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thing in Room 212 belongs to the Government, but even then I think you would have to have some identifying characteristics, machine-bymachine. You know, whereas the general public may not, that a lot of these machines are not $10,000 machines. Some of these machines cost as much as a quarter of a million dollars. This is the Government's property, the people paid for it, and they have a right to get something for the money. We don't even know if we get price reduction because of it.

WHAT TOP AGENCIES EXERT MANAGEMENT CONTROL ?

What top agencies are responsible for establishing management controls

Mr. STAATS. Well, of course, in this case the Defense Department is subject to regulations of the Budget Bureau and the GSA. But with respect to other types of equipment, we may not have this specific kind of control in either of those agencies, unless it is a part of the reserve, of the machine tool reserve, for example, OEP has the control.

FOLLOW-UP COLLECTION ACTION ON CONTRACTORS USING GOVERNMENT

EQUIPMENT

Representative GRIFFITHS. Do you know if there has been any improvement in collection from contractors for the use of Government property?

Mr. HAMMOND. We have not made a follow-up review. We do know we were not satisfied with the collections made in the last review. Defense instituted revised procedures to recompute, in some cases, to make the rental payments more reasonable in relation to the value of the equipment and get greater assurance that the Government knew when use was made for commercial purposes. We have not made a follow-up review to see how well the changes have been instituted.

Representative GRIFFITHS. I suppose if you make a more reasonable rental, you are looking at the price of the equipment now, the sale value of the equipment now. In general, when they are selling to you they are looking at replacement value. I recommend that you compute the rent based on replacement value and you will do better.

GAO TO CHECK INTO RENTAL-PURCHASE AGREEMENTS

Chairman PROXMIRE. Could I ask, Mr. Staats, will you check into the rental purchases of three or four typical contractors and let us know who owns the computer after it is paid for by the Government, how it is used, and so forth, what regulations govern its purchase; can you do that?

Mr. STAATS. Yes, I think this could be done without great difficulty.

Chairman ProxMIRE. As I would like to ask you, Mr. Mahoney, also if you will make available to us when it becomes publicly available, you might submit the report that you referred to that you are sending the chairman of the House Appropriations Committee with regard to cost of computers and so forth, anything of course for him confidentially I wouldn't pretend that we should

have, but anything that is public we would like to get also.

Mr. STAATS. All right, we will be glad to do that.

Chairman PROXMIRE. Then I would like to ask before you leave the stand, I understand that Messrs. Gaskill and Drury of the Office of Emergency Preparedness are here, is that correct?

TESTIMONY OF ALBERT F. SANDERSON, OFFICE OF EMERGENCY

PREPAREDNESS (OEP), EXECUTIVE OFFICE OF THE PRESIDENT Mr. SANDERSON. I am here.

Chairman PROXMIRE. I don't have the right names this morning. You are from the Office of

Mr. SANDERSON. OEP.

OEP ORDER 8555.1 DOES NOT COVER ADPE

Chairman ProxMIRE. Fine. Do you know if the automatic data processing equipment comes within the scope of the OEP order that referred to, that is 8555.1? Mr. SANDERSON. It does not. Chairman PROXMIRE. It does not. Mr. SANDERSON. No, sir.

Chairman PROXMIRE. Can you advise us under what order or regulation it would come?

Mr. SANDERSON. We have no responsibility in that area whatsoever.
Chairman PROXMIRE. You are not responsible ?
Mr. SANDERSON. No responsibility whatsoever for ADP.

Chairman PROXMIRE. All you can tell us is it would not come under that particular order.

Mr. SANDERSON. That is right, sir.
Chairman PROXMIRE. Thank you.

Mr. Staats, can you tell us, can you give us any idea, under what order it would come, what regulation ?

Mr. STAATS. We would have to supply it, Mr. Chairman, but I think we would have to find it in the Defense Department's own regulations but Mr. Ward could be quite right this could not be covered but we will check it and if so we will supply the appropriate reference.

Chairman PROXMIRE. Here is what I want to know: I want to know the regulation which limits the commercial use of industrial plant equipment owned by the Government, and I want to know whether it has been amended to forbid use, if it is Government owned, of more than 25 percent of the time in commercial areas.

Mr. STAATS. We will check it.
Chairman PROXMIRE. As I understand- -

OEP AMENDMENT REG. 8555.1 TO FORBID USE OF IPE MORE THAN 25

PERCENT COMMERCIALLY

Mr. SANDERSON. May I speak to that? Our regulation covers machine tools and production equipment but not ADP and we do have a policy on the 25-percent commercial use of such equipment but such use is being abolished. We have not authorized any for the last 18 months and we are revising the regulation right now to forbid, except in unusual cases, any commercial use of the equipment covered by our directive for more than 25 percent of the time it is available for use.

Chairman PROXMIRE. So it is not a matter of reporting them, you just flatly forbid it, it can't be used more than 25 percent.

Mr. SANDERSON. That is correct, over 25 percent.
Chairman PROXMIRE. This does not affect ADP.
Mr. SANDERSON. No, sir.

Mr. STAATS. Nor would it affect other government-furnished equipment not in the OEP inventory.

Chairman PROXMIRE. I see. Then as I understand one of the main purposes of your testimony was to tell us that the Bureau of Standards simply doesn't have the manpower to do the interface compatability work which is necessary in order to permit effective competition and reduce the costs in procurement.

NBS BUDGET REQUEST FOR INTERFACE RESEARCH

Let me just ask before I ask you, sir, could you tell us whether you have requested the Bureau of the Budget for this personnel, whether your agency has?

Mr. NIGRO. Well, may I clarify it a little deeper. We are in the middle of a study now within the computer center in the Bureau of Standards.

Chairman PROXMIRE. You have known about it for some time. You have only been able to put a certain number of people on this work, that it would save the Government enormous sums.

Mr. NIGRO. It has gone through the budget cycle but for various reasons we have never received an increase.

RESPONSIBILITY FOR BUDGET REQUEST

Chairman PROXMIRE. That is not satisfactory. Your agency has requested the Bureau of the Budget for additional money or personnel ; have you or have you not?

Mr. NIGRO. Not specifically for this up until this coming fiscal year.

Chairman PROXMIRE. Then the burden is on the Department of Commerce, it is not on the Bureau of the Budget. If they don't get a request they can hardly give you more money than you are asking.

Mr. NIGRO. Well, partly I would say.

Chairman PROXMIRE. Why isn't it very largely on the Secretary of Commerce?

Mr. NIGRO. Well, as I am trying to point out, we are in the middle of a study within our own center now as to what we can do better to promote efficiency and this is one of our high priority items, and in fiscal 1971 we will start a program with our present assigned monies and definitely ask for additional monies to move on for this program.

Chairman PROXMIRE. This is something which has been going on for a long time for years.

NBS HAS FAILED TO GET A STANDARD BY CONSENSUS

Mr. Nigro. Yes, for years; but our activity has been mainly for years working with the American Standards Institute and participating committee memberships where you try to establish a standard or philosophy by consensus. I won't go into that at this time.

Chairman PROXMIRE. No. As a Democrat I hate to say we had 5 years of that.

Mr. NIGRO. It is very difficult to get consensus when quite often something is really not to the good of everybody at the conference table, and you may understand what I am talking about.

Chairman PROXMIRE. At any rate, I think the most useful thing I can do, you are not responsible for the Department, but the Secretary of Commerce, you are giving us the answers you can, maybe the thing for me to do is write the Secretary of Commerce and ask him whether or not he has included it and if not, why not.

NBS HAS PROGRAM IN 1972 BUDGET CYCLE

Mr. NIGRO. I think that is unnecessary, sir, because in our coming budget cycle for 1972 this program is in there. They are in our study, and we have communicated with the Bureau of the Budget concerning our immediate plans to tackle this problem.

POSSIBILITY OF A SUPPLEMENTAL REQUEST ?

Chairman PROXMIRE. Any prospects at all that you could consider asking for a supplemental request? You are losing money every day.

Mr. Nigro. It is possible. Chairman PROXMIRE. As Mrs. Griffiths points out, it is a matter of well over a hundred million dollars. Mr. Nigro. I cannot answer that. I can request it, but it is up

to somebody higher in Commerce about a supplementas.

INTERFACE PROBLEM OF PARTICULAR IMPORTANCE

Mr. STAATS. Mr. Chairman, if you go back on the question you raised with me as to the main thrust of our statement here this morning, I think what we tried to do is aside from giving you a kind of a general picture of all the ramifications of work that we are doing that relates to the Government's investment in computers, is to emphasize particularly the importance of this interface question, but again that is only one piece of the broader question of how can we get greater compatability and standardization in the whole field insofar as the Government is concerned, and using the Government's investment, the Government's leadership, leverage here to bring this about for the whole economy.

The report made to the Congress in 1965 that I referred to earlier has a chapter on this whole subject, and this is a matter that was dealt with at great length in the hearings before the House and Senate Government Operations Committee that took place prior to the enactment of the 1965 legislation. So this is a very important piece of the total problem, as we see it, and we don't believe that nearly enough attention has been given to this aspect of it.

Chairman PROXMIRE. Thank you very much. Do you have any more questions?

You did, I think, a very helpful job considering this, and I don't mean any offense to you at all. I think you are one of the finest civil servants we have but there is a sea of ignorance in which we are operating here and I think we will have to see if we can get more information out of the Bureau of the Budget and the Defense Department in this area when they come forth.

Mr. STAATS. I don't believe there is as much lack of information about numbers here as perhaps could be concluded from this. It has been mostly in the area of contractor leased or contractor owned equipment that constitutes this range that is of concern to you. Chairman PROXMIRE. Thank you very much. Next is Mr. Dwight A. Ink.

Mr. Ink we are delighted to have you. We have your prepared statement here. You might identify the distinguished gentlemen who are with you. STATEMENT OF DWIGHT A. INK, ASSISTANT DIRECTOR FOR

EXECUTIVE MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET, ACCOMPANIED BY JOSEPH F. CUNNINGHAM AND CLARK R. RENNINGER, AUTOMATIC DATA PROCESSING STAFF

Mr. INK. Yes, Mr. Chairman. I have on my right Mr. Joseph F. Cunningham and on my left Mr. Clark R. Řenninger who are on our automatic data processing staff.

NEW OFFICE OF MANAGEMENT AND BUDGET (OMB)

Mr. Chairman, as Mr. Brown knows, there is no longer a Bureau of the Budget; that went out of existence last night, and for those people who are delighted, I have discouraging news because it is back in operation as the Office of Management and Budget. We are in a period of transition in the two organizations, and although I do not have responsibility for the ADP area, I am concerned with management and, Mr. Chairman, I would like to make some comments this morning.

There are parts of my prepared statement, Mr. Chairman, which I think have been covered and if you don't mind I would be happy to skip some of it as I go through depending upon what you wish.

Chairman PROXMIRE. Yes, we would appreciate it if you would get through with it in 15 minutes or so if possible, because there are three of us here and we would all like to ask questions.

Mr. INK. Yes, sir.

ADPE INVENTORY SYSTEM FOR GOVERNMENT

When Mr. Hughes, then Deputy Director of the Bureau of the Budget, testified before this subcommittee on November 30, 1967, he reported that a new automatic data processing equipment inventory system had been put into effect through the issuance of Bureau of the Budget Circular No. A-83. He likewise reported that initial inputs had been received from agencies and were at that time being processed by the General Services Administration. We anticipated problems would be encountered in securing accurate initial informatioin for establishing the master files which form the basis for a perpetual inventory system.

However, Mr. Chairman, at that time the Bureau underestimated the difficulties which were involved in establishing the perpetual inventory system and the effort and time which would be required to minimize or eliminate errors. We continue to experience difficulties in the accuracy and timeliness of the data inputs.

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