Data Processing Costs Can Be Reduced at Army and Air Force Exchange Service

As part of a continuing effort to assess the effectiveness of data processing management in agencies that rely heavily on computer resources to accomplish their missions, GAO suggested ways to improve data processing management at the Army and Air Force Exchange Service and to avoid excessive computer support costs.

GAO found that the Exchange Service could have saved up to $4.5 million on two recent computer purchases and that the Exchange Service has not followed Department of Defense (DOD) policies calling for maximum practical competition and adequately defined needs in computer acquisition. Moreover, project management problems have caused substantial cost and schedule overruns and costly delays in providing needed computer software support to data processing users. Exchange Service procedures for acquiring automatic data processing (ADP) equipment encourage sole-source procurements, which have been the rule at the Exchange Service for years. The four major purchases of computers since 1978 were made noncompetitively, and in its review GAO found that the two largest sole-source procurements were not adequately justified. Exchange Service personnel did not prepare adequate studies to document their computer needs which resulted in the purchase of excess computer capacity. Exchange Service software development projects were consistently late and over budget because the projects were not adequately planned and managed. Similar procurement and management control weaknesses have delayed a multimillion-dollar effort to install a nationwide point-of-sale system.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Walter L. Anderson Team: General Accounting Office: Accounting and Financial Management Division Phone: (202) 275-5044