TABLES OF PERSONNEL IN THE DEPARTMENT OF DEFENSE WHO ARE DIRECTLY CONCERNED
WITH THE SELECTION OR PROCUREMENT OF ADPE-Continued

Representative BROWN. Then there is also a group in the Defense Department, is that correct?

Colonel WARREN. Yes, sir, in my office.

Representative BROWN. How many people do you have?

Colonel WARREN. Those in my office involved in this area total 10

people, eight professionals and two secretaries, not including myself, my deputy and one secretary.

Representative BROWN. How long have they served on the average? Colonel WARREN. I could furnish all that. (See pp. 126-128.) Representative BROWN. Do you have anybody who goes back to

1960?

Colonel WARREN. Yes, sir.

Representative BROWN. The reason for my curiosity about the extended length of service of people in this area is to determine whether or not any new personnel are coming into the process of selection of ADP equipment, and also to determine whether or not there are loophole possibilities with reference to either systems favoritism or corporate favoritism on the part of those people who are making these selections. There could be a relationship between the procurers and those from whom procurements are made that would not be in the interest of the Government or even though it might be in the interest of the Government might more specifically be in too great an interest of the individual provider or purveyor of equipment.

Colonel WARREN. Yes, sir, well

Representative BROWN. You might comment if you will on what steps are taken to insure that this does not occur.

Colonel WARREN. Anyone involved in the procurement process or who might have a bearing on a procurement in the Department of Defense must file a statement of any interest they have or holdings or stock in a company with which the Government is doing business. That is a requirement.

Now, I think in the computer selection process to some extent it is self checking in that the procedures require the awarding of the contract to the lowest bidder who meets the specifications.

Representative BROWN. Ah, but there is the rub.

Colonel WARREN. Yes, sir, the specifications. Well, great care is taken to insure that broad competition is allowed by the specifications, and further than that, once the contract is awarded, all losing vendors are debriefed and basis for the award explained and the terms of the contract are public knowledge. Any time that a losing vendor feels he has not been fairly treated he does have recourse.

Mr. ABERSFELLER. I think a very good example of that, Mr. Chairman, was a case involving two well-known companies a couple of years ago in which a decision was made and it was appealed and reversed and ended up with a third company. The point you make

Representative BROWN. The appellant did not necessarily win. Mr. ABERSFELLER. The appellant didn't win and the original winner didn't win but the third party won.

Representative BROWN. I hope there is no message in that conclusion, however, for those who wish to appeal.

Mr. ABERSFELLER. No, we would hope not.

The point that you make is very well taken. It is a real possibility for those of us responsible for the multibillion dollar procurement program of the Federal Government is obviously of constant concern. Not only do we repeatedly emphasize to the staff the need for propriety in this but we rely to a very large extent on the other companies in the business to report these things to us. Very frankly we don't have very much of that. I have had none in ADP alleging the preferential kind of treatment. We do have occasional instances

in other areas. Those are examined in GSA by a part of our investigative staff which reports only to the Administrator, and we are obliged by his results to report those things to that office. They investigate them, get the facts and we make judgments based on the facts. I think it is simply safe to say if someone is of that inclination, and if all the systems that we have fail, then it can be done. It is a little bit like trying to avoid someone breaking into your own home. If someone has it in mind to do that I suggest they will, and it is very difficult to guard against in that totality. But I think, I happen to believe very strongly, that people whom we have, not only in GSA but in the other Federal agencies are true professionals, and do abide very strictly by the rules of conduct that are prescribed by the Congress for the Federal employees, and I know of only rare instances, and only those I have read about, where people have abridged those rules, and have been severely disciplined.

Representative BROWN. Mr. Caveney?

Mr. CAVENEY. I believe I know the one he is talking about, the big buy, it was the largest computer buy, and before the icing was put on the cake, most of the seven dwarfs were appealing the decision of the U.S. Air Force. The clincher came from a professor at one of the leading universities who provided the knowledge, a Government analyst, who recommended the original awardee left Government and it could have been assumed a close relationship existed between that individual and the awardee. The information was passed on to the Government operations department, which was instrumental in reversing the decision. But you are very right in your assumption.

Representative BROWN. I would go further. The reason for my concern about the era of 1960 and before is not partisan, but rather from the standpoint that in the early days of a new and developing system, particularly one that sprang originally from the Federal Government, it seemed the opportunity to provide Federal funds for a company or companies to develop and get either a toehold or a lock on the technology in this new field was much greater then than it is now as currently there are more people in the field with the technology spread more broadly. A clear misdoing, or any misdoing, would be more obvious now perhaps than it would have been then, but the total culpability is no less. I am concerned about not only how some of these apparent situations developed historically, but how they are working

now.

Mr. CAVENEY. One other comment. I receive a great deal of data about the negotiations with Government, but when you are dealing as a seller to a buyer I can understand what Mr. Abersfeller is saying, but that just isn't how the real game is played. A seller takes the position, "boy, if I say anything, this bird told me I would never receive another contract." So we swallow hard. Sometimes we have to go through the backdoor to get to the front door but I don't think anyone in this room is naive enough to think that there isn't a little hanky-panky, because there is. And it is too bad we can't go through the front door but the seller is placed in a very hairy position and will not jeopardize his firm's future.

SEPARATE REVIEW BOARD ON PROCUREMENT

Representative BROWN. Let me suggest, Mr. Abersfeller or Colonel Warren or anybody can then comment that there should be some kind of a separate review board on procurement. I don't know whether it should be this committee, although Mrs. Griffiths' suggestion is quite interesting, but it seems to me it should exist some place to be sure that a contract is properly awarded. There ought to be another party brought in to check on the procurement procedures to be sure they are valid because as an individual Member of Congress, I know situations where an unsuccessful competitive purveyor was debriefed, then challenged the award stating that the contract recipient would never deliver as they promised under the contract, and sure enough the unsuccessful bidder was right. The contract recipient never did deliver, but by this time the damage had been done and there wasn't any way out of the problem; the procurement office had to say "well, yes; I guess we were wrong, after all."

Now, what do you do about that?

Colonel WARREN. Well, sir, I would like to address the question, if I understood you correctly, as to whether or not some check is required on the procurement process to be sure it is conducted in a fair and impartial manner, and I would like to address myself solely to the ADPE selection process which is handled in a special manner now in that we have to develop our requirements for ADP and submit them to the GSA, which examines them to be sure that they give fair and full competition to everyone and the opportunity to compete. The selection process is a long process.

It takes almost 11 months from the time we issue an RFP to the time we make a selection. After the RFP is issued the equipment is examined on-site, and benchmark tests are run. There are two separate agencies in the Government intimately involved in the selection process which is closely monitored by industry as a whole, and I believe that the opportunity for anything but a fair selection is slight, and I really do not feel that the selection of ADP needs any additional rules, regulations, or checks as far as the competitive selection process is concerned.

Mr. ABERSFELLER. I share that view. I think in some instances the time lags that take place through the exhaustive review checks means substantial amounts of money are lost by the absence of new modern equipment.

In terms of harming a company, as regrettable as that particular case is, the occasions do arise, I really don't know what another body might do in terms of examining because it seems to me you would have to rely on professional people.

We had a case of our own, not involving ADP but a similar product, where our plant inspector felt the low bidder could do what he claims he could do. This was his professional judgment.

The facts were that he wasn't able to do it. I don't know, and I looked into that before the award was made, it happened to be the kind of thing that I would examine before the award was made. I have standing before me a man who has a great professional reputation, who tells me that the man can produce, and really I am pretty hard put to disagree with him, unless really to hire two or three men to examine this man's finding, but it happens very very seldom.

Representative BROWN. I assume at this point the review agency has discretion of keeping tab or keeping a file on these people who made the bad judgment and after they had fallen down a number of times a review would be taken of your administration of those personnel rather than anything else.

Mr. ABERSFELLER. It may very well be. In this case, it turned out our man was right. I did send some people up afterwards, our man was right. They did have the capability of producing but they didn't have the intent. They decided not to and, frankly, for reasons beyond me because it costs them a pretty penny, but that is something that is pretty hard for anyone to judge as to what a person intends.

Representative BROWN. Colonel, let me be more specific. What about a review of weapons systems? Can you think of any way that can be done?

Colonel WARREN. Most of the major weapons systems receive a pretty thorough review now.

Representative BROWN. You mean a separate agency review now? Colonel WARREN. I would just like to restrict my comments to ADP, if I could, because that is what I am here to talk about.

Representative BROWN. Any further comments from any of you gentlemen?

CORRESPONDENCE ON EMPLOYEE SUGGESTION (DHEW) RE TAPE DRIVES

Mr. CAVENEY. I would like this suggestion inserted in the record in its entirety.

Representative BROWN. I am sure that will be taken care of.

(The following information was supplied for the record by Mr. Caveney :)

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET, Washington, D.C., April 25, 1968.

Mr. HOWARD JORDAN,

Department Suggestion Coordinator,

Department of Health, Education, and Welfare,
Washington, D.C.

DEAR MR. JORDAN: The main thrust of the employee's suggestion resubmitted with your letter of April 3, 1968, was not overlooked in our orginal evaluation. In our answer we generalized from the particular component, magnetic tape units, to the entire class of computer components because the major considerations apply equally to many components.

After reading Mr. Chalmers' memo to you, I appreciate the uncertainty caused by our response. I hope that I can clarify our reasons for rejecting further consideration.

Procurement of Electronic Data Processing Equipment in the Federal Government today is largely through competitive bidding. In most cases the requests for proposal require bidding a complete system not part of a system or one component such as a tape unit. In addition to supplying the hardware, the bidder must also supply software needed to use the system efficiently. Computer systems also require provisions for maintenance, and training of personnel. Most of the maintenance and much of the training today is performed by the manufacturers' personnel. This is almost always the case when the equipment is rented rather than purchased.

Most magnetic tape units are cabled directly to the computer and their operation is dependent upon the control of the computer.

To provide for direct bidding of magnetic tape units or other computer system components, as separate pieces of equipment in all procurements would require complete revision of our present concepts of EDP systems and procurement. Many questions have to be answered before evaluating the desirability of this