NCJ Number
79780
Date Published
1980
Length
91 pages
Annotation
This report examines and makes recommendations regarding the treatment of computer conversion costs in evaluating competing vendor proposals.
Abstract
The problem of conversion costs arises when a Federal agency decides to update its computer equipment. Purchasing the new equipment from its present vendor bypasses the costly and time-consuming process of converting the agency's programs to work on the new computers. However, such a move also eliminates vendor competition. The General Accounting Office (GAO) reviewed numerous publications on conversion costs, interviewed officials of various agencies that had completed conversions or are in the process of converting their computer equipment, and talked with representatives of the computer industry and academia. In addition, GAO examined six competitive computer procurements involving conversions. It found inconsistencies in kinds of conversion costs included in evaluating competing vendor proposals, gross underestimates of these costs, and problems in managing a conversion. To improve the acquisition and management of data processing resources, GAO recommends that the General Services Administration (GSA) issue, for agency guidance, the provisions contained in the draft regulations covering treatment of conversion costs in evaluating competing vendor proposals. GSA should also develop technical guidelines to help Federal agencies in this area and should consider adapting for governmentwide use the Navy's project management and control system for estimating software conversion costs and managing conversions. Footnotes and a glossary are included. Appendixes present a discussion of the procurement decision, case studies of procurement actions and conversion experiences, and correspondence.