Defense Logistics: Observations on Army's Implementation of the Logistics Modernization Program

Abstract : In February 1998, the Army Materiel Command began the Logistics Modernization Program (LMP) to replace its existing material management systems the Commodity Command Standard System and the Standard Depot System. These systems have been in operation for more than 30 years. LMP is intended to transform logistics operations in six core processes: order fulfillment, demand and supply planning, procurement, asset management, material management, and financial management. When fully implemented, LMP is expected to manage goods and services valued at about $40 billion, including 6 million Army inventory items. GAO has previously reported on problems the Army has encountered in its efforts to implement LMP. The specific problems related to data conversion errors that resulted in LMP containing inaccurate unit prices or units of issue for certain materials, billing and collection errors whereby some customers were not billed for costs that should have been included in their bills and other customers were overbilled, requirements management and testing process did not comply with best practices, and a lack of an independent verification and validation process. House Report 110-652 directed the Secretary of the Army to report to the House and Senate Armed Services Committees and GAO by January 31, 2009, on the Army's efforts to implement LMP. The Army submitted its report to the House and Senate Armed Services Committees and GAO on October 21, 2008. In addition, the House report stipulated that the Army's report on LMP address nine specific areas and directed GAO to review the Army?s report for completeness and to report to the House and Senate Armed Services Committees by March 31, 2009.