Effective Management of Computer Leasing Needed To Reduce Government Costs
IMTEC-85-3
Published: Mar 21, 1985. Publicly Released: Mar 21, 1985.
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Highlights
GAO reported on its examination of federal departments' and agencies' computer leasing practices.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress, when considering future requests to increase the ADP Fund for opportunity buys, should specify that the funds be used exclusively for taking advantage of cost-effective opportunities to buy equipment. | This recommendation was triggered by a request for funding. To date, GSA has not requested such funding and most likely will not do so, since the ADP Fund has been merged into the Information Technology Fund, and the mechanism for requesting fund increases has changed. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| General Services Administration | The Administrator of General Services should issue regulations requiring all agencies to: (1) perform routine, periodic analyses of computer leases; (2) compare the costs of available refinancing alternatives; and (3) select the most reasonable, cost-effective alternative. |
GSA instituted rulemaking to change the Federal Information Resource Management Regulation (FIRMR). Actual impact of the changes cannot be determined without follow-up work, which will not be undertaken because of more pressing congressional priorities.
|
| Heads of Federal Agencies | The heads of federal civilian agencies with substantial leasing volume should, to ensure that federal departments and agencies take maximum practical advantage of available refinancing alternatives, require data processing managers to conduct a cost-effectiveness analysis of all existing leases and develop a plan to employ, where appropriate, the refinancing alternatives described in this report. |
Comments indicate that agency heads directed the evaluations. Actual impact cannot be determined without follow-up work, which will not be undertaken because of more pressing congressional priorities.
|
| Office of Management and Budget | The Director, OMB, should require agency heads to confirm, with each annual budget submission, that all of their computer leases have been evaluated for cost-effectiveness and that such leases have been contracted at the most reasonable cost alternative available to the government. |
OMB indicated that it is considering changing information systems guidance to accomplish the intent of this recommendation, but has not specified how or when. To date, action has not been forthcoming.
|
| General Services Administration | The Administrator of General Services, to ensure that the necessary leadership and governmentwide ADP management support are forthcoming, should issue guidelines for agencies in seeking third-party competition and, specifically, in transacting sale/leasebacks. |
GSA instituted rulemaking to change FIRMR and issued guidance to agencies. The actual amount of financial savings cannot be determined without additional audit work.
|
| Office of Management and Budget | The Director, OMB, should allow agencies to make greater use of the ADP Fund to purchase equipment currently leased uneconomically. |
OMB did not agree with this recommendation and stated that it does not intend to take action. No follow-up work is scheduled.
|
| General Services Administration | The Administrator of General Services, to ensure that the necessary leadership and governmentwide ADP management support are forthcoming, should identify and revise, where it will enhance competition and be otherwise appropriate, those federal contracting practices that the third-party industry believes act as major business impediments. |
GSA instituted a pilot project using changed lease terms. Actual savings cannot be validated without additional audit work.
|
| General Services Administration | The Administrator of General Services, to ensure that the necessary leadership and governmentwide ADP management support are forthcoming, should institute controls to ensure that the capital in the ADP Fund authorized for opportunity buys is available and used for that purpose unless it can justify to OMB that capital reserved for opportunity buys can be used more effectively for other ADP Fund programs. |
Congressional action created the Information Technology Fund as a successor to the ADP Fund, beginning in FY 1987, and specified rules for use of the new Fund in enabling legislation.
|
| Heads of Federal Agencies | The heads of federal civilian agencies with substantial leasing volume should, to ensure that federal departments and agencies take maximum practical advantage of available refinancing alternatives, require data processing managers to correct computer equipment inventory and accounting records and maintain them accurately to enable the recurring analysis of computer leases. |
Agency heads stated that they directed that these actions be taken. Savings cannot be documented without verifying that analyses are actually being performed and documenting the analysis results.
|
| Office of Management and Budget | The Director, OMB, should work with GSA and other federal agencies to determine and request an appropriate level of funding in the ADP Fund to buy out uneconomical leases. |
OMB does not believe that an increase in the Fund is appropriate at this time and stated that it plans no action. No follow-up work is scheduled.
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Topics
Computer equipment managementCost effectiveness analysisElectronic data processingEquipment leasesFederal procurementFinancial managementLeasing policiesRental equipmentComputersFederal agencies