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AFMD-83-60 1 (1983-06-20)

handle is hein.gao/gaobabeda0001 and id is 1 raw text is: - 1 pt to be rele,**^1 fvn e 1te I~ ~a j~ i , I ,c. ~~2 ~. V .. -. t ~ ~ pOS BY THE U.S GENERAL ACCOUNTING OFFICE Report To The Chairman, Government Operations Committee 'House Of Representatives Contracting For Computer Teleprocessing Services Can Be Improved In fiscal 1982, Federal agencies spent between $154 and $164 million to purchase commercial teleprocessing serv- ices. Many agencies found that their costs for services were substantially higher than estimated. In this study of 28 procurements of teleprocessing serv- ices, GAO found that cost overruns were prevalent among those contracts for which a cost analysis could be made. The principal causes of cost overruns for competitive contracts were inaccurate workload estimates and an unbalanced price structure; that is, low cost for a specific volume of work and high cost for work beyond that. The study also points out that costs for teleprocessing services could be reduced if the existing sole source contracts were replaced by competitive procurements. GAO found that management could do more to control high costs by charging the end users according to the services they receive and by acting promptly to replace contracts that have costs over estimates. GAO recommends that all agencies maintain ongoing workload statistics to improve the accuracy of their con- tract estimates and obtain consultation from GSA to avoid unbalanced pricing. GAO also recommends a refinement of GSA's regulations to require early management report- ing when costs exceed contract estimates. \/ 1D S>l 111111 h/llh//llI///i/ 0121904 1 r o 403;t GAO/AFMD-83-60 JUNE 20, 1983

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