reporting for the general fund. DOD has stated that the development and implementation of DEAMS is critical to its goal of producing auditable financial statements by September 2017, as called for by the National Defense Authorization Act for Fiscal Year 2010.

To support the Congress’s continuing oversight of DOD’s progress in implementing its ERP systems, we reviewed the schedule and cost estimates for selected DOD ERP systems. The objective of this review was to determine the extent to which the current schedule and cost estimates for DEAMS were prepared in accordance with GAO’s Schedule and Cost Guides. We reviewed the most current schedule and cost estimates that supported DOD’s February 2012 Milestone B decision, which determined that investment in DEAMS was justified.

We found that the schedule for the DEAMS program did not meet best practices. The cost estimate did meet best practices, but the issues associated with the schedule could negatively affect the cost estimate. Specifically, the DEAMS schedule supporting the February 2012 Milestone B decision partially or minimally met the four characteristics for developing a high-quality and reliable schedule—it was not comprehensive, well-constructed, credible, or controlled.

In contrast, the DEAMS cost estimate fully or substantially met the four characteristics of a high-quality and reliable cost estimate—it was comprehensive, well-documented, accurate, and credible. However, because the cost estimate is based on the schedule, the unreliability of the schedule could affect the cost estimate. For example, if there are schedule slippages, the costs for the program could be greater than currently estimated.