oversight

Treasury ADP Procurement: Contracting and Market Share Information

Published by the Government Accountability Office on 1990-11-13.

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

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Novc~rrllw         I !)!jO
                                                     TREASURY ADP.
                                                     PROCUREMENT
                                                     Contracting and
                                                     Market Share
                                                     Information


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                                                                                                   142812




                                                                              RELEASED
                                          RE!!STRICIXD --Not     to be released outside     the
                                          General Accounting   Office unless specifically
                                          approved by tbe Offlce of Congressional
                                          Relations.
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Information     Management        and
      Technology     Division

      B-240778

      November 13,1999

      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 request for a review of fed-
      eral agencies’ compatible computer procurements1 In your initial
      request and in subsequent discussions with your offices, we were asked
      to answer several specific questions about agencies’ procurements of
      mainframe computers and mainframe peripheral equipment. Your ques-
      tions focused on identifying the extent to which agencies’ procurements
      of mainframe computers and mainframe peripherals required compati-
      bility 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 focuses on the Department of the Treasury. The information
      we obtained from Treasury shows that during the 3-l/2 fiscal years
      ending in March 1989, Treasury had a total of 323 procurements for
      mainframes and mainframe peripherals and that 86 percent of these
      (275) required some type of compatibility. Treasury required IBM com-
      patibility 68 percent of the time (188 of its 276 compatible procure-
      ments). Treasury also required that 73 procurements have Unisys
      compatibility and that 7 have Honeywell-Bull compatibility. The
      remaining 7 small procurements had various other compatible require-
      ments. When Treasury’s procurements required IBM compatibility, IBM




      ‘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
      supply 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.



      Page 1                           GAO/IMTEG914Wf? Ckmtracting and Market Share Information
0240778
                                                                                                I




equipment was supplied 62 percent of the time (116 of the 188 IBM-COIW
patible procurements).2

Treasury obligated $270.9 million for the 323 mainframe and mainframe
peripheral procurements. When we used dollars for comparison-as
opposed to the number of procurements-we        found that overall Trea-
sury obligated more dollars (72 percent of the total) for IBM equipment
than for any other manufacturer’s equipment ($195.2 million for IBM
versus $75.7 million for all others), including both compatible and other
procurements where no compatibility was required. For the 276 compat-
ible procurements, with total obligations of $105.4 million, we found
that Treasury obligated 65 percent ($69.4 million) to IBM-compatible
procurements, 33 percent ($34.8 million) to Unisys-compatible procure-
ments, and less than 1 percent ($1 million) to Honeywell-Bull compatible
procurements. Of the $69.4 million obligated for IBM-compatible procure-
ments, $31.3 million involved IBMequipment.

As requested in discussions with your offices, we also obtained informa-
tion from Treasury on the procurement methods it used, including Trea-
sury’s use of contractors that participate in the Small Business
Administration’s program for small disadvantaged businesses-known
as 8(a) contractors. The detailed questions you asked and our answers
are summarized in appendix I. Appendix II contains tables with detailed
statistics that are the basis for our answers to your questions. Appendix
III contains tables with detailed statistics on the Internal Revenue Ser-
vice (IRS), which had the largest share of Treasury’s procurements. IRS
accounted for 83 percent (270 of the 323 procurements) of total Trea-
sury procurements and 74 percent of the obligated dollars ($200.9 mil-
lion of the $270.9 million).

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 Trea-
sury’s response to a questionnaire we devised and distributed to 35
agencies. We did not independently validate the information, which
Treasury supplied, nor did we evaluate any documentation related to
individual Treasury procurements. However, we checked Treasury’s
information for consistency with the instructions for our questionnaire

%nce 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 Honeywell-Bull or
IJnisys. As a result, competition ln procurements requiring 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/IMTEGQl-SFS Contracting and Market Share Information
B-240778




and made appropriate revisions. At your request, we did not solicit or
obtain comments from Treasury on this report. Appendix IV contains
additional details on the objective, scope, and methodology of our work.

In addition to this report on Treasury, we previously reported similar
information on the Departments of Agriculture, Commerce, Defense,
Health and Human Services, and Justice. We also reported on the Army,
Navy, Air Force, and the National Aeronautics and Space
Administration.


As arranged with your offices, unless you publicly announce this
report’s contents earlier, we plan no further distribution until 30 days
after the date of this letter. Copies of this report are being sent to the
Department of the Treasury. Copies will also be made available to
others upon request.

Should you have any questions about this report or require additional
information, please contact me at (202) 275-3195. Major contributors to
this report are listed in appendix V.




Jack L. Brock
Director, Government Information
  and Financial Management




Page 3                   GAO/lMTEGQl-WS   Contracting and Market Share Information
Contents


Letter                                                                                                     1

Appendix I                                                                                                 8
Questions and
Answers About
Treasury
Procurements
Appendix II                                                                                           20
Detailed Statistics on
Treasury
Procurements
Appendix III                                                                                          23
Detailed Statistics on
IRS Procurements
Appendix IV                                                                                           26
Objective, Scope,and
Methodology
Appendix V                                                                                            29
Major Contributors to
This Report
Related GAO Products                                                                                  30

Tables                   Table II. 1: Treasury Mainframe and Mainframe                                20
                             Peripheral Procurements
                         Table 11.2:Treasury Compatible Procurements According                        20
                             to Type of Compatibility
                         Table 11.3:Treasury IBM-Compatible Procurements                              20
                             According to Manufacturer of Equipment




                         Page 4                GAO/lMTEC-Ql-SFS Contracting and Market Share Information
          contents




          Table 11.4:Treasury Compatible Procurements According                         21
              to Procurement Method
          Table 11.5:Treasury IBM-Compatible Procurements                               21
              According to Procurement Method
          Table 11.6:Treasury Mainframe and Mainframe                                   22
              Peripheral Procurements According to Manufacturer
              of Equipment
          Table 111.1:IRS Mainframe and Mainframe Peripheral                            23
              Procurements
          Table 111.2:IRS Compatible Procurements According to                          23
              Type of Compatibility
          Table 111.3:IRS IBM-Compatible Procurements According                         23
              to Manufacturer of Equipment
          Table 111.4:IRS Compatible Procurements According to                          23
              Procurement Method
          Table 111.6:IRS IBM-Compatible Procurements According                         23
              to Procurement Method
          Table 11.6:IRS Mainframe and Mainframe Peripheral                             25
              Procurements According to Manufacturer of
              Equipment

Figures   Figure I. 1: Number of Treasury Mainframe and                                      9
               Mainframe Peripheral Procurements
          Figure 1.2: Dollars for Treasury Mainframe and                                     9
               Mainframe Peripheral Procurements
          Figure 1.3: Number of Treasury Compatible Procurements                        11
               According to Type of Compatibility
          Figure 1.4: Dollars for Treasury Compatible Procurements                      11
               According to Type of Compatibility
          Figure 1.5: Number of Treasury IBM-Compatible                                 13
               Procurements According to Manufacturer of
               Equipment
          Figure 1.6: Dollars for Treasury IBM-Compatible                               13
               Procurements According to Manufacturer of
               Equipment
          Figure 1.7: Number of Treasury Compatible Procurements                        16
               According to Procurement Method
          Figure 1.8: Dollars for Treasury Compatible Procurements                      15
               According to Procurement Method
          Figure 1.9: Number of Treasury IBM-Compatible                                 17
               Procurements According to Procurement Method




          Page 5                 GAO/IMTEGQl-BFW Cbntracthg   and Market Share Information
Contents




Figure I. 10: Dollars for Treasury IBM-Compatible                               17
     Procurements According to Procurement Method
Figure I. 11: Number of Treasury Mainframe and                                  19
     Mainframe Peripheral Procurements According to
     Manufacturer of Equipment
Figure I. 12: Dollars for Treasury Mainframe and                                19
     Mainframe Peripheral Procurements According to
     Manufacturer of Equipment




Abbreviations

ADP        automated data processing
GAO        General Accounting Office
GSA        General Services Administration
IBM        International Business Machines
IMTEC      Information Management and Technology Division
IRS        Internal Revenue Service


Page 6                  GAO/IMTEG91-WS   Contracting and Market Share Information
Page 7   GAO/IMTW91-9FLp Contracting and Market Skare Information
Ppc!

‘&%ions and Answers About                                                                   I


Treasury Procurements

             What are the numbers and dollar amounts of Treasury’s mainframe
             and mainframe peripheral procurements     requiring compatibility,
             and is there any trend toward the increased use of compatible
             procurements?

             Treasury had a total of 323 procurements and obligated a total of
             $270.9 million for mainframe computers and mainframe peripherals
             during the 3-l/2 fiscal years ending in March 1989. According to Trea-
             sury’s data, compatible procurements comprised 276 of Treasury’s 323
             total procurements and represented $105.4 million of the $270.9 million
             obligated. In each of the 3-l/2 fiscal years-using Treasury’s number of
             procurements as a measure-the percentage of compatible procure-
             ments versus other procurements was 79 percent or higher. With the
             exception of fiscal year 1986, the percentage of dollars obligated to com-
             patible procurements versus other procurements was 78 percent or
             higher in each year. In fiscal year 1986, the percentage of dollars obli-
             gated to compatible procurements was 16 percent because of a single
             non-compatible IRS procurement ($166 million). Treasury’s data did not
             indicate a trend toward increased compatible procurements.




             Page 8                  GAO/IMTEG9143Es Contracting and Market Share Information
                                     Appendix I
                                     Quee~tionaand Answers About
                                     lhaaury Procurements




Figure 1.1: Number of Treasury
Mainframe and Mainframe Peripheral   Numbor   01Procunmmla
Procurements                         110




Figure 1.2: Dollars for Treasury
MaInframe and Mainframe Peripheral   zoo (DollmInYllllons)
Procurements
                                     100

                                     100

                                     140

                                     120

                                     100

                                      00
                                      00
                                      40I-_
                                      al
                                       O-a                   L




                                     Page 9                        GAO/IMTJZGQl-8FS Contracting and Market Share Information
                                                                          I

Appendh   I                                                                         ,
Queadona and Anawem About
Tmaaury Procurementa




What is the distribution of Treasury’s compatible mainframe                   and
mainframe peripheral procurements     according to type of
compatibility?

Of those procurements that Treasury identified as having a compati-
bility requirement, 97 percent were for either Honeywell Bull, IBM, or
Unisys compatibility. Specifically, 188 of the 276 procurements were to
satisfy IBM-compatible requirements representing $69.4 million of the
$106.4 million obligated for all compatible procurements. Unisys-com-
patible requirements represented 73 of the 276 procurements and $34.8
million of the $106.4 million in obligations, while Honeywell Bull-com-
patible requirements represented 7 procurements and $1 .Omillion in
obligations. Treasury had various other compatible requirements in 7
procurements totaling $200,000 in obligations.




Page 10                     GAO/lMTJ%914WS Contracting and Market Share Information
                                       Appendix I
                                       Quemdoneand Anawen~About
                                       Treasury Procurements




Figure 1.3: Number of Trearury
Compatible Procurement6 According to
Type of Compatibility




Figure 1.4: Dollars for Treasury
Compatible Procurements According to   40   (0dl.n   In Nllllors)
Type of Compatibility




                                       Page 11                      GAO/IMTEGQl-BFS Contracting and Market Share Information
Appendix I
Questions and Anmvem About
Trecunuy Procuwmenti




What equipment manufacturers   are involved               in Treasury’s IBM-COIIZ-
patible mainframe and mainframe peripheral                 procurements?

Treasury obtained IBMequipment more frequently than any other manu-
facturer’s equipment in its IBM-compatible procurements during fiscal
years 1986,1988, and 1989 (through the second quarter). In fiscal year
1987, Treasury obtained IBM and National Advanced Systems equipment
in 14 IBM-compatible procurements each. Of the 188 IBM-compatible
procurements during fiscal years 1986 through 1989 (through the
second quarter), 116 (62 percent) resulted in Treasury obtaining IBM
equipment. Using obligated dollars as a measure, IBM equipment repre-
sented $31.3 million (46 percent) of the $69.4 million obligated to IBM-
compatible procurements. In addition, $28.6 million (41 percent) of the
$69.4 million obligated to IBM-compatible procurements was for procure-
ments involving National Advanced Systems equipment, while $6.6 mil-
lion (8 percent) was for procurements involving Amdahl equipment.
Memorex, NCR Comten, Storage Technology Corporation, and other
manufacturers’ equipment was also supplied in IBM-compatible procure-
ments during the same period.




Page 12                      GAO/IMTEGQl-W!3 Contracting and Market Share Information
                                                           Appendix I
                                                           Questions and Answem About
                                                           Treasury Procurements




Figure 1.5: Number of Treasury IBM-Compatible Procurements According to Manufacturer of Equipment
00  Number 01Prmunnmdl


00
40




Figure 1.6: Dollars for Treasury IBM-Compatible Procurements According to Manufacturer of Equipment
‘30   (Ddlm   In Mlllbnm)




      0       Fkd     Vru   1088
              F!aA VW 1987
              Fkd     VW 1086
              Fkcd VW ICI89 (lhrcwh   the Semnd Cluaner)



                                                           Page 13                      GAO/IM’IWC91-9PS Contracting and Market Share Information
                                                                                      -
Appendix I
Queetione and Answers About
Treasury Procurements




What procurement      methods were used to obtain aJl types of com-
patible mainframe computers and mainframe peripheral equip-
ment? And, did Treasury frequently    use new contracts with 8(a)
contractors  to obtain compatible mainframes and mainframe
peripherals?

Overall, purchases from General Services Administration (GSA) sched-
ules were used most frequently as the procurement method when Trea-
sury identified compatible requirements (87 of 276 procurements).
These procurements accounted for $4.6 million of the $105.4 million
obligated for compatible procurements. Also, 81 of the 276 procure-
ments ($4.0 million) were identified as other procurements and con-
sisted mostly of small purchase orders for a variety of mainframe
peripherals under $25,000 each. Modifications to existing contracts (67
of 275 procurements) made up the largest share of the dollars obligated
($40.0 million of $105.4 million) for compatible procurements. New con-
tracts with system developers or integrators made up 7 of the 275
procurements for compatible equipment and accounted for $29.6 million
of the $106.4 million obligated. New contracts with companies desig-
nated as 8(a) firms by the Small Business Administration were used in 3
of the 275 procurements, totaling $3.4 million.




Page 14                       GAO/IMTEG9l-SFS   Contracting and Market Share Information
                                          Appendix I
                                          Questions and Answera About
                                          Treaeury Procurements




Flgure 1.7: Number of Treasury Compatible Procurements According to Procurement Method
00 PlwnbwdRmu-




Flgure 1.8: Dollars for Treasury Compatible Procurements According to Procurement Method
*o (Do0.n
       InYlllk.n9)

PO


20


10


10


0


0
                                             n,




                                          Page 16                       GAO/IMTEG9l-SFS   Contracting and Market Share Information
Appendix I
Questions and ANIWU~EAbout
-UT      Procurements




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

Treasury used GSAschedule purchases and other procurements-con-
sisting mostly of small purchase orders for a variety of mainframe per-
ipherals under $25,000 each for about 77 percent (144 of 188
procurements) of the procurements used to obtain IBM-compatible equip-
ment. These made up $6.2 million of the $69.4 million obligated for IBM-
compatible procurements. New contracts with system developers or
integrators (6 of 188 procurements and $29.6 million of $69.4 obligated)
and new contracts with more than one offeror (9 of 188 procurements
and $19.6 million of $69.4 million obligated) accounted for 71 percent of
the dollars obligated for IBM-compatible equipment during the 3-l/2
fiscal years. New contracts with companies designated as 8(a) firms by
the Small Business Administration were used in 3 of the 188 procure-
ments for IBM-compatible equipment.




Page 16                      GAO/IMTEG91-SF+S Contracting and Market Share Information
                                         Appendix I
                                         QuestIone and Answers About
                                         +Ikenaury Procurement8




Flgure 1.9:Number of Trearury IBM-Compatlble Procurements According to Procurement Method
00 Numbr 04RoowUIi~lO




Flgure 1.10: Dollars for Treasury IBM-Compatible Procurements According to Procurement Method


 10



 a0



 10



 10



  0




                                 .
                    w        J




                                          Page 17                      GAO/IMTJ3C91-8Fs Contracting and Market Share Information
Appendix I
Queatione and Anewera About
lYeawry   Procurement8




What equipment manufacturers       are involved in Treasury’s main-
frame and mainframe peripheral procurements,        including both
procurements   where compatibility    is required and procurements
with no compatibility requirement?

IBM equipment was supplied to Treasury more frequently than arty other
manufacturer. During the 3-l/2 fiscal years ending March 1989, IBM
equipment made up 153 out of 323 total procurements for mainframes
and mainframe peripherals. Additionally, using obligated dollars as the
measure, Treasury’s obligations for procurements involving IBM equip-
ment during the same 3-l/2 fiscal years were $195.2 million of a total of
$270.9 million. Unisys equipment was supplied to Treasury for 57 of the
323 mainframe and mainframe peripheral procurements for a total of
$26.2 million. National Advanced Systems equipment was supplied in 23
of the 323 procurements for a total of $28.6 million. Amdahl, Honeywell
Bull, Memorex, NCR Comten, and Storage Technology Corporation also
supplied equipment to Treasury. Each vendor supplied equipment in
less than 9 procurements with less than $6.0 million in obligations.
Various other manufacturers supplied equipment in 60 small procure-
ments with obligations totaling $11.2 million.




Page 18                       GAO/IMTEC91-8FS Contracting and Market Share Information
                                          Appendix   I
                                          Quedona and Anewere About
                                          Treamry Procurements




Flgure 1.11: Number of Treasury Mainframe and Mainframe Peripheral Procurements According to Manufacturer of Equipment
00 Numbmr
        olPrmwwmll~




Figure 1.12: Dollars for Treasury Mainframe and Mainframe Peripheral Procurements According to Manufacturer of Equipment
loo   (rMhmhlYloh)

toa

140

110

rm

 10

 00

 40

 10




                                          Page 19                     GAO/IMTEC9lSFS   Contra,cting and Market Share Information
Appendix II

Detailed Statistics on Treasury Procurements ’


Table 11.1:Treasury Mainframe and Mainframe Peripheral Procurements
Dollars in Millions
                                  Fiscal Year 1988            Fiscal Year 1987     Fiscal Year 1988              Fiscal Year 1989O Total  -
                                  Number Amount               Number Amount        Number Amount                 Number Amount Number Amount
Compatible                             65        $28.6             78     $44.0          85        $15.9               47     $16.9           275    $105.4
Oihei                                   6        156.6             13        1.3         23          4.4                6       3.2            48     185.5
Total                                  71      $185.2              91     $45.3         108        $20.3               53     $20.1           323    $270.9

Compatible Percent of Total            92%           15%           88%       97%        79%            78%             89%       84%           85%       39%
                                                aFiscal year 1989 through the second quarter.



Table 11.2:Treasury Compatible Procurements According to Type of Compatibility
Dollars in Millions                 _. _-.-..--~
                                  Fiscal Year 1988            Fiscal Year 1987     Fiscal Year 1988              Fiscal Year 1989’        Total
                                  Number Amount               Number Amount        Number Amount                 Number Amount        Number Amount
Honeywell Bull-Compatible               2        $0.5               3      $0.4          1            0.1               1          $b      7    $1.0
IBM-Compatible         --              37         18.7             55      35.9         65            5.7              31        9.1     188    89.4
UnisysCompatible            -~~        26          9.4             20       7.7         15           10.0              12        7.7           73      34.8
Other         ----                      0          0.0         ___- 0       0.0          4            0.1                        0.1            7       0.2
Total                                  85       $28.8              78     $44.0         85         $15.9               4:     $18.9           275    $105.4
                                                aFiscal year 1989 through the second quarter.
                                                bLess than $50,000.



Table 11.3:Treasury IBM-Comoatibie Procurements Accordina to Manufacturer of                    EDUiDnWnt
Dollars in Millions
                                  Fiscal Year 1988            Fiscal Year 1987     Fiscal Year 1988              Fiscal Year 1989’             Total
                                  Number Amount               Number Amount        Number Amount                 Number Amount             Number Amount
Amdahl                                  4          $3.1              1     $1.2           3          $1.3               0       $0.0            8      $5.8
IBM                                    19          14.2             14      5.7          56           2.9              27        8.5          118      31.3
Memorex                                 4                 b          0      0.0           2           1.2               2        0.6            8       1.8
National
Advanced Systems                        6           0.2             14     28.0           2           0.3               0        0.0           22      28.5
NCR Comten -.                           1                 b          0      0.0           1                 b           0        0.0            2             b
                                                                                _____
Storage Tedhnology Corporation           3            1.2             1     0.1           1                 b           0        0.0            5       1.3
Other                                    0           0.0
                                        --.--_-~ _... ..____
                                                          -_-.-.-.-_ 25     0.9          0            0.0               2              b       27       0.9
Total                                  37        $18.7               55   $35.9         85           $5.7              31      $9.1           188     989.4
                                                aFiscal year 1989 through the second quarter.
                                                bLess than $50,000.




                                                Page 20                            GAO/IMTECSl-SFS              Contracting and Market Share Information
              .
                                                            Appendix II
                                                            D&ailed Statlstica on Trwwury Procurement44




Table 11.4:TreO8Ut’YCompatible Procurement8 According to Procurement Method
Dollars in Millions           -
                                                Fiscal Year 1988   Fiscal Year 1987   Fiscal Year 1988                 Fiscal Year 1989O  Total
                                                Number Amount Number Amount Number Amount                              Number Amount Number Amount
New   Contract-Sole
--I_---.-.                  Source                     2      $0.5        4      $2.8        5      $0.1                      1      $0.1 12    $3.5
New   Contract-One
_------..-.- _...---        Offeror                    0       0.0           1               b         0        0.0           5       0.6  8     0.8
New Contract-More            Than One
   Offeror                                             3       8.9           3         1.8             3        1.3           3        7.7        12       19.7
New Contract-Developer             or
   Integrator
“- __-.-..._ .-_. .------ _.--.--_-                    3       3.3           2        26.2             1        0.1           1              b     7       29.8
New Contract-8a           Firms                        2       3.4           1               b         0        0.0           0        0.0         3        3.4
Modifications to Existing
   Contracts
.- __...
       --..- _-...-.__-.----_-                        18       9.0          19        10.5            21       12.7           9        7.8        87      40.0
GSA Schedule Purchases                                30      0.8           22        2.3              8       0.8           27        0.7        87       4.8
Other
__...--.-__. __.-.._.._.___.
                         -.-..---.                     7      2.7           26        0.4             47       0.9            1              b    81       4.0
Total                                                 85    $28.8           78      $44.0             85     $15.9           47     $18.9        275    $105.4
                                                            aFiscal year 1989 through the second quarter.
                                                            bLess than $50,000.



Table 11.5:Treacrunr I6WCOmDOtibie Procurement8 According to Procurement Method
Dollars in Millions               ---
                                                Fiscal Year 1988   Fiscal Year 1987   Fiscal Year 1988 Fiscal Year 1989’    Total
                                                Number Amount      Number Amount Number Amount Number Amount Number Amount
New Contract-Sole           Source                     0      $0.0        2      $2.8        1         Sb     1      $0.1    4    $2.9
New Contract-One            Offeror                    0       0.0        0       0.0        0       0.0      1           b  1         b
                                                _-.
New Contract-More                Than One
   Offeror
_-_.    _.-.-.I.__.
                  -..-.. --..-.__-.--______            3       8.9           2         1.8             2        1.2           2        7.7         9       19.8
New Contract-Developer                or      --
Integrator
. -.. .._-.-.._._.~_.---.- _-.---..-._~~-__            3       3.3           1        26.2             1        0.1           1              b     8       29.8
New Contract-8a               Firms                    2       3.4           1               b         0        0.0           0        0.0         3        3.4
Modifications to Existing
    Contracts                                          2            b
                                                                   .-___     9        4.3              8        2.7           2        0.7        21        7.7
GSA._ . Schedule
        _- .._.-_-...-- Purchases
                          .-. ~~                      21       0.5 --       15        0.5              6        0.8          23        0.6        85        2.4
Other
  ,.._.._                ..-. .----       ..-.         6       2.6          25        0.3             47        0.9                          b    79        3.8
Total             ._-_                  ..._.         37   - $18.7    -     55      $35.9             85       $5.7          3:      $9.1        188      $89.4
                                                            aFiscal year 1989 through the second quarter
                                                            bLess than $50,000.




                                                            Page 21                              GAO/IMTFCI)l-(IFS    Contracting and Market Share Information
                                                        Appendix II
                                                        ROWed Statistics on !lhasury      Procurementa




Table 11.0:Treasury Mainframe and Mainframe Peripheral Procurements According to Manufacturer of Equipment
Dollars in Millions
             ____.     -.__-
                                        Fiscal Year 1988          Fiscal Year 1987       Fiscal Year 1988               Fiscal Year 1989’           Total
_               __                      Number Amount             Number Amount          Number Amount                  Number Amount           Number Amount
Amdahl ..      - . ..- ~~                       4        $3.1            1        $1.2           3           $1.3             0      $0.0            8     $5.8
                                                                                                                                            b
Honevwell
   ^_ .I
             Bull                               2         0.5            3         0.4           1            0.1             1                      7      1.0
IBM
- --      .- ..-.. ..~~                       25        170.8           25         6.8          72            6.7            31      10.9          153    195.2
Msmorex                                         4
                                             -~---.---____     b         0         0.0           2            1.2             2       0.6            8      1.8
National
 _..“.    _. ^.. .._ ..--.--.-- . --.-.__
Advanced Svstems                                6         0.2           15        28.1           2            0.3             0       0.0           23     28.8
NCR ComterP                                                    b                                                    b                                2            b
                                          --..- 1
                                                          _._ -----_     0         0.0           1                            0       0.0

Storage ..”
          Technology          Corporation
                .__......-...-...--  -___       3         1.2            1        0.1            1                  b         0       0.0            5      1.3
Unisvs                                        18          7.8           14        4.7           16            7.2             9       6.5           57     28.2
Other . ..“. _. _. ..                           8         1.6           32        4.0           10            3.5            10       2.1           80     11.2
Total                                          71     $185.2            91      845.3          108          $20.3            53     $20.1          323   $270.9
                                                       aFiscal year 1989 through the second quarter.

                                                        bLess than $50,000.

                                                       Clncluded in Other on Figure 1.11 and Figure 1.12.




                                                        Page 22                           GAO/IMTEC91-8R3 Contracting and Market Share Information
Appendis            III

Detailed&atistics on IRS Procurements


Table 111.1:IRS Malnframe and Mainframe Peripheral Procurements
Dollars ^in Millions
            _        _._... ~.---.
                                                  Fiscal Year 1988   Fiscal Year 1987                               Fiscal Year 1988            Fiscal Year 1989’               Total
                                                 Number Amount Number Amount                                        Number Amount               Number Amount               Number Amount
 Compatible                         -~--..__-.-..       52      $9.9       62     $11.2                                   75      $11.5                39        $8.3          228   $40.9
.Other
 .                  _ -.. ~. ._-- ._._                              6              156.6           11       0.9           21        2.0                 4         0.5           42   180.0
. _.                    _....
                          -. . ..-- _..-.._ -..                    58             $166.5           73     $12.1           96      $13.5                43        $8.8          270  $200.9
Compatible Percent of Total                                        90%                 6%          85%        93%         78%        85%               91%         94%          84%     20%
                                                                                  aFiscal year 1989 through the second quarter.



Table 111.2:IRS Compatible Procurements According to Type of Compatibility
Dollars
.-._        in .Millions
     ^...._..-  .-.- -_..._..
                           -- -...._---___
                                                         Fiscal Year 1St%8 Fiscal Year 1987                         Fiscal Year 1988    Fiscal Year 1989O    Total
             _ _ ._. .              _..- ~---~~ Number
                                  ..~                              Amount Number Amount                             Number Amount       Number Amount Number Amount
Honeywell Bull-Compatible                                    1         §P                           0      $0.0            0       $0.0        0      $0.0    1      Sb
lt3MCompatible
         ._.- .         ..-. ~~~~~~~.  -~-.-__              25       0.5
                                                       ___________._____I                          42       3.5           56        1.4       24       0.5 147     5.9
Unisys-Compatible
A.---...        .^... ___ .--- --~.---
                                                            26       9.4                           20       7.7           15        10.0                12        7.7           73     34.8
Other                                                        0       0.0                            0       0.0            4         0.1                 3        0.1            7      0.2
Total                                                       52     89.9                            62     $11.2           75      $11.5                39        $8.3          228    $40.9
                                                                                  aFiscal year 1989 through the second quarter.
                                                                                  bLess than 550,000.



Table 111.3:IRS IBM-Compatible Procurements According to Manufacturer of Equipment
Dollars in Millions
                                                       Fiscal Year 1986                       Fiscal Year 1987      Fiscal Year 1988            Fiscal Year 1989’               Total
                                                       Number Amount                          Number Amount         Number Amount               Number Amount               Number Amount
Amdahl                                            0      $0.0                                       1       $1.2           1       $0.1                 0        $0.0            2     $1.3
iefi ‘-’      -.   ~. .-.... ~~~.-              12         0.3
                                          . ...-.- ____--_____                                      3        0.1          50        0.9                21         0.4           86      1.7
Memorex
  _          -.. .~~~
                   .~~          -.....-.-         4            b                                    0        0.0           1        0.1                 1         0.1            6      0.2
National Advanced Systems _...~ --.- ...-.- 6___.          0.2
                                                          --..                                     13        1.8           2        0.3                 0         0.0           21      2.3
NCR Comten                                        1            b                                    0        0.0           1               b            0         0.0            2                b
                                    _. . .   __-..   __.... --   ___-.       -.
Storage Technology
             . - ~~...~Corporation
                       -.--~----..-                                      2                b         1       0.1           1                b            0         0.0            4          0.1
Other                                                 ..-_- _____^_
                                                              0    -__-____-______
                                                                      0.0       24                          0.3           0         0.0                 2               b       28      0.3
Total                     -                                        25              $0.5            42      $3.5          56        $1.4                24       $0.5           147     $5.9
                                                                                  aFiscal year 1989 through the second quarter.
                                                                                  bLess than $50,000.




                                                                                  Page 23                           GAO/lMlXG914WS             Contracting   and Market Share Information
                                                Appendix III
                                                Detailed Statbtics on IRS Procurements




Table 111.4:IRS Compatible Procurements According to Procurement Method
Dollars in Millions
                                    Fiscal Year 1988    Fiscal Year 1987    Fiscal Year 1988            Fiscal Year 198ga     Total
                                    Number Amount       Number Amount Number Amount                     Number Amount     Number Amount
New
 .^ Contract-Sole
              - .- Source                 1          $b        4      $2.8         5      $0.1                0      $0.0     10    92.9
New Contract-One~~ ~.Offeror
                       -_.--_- -_~--.     0     -. 0.0         1          b        0       0.0                5       0.6      6     0.6
New Contract-More       Than One
   Offeror                                0        0.0           0          0.0           1       0.1         0       0.0         1      0.1
f&C&tract-Developer          or
   integrator                             0        0.0           0          0.0           1       0.1         0       0.0         1      0.1
Modifications to Existing
   Contracts                             16        9.0          11        5.9           17       10.1         7       7.1        51     32.1
GSA SchedulePurchases                    29       0.7           20        2.1            4        0.2        26       0.6        79      3.6
Othe;                                     6       0.2           26        0.4           47        0.9         1             b    80      1.5
Total.   ..                              52      $9.9           62      $11.2           75      $11.5        39      $8.3       226    $40.9
                                                aFiscal year 1989 through the second quarter.

                                                bLess than $50,000.



Table 111.5:IRS IBM-Compatible Procurements According to Procurement Method
Dollars in Millions
                                    Fiscal Year 1986   Fiscal Year 1987   Fiscal Year 1988 Fiscal Year 1989’   Total
                                    Number Amount      Number Amount Number Amount Number Amount Number Amount
NevvCobtract-Sole       Source            0--     $0.0        2      $2.8        1         $b     0      $0.0   3    $2.8
New Contract-One        Offeror           0        0.0        0       0.0        0       0.0      1          b  1         b


New Contract-More        Than One
  Offeror                                 0        0.0           0          0.0           1       0.1         0       0.0         1      0.1
New Contr&t-Developer         or
_-..Integrator
     .___
        -__. .__.._._._                   0        0.0           0          0.0           1       0.1         0       0.0         1      0.1
Modifications to Existing
  Contracts                               0        0.0           2          0.1          4        0.1         0       0.0         6      0.2
GSA Schedule Purchases                   20        0.4          13         0.3           2        0.2        22       0.5        57      1.4
Other                                     5
                                        ~---       0.1          25         0.3          47        0.9                       b    76      1.3
Total                                   25       $0.5           42        93.5          56       $1.4        2:      $0.5       147     $5.9
                                                aFiscal year 1989 through the second quarter.

                                                bLess than $50,000.




                                                Page 24                           GAO/IMTEG91-8F’S Contracting and Market Share Information
      .                                                                 Appendix III
                                                                        Debtled Statlati~      on IRS Procurements




Table 11.6:IRS Mainframe and Mainframe PerlDheral Procurements Accordina to Manufacturer of EauiDment
Dollars in Millions
                                                             Flscal Year 1988        Fiscal Year 1987         Fiscal Year 1988        Fiscal Year 1989”       Total
                                                             Number Amount           Number Amount            Number Amount           Number Amount       Number Amount
Amdahl
 -..--... ~-...-. ---.-~----.-___I                   _._--         0      $0.0             1       $1.2             1      $0.1             0      $0.0        2   I_-
                                                                                                                                                                           $1.3
Honeywell Bull                                                     1             b         0         0.0            0       0.0             0       0.0        1                  b
 I”       ._.... .-_   _....-_   --   ~~-~..-----_
IBM                                                               18     156.9            13         0.9           65       2.6            24       0.5      120          1803
Memorex                                                            4             b         0         0.0            1       0.1             1       0.1        8            0.2
National Advanced
 ._- - ..__.
           .._......   Systems
                 - ._.-.-~
                         . ..- -.---..-____-                       6      -0.2            14         lG----         2       0.3             0       0.0       22            2.4
NCR Comten                                                         1             b         0         0.0            1             b         0       0.0        2                  b

                                                                                                                                  b
Storage Technology Corporation                                     2             b
                                                                                           1         0.1            1                       0       0.0        4            0.1
Unisys                                                            18       7.8            14        4.7            16       7.2             9       6.5       57           28.2
&her                                                               8       1.6            30        3.3             9      3.2              9       1.7       58            9.6
Total                                                             58   $168.5             73      $12.1            98    $13.5             43      $8.6      270         $200.9
                                                                        aFiscal year 1989 through the second quarter.

                                                                        bLess than $50,000.




                                                                        Page 26                               GAO/IMTEC914WS 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
                automated data processing 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 per-
                ipherals 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 ADP-related procurements. This report focuses
                on the Department of the Treasury and includes the number and aggre-
                gate dollar value of Treasury’s mainframe-related contracts, distribu-
                tion of procurements among equipment manufacturers, and various
                procurement methods used by Treasury to obtain mainframe-related
                equipment.

                We used the following mutually exclusive procurement methods to
                group Treasury’s 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-excluding    any contracts separately categorized as awarded to
                8(a) firms. We also obtained and analyzed data on Treasury’s modifica-
                tions to existing contracts, use of the General Services Administration’s
                multiple award schedule contracts, and other miscellaneous procure-
                ment methods.

                To accomplish our objective and facilitate Treasury’s information gath-
                ering, we designed a questionnaire which, when properly completed by
                Treasury, provided us with the necessary information. Our question-
                naire included several charts and provided detailed instructions, with
                definitions and examples, to help Treasury identify and report the rele-
                vant information. Our questionnaire instructions cited pertinent federal
                regulations to ensure consistency in understanding the terms used and
                to identify key definitions.




                Page 26                 GAO/IMTFZ914WS   Ckmtracting and Market Share Information
.   Appendix IV
    Objective, Lope, and Methodology




    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 capacit.y, 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 sim-
    ilar performance characteristics that do not belong to a mainframe
    family 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
    clarity. After modifying the questionnaire based on comments received,
    we asked the senior information resources management officials at
    Treasury and 34 other federal agencies to complete the questionnaire.

    Our questionnaire was furnished to Treasury in mid-April 1989. Upon
    receiving Treasury’s response in June 1989, the information was
    reviewed to determine if the instructions were followed correctly and if
    the information was clear and consistent. Although we did not indepen-
    dently validate the information supplied in the Treasury response, our
    questionnaire contained several internal checks to determine if inconsis-
    tencies were present. In instances where inconsistencies were found, we
    contacted Treasury officials to clarify the data. Our work did not
    include solicitation or evaluation of documents related to Treasury’s
    individual procurements. The information in appendixes I through III
    was developed from our analyses.



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



    Page 27                          GAO/IMTEG91-SFS Contracting and Market Share Information
Appendix IV
Objective, Scope, and Methodology




We did not solicit or obtain comments from Treasury about this report;
however, we discussed our scope and methodology with Treasury offi-
cials in June 1990, at Treasury headquarters in Washington, DC. Our
review was conducted from February 1989 through July 1990, in accor-
dance with generally accepted government auditing standards.




Page 28                       GAO/IMTEG914WS Contracting and Market Share Information
Appendix* V

Major Contributors to This Report


                        Mark E. Heatwole, Assistant Director
Information             Mark T. Bird, Evaluator-In-Charge
Management and          Bernard R. Anderson, Senior Evaluator
Techtiology Division,   Ona M. Noble, Senior Evaluator
                        Darlene D. Rush, Evaluator
Washington, D.C.        Peter C. Wade, Evaluator




                        Page 29                GAO/LMTElG9l-t3FS Contracting and Market Share Information
RelatedGAO Products                                                                         .


             Justice ADP Procurement: Contracting and Market Share Information
             (GAOIIMTEC-00-4OFS,Sept. 28,199O).

             HHS ADP Procurement: Contracting and Market Share Information             (GAO/
             IMTEC-OO-87FS,Aug. 30, 1990).

             Commerce ADP Procurement: Contracting and Market Share Information
             (GAO/IMTEC-OO-77FS,July31, 1990).

             Agriculture ADP Procurement: Contracting and Market Share Informa-
             tion (GAO/IMTEC-OO-62F'S,June 27, 1990).

             Defense ADP Procurement: Contracting and Market Share Information
             (GAOIIMTEC-9060Fs, June 8, 1990).

             NASA ADP Procurement: Contracting and Market Share Information
             (GAO/IMTEC-90-39FS, Apr. 20, 1990).

             Air Force ADP Procurement: Contracting and Market Share Information
             (GAO/IMTEC-90-36m, Apr.9, 1990)

             Army ADP Procurement: Contracting and Market Share Information
             (GAOIIMTEC-oo-28Fs, Mar. 1, 1990).

             Navy ADP Procurement: Contracting and Market Share Information (GAO/
             IMTEC-89-66Fs, Sept. 15, 1989).




(610660)     Page 30                GAO/JMTEG91-SF’S Contracting and Market Share Information
Ill
ri

 (    ____“~.,”   -----   - ._.-. l.--” _--__..--_-. _-_.“-l-~ .._-_-_..-.-..
                                                                        -----   ._-.-- -.-- -_.--.----~~“~        --.---_     -
IIi




                                                                Ordt~rs may also be plac4xi by calling       (202) 2756241.