ADP Procurement:

Navy Improperly Restricted Competition for Its Civilian Pay System

IMTEC-89-61: Published: Jun 21, 1989. Publicly Released: Jun 23, 1989.

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Pursuant to a congressional request, GAO reviewed allegations that the Navy improperly restricted competition for two contracts for computer equipment and software for the Navy Standard Civilian Pay System (NAVSCIPS).

GAO found that the Navy: (1) selected the data-base management system, hardware and operations sites without conducting appropriate studies and developing adequate support; (2) improperly restricted competition to brand-name-or-equal hardware and related equipment; (3) selected new data-base management software and reduced the number of processing sites, since the selected system design did not meet its needs; and (4) substantially changed the original requirements so that it could not prudently use its current contract to procure additional hardware without clear evidence that represented the most cost-effective solution.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Navy will use its current contract to procure peripheral equipment only.

    Recommendation: To ensure that the Navy selects an appropriate system configuration and achieves full and open competition in accordance with federal procurement law and regulations, the Secretary of the Navy should direct the Assistant Secretary for Financial Management to cease any further orders for hardware and software under the current contract with Federal Computer Corporation.

    Agency Affected: Department of Defense: Department of the Navy

  2. Status: Closed - Implemented

    Comments: The Navy has determined that a single data processing site is the most cost-effective for processing NAVSCIPS.

    Recommendation: To ensure that the Navy selects an appropriate system configuration and achieves full and open competition in accordance with federal procurement law and regulations, the Secretary of the Navy should direct the Assistant Secretary for Financial Management to determine the most cost-effective number of sites needed to process NAVSCIPS by conducting an analysis of the costs and benefits of the full range of site alternatives.

    Agency Affected: Department of Defense: Department of the Navy

  3. Status: Closed - Implemented

    Comments: The Navy will use its existing contract to procure peripheral equipment for NAVSCIPS, but not for mainframes. The Navy will use existing mainframes in Washington, D.C. to process NAVSCIPS.

    Recommendation: To ensure that the Navy selects an appropriate system configuration and achieves full and open competition in accordance with federal procurement law and regulations, the Secretary of the Navy should direct the Assistant Secretary for Financial Management to promote full and open competition by recompeting the NAVSCIPS requirements using functional specifications.

    Agency Affected: Department of Defense: Department of the Navy

  4. Status: Closed - Not Implemented

    Comments: The Navy has agreed to limit procurement from the existing contract to $7.8 million in peripheral equipment, but will not procure any mainframes from the contract.

    Recommendation: To ensure that the Navy selects an appropriate system configuration and achieves full and open competition in accordance with federal procurement law and regulations, the Secretary of the Navy should direct the Assistant Secretary for Financial Management to determine, given the results of the competition, whether to continue the current contract, limit orders to the $5.6-million minimum, or terminate it for the convenience of the government and award a new contract to fulfill the NAVSCIPS requirements.

    Agency Affected: Department of Defense: Department of the Navy

 

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