Effective Management of Computer Leasing Needed To Reduce Government Costs

Gao ID: IMTEC-85-3 March 21, 1985

GAO reported on its examination of federal departments' and agencies' computer leasing practices.

GAO found that federal agencies spent about $1.1 billion to lease automatic data processing (ADP) equipment in fiscal year (FY) 1983. Among the leases that GAO analyzed, costs could have been reduced for up to 90 percent of the components by employing one or more of the available refinancing alternatives. Lease costs could also be reduced by exercising contract options, which change a straight lease to a lease plan, that would result in ownership. Data processing managers at the civilian and defense installations GAO visited had not identified or pursued refinancing alternatives because they lacked the specific management procedures and monetary control policies essential to such operations. Further, agency managers and officials were generally uninformed about certain alternatives. GAO also noted that the General Services Administration (GSA) and the Office of Management and Budget (OMB) have not provided agencies the funding support needed for such unbudgeted purchase opportunities.

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: James R. Watts Team: General Accounting Office: Information Management and Technology Division Phone: (202) 275-3455


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