The Allocation of Computer Time by University Computer Centers

IN THIS paper we discuss the allocation of computer time by university computer centers' and how that allocation is affected by federal-government auditing rules. The problem is of interest at this time, because several major universities have recently complained that government insistence on paying only average full costs for computer time creates incentives for them to let their computers stand idle, substantially reducing faculty and student use.2 The problem is likely to become more acute and interpretation of present auditing rules more difficult for the coming generation of time-sharing computers. The problem of allocating computer time is also of general interest because the federal government uses average-fullcost pricing as a basis for many of its transactions, both with the public and internally. Thus, the problems raised here extend beyond university computer centers.3The government in dealing with non-profit institutions, and indeed in all cost-plus fixed-fee contracts, must balance equity considerations with mechanisms to create efficiency. On a cost-plus contract the contractor will exploit the contract terms in order to increase the * We wish to thank Dean William Meckling, University of Rochester, and Dr. Stephen Enke, General Electric Tempo, for helpful discussions. Much of the information in this article was obtained from computer-center directors and business officers at a dozen major universities, non-randomly selected. Errors of interpretation or analysis are, of course,, the responsibility of the authors.