Conversion: A Costly, Disruptive Process That Must Be Considered When Buying Computers

The objectives of Federal procurement policy are to obtain the best prices for goods and services and give all responsible vendors an opportunity to compete. The policy requires competitive acquisition to the extent practicable. However, competitive procurement of computers has been complicated by the lack of clear and concise procurement policy on the treatment of conversion costs in evaluating vendor proposals and difficulties in estimating these costs. When replacing a computer system, an agency must choose between: (1) buying a compatible computer from the same manufacturer, thereby denying other manufacturers an opportunity to compete; or (2) holding a competitive procurement and possibly facing substantial effort, high costs, and operational disruption to convert its application software and change over to the new equipment. In addition to software conversion costs, an agency can spend substantial amounts to retrain its personnel, operate both the old and new computers during the conversion, and modify the computer facility to house both the old and new computers during this period. However, GAO examined six competitive computer procurements involving conversions and concluded that even though conversion costs are frequently substantial, changing to a different brand can be less costly on a life cycle basis.