Contracting for Computer Software Development--Serious Problems Require Management Attention To Avoid Wasting Additional Millions

FGMSD-80-4: Published: Nov 9, 1979. Publicly Released: Nov 9, 1979.

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Contracting for computer software can be an effective alternative to software development by federal employees. However, a review of several software development contracts found that many experience large cost overruns and lengthy delays. Certain problems were found to be common to all software contracts that had trouble.

Federal agencies contracted for software with little specific guidance. They often overestimated the stage of systems development they had reached before contracting. This overestimation often led to the issuing of inappropriate contracts using inadequate criteria for contractor performance. Agencies overcommitted themselves and failed to control contractors through strict phasing. Management failures while the work was being done included excessive changes, failures to inspect intermediate stages of work, and failure to require progress reports from the contractor. Contractual testing requirements were often inadequate or absent. Lack of a single identified contractor source for answers and interpretation of the requirements led to communications problems. The agencies were not enforcing recovery clauses.

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