Shifting the Government's Automatic Data Processing Requirements to the Private Sector:

Further Study and Better Guidance Needed

FGMSD-78-22: Published: Apr 11, 1978. Publicly Released: Apr 11, 1978.

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Office of Management and Budget (OMB) Circular A-76 states that, as national policy, the Government should rely on private enterprise to provide commercial or industrial products and services with specific exceptions. The Office of Federal Procurement Policy (OFPP), OMP, is concerned over the limited extent to which agencies have implemented the policy as it relates to their automatic data processing (ADP) requirements. The capabilities of the data processing services industry were studied to determine whether obtaining such services from this source is both feasible and in the best interest of Government and industry.

A nationwide survey of 348 data processing services companies indicated that lack of qualified personnel and investment capital difficulties limited many firms' ability to expand enough within 12 months to meet Federal agencies' large-scale data processing requirements. However, given adequate leadtime and a reduction in the administrative burden of responding to Government proposals, many firms could develop the capacity to accomodate more of the Federal Government's data processing needs. According to management officials of 31 firms, the net benefit of in-house operations generally outweighs the net benefit of relying on commercial ADP firms. OFPP has undertaken a comprehensive study of OMB Circular A-76 which has delayed the issuance of proposed supplemental guidance for the ADP area.

Recommendation for Executive Action

  1. Status: Closed

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

    Recommendation: Once the basic OMB Circular A-76 is revised, OFPP should study the situation in the ADP area and consider the industry's capabilities to meet Federal data processing needs. OFPP should then develop and issue policy guidance for Federal agencies to follow in decisions to acquire data processing services from commercial sources or by in-house performance.

    Agency Affected:


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