oversight

Defense ADP Procurement: Contracting and Market Share Information

Published by the Government Accountability Office on 1990-06-08.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

Appendix V

Major Contributors to This Report


                       Mark E. Heatwole, Assistant Director
Information            Mark T. Bird, Project Manager
Management and         Ona M. Noble, Senior Evaluator
Techiology Division,   Darlene D. Rush, Evaluator
                       Charles S. Stanley, Evaluator
Washington, DC.        Peter C. Wade, Evaluator




(610664)               Page 30                GAO/IMTEC!XUZOFS   Contracting   and Market Share Information   ‘.
Appendix IV
Objective, Scope, and Methodology




the information was reviewed to determine if the instructions were fol-
lowed correctly and if the information was clear and consistent.
Although we did not independently validate the information supplied in
the defense agencies’response, our questionnaire contained several
internal checks to determine if inconsistencies were present. In some sit-
uations we modified the data on the basis of discussions with Depart-
ment of Defense officials. In other cases we excluded inappropriate
data. For example, we directed the defense agencies to include only pro-
curement data for mainframe-related equipment. However, in a few
instances the defense agencies included procurements for computers
other than mainframes. In order to maintain consistency in the statistics
across the 35 federal agencies, any procurements reported by the
defense agencies for equipment other than mainframes and related per-
ipherals were deleted from our analysis. Our work did not include solici-
tation or evaluation of documents related to the defense agencies’
individual procurements. The figures and tables in appendixes I, II, and
III were developed from our analysis.

We did not solicit or obtain comments from Department of Defense offi-
cials about this report, however, we discussed our scope and methodol-
ogy with them in April 1990, at the Pentagon. Additionally, meetings
were conducted with the Department of Agriculture, the Department of
Transportation, and the General Services Administration in Washington,
DC. Our review was conducted from February 1989 through April 1990.
Our work was performed in accordance with generally accepted govern-
ment auditing standards.




Page 29                        GAO/IMTEC994jOFS   Con&acting   and Market   Share Information
Appendix Iv
Objective, Scope, and Methodology




To accomplish our objective and facilitate the Department of Defense’s
information gathering, we designed a questionnaire which, when prop-
erly completed, provided us with the necessary information. Our ques-
tionnaire included several charts and provided detailed instructions,
with definitions and examples, to help the defense agencies identify and
report the relevant information. Our questionnaire instructions cited
pertinent federal regulations to ensure consistency in understanding of
the terms used and to identify key definitions.

In preparing instructions for our questionnaire, we recognized the need
to clearly and consistently identify mainframe computers, as opposed to
superminicomputers and supercomputers. Because technology changes,
criteria such as storage capacity, processing speed, physical size, cooling
requirements, and cost do not provide an adequate basis for clear and
consistent identification of mainframes. Therefore, after consulting with
computer vendors, GSA, other federal agency officials, and Datapro,’ we
considered vendor marketing strategy-in addition to computer archi-
tecture and performance-as the basis for classifying particular com-
puters as superminicomputers, mainframes, or supercomputers. Like
Datapro, we classified as mainframes some smaller and less expensive
models if they belong to a product line, or family, of mainframes sharing
a common architecture or operating system. However, models with simi-
lar performance characteristics that do not belong to a mainframe fam-
ily and are manufactured by companies that are not traditionally
recognized as mainframe manufacturers were not classified as main-
frames. We provided a list of mainframe manufacturers and models in
the instructions for our questionnaire as examples of computers that
agencies should include in completing the questionnaire.

We obtained comments on preliminary copies of our questionnaire from
information resources management officials at the Departments of Agri-
culture and Transportation, to aid in ensuring the questionnaire’s clar-
ity. After modifying the questionnaire based on comments received from
officials at the Departments of Agriculture and Transportation, we
asked the senior information resources management officials at the
Department of Defense and other federal agencies to complete the
questionnaire.

Our questionnaire was furnished to the Department of Defense in mid-
April 1989. Upon receiving the defense agencies’response in June 1989,

‘Datapro is a trade publication that provides detailed information on computers, peripheral equip-
ment, and software.



Page 28                         GAO/IMTEG90-6OF’S      Contracting   and Market   Share Information
Appendix IV

Objective, Scope, and Methodology


               In February 1989 we were requested by the Chairman and the Ranking
               Minority Member, House Committee on Government Operations, to per-
               form a comprehensive review of the government’s use of IBM-compatible
               ADP procurements. In response to the requests and in discussions with
               the Chairman’s and Ranking Minority Member’s offices, we agreed that
               procurements of mainframes and mainframe peripherals would be
               included in our review, with emphasis on compatible procurements. Our
               review covered procurements during the 3 l/2 fiscal years ending in
               March 1989, at 35 federal agencies.

               Our primary objective was to obtain and analyze information on specific
               aspects of each agency’s AnP-related procurements. This report focuses
               on the Department of Defense and includes the number and aggregate
               dollar value of the defense agencies’mainframe-related contracts, distri-
               bution of procurements among equipment manufacturers, and informa-
               tion on the use of the Warner Amendment in mainframe-related
               procurements. Defense agencies included in this report are the Defense
               Communications Agency, Defense Contract Audit Agency, Defense
               Investigative Service, DLA, Defense Mapping Agency, Defense Nuclear
               Agency, Strategic Defense Initiative Organization, Defense Medical Sup-
               port Activity, Defense Technology Security Administration, and Wash-
               ington Headquarters Services. Also, we included separate tables of
               detailed statistics on DLA's procurements in appendix III. Although
               Defense provided us with data on procurements by the Defense Intelli-
               gence Agency, we did not include any related information in this report
               because the data was classified.

               Additionally, we are reporting on the various procurement methods the
               defense agencies used to obtain mainframe-related equipment. We used
               the following mutually exclusive procurement methods to group the
               defense agencies’procurements. The first three methods represent spe-
               cific types of new contracts with mainframe and peripheral equipment
               manufacturers. These consist of sole source new contracts, new con-
               tracts that resulted from competitive procedures where only one offeror
               remained in the procurement at the time the awardee was selected, and
               new contracts that resulted from competitive procedures where the
               awardee was selected from among multiple competitors. We also
               included a category for new contracts with system developers and inte-
               grators-except any contracts separately categorized as awarded to
               8(a) firms. We also obtained and analyzed data on the defense agencies’
               modifications to existing contracts, use of GSA'S multiple award schedule
               contracts, and other miscellaneous procurement methods.



               Page 27                GAO/lMTEG90-6OFS   Contracting   and Market   Share Information
                                         Appendix JlI
                                         Detailed Statistics   on DLA Procurements




Table 111.6:DLA Mainframe and Mainframe Peripheral Procurements According to Manufacturer of Equipment
Dollars In millions
                                                                                       Fiscal Year
                                    Fiscal Year 1986 Fiscal Year 1987 Fiscal Year 1988    1989=    Total
                                    Number Amount Number Amount Number Amount Number Amount Number Amount
Amdahl                                    0         $0.0         0      $0.0            I    $5.7             0        $0.0          1        $5.7
Control Data Corporation                  0          0.0         1             b        0     0.0             0         0.0          1               b

Honevwell Bull                            1          8.4         0       0.0            1     0.2             0         0.0          2         8.6
IBM                                                  1.8         3       0.7            3     0.4             0         0.0          8         2.9
National Advanced Systems                 0          0.0         0       0.0            0     0.0             1         0.8          1         0.8
NCR Comten                                2          3.1         6       11             1            b        3         0.2         12        4.4
Storage Technology Corporation            1          6.5         0       0.0            3     1.7             2         1.0          6         9.2
Unisys                                    2                b     0       0.0            3     0.4             1         0.3          6         0.7
Other                                     1          0.1         0       0.0            4      1.3            0         00           5         1.4
Total                                     9      $19.9         10       $1.8         16      $9.7             7        $2.3         42      $33.7
                                         aFlscal year 1989 through the second quarter
                                         bLess than $50,000.




                                                                                                                                                         i .:


                                          Page 26                         GAO/IMTEGso-GoFs      Contracting       and Market   Share Information
                                                 Appendix JII
                                                 Detailed Statistics   on DL4 Procurements




Table 111.4:DLA Compatible Procurements According to Procurement Method
Dollars in mullions
                                                                                                 Fiscal Year
                                             Fiscal Year 1986 Fiscal Year 1987 Fiscal Year 1988     198ga        Total
                                             Number Amount Number Amount Number Amount Number Amount Number Amount
New Contract-Sole      Source                      0      $0.0      0      $0.0      4      $0.5    1      $0.3  5     $0.8
New Contract-One       Offeror                     2           b    0       00       1       1.0    0        0.0 3      1 .o
New Contract-More       Than One Offeror           2       6.6      0       0.0      2       1.9    2        1.0 6      9.5
New Contract-Developer      or Integrator          0       0.0      2       0.1      2       5.9    1        0.8 5      6.8
Modifications to Existrng Contracts                1       0.1      2       0.6      0       0.0    0        0.0 3      0.7
GSA Schedule Purchases                            0         0.0         0         0.0            1    0.1            0          0.0           1        01
Total                                             5        $6.7         4       $0.7         10      $9.4            4        $2.1          23      $18.9
                                                                                                                                                      -”
                                                 aFlscal year 1989 through the second quarter.

                                                 bLess than $50,000



Table 111.5:DLA IBM-Compatible Procurements According to Procurement Method
Dollars rn millions
                                                                                                 Fiscal Year
                                             Fiscal Year 1986 Fiscal Year 1987 Fiscal Year 1988     198g8       Total
                                             Number Amount Number Amount Number Amount Number Amount Number Amount
New Contract-Sole      Source                      0      $0.0      0      $0.0      3      $0.3    0      $0.0 3     $0.3
New Contract-One      Offeror                     0         00          0         0.0            1    1 .o           0          0.0           1            1 .o
New Contract-More      Than One Offeror           1         6.5         0         0.0            1    1.5            2          1 .o         4         9.0
New Contract-Developer       or Integrator        0         0.0         1         0.1            2    5.9            1          0.8          4         6.8
Modrfications to Existing Contracts               1         01          2         06             0    0.0            0          0.0          3         0.7
GSA Schedule Purchases                            0         0.0         0         0.0            1    01             0          0.0           1        0.1
Total                                             2        $6.6         3       $0.7             8   $8.8            3        $1.8          16      $17.9

                                                 aFlscal year 1989 through the second quarter.




                                                 Page 26                          GAO/IMTEG90-6OFS     Contracting       and Market    Share Information
Appendix III

Detailed Statistics on DLA Procurements



Table 111.1:DLA Mainframe and Mainframe Peripheral Procurements
Dollars in millions
                                                                                          Fiscal Year
                                      Fiscal Year 1986 Fiscal Year 1987 Fiscal Year 1988     198ga         Total
                                      Number Amount Number Amount Number Amount Number Amount Number Amount
Compatible                                  5      $6.7      4      $0.7     10      $9.4    4      $2.1  23     $18.9
Other                                       4      13.2      6       1.1      6       0.3    3        0.2 19      14.8
Total                                       9     $19.9     10      $1.8    16       $9.7    7      $2.3  42     $33.7

Compatible Percent of Total               56%         34%        40%        39%       63%       97%        57%            91%        55%            56%
                                           aFiscal year 1989 through the second quarter.



Table 111.2:DLA Compatible Procurements According to Type of Compatibility
Dollars in millions
                                                                                          Fiscal Year
                                      Fiscal Year 1986 Fiscal Year 1987 Fiscal Year 1988     1 98ga      Total
                                      Number Amount Number Amount Number Amount Number Amount Number Amount
Control Data Corporation-Compatible         0      $0.0      1         b      0      $0.0    0      $0.0 1                                            b

Honeywell Bull-Compatible                  0          0.0        0        $0 0             1    0.2            0         0.0          1        $0.2
IBM-Compatible                             2          6.6        3         0.7            8     8.8            3         1.8         16        17.9
Unisys-Compatible                          3          0.1        0         0.0             1    0.4            1         0.3          5        0.8
Total                                      5         $6.7        4       $0.7         10       $9.4            4        $2.1         23      $18.9
                                           aFiscal year 1989 through the second quarter
                                           bLess than $50,000.



Table 111.3:DLA IBM-Compatible Procurements According to Manufacturer of Equipment
Dollars in millions
                                                                                          Fiscal Year
                                      Fiscal Year 1986 Fiscal Year 1987 Fiscal Year 1988     198ga         Total
                                      Number Amount Number Amount Number Amount Number Amount Number Amount
Amdahl                                      0      $0.0      0      $00       1      $5.7    0      $0 0   1      $5.7
IBM                                         1       0.1      3       07       3       0.4    0        00   7       1.2
National Advanced Systems                   0       0.0      0       0.0      0       0.0    1        0.8  1       0.8
Storaae Technoloav
                 -, Corooration
                       .                    1       65       0       00       2       1.6    2        1.0  5       9.1
Other                                       0       00       0       0.0      2       1.1    0        0.0  2       1.1
Total                                       2      $6.6      3      $0.7      8      $8.8    3      $1.8  16     $17.9
                                           aFiscai year 1989 through the second quarter.




                                           Page 24                         GAO/IMTEG90-f3OFS     Contracting       and Market   Share Information
                                         Appendix II
                                         Detailed Statistics on Defense
                                         Agencies’ Procurements




Table 11.6:Defense Aoencies’ Mainframe and Mainframe Peripheral Procurements According to Manufacturer of Equipment
Dollars in milllons
                                                                                       Fiscal Year
                                    Fiscal Year 1966 Fiscal Year 1967 Fiscal Year 1968    198ga    Total
                                    Number Amount Number Amount Number Amount Number Amount Number Amount
Amdahl                                   4         $0.6         1         $0.5          1     $5.7             0        $0.0          6        $6.8
Control Data CorporationC                0          00          1                b      0      00              0         00            1              b

Honeywell Bull                            4         97          3          23            3     4.1             0          0.0        10        16.1
IBM                                      13         4.1        10          2.9          13    150              5          02         41        22.2
MemorexC                                  1               b     0          00            2     0.1             0          0.0         3         0.1
National Advanced Svstems                 1         0.6         0          0.0           1     0.2             1          0.8         3         1.6
                                          2         3.1         6          11                         b
NCR Comten                                                                                                     3          0.2        12         4.4
Storage Technology Corporation            2         6.9         3          03            3     1.7             2          1.0        10         9.9
Unisvs                                   18        10.3        21          5.5          14     31              6         0.6         59        19.5
Other                                    3        0.2           1                b    6         1.3                      0.0        10          1.5
Total                                   48      $35.5          46     $12.6          44      $31.2         1;           $2.8       155       $82.1
                                         aFlscal year 1989 through the second quarter

                                         bLess than $50,000.

                                         %cluded In Other on Flgure I 11 and Figure I 12



Table 11.7:Defense Agencies’ Mainframe and Mainframe Peripheral Procurements Under the Warner Amendment
Dollars in millions
                                                                                        Fiscal Year
                                    Fiscal Year 1986 Fiscal Year 1987 Fiscal Year 1988     198ga        Total
                                    Number Amount Number Amount Number Amount Number Amount Number Amount
Comoatible                               12     $12 1     18      $7 3      9      $6.6    2      $0.3 41     _~~ -
                                                                                                              $26.3
Other                                     0         0.0         0          0.0           1    14.0             0         .o.o          1       14.0
Total                                   12      $12.1          18       $7.3         10      $20.6             2        $0.3         42      $40.3
                                         aFlscal year 1989 through the second quarter




                                         Page 23                           GAO/IMTEG9O-6OFS      Contracting       and Market   Share Information
                                                 Appendix II
                                                 Detailed Statistics on Defense
                                                 Agencies’ Procurements




Table 11.4:Defense Aaencies’ Compatible Procurements According to Procurement Method
Dollars in millrons
                                                                                                Fiscal Year
                                             Fiscal Year 1986 Fiscal Year 1987 Fiscal Year 1988    1989=    Total
                                             Number Amount Number Amount Number Amount Number Amount Number Amount
New Contract-Sole     Source                     3       $1.1           1         $2.1        9       $66           3           $0.6            16       $10.4
New Contract-One      Offeror                    5         0.3          0          0.0        1         10          0            0.0             6          1.3
New Contract-More      Than One Offeror          5         77           4          0.3        3         1.9         2            1.0            14         10.9
New Contract-Developer       or Integrator       1         0.1          3          06         3        6.0          1            0.8             8          7.5
Modifications to Existing Contracts             20        11.0         19          3.8        5        01           3                  b        47         14.9
GSA Schedule Purchases                           8         0.9          a          0.9       14        0.7          4            0.2            34          2.7
Other                                            2         1.2          3          2.3        1        0.4          1                  b         7          3.9
Total                                           44      $22.3          38      $10.0         36      $16.7         14           $2.6           132       $51.6
                                                 aFlscal year 1989 through the second quarter.

                                                 bLess than $50,000.



Table 11.5:Defense Agencies’ IBM-Compatible Procurements According to Procurement Method
Dollars in millrons
                                                                                                Fiscal Year
                                             Fiscal Year 1986 Fiscal Year 1987 Fiscal Year 1988    1 98ga   Total
                                             Number Amount Number Amount Number Amount Number Amount Number Amount
New Contract-Sole     Source                     2         $1.0         0         $0.0           4     $0.4            0        $0.0              6        $1.4
New Contract-One      Offeror                    3          0.3         0          0.0           1      10             0         0.0              4         1.3
New Contract-More      Than One Offeror          4          7.6         4          0.3           2      1.5            2         1.0             12        10.4
New Contract-Developer       or Integrator       1          01          2          0.6           3      6.0            1         0.8              7         7.5
Modifications to Exrstrna Contracts              4          07          2          06            0      0.0            0         0.0              6         1.3
GSA Schedule Purchases                           a          0.9         5          0.7          11      0.6            4         0.2             28         2.4
Other                                            0          0.0         0          0.0           0      00             1                b         1               b

Total                                           22      $10.6          13         $2.2       21        $9.5            8        $2.0             64      $24.3
                                                 aFlscal year 1989 through the second quarter

                                                 bLess than $50,000




                                                 Page 22                           GAO/IMTElC90-6OFS     Contracting       and Market       Share Information
  Appendix II

! Detailed Statistics on Defense
  Agencies’Procurements


  Table 11.1:Defense Agencies’ Mainframe and Mainframe Peripheral Procurements
  Dollars In millions
                                                                                             Fiscal Year
                                          Fiscal Year 1986 Fiscal Year 1987 Fiscal Year 1988    196ga    Total
                                          Number Amount Number Amount Number Amount Number Amount Number Amount
  Compatible                                 44      $223          38      $10.0          36      $16.7    14           $2.6      132      $51.6
  Other                                       4        132          a         2.6          a        14.5    3            0.2       23       30.5
  Total                                      48      $35.5         46      $12.6          44      $31.2    17           $2.8      155      $82.1

  Compatible Percent of Total                92%         63%       83%         79%        82%        54%   82%            93%       85%           63%
                                              aFlscal year 1989 through the second quarter



  Table 11.2:Defense Agencies’ Compatible Procurements According to Type of Compatibility
  Dollars in millions
                                                                                              Fiscal Year
                                          Fiscal Year 1986 Fiscal Year 1987 Fiscal Year 1988     198ga       Total
                                          Number Amount Number Amount Number Amount Number Amount Number Amount
                                                                           b
  Control   Data Corooration-Compatible         0      $0.0      1                0      $0 0    0      $0.0 1                                       b

  Honeywell    Bull-Compatible                3         1.3          3       $2.3             3      4.1       0          0.0        9       $7.7
  IBM-Compatible                             22        10.6        13          2.2           21      9.5       8         2.0       64        24.3
  Unisys-Compatible                          19        10.4        21          5.5           12      3.1       6         0.6       58         19.6
  Total                                      44      $22.3         38       $10.0         36      $16.7    14           $2.6      132       $51.6
                                              aFlscal year 1989 through the second quarter.
                                              bLess than $50,000



  Table 11.3:Defense Aaencies’ IBM-ComDatible Procurements According to Manufacturer of Eauioment
  Dollars in Mlllions
                                                                                             Fiscal Year
                                          Fiscal Year 1986 Fiscal Year 1987 Fiscal Year 1988    1 98ga      Total
                                          Number Amount Number Amount Number Amount Number Amount Number Amount
  Amdahl                                        4      $0 6      1      $0.5      1      $57    0      $0.0 6     $6.8
  IBM                                        12         24           a         1.4           11      0.8       5          0.2       36         4.8
  Memorex                                     1               b      0         00             2      0.1       0          0.0        3         0.1
  National Advanced Systems                   1         0.6          0         0.0            1      0.2       1         0.8         3        1.6
  Storage Technology Corporation              2        69            3         03          2         16        2         1 .o        9       9.8
  Other                                       2        0.1                           b     4         1.1       0         00          7        1.2
  Total                                      22      $10.6         1:        $2.2         21       $9.5        8        $2.0        64     $24.3
                                              aFiscal year 1989 through the second quarter

                                              bLess than $50,000




                                              Page 21                          GAO/lMTJ3G9O-GOFS Contracting       and Market Share Information
                                                                                                I
Appendix I
Questions and Answers About Defense
Agencies’ Procurements




To what extent have the defense agencies procured mainframe                             com-
puters and mainframe peripheral equipment under the Warner
Amendment?

The defense agencies’statistics showed that they conducted 42 procure-
ments for mainframe computers and mainframe peripherals, represent-
ing $40.3 million in obligations, under the Warner Amendment. Of those
42 procurements, 41 were compatible procurements. Those 41 procure-
ments represented $26.3 million in obligations.




Page 20                     GAO/IMTEG9O-f3OF’S   Contracting   and Market   Share Information
                                       Appendix I
                                       Questions and Answers About Defense
                                       Agencies’ Procurements




Figure 1.11: Number of the Defense
Agencies’ Mainframe and Mainframe      25 N”mtflrofPrccln~m.“,s
Peripheral Procurements According to
Manufacturer of Equipment




Figure 1.12: Dollars for the Defense
Agencies’ Mainframe and Mainframe
Peripheral Procurements According to
Manufacturer of Equipment




                                       Page 19                     GAO/IMTEG90-6OFS   Contracting   and Market   Share Information
Appendix I
Questions and Answers About Defense
Agencies’ Procurements




What equipment manufacturers    were involved in the defense agen-
cies’ mainframe and mainframe peripheral procurements, including
both procurements where compatibility    was required and procure-
ments with no compatibility requirement?

Using the number of procurements as a measure, Unisys equipment was
most frequently supplied to the defense agencies for mainframe and
mainframe peripheral procurements in each of fiscal years 1986
through 1988 and for the first half of fiscal year 1989 with 59 out of
155 total procurements. IBM was the manufacturer whose equipment
was second most frequently supplied to the defense agencies with 41 out
of 155 total procurements. However, using obligated dollars as the mea-
sure during the same 3 l/2 fiscal year period, the defense agencies’
procurements involved more IBM equipment than any other manufactur-
ers’ equipment, with $22.2 million of the $82.1 million in total obliga-
tions. Unisys was the second greatest with $19.5 in total obligations.
Amdahl, Control Data Corporation, Honeywell Bull, Memorex, National
Advanced Systems, NCR Comten, Storage Technology Corporation, and
others were also involved in supplying equipment to the defense
agencies.




Page 18                     GAO/IMTEG90-6OFS   Contracting   and Market   Share Information
                                        Appendix I
                                        Questions and Answers About Defense
                                        Agencies’ Procurements




Agencies’ IBM-Compatible
Procurements According to Procurement   ” N”mberafPrDc”rDmPn’s
Method




Figure 1.10: Dollars for the Defense
Agencies’ IBM-Compatible
Procurements According to Procurement   ” ‘Dol’a~‘“M”iO”r’
Method
                                        8




                                        Page 17                     GAO/‘IMTEC9O-6OFS   Contracting   and Market   Share Information
Appendix I
Questions and Answers About Defense
Agencies’ Procurements




What procurement methods were used to obtain IBM-compatible
mainframe computers and mainframe peripheral equipment? And,
did the defense agencies frequently use new contracts with S(a)
contractors to obtain IBM-compatible mainframes and mainframe
peripherals?

The defense agencies most frequently used GSAschedule purchases as
the procurement method for obtaining IBM-compatible equipment (28 of
64 procurements). However, new contracts with more than one offeror
participating in the selection process accounted for more dollar obliga-
tions ($10.4 million of $24.3 million obligated) than any other procure-
ment method. New contracts with 8(a) firms were not used by the
defense agencies for any of the 64 IBM-compatible procurements during
the 3 l/2 year period.




Page 16                     GAO/IMTEZG9O-66PS   Contracting   and Market   Share Information
                                      Appendix I
                                      Questions and Answers About Defense
                                      Agencies’ Procurements




Figure 1.7: Number of the Defense
Agencies’ Compatible Procurements
According to Procurement Method




Figure 1.8: Dollars for the Defense
Agencies’ Compatible Procurements
According to Procurement Method




                                                                                            ,f:
                                                                                             4..
                                                                                             ;;
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                                                                                            JIIL


                                      Page 15                     GAO/IMTEG9O-f3OFS   Contracting   and Market   Share Information
Appendix I
Questions and Answers About Defense
Agencies’ Procurements




What procurement methods were used to obtain all types of com-
patible mainframe computers and mainframe peripheral equip-
ment? And, did the defense agencies frequently use new contracts
with S(a) contractors to obtain compatible mainframes and main-
frame peripherals?

Using either the number of procurements or dollar obligations as a mea-
sure, the defense agencies most frequently used modifications to
existing contracts as the procurement method to obtain equipment when
compatible requirements were identified. These contract modifications
accounted for 47 of the 132 compatible procurements and $14.9 million
of $5 1.6 million obligated. New contracts with 8(a) firms were not used
by the defense agencies in any of the 132 compatible procurements.




Page 14                     GAO/IMTFZ9O-6OFS   Contract&   and Market   Share Information
                                      Appendix I
                                      Questions and Answers About Defense
                                      Agencies’ Procurements




Figure 1.5: Number of the Defense
Agencies’ IBM-Compatible
Procurements According to
Manufacturer of Equipment




Figure 1.6: Dollars for the Defense
Agencies’ IBM-Compatible
Procurements According to
Manufacturer of Equipment




                                      Page 13                    GAO/IMTEG90-60FS   Contracting   and Market   Share Information
Appendix I
Questions and Answers About Defense
Agencies’ Procurements




What equipment manufacturers             are involved in the defense agen-
cies’ IBM-compatible mainframe          and mainframe peripheral
procurements?

Regarding the IBM-compatible procurements in each of fiscal years 1986
through 1989 (through the second quarter), the defense agencies
obtained IBM equipment in most of these procurements and obligated the
most money for Storage Technology Corporation equipment. Of the 64
IBM-compatible procurements, 36 resulted in the defense agencies
obtaining IBM equipment which represented $4.8 million in obligated dol-
lars. Of the total $24.3 million obligated to IBM-compatible procurements,
$9.8 million was for procurements involving Storage Technology Corpo-
ration equipment and $6.8 million involved Amdahl. Memorex, National
Advanced Systems, and others were among those manufacturers
involved in the remainder of the defense agencies’IBM-compatible
procurements.




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                                      Appendix I
                                      Questions and Answers About Defense
                                      Agencies’ Procurements




Agencies’ Compatible Procurements
According to Type of Compatibility




Figure 1.4: Dollars for the Defense
Agencies’ Compatible Procurements
According to Type of Compatibility




                                      Page 11                     GAO/IMTEG90-6OFS   Contracting   and Market   Share Information
Appendix I
Questions and Answers About Defense
Agencies’ Procurements




What is the distribution of the defense agencies’ compatible main-
frame and mainframe peripheral proc!rements      according to type of                        _
compatibility?
                                                                                                 I
Those procurements that the defense agencies identified as having a
compatible requirement were for either Control Data Corporation, Hon-
eywell Bull, IBM, or Unisys compatibility. Specifically, 64 of the 132
procurements were to satisfy IBM-compatible requirements representing
$24.3 million of $5 1.6 million obligated for all compatible procurements.
Further, Unisys-compatible requirements represented 58 of the 132
procurements and $19.6 million of the obligations. Procurements to meet
Honeywell Bull-compatible requirements accounted for nine of the com-
patible procurements and $7.7 million of the obligations, while one Con-
trol Data Corporation-compatible procurement represented $40,000 of
the obligations for compatible mainframe and mainframe peripheral
procurements by the defense agencies.




Page 10                     GAO/IMTECXJO-6OPS Contracting   and Market   Share Information
                                      Appendix I
                                      Questions and Answers About Defense
                                      Agencies’ Procurements




Figure 1.1: Number of the Defense
Agencies’ Mainframe and Mainframe
Peripheral Procurements




Figure 1.2: Dollars for the Defense
Agencies’ Mainframe and Mainframe
Peripheral Procurements




                                       Page 9                      GAO/IMTEG904OPS   Contracting   and Market   Share Information
Appendix I

Questions and Answers About Defense
Agencies’Procurements

              What are the numbers and dollar amounts of the defense agencies’
              mainframe and mainframe peripheral procurements requiring com-
              patibility and is there any trend toward the increased use of com-
              patible procurements?

              The defense agencies had a total of 155 procurements and obligated a
              total of $82.1 million for mainframe computers and mainframe peripher-
              als during the 3 l/2 fiscal years ending in March 1989. The defense
              agencies’statistics showed that compatible procurements comprised 132
              of their 155 total procurements, representing $51.6 million of the $82.1
              million obligated. In each year of the 3 l/2 fiscal years ending in March
              1989-using the defense agencies’number of procurements as a mea-
              sure-the percentage of compatible procurements versus other procure-
              ments was 82 percent or higher. For the same time period, the
              percentage of dollars obligated to compatible procurements versus other
              procurements was 54 percent or higher in each year. These statistics, as
              depicted in figures I.1 and 1.2, show that there was no trend toward
              increased compatible procurements.




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Page 7   GAO/lMTF%90-6OFS   Contracting   and Market   Share Information
Contents




Figure 1.9: Number of the Defense Agencies’ IBM-                                     17
    Compatible Procurements According to Procurement
    Method
Figure 1.10: Dollars for the Defense Agencies’ IBM-                                  17
    Compatible Procurements According to Procurement
     Method
Figure I. 11: Number of the Defense Agencies’ Mainframe                              19
     and Mainframe Peripheral Procurements According
     to Manufacturer of Equipment
Figure I. 12: Dollars for the Defense Agencies’ Mainframe                            19
     and Mainframe Peripheral Procurements According
     to Manufacturer of Equipment




Abbreviations

ADP        automated data processing
DLA        Defense Logistics Agency
GAO        General Accounting Office
GSA        General Services Administration
IBM        International Business Machines
IMTEC      Information Management and Technology Division


Page 6                 GAO/IMTEG90-6OFS   Contracting   and Market   Share Information
          Contents




          Table 11.5:Defense Agencies’ IBM-Compatible                                             22
              Procurements According to Procurement Method
          Table 11.6:Defense Agencies’ Mainframe and Mainframe                                    23
              Peripheral Procurements According to Manufacturer
              of Equipment
          Table 11.7:Defense Agencies’ Mainframe and Mainframe                                    23
              Peripheral Procurements Under the Warner
              Amendment
          Table III. 1: DLA Mainframe and Mainframe Peripheral                                    24
              Procurements
          Table 111.2:DLA Compatible Procurements According to                                    24
              Type of Compatibility
          Table 111.3:DLA IBM-Compatible Procurements According                                   24
              to Manufacturer of Equipment
          Table 111.4:DLA Compatible Procurements According to                                    25
              Procurement Method
          Table 111.5:DLA IBM-Compatible Procurements According                                   25
              to Procurement Method
          Table 111.6:DLA Mainframe and Mainframe Peripheral                                      26
              Procurements According to Manufacturer of
              Equipment

Figures   Figure I. 1: Number of the Defense Agencies’ Mainframe                                   9
               and Mainframe Peripheral Procurements
          Figure 1.2: Dollars for the Defense Agencies’ Mainframe                                  9
               and Mainframe Peripheral Procurements
          Figure 1.3: Number of the Defense Agencies’ Compatible                                  11
               Procurements According to Type of Compatibility
          Figure 1.4: Dollars for the Defense Agencies’ Compatible                                11
               Procurements According to Type of Compatibility
          Figure 1.5: Number of the Defense Agencies’ IBM-                                        13
               Compatible Procurements According to Manufacturer
              of Equipment
          Figure 1.6: Dollars for the Defense Agencies’ IBM-                                      13
              Compatible Procurements According to Manufacturer
              of Equipment
          Figure 1.7: Number of the Defense Agencies’ Compatible                              15
               Procurements According to Procurement Method
          Figure 1.8: Dollars for the Defense Agencies’ Compatible                            15
              Procurements According to Procurement Method




          Page 5                GAO/IMTEC90-6OFS   Contracting   and Market   Share Information
Contents


Letter
Appendix I                                                                                                      8
Questions and
Answers About
Defense Agencies’
Procurements
Appendix II                                                                                                 21
Detailed Statistics on
Defense Agencies’
Procurements
Appendix III                                                                                                24
Detailed Statistics on
DLA Procurements
Appendix IV
Objective, Scope,and
Methodology
Appendix V                                                                                                  30
Major Contributors to
This Report
Tables                   Table II. 1: Defense Agencies’ Mainframe and Mainframe                             21
                             Peripheral Procurements
                         Table 11.2:Defense Agencies’ Compatible Procurements                               21
                             According to Type of Compatibility
                         Table 11.3:Defense Agencies’ IBM-Compatible                                        21
                             Procurements According to Manufacturer of
                             Equipment
                         Table 11.4:Defense Agencies’ Compatible Procurements                               22
                             According to Procurement Method



                         Page 4                GAO/IMTJZG90-6OlW   Contracting   and Market Share Information
B-239180




military-related automated data processing (ALIP) resources. The detailed
questions you asked and our answers are summarized in appendix I.
Appendix II contains tables with aggregate statistics on detailed aspects
of the defense agencies’procurements. The tables in appendix II are the
basis for our answers to your questions. Also, because of your particular
interest in the Defense Logistics Agency (DLA), we have included sepa-
rate tables in appendix III of detailed statistics on DLA’S procurements.

We are reporting information for the 3 l/2 fiscal years from October 1,
1985, through March 31,1989. All the information is based on the
Department of Defense’s response to a questionnaire we devised and dis-
tributed to 35 federal government agencies. We did not include any
information on the Defense Intelligence Agency because the data
reported in response to our questionnaire was classified. We did not
independently validate the information, which Defense supplied in June
1989, nor did we evaluate any documentation related to individual
defense agencies’procurements. However, we checked the defense agen-
cies’information for consistency with the instructions for our question-
naire and made appropriate revisions. At your request, we did not solicit
or obtain comments from the defense agencies on this report. Appendix
IV contains additional details on the objective, scope, and methodology
of our work.


As arranged with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days after
the date of this letter. We will then send copies to the Secretary of
Defense, and will also make copies available to others upon request.

This information was compiled under the direction of Jack L. Brock, Jr.,
Director, Government Information and Financial Management, who can
be contacted at (202) 275-3195, should you require additional informa-
tion. Other major contributors to this report are listed in appendix V.




Ralph V. Carlone
Assistant Comptroller    General




Page 3                  GAO/IMTEG90-6OFS   Contracting   and Market   Share Information
B239180




included in our work will be reported after we have fully analyzed pro-
curement data we collected from them.

The information we obtained from the Department of Defense shows
that during the 3 l/2 fiscal years ending in March 1989, defense agen-
cies had a total of 155 procurements for mainframes and mainframe
peripherals and that 85 percent of these (132) required some type of
compatibility. The defense agencies required IBM compatibility 48 per-
cent of the time (64 of their 132 compatible procurements). Of the 68
remaining compatible procurements, the defense agencies required that
58 have Unisys compatibility, while nine required Honeywell Bull com-
patibility and one required Control Data Corporation compatibility.4
When the defense agencies’procurements required IBM compatibility,
IBM equipment was supplied 56 percent of the time (36 of the 64 IBM-
compatible procurements).

Defense agencies obligated $82.1 million for the 155 mainframe and
mainframe peripheral procurements. When we used dollars for compari-
son-as opposed to the number of procurements-we found that overall
the defense agencies obligated more dollars for IBM equipment than for
any other manufacturer’s equipment ($22.2 million for IBM versus $59.9
million for all others), including both compatible and other procure-
ments where no compatibility was required. For the 132 compatible
procurements, with total obligations of $51.6 million, we found that the
defense agencies obligated $24.3 million to IBM-compatible procure-
ments. For the IBM-compatible procurements the defense agencies obli-
gated the most dollars to Storage Technology Corporation, Amdahl, and
IBM respectively.

As requested in discussions with your offices, we also obtained informa-
tion from the defense agencies on the procurement methods they used,
including their use of contractors that participate in the Small Business
Administration’s program for small disadvantaged businesses-known
as 8(a) contractors. Additionally, we collected information on the
defense agencies’procurements performed under the Warner Amend-
ment (10 U.S.C. 2315), which exempts the Department of Defense from
General Services Administration (GSA) oversight when procuring certain

“Since several companies manufacture and market IBM-compatible equipment, competition in IBM-
compatible procurements may occur among a variety of manufacturers and marketers. However,
there are few if any companies that manufacture equipment compatible with Unlays, Honeywell Bull,
or Control Data Corporation. As a result, competition in procurements requiring Control Data Corpo-
ration, Honeywell Bull, or Unisys compatibility generally occurs only between the manufacturer of
the required equipment and companies marketing that manufacturer’s equipment.



Page 2                         GAO/IMTEG90-6OF’S      Contracting   and Market   Share Information
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Information      Management        and
      Technology      Division

      B-239180

      June 8,199O

      The Honorable John Conyers, Jr.
      Chairman, Committee on Government
        Operations
      House of Representatives

      The Honorable Frank Horton
      Ranking Minority Member, Committee
        on Government Operations
      House of Representatives

      This report responds to your February 1989 requests for a comprehen-
      sive review of federal agencies’compatible computer procurements.’ In
      your initial requests and in subsequent discussions with your offices, we
      were asked to answer several specific questions about agencies’procure-
      ments of mainframe computers and mainframe peripheral equipment.
      Your questions focused on identifying the extent to which agencies’
      procurements of mainframe computers and mainframe peripherals
      required compatibility with International Business Machines (IBM) or
      any other computer manufacturer. You were also interested in knowing
      details such as the identification of manufacturers whose equipment
      was acquired by each agency and the procurement methods used to
      obtain equipment.

      This report includes statistics from agencies within the Department of
      Defense’ but does not include information on the armed services. We
      previously reported similar statistics on the Navy (including the Marine
      Corps), the Army, the Air Force, and the National Aeronautics and
      Space Administration.:’ Information on the remaining agencies we

      ‘A compatible procurement requires hardware or software that functions like specified or existing
      hardware or software, with little or no modification. Competition in such procurements may occur
      between manufacturers and marketers-such as system developers and system integrators-to sup
      ply equipment that meets the compatible requirements. Since there is the potential for competition
      between manufacturers and marketers, a compatible procurement does not necessarily result in the
      award of a sole source contract.

      ‘Defense agencies included in this report are the Defense Communications Agency, Defense Contract
      Audit Agency, Defense Investigative Service, Defense Logistics Agency, Defense Mapping Agency,
      Defense Nuclear Agency, Strategic Defense Initiative Organization, Defense Medical Support Activity,
      Defense Technology Security Administration, and Washington Headquarters Services.
      “Navy ADP Procurement: Contracting and Market Share Information (GAO/IMTEC-89-66F’S, Sept.
      15, 1989); Army ADP Procurement: Contracting and Market Share Information (GAO/
      IMTEC-90-28FS, Mar. 1, 1990); Air Force ADP Procurement: Contracting and Market Share lnforma-
      tion (GAO/IMTEC-90-35FS, Apr. 9, 1990): and NASA ADP Procurement: Contracting and Market
      ?-
      Share Information (GAO/IMTEC-90-39FS. Apr. 20, 1990).



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