Summary of Review of the Army's Division Level Data Entry Device Acquisition

Pursuant to a congressional request, GAO reviewed the Army's Division Level Data Entry Device (DLDED) acquisition program to determine: (1) the scope and viability of the program; (2) whether competitive sources were available to fulfill the Army's requirements; (3) whether a sole-source procurement was justified; and (4) whether the contractual agreements were proper, valid, and in the best interests of the government. The Army developed the DLDED program to acquire a system of small computers after automated data entry was shown to be more efficient than manual methods in tests conducted using commercial, off-the-shelf equipment. In 1978, Congress directed the Army to delay its DLDED program until a similar Marine Corps program could be tested and proven cost effective. Subsequent to the Marine Corps procurement, the Army made numerous additions to the specifications established by the Marine Corps, increasing the price by $85,000 per unit, and procured 688 DLDED units on a sole-source basis.

GAO found that: (1) no documentation was presented to support the Army's need for more extensive requirements than those of the Marine Corps; (2) other computer systems and components could meet the Army's basic needs; (3) the supporting documents did not provide a sufficient level of justification for a sole-source procurement; and (4) the contractual agreements for the DLDED equipment were proper and valid, but not in the government's best interest because the contractor had no previous hardware manufacturing and systems integration experience and the brokering arrangement would result in a higher cost to the government. After the DLDED acquisition review began, the Army terminated the contract, renamed it, and is conducting a competitive procurement. Because of a large increase in the number of systems to be purchased, the new procurement will have a much higher cost, and GAO noted that the acquisition should be carefully managed.