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Audit of the Department of Defense’s Sustainment, Restoration, and Modernization of Military Medical Treatment Facilities (DODIG-2020-103)

Audit

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Publicly Released: July 10, 2020

Objective

The objective of this audit was to identify issues that the Defense Health Agency (DHA) will need to address after it assumes responsibility for the sustainment, restoration, and modernization (SRM) of all military medical treatment facilities (MTFs) within the Military Health System (MHS).

Background

The MHS is a health system with 52 hospitals, 401 medical clinics, and 246 dental clinics at facilities across the Nation and around the world. The MHS serves 8.5 million active duty personnel and their beneficiaries through care purchased from private providers as well as directly through a system of DoD MTFs. The Office of the Under Secretary of Defense for Personnel and Readiness, the Office of the Assistant Secretary of Defense for Health Affairs, the DHA, and the Military Departments (MILDEPs) have various responsibilities for the oversight and management of the MHS.

The National Defense Authorization Act for FY 2017 called for transitioning the administration and management of military hospitals and clinics of the Army, Navy, and Air Force to one system managed by the DHA. The John S. McCain National Defense Authorization Act for FY 2019 provided additional authorities to the DHA Director and extended the date for the transfer of the administration of the military MTFs to the DHA from the original deadline of October 1, 2018, to September 30, 2021.

The “DHA Plan 3 Implementation Plan for the Complete Transition of Military Medical Treatment Facilities to the DHA” detailed the DoD’s multiyear transition of military MTFs from the MILDEPs to the DHA. The plan required the DHA to assume authority, direction, and control of the military MTFs by October 1, 2019. On October 25, 2019, the Deputy Secretary of Defense directed that authority, direction, and control over the MTFs and dental treatment facilities based in the continental United States, along with those in Alaska, Hawaii, and Puerto Rico, transfer from the MILDEPs to the DHA.

DoD personnel responsible for military MTF management use Defense Medical Logistics Standard Support-Facilities Management (DMLSS-FM) and the BUILDER Sustainment Management System (SMS) to collect data on each facility’s condition and future needs. DMLSS-FM is the official database of record for all MHS facility inventory, maintenance, requirements, and project data including related financial data that is managed by the DHA. The Requirements Module in DMLSS-FM is designated to capture data about future facility sustainment needs. The BUILDER SMS shows the facility and the deterioration of its components over time, and the best time to perform facilities work to avoid more costly rehabilitation projects later.

The facilities sustainment portion of the Defense Health Program for FY 2019 was approximately $631.9 million and $441.3 million for the restoration and modernization, totaling $1.1 billion.

Facility management personnel identified unfunded requirements and categorized each requirement according to DHA guidance.1 The categories included requirement codes that described the type of deficiency found at the MTFs, such as whether it related to the MTF’s safety or mission. The facility management personnel also assigned a criticality code, such as Imminent or Serious, that identified the potential effects of the unfunded requirements if the repair is not done as either death or major property damage.

Finding

The DHA Facilities Enterprise personnel will need to develop and implement procedures to address issues at the military MTFs after assuming responsibility for the SRM. Specifically:

  • Facility management personnel for the military MTFs at the six installations reported more than 760 unfunded requirements with an estimated value of $552 million as of September 17, 2019. The requirements included:
     
    • 3 safety and 4 mission unfunded requirements at four installations that facility management personnel determined could cause death or major property damage if not addressed immediately; and
       
    • 92 mission unfunded requirements on three installations that facility management personnel determined could cause moderate property damage and severe injury over time if not addressed.
       
  • Two primary information systems that the DHA plans to rely on to manage facilities maintenance, DMLSS-FM and the BUILDER SMS, contained missing and inaccurate data specific to the criticality value, hazard severity data elements, completeness of the data set, or the condition of component systems for a nonstatistical sample for the military MTFs on the six installations reviewed.

Delays in addressing more than $552 million of unfunded requirements for 60 military MTFs on the six installations reviewed could worsen the overall condition, readiness, use, functionality, and services provided. In addition, the DHA will need to address $14.8 billion in unfunded requirements that were reported as of September 2019, for the more than 576 hospitals and clinics and 87 dental facilities worldwide. Furthermore, unless facilities data quality is improved, the DHA may rely on less than accurate information related to future maintenance requirements when planning for short-term and long-term SRM requirements.

Recommendations

We recommend that the DHA Director develop and implement: guidance that establishes uniform funding thresholds for SRM requirements for all MTF unfunded requirements; standard procedures to prioritize unfunded requirements; guidance for updating the BUILDER SMS data to reflect the status of repair as reported in DMLSS-FM and grant the BUILDER SMS access to local facility management personnel; and standard training for facility management personnel to use DMLSS-FM and the BUILDER SMS.

Management Actions Taken

During, the audit, the DHA issued interim guidance for DMLSS-FM and for the BUILDER SMS. On August 7, 2019, the DHA issued a memorandum that required MTF facilities managers to review and update all requirements packages in DMLSS-FM. In June 2019, the DHA issued Interim Procedures Memorandum 19-005, which established DHA procedures for managing data in the U.S. Army Corps of Engineers BUILDER SMS.

The DHA Director agreed with all of the recommendations and stated that in response to the recommendations, the DHA and MILDEPs have worked to define, refine, and create a new standard set of DMLSS requirement codes to use across the Services. The Director further stated that DHA is incorporating training for BUILDER and DMLSS into a DHA Training Management System, to ensure that all facilities personnel have the skills required to be effective in their positions. Comments from the Director addressed the specifics of the recommendations; therefore, the recommendations are resolved but will remain open. We will close these recommendations when we confirm that the proposed actions are completed.

This report is the product of Proj. No. D2019-D000AV-0096.000.