Teleprocessing Services Contracts for the Support of Army and Navy Recruitment Should Be Recompeted

AFMD-82-51: Published: Mar 24, 1982. Publicly Released: Mar 24, 1982.

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In response to a congressional request, GAO investigated the conditions that led to the award of teleprocessing services contracts to support the Army and Navy recruiting efforts and determined whether these contracts should be immediately recompeted.

Both services acquired the teleprocessing services from the same contractor efforts and both are experiencing high cost overruns. The Army's initial cost projection of $8.5 million for the life of the contract currently projects a cost of about $120 million, and the Navy's initial cost projection of $524,000 now projects a cost of about $13 million. Both services used benchmarks to evaluate the proposals, and neither benchmark adequately represented the actual workload subsequently placed on the system. As a result, the benchmarks were a poor indication of system life costs. Computer resources used by both the services greatly exceeded the amount anticipated. Because the contractor submitted an unbalanced proposal in which commercial rates were charged for teleprocessing services beyond the projected level, both services incurred costs beyond those expected. Further, the lack of appropriate management controls has contributed to the problem of excessive costs. The Army's workload projection did not include the support of some recruiting and reenlistment activities outside the United States, an increased number of users accessing the system at the same time, and a planned addition to the system. Although the number of Army enlistments decreased by 18 percent, the cost for teleprocessing services almost tripled. The Navy underestimated the number of users accessing the system at the same time and used a benchmark that did not represent the system's programs and transactions. While Navy enlistments have increased by 3 percent, the cost for teleprocessing services had doubled.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Army recompeted the service and awarded a $32 million, 5 year contract to Computer Sciences Corporation on July 12, 1984. The Army expects the new contract to cost $116.7 million less than the old one over the system life of the contract. An accomplishment report is in process.

    Recommendation: The Secretary of the Army should take steps to immediately recompete, including the development of a new benchmark, for the teleprocessing services now provided by the Boeing Computer Services Company.

    Agency Affected: Department of Defense: Department of the Army

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Navy should institute appropriate management controls over the usage of the computer systems through the operating expense budgets of the users by distributing the costs of teleprocessing according to the service received.

    Agency Affected: Department of Defense: Department of the Navy

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Navy should direct the program managers to expeditiously reduce costs by eliminating nonpriority usage and improving operational efficiency.

    Agency Affected: Department of Defense: Department of the Navy

  4. Status: Closed - Implemented

    Comments: The Navy recompeted the service and awarded a new 65 month contract for $4.4 million. The Navy expects the contract to cost $13.8 million less than the old contract over the system life of the contract. An accomplishment report is in process.

    Recommendation: The Secretary of the Navy should take steps to immediately recompete, including the development of a new benchmark, for the teleprocessing services now provided by the Boeing Computer Services Company.

    Agency Affected: Department of Defense: Department of the Navy

  5. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Army should direct the program managers to expeditiously reduce costs by eliminating nonpriority usage and improving operational efficiency.

    Agency Affected: Department of Defense: Department of the Army

  6. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Army should institute appropriate management controls over the usage of the computer systems through the operating expense budgets of the users by distributing the costs of teleprocessing according to the service received.

    Agency Affected: Department of Defense: Department of the Army

 

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