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Mr. Ink. The problem here, Mr. Chairman, is getting standards which are workable and realistic, which requires industrial input because of their background, because of their experience. We can come up with standards, in effect, by edict insofar as Government procurement is concerned, but we don't want to come up with standards for the sake of standards. We want to come up with standards that are workable.

If we come up with standards that are unrealistic and unworkable, we could actually lose

INFLUENCE OF INDUSTRY IN MAKING STANDARDS

Chairman PROXMIRE. But that determination ought to be made by you. You see what concerns me there is obviously, as Mrs. Griffiths very skillfully brought out, I thought, a vested interest by the big, very powerful and influential firms in the field to prevent this costreducing competition. They are doing mighty well under present circumstances, and if competition gets tough and drives down the cost to the Government their profits are going to diminish.

So they have a real vested interest in exercising their position to drag their feet as long as they can.

We are familiar with this particularly in the housing area, where you have the same kind of footdragging with regard to codes and getting the industry to accept codes which are in the public interest and will do the job and provide the safety, and so forth, and do so at minimum cost. But the vested interests have been very effective in that area. They have almost paralyzed the housing industry, and we are very much concerned, I am concerned, maybe the same kind of thing is happening here.

At any rate, Mr. Cunningham and you, Mr. Ink, are telling us that the determination is made by the Department of Commerce, that you consult but they have no practical veto whatsoever, is that right?

PRIVATE INDUSTRY HAS NO VETO

Mr. CUNNINGHAM. Private industry has no veto.
Mr. INK. Yes.

Mr. CUNNINGHAM. As a matter of fact, we have one standard, we have a set of three standards approved in

Chairman PROXMIRE. How about USASI, do they have a veto?

Mr. CUNNINGHAM. As now called the American National Standards Institute, Dr. Branscomb, Director of NBS, is on the board of ANSI, members of the Department of Defense, GSA and NBS are on the committee that builds standardization into the computer field. The report to which Mr. Ink referred said it looks like they are going too slow, and the report recommended that NBS embark on a well publicized program to develop a standard.

Chairman PROXMIRE. How long have they taken?

Mr. CUNNINGHAM. I think that I heard from Comptroller General Staats that ANSI started in 1966 and they have made very little progress.

Chairman PROXMIRE. Well that is the point.
Mr. CUNNINGHAM. That is why I would like to point out-

GOVERNMENT KNOW-HOW IN MAKING STANDARDS

Chairman PROXMIRE. Why doesn't the Government have the knowhow to make these standards. I can see why you would want as much information as you can get from the industry, they have a right to come in and testify and give you any kind of opinion they may have, but I would think the Government should have the know-how there and you just ought to say “we are going to go ahead in 3 months” or 6 months or a reasonably limited period.

DEPENDENCE ON EXTERNAL IDEAS BY NBS

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Mr. Ink. Mr. Chairman, I am afraid on this one I would like to defer to the National Bureau of Standards with respect to the technicalities that are involved, but I would hope though, I would share your concern, that we do need more strength in the Bureau of Standards and I think with stronger resources that they would be in a position to move forward more rapidly and be less dependent upon external ideas.

Chairman PROXMIRE. I am very concerned about the lack of some kind of comprehensive overall control or knowledge at least of the computers that are used throughout the Government because we are moving more and more into an area where the weapons are becoming computers. The ABM, the computer cost of that is very large; the electronic battlefield on which we have already expended $2 billion without an authorization and we expect to expend $20 billion, is very largely an electronic operation.

This subcommittee has been responsible for exposing a number of enormous overruns and again and again we are reminded of the fact that the overruns are often largely the result of electronic devices.

The Stubbings report which you recall-Mr. Stubbings is in your organization.

Mr. Ink. Yes, sir.

NEED FOR COMPUTER COSTS AND ANALYSES

Chairman PROXMIRE. Made a very devastating indictment, I thought, of the electronic weapons systems throughout the 1960's, found they were 100 to 200 percent in overrun, and it seems to me that somehow we have lost control of our computer investment and we don't seem to have any kind of effective economic analysis as to whether it is wise to rely as much as we are relying and move as much as we have into the computer area.

The costs are great, and the returns don't seem to be satisfactory, and again and again these weapons not only cost a lot more, they just aren't performing well.

As Nr. Stubbings pointed out in his report, of the 11 major weapons systems, electronic systems, procured at a cost of $40 billion in the first part of the 1960's, they performed, only two of the 11 major weapons systems performed, up to standard, and six or a majority performed, met less than 25 percent of their standard specifications.

Now it would seem to me that the Bureau of the Budget would have a real reason for at least getting for us the rudimentary figures, as to how much we are putting into computers overall and then be

able to proceed to an economic analysis as to whether the investment is wise.

Mr. INK. Well, Mr. Chairman, the Bureau of the Budget has a very sizable portion of that, of course, is included in inventory. But we have discussed at the hearing there is also a significant portion which is not included.

Chairman PROXMIRE. It sounds as if less than half is included.

ROLE OF OFFICE OF MANAGEMENT AND BUDGET (OMB)

Mr. INK. Mr. Chairman, as we move from the Bureau of the Budget to the Office of Management and Budget we will get back to the committee with respect to our views on this.

Chairman PROXMIRE. I am reminded that this is one of the reasons why the military spending is out of control is because the Bureau of the Budget just has not been looking at this.

Mr. INK. Mr. Chairman, as you know, the role of the Bureau was different last year than it has been heretofore, and I am sure there will be further changes.

GOVERNMENT EQUITY IN ADPE

Chairman PROXMIRE. Who keeps account of the Government equity in this ADPE?

Mr. CUNNINGHAM. General Services Administration.

Chairman PROXMIRE. I see. And they would be in the position or could you tell us how much by years the Government has paid in rentals for ADPE?

Mr. CUNNINGHAM. It is included in the inventory report.
Chairman PROXMIRE. Included in that.

POTENTIAL SAVINGS FROM INTERFACE STANDARDS

Do you agree, Mr. Ink, with the estimates by Mr. Staats that the potential savings involved in the interface capability point that he made? Mr. Ink. Yes, sir; we do agree

that there areMr. PROXMIRE. Tens of millions of dollars?

Mr. Ink. The studies and the experience will enable us to pinpoint it further, but we are in full agreement this is desirable and will save money.

Chairman PROXMIRE. Mr. Brown?

NATIONAL CENSUS OF ADPE BY SELECTED YEARS

Representative Brown. Would it be possible for you to give me the national inventory or national census figures for the years 1962 and 1966 or get them for me?

Mr. CUNNINGHAM. We will get them for you and send them to you; yes, sir.

Representative BROWN. Also I would like to have a copy of that inventory.

Does the information on the rental program indicate the company involved in the rental arrangement ?

Mr. CUNNINGHAM. Well, not in the actual amount of funds paid to the company which is not included in here. We know that from the GSA report on obligations against schedules, which is a large portion of our total payments to companies and if you want it by

Representative BROWN. I would like to have that information.

It strikes me as interesting that in 1962, 66 percent of the computers in the inventory were with IBM or were IBM equipment, and that the national census now is 57.7 percent, and if I understand what has happened the 1962 national census would indicate that not that many were then IBM.

Mr. CUNNINGHAM. No, sir; it would be a lot higher. IBM about 1962 had in the vicinity of 75 to 80 percent of the national market.

Representative Brown. Of the national market?

Mr. CUNNINGHAM. Of the national market. They had about 66 per cent of our market. These are order of magnitude figures.

Representative Brown. Can you give me some indication of the rental arrangements at that time?

Mr. CUNNINGHAM. By dollars you mean?
Representative Brown. By dollars.
Mr. CUNNINGHAM. Or the manner-

Representative Brown. By numbers of contracts, anything that is available.

Mr. CUNNINGHAM. Yes, sir.

(The following information was subsequently supplied for the record by the Office of Management and Budget :)

EXECUTIVE OFFICE OF THE PRESIDENT,
OFFICE OF MANAGEMENT AND BUDGET,

Washington, D.C.
Hon. GEORGE E. BROWN, Jr.,
House of Representatives,
Washington, D.C.

DEAR MR. BROWN: At the Joint Economic Committee hearings on July 1, 1970, you asked for tables showing the distribution of automatic data processing systems produced by U.S. manufacturers. Those tables are attachedone a numerical, the other a percentage distribution, by supplier and by year. Also enclosed are comparable data for the Federal inventory.

A problem we have been unable to resolve is finding a source of industrywide statistics that is both stable and reliable. Hence, the attached shows three sources for the national figures; the differences between 1968 and 1969 data are presumably attributable to the differences in the methods of the two sources.

If you have any further questions in this area, please feel free to contact me or Joe Cunningham, Chief, ADP Management Staff, telephone 395–4960. Sincerely,

DWIGHT A. INK.
Assistant Director.

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Source: Federal data from annual inventory of ADP equipment; national data: 1960-62 from "Introduction to Automatic Computers," by Ned Chapin; 1964-68 from Computers and Automation" magazine; 1969 from Diebold census, published by ADP Newsletter.

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FEDERAL INVENTORY OF AUTOMATIC DATA PROCESSING EQUIPMENT-DISTRIBUTION BY SUPPLIERS AS OF JUNE

30, 1969, SHOWING SUPPLIER REPRESENTATION IN THE FEDERAL INVENTORY

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49-580—70-5

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