Major NIH Computer System

In September 1988, the National Institutes of Health (NIH) awarded IBM a contract for all aspects of a major computer system, including hardware, software, and related services. The contract has a potential value of more than $800 million. GAO found that NIH did not effectively manage four key aspects of the IBM contract, resulting in major costs and a system that did not meet scientists' needs. First, NIH's information resources management organization did not assert leadership or exercise its authority over the acquisition. Second, the acquisition was not addressed in strategic planning efforts. Third, computer center personnel did not collect or analyze data to identify the needs of scientific users. Fourth, as a result of ineffective capacity management, NIH (1) acquired excess computer capacity and (2) spent more than $16 million on unnecessary computers since the contract's initiation. In addition, while NIH officials tried to foster competition for the contract, they did not succeed.

GAO found that: (1) the NIH information resources management (IRM) organization, which was established to oversee and coordinate IRM functions, did not assert leadership or exercise its authority over the acquisition; (2) since the IRM Council did not address this major computer contract in its strategic plans, the computer center adopted an acquisition approach that did not consider whether the contract would meet its scientists' changing needs; (3) the NIH computer center did not collect and analyze data to identify scientific users' needs; (4) after NIH awarded the contract, two of its committees independently determined that the contract did not effectively meet the NIH scientific community's needs; (5) NIH overestimated the capacity requirements for the contract, and consequently NIH acquired more computer capacity than it needed and upgraded its already underutilized computers; (6) NIH has wasted over $16 million in equipment leasing costs on the computers; (7) NIH took such steps to promote competition for the computer contract as soliciting industry comments on its draft solicitation, offering up to $1 million to offerors who successfully completed a required benchmark, and extending its bid acceptance period specifically at the request of a potential bidder; and (8) despite those efforts, NIH was unsuccessful in attracting more than one vendor.

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.

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