DoD Business Transformation and Environmental Liabilities Recognition,
Valuation and Reporting
March 2006
Office of the Deputy Under Secretary of Defense for Installations and Environment
ODUSD(I&E) Business Enterprise Integration
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Overview
• Defense Business Transformation
• DUSD(I&E) Business Enterprise Integration (BEI)
• Initial ESOH Priority: Environmental Liabilities
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Transformation “Drivers”
Industry/Government Leading Practices
Business Management Drivers
Information Management Drivers
Warfighter Transformation Drivers
The Budget
CFO Act 1990
Continuity of Operations
GAO Reports
Friedman Report
Congress/ Public Laws
President’s Management
Agenda
Joint Vision
2010/2020
Defense Planning Guidance
Quadrennial Defense Review (QDR) Report
Defense Transformation
Planning Guidance
Clinger-Cohen Act 1996
GAO Reports
Global Information Grid (GIG)
OMB A-130
OMB FEA
GPRA 1993
DoD Business Transformation
OMB A-11
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Evolution of Business Transformation in DoD
• July 2001: SECDEF established Financial Management Modernization Program (FMMP)– Established under DoD Comptroller to:
o improve efficiencies of financial operationso achieve unqualified audit
• April 2003: Scope expanded and renamed Business Management Modernization Program (BMMP)– Established under Comptroller, with functional “Domains” to:
o reengineer business processes o identify standard data requirements o implement an integrated net-centric business environment to supports warfighters’
needs
• October 2005: Defense Business Transformation and BTA
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Business Transformation Agency
Vision
The Business Transformation Agency will be recognized as the champion for driving and accelerating improvements to business operations across the Department of Defense. We will serve as a magnet to attract talented, dedicated professionals, creating a model for transformation leadership across the Federal Government.
Mission
The mission of the Business Transformation Agency is to guide the transformation of business operations throughout the Department of Defense and to deliver enterprise-level capabilities that align to warfighter needs.
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The Business Enterprise Priorities on the right address the top level responsibilities for the Department of Defense associated with each Core Business Mission (CBM) on the left.
Who are our people, what are their skills, where are they located?
Who are our industry partners, and what is the state of our relationship with them?
What assets are we providing to support the warfighter, and where are these assets deployed?
How are we investing our funds to best enable the warfighting mission? Financial Visibility
Materiel Visibility
Common Supplier Engagement
Personnel Visibility
Real Property Accountability
Acquisition Visibility
Financial Management
Materiel Supply & Service Management
Weapon System Lifecycle Management
Human Resources Management
Required Integration
DoD Core BusinessMissions (CBMs)
BEA 3.0 Construct
DoD Business Enterprise Priorities (BEPs)
ARMY NAVY/MC Air Force DLA USTRANSCOM …
Components
Real Property & InstallationsLifecycle Management
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Business TransformationOrganization and Governance – I&E View
Program Success Factors(i.e., ‘Why we will
succeed’)• Senior leadership engagement --
with realistic and robust governance model
• Joint warfighting imperatives --creates opportunities for collective decisions
• Statutory and regulatory requirements for business transformation
• Acknowledgement of tiered accountability
• Continuity – leverages learning from past three years, with visible opportunity for success during next four years.
• BRAC – forcing function for integration
• Team members who have done this before in private sector
• Business Enterprise Architecture (BEA) and Enterprise Transition Plan (ETP) serve as blueprint and course of action for transformationDoD ComponentDoD Component——BEI Business BEI Business
Process Reengineering TeamsProcess Reengineering Teams
DEPSECDEF, USDs, CJCS, Secretaries of the Military Departments
DUSD(BT)DUSD(BT)DUSD(FM)DUSD(FM)
Defense Business Systems Management Committee
Governance
Governance
Subject Matter E
xpertiseSubject M
atter Expertise
I&E Domain
Governance Board
RP&ILM Investment
Review Board
DUSD(I&E)DUSD(I&E)
BEI DirectorateBEI Directorate
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ODUSD(I&E) Business Enterprise Integration
Vision:An I&E community that provides timely, accurate and reliable information within I&E and
to the warfighter and DoD business enterprise
Mission: Support both the I&E and DoD Business Transformation goals
Goals: The ODUSD(I&E) Business Enterprise Integration Directorate will produce outcomes that:
Provide better information for strategic and tactical decisionsReduce the cost of business operations
Improve stewardship of I&E assetsSupport integration of DoD enterprise business operations
• Support joint warfighting• Provide better information
for strategic resourcing decisions
• Reduce the cost of business operations
• Improve stewardship to the American People
• Enable achievement of I&E strategic and tactical goals and objectives
• Provide better information for strategic resourcing decisions
• Reduce the cost of business operations• Improve stewardship of I&E assets• Support integration of DoD enterprise
business operations
• Right Size and Place
• Right Quality• Right Safety and
Security• Right Resources• Right Tools and
Metrics
DoD BTEnterprise Goals
AlignmentI&E Business Enterprise Integration GoalsI&E Strategic Goals
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Enabling Transformation: The BEI Approach
Collaborative Business Process Reengineering
Document Collaborative Results
• Integrate requirements and processes
–Business Enterprise Architecture (BEA)
–Enterprise Transition Plan (ETP)
• Update policies
Implementation• Develop enterprise
capabilities• Development of
implementation plans and milestones
• Implementation• Program management• Achievement of
outcomes
Ongoing Activities• Manage the real property and installations lifecycle management portfolio, and provide investment review• Host new I&E enterprise capabilities• Pursue new reengineering opportunities
Requirements Documentation
• Prepare document• Component
authorization
KeyGreen: Responsibility of components Purple: Responsibility of components and BEI Blue: Responsibility of BEI
Environmental Liabilities Recognition, Valuation and Reporting
The Initial ESOH Application of the ODUSD(I&E)/BEI Approach to Transformation
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Environmental Liabilities Recognition, Valuation and Reporting Requirements
• Problem: DoD is unable to provide auditable environmental liabilities information (a material weakness)
• Key efforts– Collaborative development of standard processes and data (in process)– Upgrade of policies (in process)– Incorporation by Components (in process)
• Outcomes– Standard and auditable process and data model for recognizing, valuing
and reporting environmental liabilities– Complete, accurate and visible inventory of environmental liabilities
reconciled with asset records (includes real and some personal property)
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Real Property Accountability (RPA) –Perform ESOH Services Business Process
RealProperty
andInstallationLifecycle
Management
FinancialManageme
nt
Shared
MaterielSupply
andService
Management
WeaponSystem
LifecycleManageme
nt
HumanResourcesManageme
nt
ExternalNon-DoDUser or
Non-DoDSource
Warfighteror DoDUser or
DoDSource
Perform ESOH AspectIdentification
50.01
Verify Environmental LiabilitySummary Documentation
50.12
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Provide Information forEnvironmental Liability Form and
Content50.11
Determine Likelihood of PotentialLiability50.03
Classify Environmental Liability50.05 Verify Accuracy and
Completeness ofEnvironmental Liability
50.09
Develop or CollectEnvironmental Liability
Documentation50.08
Attest to Documentation50.10
Develop ESOH ControlAgreement
50.13
Implement ESOHSolution50.07
Assess ESOH Risk50.04
Develop ESOHSolution50.06
Perform ESOHAspect Assessment
50.02
EnvironmentalLiability Information
[Rejected]
Real PropertyPlaced inService
Notification
EnvironmentalLiability CostInformation
EnvironmentalCost Estimate
EnvironmentalCost Estimate
EnvironmentalCost EstimateEnvironmental
Cost Estimate
Program andFunding
Document
ESOH IssueDescription
EnvironmentalCost Estimate
ESOH ControlRequirement
ESOH ControlRequirement
ESOH ControlRequirement
ESOH ControlRequirement
ESOH ControlRequirement
ESOH ControlRequirement
ESOH ControlRequirement
ESOH ControlRequirement
ESOH ControlRequirement
Form andContent
Guidance
DeployedESOHSolution
CostInformationRequest
AnalyticalResults
BusinessPlan
Dispose or ReturnProperty and Materiel
Manage Sales and Procurement
End - EnvironmentalLiability Process
Perform Installations Support
Perform AssetAccountability
Manage Defense Acquisition SystemConduct Program ManagementGenerate Requirements Response
Manage Organization
Manage Sales and Procurement
Execute Sourcing Strategy
Develop Sourcing StrategyProcess Requirement
Perform Forecasting PlanningProgramming and Budgeting
Manage Liabilities
Manage Financial Management Policy
Perform Cost AnalysisDefine Cost Performance Model
Liability Update Requirement
No Environmental Liability
End ESOH Operations
13. RPA - Perform ESOH Services (OV-06c Business Process)System Architect
Fri Oct 14, 2005 13:07
Stakeholder Input
Research Information
Deployed ESOH Solution
Environmental Liability Information
Analytical Results
Form and Content Guidance
Cost Information Request
ESOH Issue Communication
Program and Funding Document
ESOH Issue Communication
ESOH Issue Description
Real Property Operation Ceased Notification
AttestationCompleteFailed Document Verification Failed
Attestation
DocumentationVerified
Evidence of Goods Tendered and Services Rendered
Real Property Placed in Service Notification
Potential Environmental Liability
Estimate Required
Remote or Operational Cost orNon Environmental Liability
Environmental LiabilityCost Information
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ESOH Interest Areaand Unique Identification
• Definition: ESOH Interest Area (EIA) is a place, location, or a program management initiative of specific interest that may be described, located, or referenced geospatially
• Attributes -- may– Be created due to one or more ESOH events or because an area has ESOH interest– Not be constrained by RPI boundaries– Be part of an asset, or linked to one or more real property assets (RPA)– Be overlaid
• Definition: ESOH Interest Area Unique Identifier (EIAUID) is a code used to permanently and uniquely identify an ESOH interest area
• Attributes:– Permanently and uniquely identifies ESOH Interest Areas– Is owner or organization independent– Does not change over the life of the EIA even if EIA attributes change– Links to the common data describing financial, legal, and physical attributes at the
enterprise level– Supports parent – child relationships and enables audit trails within and between DoD
systems
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UST
LAKE
ESOH INTEREST AREAUST: StructureLake: Natural Water bodyGrounds: Govt Land (Partial)Grounds: TPS #1 (Partial)Grounds: TPS #2 (Partial)
ESOH INTEREST AREAGround Floor: Building
DoD-owned Building
DoD-owned land parcel
Privately owned land parcels
ESOH INTEREST AREA Grounds: Govt Land (Partial)
ESOH INTEREST AREA Grounds: Govt Land (Partial)
ESOH INTEREST AREAGrounds: TPS Land (Partial)
wetland
release
release
cultural
TPS #1 TPS #2
ESOH Interest Area Examples
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09/30/0509/30/05 03/31/0603/31/06 09/30/0609/30/06 03/31/0703/31/07 09/30/0709/30/07
Hazardous Hazardous Materials Materials Process Process
Controls & Controls & Information Information Management Management RequirementsRequirements
Draft Phase I Hazardous Materials Process Controls and Information Management Requirements Document
Define Approach for Unique Association of Haz. Products and Std. Product Haz. Data
Release Phase I Hazardous Materials Process Controls and Information Management Requirements Document
Draft Configuration Control Process for Hazardous Materials Management
Incorporation of Product Data in DoD Data MasterIncorporation of Product Data in DoD Data Master
Draft Phase II Hazardous Materials Process Controls and Information Management Requirements Document
BPR Phase IIIncorporate Phase II Results in BEA 5.0Incorporate Phase II Results in BEA 5.0
Hazardous Materials Controls in BEA 3.0 Implement Requirements into Core Business Mission Areas
ESOH Enterprise Transition PlanActivities, Milestones, Responsibilities and Status
12/31/0512/31/05 06/30/0606/30/06 12/31/0612/31/06 06/30/0706/30/07
Environmental Environmental Liabilities, Liabilities,
Recognition., Recognition., Valuation &Valuation &Reporting Reporting
RequirementsRequirements
Update Data Model and Begin Linkage to Asset Records
Release Environmental Liabilities Recognition, Valuation and Reporting Requirements document
Complete Linkage to Real Property Inventory
Implement Environmental Liabilities RequirementsImplement Environmental Liabilities Requirements
EL Process and Data Model in BEA 3.0
Issue Final Implementation Plan
BT Efforts currently unfundedBT Efforts currently unfundedEfforts complete or scheduled for completion on/before 12/31/05
Efforts funded, on schedule and underway; No issues at this time.
Efforts funded; schedule or deliverable risk potentialComponent Responsibility I&E BT Responsibility
Milestone Status
Component status unknown