ADP Procurement:

Better Capacity Planning Needed at Agriculture's National Finance Center

IMTEC-91-14: Published: Feb 13, 1991. Publicly Released: Mar 20, 1991.

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Pursuant to a congressional request, GAO reviewed the Department of Agriculture's (USDA) National Finance Center's procurements from a computer manufacturer, focusing on whether: (1) USDA circumvented competitive procurement requirements in acquiring automatic data processing (ADP) equipment for the Center; and (2) the Center procured ADP equipment that exceeded its needs and entered into cross-servicing agreements with other federal agencies to use the excess capacity.

GAO found that: (1) in the 4.5 fiscal years ending in March 1990, USDA procured $51.3 million in ADP equipment for the Center; (2) USDA spent $26.2 million for 2 contracts with the computer manufacturer for mainframe computers and storage devices; (3) USDA spent an additional $900,000 for 59 orders of the computer company's equipment under General Services Administration (GSA) schedule contracts; (4) USDA complied with federal regulations in awarding the mainframe and storage device contracts, and the solicitation specifications for either procurement did not unnecessarily restrict competition; (5) the Center's failure to aggregate $163,000 in procurements of the contractor's equipment from the GSA schedule resulted in its avoiding a requirement that it advertise orders from the GSA schedule exceeding $50,000; (6) while the Center acquired excess computer capacity, there was no evidence that it deliberately bought excess equipment and then sought customers to use the extra capacity; (7) the Center lacked an adequate capacity planning process; and (8) Center officials believed that the use of the underutilized system would improve in fiscal year 1991.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To ensure that early acquisition of unneeded computer capacity does not take place, the Secretary of Agriculture should defer the acquisition of additional processing capability for the National Finance Center until the Center has implemented an effective capacity management and planning program, as defined by the Federal Information Management Regulation parts 201-16 and 201-30, and that all future acquisitions include adequate supporting data.

    Agency Affected: Department of Agriculture


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