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Because of the large amount of Federal grant money being spent for automatic data processing systems, there is potential for either savings or waste — often amounting to hundreds of thousands of dollars for an individual grantee. This report shows that it is important that Federal managers make sure that grantees follow business-like procedures in acquiring (by purchase, lease, or other methods) computers for grant programs. Although instructions and procedures exist, these need to be extended to require consideration of all reasonable alternatives. Agencies should make sure that the instructions are followed.