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further savings in respect to data processing equipment. This area of savings is in the software costs associated with and required of computer

systems with all areas of hardware and software costing the Federal Government well over $6 billion per year and, of this amount, a good $2 billion could be saved without the slightest deficiency of any Government entity. The major components of computer expenditures are hardware costs and software costs. “Software” is what makes the “hardware" run.

The Comptroller General of the United States has given a "horseback estimate” of the Federal hardware costs as "something in excess of $3 billion." He estimates software to be about equal to the hardware costs. This estimate of Federal software costs is grossly understated, since General Services Administration (GSA) computes software costs for the Comptroller General by multiplying the number of people on duty as programers by their average grade salary. This is comparable to considering the average salary of carrier pilots as the software costs required to maintain a wing of carrier aircraft (the hardware) at sea.

The computer revolution has become a revolution in software. Great redundancy exists in software development throughout the Federal Government. Personnel accounting; financial management; supply and procurement systems for all agencies are autonomous and duplicating. At this time, no Federal policy has been enunciated that could change the great waste in personnel and money that this redundancy spawns. Responsible estimates place the potential savings at $3 billion of the Government's true costs.

The reported "hardware” expenditures of some $3 billion seems to be little more than a "horseback estimate” as the submitted suggestion by a Federal employee indicated a savings of at least $700 million to $1 billion could have been realized on tape drive purchases alone back in the early part of 1968. Mr. Kelly of the Bureau of the Budget disapproved this suggestion in 1968 as his letter of disapproval points out that to implement this suggestion "would require complete revision of our present concepts of EDP systems and procurement”. “Our” being the Executive Office of the President, Bureau of the Budget—the Federal Establishment. He notes “many questions have to be answered * * *” and “that implementation of such specific suggestions ($700 million savings) is impossible without making other major changes”. (See p. 133 et seq.)

Major changes and questions to be answered be damned. The private sector accomplished this without any changes or did questions have to be answered—it is no wonder citizens of this country become frustrated and disgusted with government. The President of the United States appointing an ombudsman is a sound step and the office of the ombudsman should be permanent as the first ombudsman appointed by the President did permit the outside world to communicate with the President.

My congressional testimony on Federal EDP hardware procurement policy in November 1967, reported great savings would result from a new procurement policy. One example given in my testimony in 1967 clearly indicated a savings of $500,000 to be realized from one $900,000 system with over 100 such svstems to have been procured at that time, savings totaling over $10 million.


Recent technological advances in both software and hardware make new public policy possible. The extraordinary capacities of today's hardware are insulated from the average user by a thick blanket of programing systems. The development of Governmentwide computer utilities for the development and maintenance of standard software for certain classes of activities, such as personnel accounting; payroll; inventory and contract control, etc., are now technically present.

If such a concept of uniform software for every portion of the executive branch were implemented, it would mean that a central group would be responsible for the collection of those programs now developed that are tried and proven and would provide for the central maintenance of such programs and documentation. In this way, any error-logical or procedural—found in any agencies' activities is corrected for all Government users. Compatibility resulting from common software, in turn allows for the maximum utilization of hardware and communication facilities—all of which would sharply reduce governmental operating costs.





$50,000 to $500,000 per program.

$5,000 to $40,000 per program, because

of multiple use and distribution of

costs over larger number of activities. 6 months to 1 year required to design Programs available now, tried and

and build any significant program- proven, error-free. For example, CSC doesn't count the months getting rid personnel package.

of bugs. Individual unit must bear all on-going Central program maintenance provided maintenance costs.

for all users for a small "fee”. Every logical or procedural error that is found by any agency's activities is

corrected for all Government users. Frequently incomplete, costly documen- Comprehensive documentation at all

tation that makes programs useless if levels at "no additional cost”. Can certain key individuals move on. Typ- utilize advanced electronic printing ing and/or printing done on indi- techniques and mass distribution vidual installation basis.

techniques. Tailored to fit a single hardware con- Flexible programs-usable many

figuration, and frequently written configurations. Common user manuals many times so as to be intelligible to to interface to hardware.

only one individual. Patching, "fire-fighting", required to Generalized programs applicable to on

keep up with individual agencies' going needs, which are modified cenchanging needs resulting in many trally to meet new legislation reportcases from Government-wide legis- ing requirements.

lation. Programs written in various computer Programs written in generalized higher

languages and in special “shorthand” order languages such as COBOL or known only to the individual pro- FORTRAN, which are easier to maingrammer.

tain than machine oriented languages and applicable on a wide variety of

instrumentation. Skilled programmers tied up on re- Skilled programmers free for your

dundant work, continually “re-invent- "unique” requirements

ing the wheel". “Uniqueness" of programs and codes Creates ability to interchange data be

used to incorporate data precludes tween organizations (computers).

data interchange. Complete rewrite to update new equip- Already in higher language for new ment.


Compatibility that results from common software allows the maximum utilization of hardware and communications facilities.

In November 1967, the following was presented to the committee and the writing of specifications by private industry for Government still persists and is stagnating and wasting tax dollars.

The laxity by certain Government procurement facilities to write their own specifications stimulate the lock out of independents as the Government calls on a major computer manufacturer to write the specifications for the Government and naturally the specifications are written to that manufacturer's equipment. The Government places these specifications in a Request for Quote and then invokes that portion of Armed Services Procurement Regulations (ASPR) which will not allow any deviations and the manufacturer who wrote the specifications is assured that he will receive the award because all the other bidders cannot meet the specification without deviation.

Further stimulates to the freeze of independents and even computer manufacturers by the Federal Government is expressed in procurement ethics of the U.S. Air Force as stated by the November 22, 1967 issue of “The Wall Street Journal” with the following statements quoted verbatim :

“Some IBM competitors say that Government buying practices over the years also helped IBM gain dominance. The head of one rival computer makes claims that Federal “Procurement specifications are written around IBM machines," a charge that Government purchasing men deny.

This computer executive also maintains that Air Force purchasing officers "want aerospace firms to stick to IBM machines" and, in some cases, have refused to allow aerospace companies to buy from other manufacturers on the ground that costly new computer programs would have to be prepared for non-IBM machines.”

All the independent peripheral manufacturer is asking is to have an equal opportunity, on a competitive basis, to be considered for Government business on his own merits of price, delivery, maintenance, logistic support, reliability, reputation and performance. Today this is no sure road to success since the major manufacturers are all dedicated to building their own peripheral equipment and, in effect, freezing out the independent manufacturer from this growing and important segment of the computer business which is right in the free enterprise system but to have the Federal Government literally lock out independents is not right. The main frame is becoming less and less the major cost item in the average computer system. The difference in performance between computer systems of the future may well rest in the efficiency and reliability of the input/output devices. For the Government to obtain the most of its taxpayer's dollar in the electronic data processing field the Government must immediately recognize the fallacy in their current procurement methods involving the purchase of total computer systems from one manufacturer. The degree of sophistication of some Government users is increasing and today some scientific branches of the Government are actually purchasing computer systems and equipment, with hardware and software often coming from different sources, with even maintenance being supplied by a third party. Some large industrial users are going this same route and the trend is definitely toward the acquisition in major computer user organizations of harduare-oriented people to make the purchasing decisions on the basis of merit of the individual equipment or service, whether it be manufactured by computer makers or from an independent supplier.


Also, in my testimony in November 1967, the following was presented and the CPMA strongly urges H.R. 1366 granting unprecedented freedom to the executive branch from specific procurement restrictions during peacetime is being used not in the best interest of the United States but in my mind to benefit a few, which to the CPMA indicates dictatorial procurements can be made by law.

Former President of the United States, Harry S. Truman, said in his White House letter dated February 19, 1918, when he signed into law H.R. 1366, which granted unprecedented freedom to the Executive Branch from specific procurement restrictions during peace-time, that this bill had a hidden danger. This freedom, he said, was given to permit the flexibility and latitude needed in national defense activities. The basic need, however, remains to assure favorable price and adequate service to the Government. To the degree that restrictions have been diminished, therefore, responsibility upon the Executive Branch of Government, which includes the Defense Establishment, has been increased. The danger, he said, is the natural desire for flexibility and speed in procurement will lead to excessive placement of contracts by negotiation and undue reliance upon large concerns, and this he said must not occur—it has and is.

The CPMA is very proud to have the first and, to the best of our knowledge, the only minority group enterprise in the computer industry as a member of our association. The name of this firm is Software Programming Associates, Inc. Mr. C. M. Darden, president of this minority group enterprise, contacted me and requested the association's assistance in proposed efforts with both the U.S. Government and private industry. The board of directors of CPMA authorized my office to assist to the fullest extent possible and I was very pleased with the reception, honest effort, and cooperation I received from the President of the United States' staff. I am also delighted to report this firm has just recently been awarded their first contract from the Department of Agriculture, and I would also like for this committee to know the Small Business Administration, and with their new young division, minority group enterprise division, SBA has a tough road but they will make it and we certainly will support them as they are doing an excellent job.

The Association feels the President of the United States' policy on minority group enterprises will reap many rewards for not only the citizens but for the Nation as a whole. CPMA supports the President's policy because working within the policy and with a minority group enterprise gives one the insight to the President's objectives and seeing and doing is believing; it is working, and although it is a young policy, it is rapidly accelerating to a positive action force which will benefit the entire United States. CPMA is dedicated to assist both the President of the United States and minority group enterprise firms within the computer industry to achieve a successful goal.

The CPMA feels the increased budgets of NASA and the DOD are very necessary to provide the technological achievements necessary for our society, however, without the waste of tax dollars. We, like the majority, are not naive enough to believe that waste can ever be eradicated totally because some waste will always persist in Government as it does within the framework of private industry. NASA and the DOD create an abundance of employment necessary to push into the sciences and provide new products which are released to the free enterprise system which then creates many business entities and thus new employment is created by such new business firms being formed. This cycle increases the private industry base, increases the national economy, and provides a steady growth of employment which results in increased tax dollars to support this monster called Government and, likewise, the Government in return spends these tax dollars which again creates employment. After all, economics is a two way street.

The peripheral community has enjoyed many of the benefits derived through the exploration of the sciences by NASA and the DOD as our growth rate over a shot span of 5 years will substantiate, with the end result of approximately one million in new jobs have been provided to the population of the United States. It irks me personally that the attitude of various segments of our society and certain Members of the Congress really believe we can take billions of dollars from the productivity of the executive branch and literally hand it out in the form of free cash disbursements to the nonproductive portions of our society. This to me does nothing but increase unemployment as those productive portions of the executive branch must cut back in programs and thus employment must be decreased and this decrease also forces sharp decline in the amount of tax dollars that can be collected and thus the intake of tax dollars is substantially decreased. Total result, nonproductive portions of our society increases and will be provided with free cash but the amount of taxpayers is decreasing. Oh yes, I missed one point—the U.S. Government can print more money. If this is so, let's all stop working—let the Government print more money and hand it out free. Which brings up one last and paramount question—who will print the money?

The President's new department of managing the executive branch is a firm step in demanding an affirmative and constructive spirit regarding institutional changes within Government. We must also encourage the development of those attributes within the Governmental service that will steadily push the frontier of knowledge farther into the area marked unknown while managing in a manner that will evoke the best from those that labor at all levels of Government.

This country can settle for nothing less.

Before I make my closing statement, I would like to introduce, Mr. Chairman, Mr. George O. Harmon, whose testimony today has brought out one major and critical area within the computer industry, and where the end user, mainly the Government, and that is maintenance. It is a very costly expenditure of taxpayers' money, and I would like Mr. Harmon to elaborate, if I may, at this time and I will end my testimony at this point.

Thank you.

Chairman PROXMIRE. Is Mr. Harmon here? Mr. Harmon, do you have a brief statement?

Mr. HARMON. Yes, I have.

Chairman PROXMIRE. We hoped Mr. Caveney could complete his whole statement in 15 minutes. We are over that now.

We will be happy to print your full statement in the record.



Mr. HARMON. Yes, sir. Mr. Chairman, I am George O. Harmon and I appear here as president of Comma Corp., located at 1250 Broadway, New York, N.Y. This hearing is of great importance to small business enterprises who are attempting to compete in the EDP market place. I appear here not only as a representative of Comma Corp., but also as a member of the Computer Peripheral Manufacturers Association.


We have seen the industry evolve from the first generation computer in the early 1950's to multiple vendors from which an end user may

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