Review of Selected Computer System Procurements

• NCJ Number: 69918
• Author(s): Anon
• Date Published: 1980
• Length: 9 pages
• Corporate Author: US Comptroller General
• Sale Source: National Institute of Justice/
• Language: English
• Country: United States of America

Annotation

Results are reported from the Comptroller General's study of how conversion costs affect the procurement of new computer systems for Federal agencies.

Abstract

Of particular concern in the study was whether including conversion costs in computer procurements would result in selecting the system that would cost the Government the least over the system's life, since conversion costs can be a significant factor in computer replacement procurements. In conducting the study, six computer procurements requiring the acquisition of different makes of computers from those currently in use were reviewed. The objectives were to ascertain whether conversion costs were considered when selecting the successful offerors and whether the selected proposal cost the least over the life of the system. The costs used in selecting the winning vendor were increased by including conversion costs which were part of the change and adjusting for significant underestimates. In two cases, the procurement decision would have been different, and the incumbent vendor would have been selected. In one case, the same nonincumbent vendor would have been selected, because he offered a lower price despite inclusion of conversion costs. In three cases, the same nonincumbent vendor would have been selected, because the incumbent vendor either declined to submit a proposal, was no longer manufacturing computer equipment, or was disqualified from the competition. Although some have claimed that considering conversion costs would eliminate vendor competition, this does not concern the Government, since the goal of procurement is to obtain minimum requirements at the lowest possible costs. At any rate, the review shows that considering conversion costs will not necessarily eliminate nonincumbent vendors from competition. Suggestions for actions that may ease conversion when it does occur are offered. An enclosure is provided of the General Services Administration Draft Regulation on the Treatment of Conversion Costs in the Evaluation of Vendor Proposals. Tabular data from the study are provided.