Opportunity To Reduce Costs Substantially In Acquiring Teletypewriters For Use In The Advanced Record System Communications Network

B-162104: Published: Sep 12, 1968. Publicly Released: Sep 12, 1968.

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GAO examined the leasing of teletypewriters by the General Services Administration (GSA) for use in the Advanced Record System (ARS) to determine if they had been acquired by the most economical means.

GAO noted that: (1) GSA did not evaluate the relative financial advantages of acquiring ARS teletypewriters by means other than leasing; (2) it is estimated that, after the present contract expired, the acquisition of the teletypewriters by an alternative method or the negotiation of a new lease agreement more in line with the cost of an alternative method could result in cost reduction ranging from $2.4 million to $5 million over the remaining useful life of the teletypewriters; and (3) GSA's ability to pursue the most economical alternative at the expiration of the present leasing arrangement would be limited because the tariff filed by Western Union (WU) for ARS service contained a provision which restricted GSA to using leasing arrangements in acquiring teletypewriters for use by civil agencies.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: Prior to the expiration of the 5-year contract period, the Administrator, of General Services, should request WU to initiate action with the Federal Communications Commission (FCC) to eliminate the tariff provision that prohibits the use of government-furnished teletypewriters by GSA and other civil agencies. If WU does not act, the Administrator, of General Services, should institute proceedings before the FCC to have the provision eliminated. The Administrator, of General Services, should, in future communications procurements, give consideration to alternative means of obtaining the services and to the relative costs thereof so that the means most favorable to the government may be determined.

    Agency Affected:


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