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4/30/2002
02:27 PM
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GAO Urges Closer Look At Desktop Outsourcing

Federal agencies aren't carefully analyzing the costs, benefits, and risks, according to a new report.

Federal agencies need to take a closer look at the costs, benefits, and risks associated with desktop outsourcing, according to a recent report from the U.S. General Accounting Office.

The GAO report reviewed desktop outsourcing, or seat management, at six agencies: NASA, the Centers for Medicare and Medicaid Services, the Treasury's Departmental Offices and Bureau of Alcohol, Tobacco and Firearms, the Peace Corps, and the Defense Logistics Agency. While agencies did track contractor performance against specific metrics like service delivery, they failed to carefully analyze big-picture goals that weren't necessarily spelled out in vendors' contracts, says Linda Lambert, the GAO's assistant director of IT who spearheaded the review.

Part of the Peace Corps' performance goals, for example, includes cutting costs and improving productivity, but that's not measured in the agency's seat-management performance-metrics plan. The GAO report also found there was limited or no analysis of expected costs and benefits. At the Treasury's Departmental Offices, the cost estimate for desktop outsourcing was developed about a week before the contract was awarded, and was based on the winning bidder's proposal.

Risk analysis is another weak spot. "You don't want to get into a position where something goes wrong and you don't know how you're going to address it," Lambert says. While agencies did identify some risks, such as contractor performance and implementation time frames, they didn't identify actions to mitigate risk or rank risks in order of their potential impact on operations.

Federal agencies began using desktop outsourcing in 1997. Now, more than a dozen federal entities are doing it, and others are considering it. The rise in desktop outsourcing prompted Rep. Tom Davis (R-Va.), the chairman of the House Government Reform Committee's Technology and Procurement Policy Subcommittee, to request a GAO report on the subject.

Prior to the GAO report, some agencies already acknowledged the need to assess overall costs and benefits for desktop outsourcing, and have taken steps in that direction. In January, the Treasury signed a contract for a total-cost of ownership seat-management study that's expected to be completed June 2002.

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