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you come to the table here, so the three of you gentlemen can be together, and you can cheerfully agree or disagree.
Our first witness is Mr. H. A. Abersfeller, Commissioner of Federal Supply Service, GSA. Commissioner, you go right ahead. I think, why don't all of you gentlemen go ahead with your statements and then we will question you in turn?
STATEMENT OF HEINZ A. ABERSFELLER, COMMISSIONER, FED
ERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION; ACCOMPANIED BY GEORGE W. DODSON, JR., ASSISTANT COMMISSIONER, OFFICE OF AUTOMATED DATA MANAGEMENT SERVICES, FEDERAL SUPPLY SERVICE
Mr. ABERSFELLER. Mr. Chairman, and members of the subcommittee, I am Heinz A. Abersfeller, Commissioner of the Federal Supply Service the General Services Administration. On behalf of the Administrator of General Services, Robert L. Kunzig, I wish to express our appreciation for this opportunity to appear before your subcommittee. With your permission, Mr. Chairman, and in order to conserve the overall time of the committee, I will present a summary statement of the actions the General Services Administration has taken in support of Public Law 89–306, the Brooks bill, and our active concern in improving the overall management of ADP in the Federal Government.
May I say, I have with me Mr. George W. Dodson, Jr., Assistant Commissioner, Office of Automated Data Management Services for the Federal Supply Service.
COSTS REDUCED $93.5 MILLION ON ADPE
Since our appearance before you on November 12, 1967, we have:
During fiscal year 1969 and 1970 been able to obtain reduced costs, through improved and continuing Federal supply schedule terms and conditions of $13 million, plus an additional $50.5 million in reduced costs of individual ADP systems procurements, compared to schedule costs, for a total of $93.5 million.
During fiscal year 1969 and 1970 we achieved a total cost reduction of about $19.5 million in the procurement of magnetic tape compared to Federal supply schedule tape prices in force prior to the development of a tape specification and competitive procurement.
During fiscal year 1970, just ended, increased the number of Federal supply schedule contracts with independent manufacturers of peripheral and accessorial equipments used with ADP equipment to 71 with an estimated annual volume of $12 million in sales, compared to 42 such contracts and a volume of $10.7 million during fiscal year 1969. Included in these 71 schedule contracts were four manufacturers of plug-to-plug compatible tape and disk drives and six independent suppliers of disk packs, for å fiscal year 1970 estimated volume of $350,000 which compares to a volume of $89,500 for fiscal year 1969.
We developed a specification and qualified products list for the six high disk pack, obtained government-wide requirements, and made plans to issue a competitive solicitation by mid-July 1970.
We implemented Bureau of the Budget bulletin No. 70–9, subject, “Acquisition of Peripheral Components for Installed ADP Systems,
by identifying 2,867 such units, which if determined by the using agencies to be replaceable, would at least equal the $5 million annual cost reduction estimated by the Comptroller General in his report to the Congress on this subject No. B-115369 dated July 24, 1969.
I might digress for a moment. As of this morning we have a report from the agencies of 2,138 will be replaced at a savings of in excess of $6 million.
Chairman PROXMIRE. Do you have a date as to when they will be replaced?
Mr. ABERSFELLER. No, it is a continuing thing. I don't have a final time period, some in fact have already been replaced but we don't have a time phase.
Chairman PROXMIRE. Roughly over the next year or two.
Mr. A BERSFELLER. I would say within the next 12 months at the outside.
We delegated procurement authority to the Veterans Administration and the Defense Supply Agency for replacement of installed ADP peripherals with plug-to-plug compatibles which resulted in completed action with reported annual savings of $300,000 and $220,000, resnectively.
We issued a request for proposals on May 1, 1970, for a test procurement to separate the requirements for the central processing unit from the peripheral requirements in order to offer individual ADP equinment components for quotation in a new ADP system procurement. In connection with the procurement test, we held a vendors' conference on May 27, 1970, at which 14 firms were represented: these were, two leasing companies, one software house, two consulting firms, eight computer manufacturers, and one peripheral equipment manufacturer,
We issued a Federal property management regulation on January 17, 1969, immediately after your last hearings ended, which provided for the procurement of the several components, including peripheral equipment, of a ADP system, or augmenting an existing system, from a number of different sources, if such multiple source action is in the best interests of the Government.
We clarified the reporting instructions for the ADP management information system in order to improve agency reporting accuracy.
We monitored agency reporting timeliness in coordination with BOB in order to improve timeliness of the data base.
We monitored agency projected gains and losses against actual reports and fed back differences in order to enhance agency projections and correct reporting errors.
We used the ADP management information system data base to generate recurring reports used daily by the GSA guided Governmentwide sharing exchanges; to compute purchase/lease analysis, and to prepare special one-time management reports, at the call of the legislative and executive branches.
As an example GSA required 106 of these special reports to support our Public Law 89–306 mission. The Bureau of the Budget required 25 special reports, the Department of Commerce three, and the Department of Defense 43. In all, 10 agencies, and the General Accounting Office have required 218 special management information system reports.
We published for the public more than 6,000 copies annually of the "Inventory of Automatic Data Processing Equipment in the United States."
We provided to the public copies of the data base in' magnetic tape form.
We organized with the BOB, and major agencies concerned, a project to review the circular A-83 requirements to develop, on a phased basis, a revised information system giving special attention to:
Timeliness of submission and perpetual data requirements;
Correlation of projected acquisitions and release with BOB A-11 submissions;
Component versus system level reporting;
Mr. Chairman, in your letter of June 12, 1970, you requested information on space and storage requirements caused by the expanding use of ADPE. We have not been able to attribute any net increased space requirements to the expanding use of ADPE. We have found that paper records produced by automatic data processing equipment are relatively short lived from a records management point of view. We are incidentally reviewing alternative methods of recording data for archival purposes with the objective of achieving a substantial compaction in data storage compared to that density normally achieved with digital data recorded on magnetic tape.
If we are successful here we will, of course, be able to turn back into use several thousand reels of magnetic tape.
FUTURE PLANS OF GSA
Mr. Chairman, turning now to the future, I would like to inform you of our most significant plans for the future which are, to test the economic and technical feasibility of expanding Federal data processing center services to include time sharing.
To reduce the proliferation and maintenance of similar bread and butter computer applications which are common to many agencies by offering central Government-wide system services through the Federal data processing centers such as:
Payroll and manpower statistics;
To increase our advertised procurements by developing specifications for:
Eleven high disk packs; and
To improve the ADP procurement process by the development of a uniform ADP contract clause handbook.
Mr. Chairman, this concludes my summary statement. Mr. Dodson and I will be pleased to respond to any questions or comments that you or members of the subcommittee may have.
(The prepared statement of Mr. Abersfeller follows:)
PREPARED STATEMENT OF HEINZ A. ABERSFELLER
Mr. Chairman and Members of the Subcommittee, I am Heinz A. Abersfeller, Commissioner of the Federal Supply Service, of the General Services Administration. On behalf of the Administrator of General Services, Robert L. Kunzig. I wish to express our appreciation for this opportunity to appear before your Subcommittee. The following is a full statement of the actions the General Services Administration has taken in support of Public Law 89–306 and our active concern in improving the overall management of ADP in the Federal Government. I have with me a principal member of my staff, Mr. George W. Dodson, Jr., Assistant Commissioner, Office of Automated Data Management Services for the Federal Supply Service.
PROGRESS IN PROCUREMENT OF ADPE
In the general area of procurement of ADPE we have continued to make progress in efforts to achieve benefits and economies to the Government. As indicated in testimony before your Committee in November 1968, improved Federal Supply Schedule contractual terms and prices were obtained for FY 69. For FY 69 and 70 these benefits, together with continuing prior-year items, resulted in reduced costs of about 43 million. We further indicated that in FY 69 we had also included for the first time in Federal Supply Schedule contracts for computers a maximum order limitation. During FY 69 and FY 70 we have continued to review agency requests for Proposals—RFP's—, requests for delegations of procurement authority, and provided assistance and advice to the agencies. During these years we have undertaken a number of individual procurements for agencies totaling $163.0 million and have been able to obtain reduced costs by about $50.5 million compared to Federal Supply Schedule prices.
TESTIMONY BEFORE COMMITTEE
In Testimony before your committee in November 1968, we indicated the need for development of additional specifications in order to get competition. GSA has, over the past three (3) years been successful in reducing the Government's acquisition costs for digital EDP tape by more than 50% as a result of the development of a Federal Specification and a Qualified Products List. Except for occassional negotiated contracts for special requirements, based on adequate justification, all Federal Supply Schedule, definite quantity and requirements contracts are consumated on a formal competitive bids basis. All 12'' EDP tape procured, except for occassional non-standard requirements, conforms with the specification and is inspected and tested before it is released for shipment. During Fiscal year 68 and Fiscal year 69 cost reduction of $3.4 million and $9.1 million respectively were achieved. The competitive pricing structure again prevails for Fiscal year 70 with current volume approximating 0.9 million reels annually, at prices ranging from $9.88 to $12.48 per reel, depending upon quantity, type of contract and delivery zone as compared to an average price of $23.36 prior to the development of the specification. This represents a cost reduction of about $10.4 million for FY 70.
In Testimony before your Committee on November 12, 1968, we advised you of our actions in the area of providing procurement opportunities to numerous producers of so-called independent peripheral equipments. We indicated that we would continue to study the area so that we could reach further determinations and take additional actions. I am pleased to advise you of these additional actions.
In the area of independent peripheral procurements, we have continued to provide opportunity for the smaller manufacturers of ADP peripheral and accessorial equipments to furnish part of the Government's requirements.
CONTRACTS TO INDEPENDENT MANUFACTURERS
We have during Fiscal year 70, just ended, made additional progress in awarding Federal Supply Schedule contracts to independent manufacturers of peripheral and accessorial equipments used with ADPE. During Fiscal year 70 we have a total of 71 such contracts with an estimated annual volume of $12.0 million, as compared to 42 in the previous fiscal year with a volume of $10.7 million. Among these were contracts with four manufacturers and suppliers of plug-to-plug compatible tape and disk drives and six independent suppliers of disk packs at prices lower than available from computer manufacturers. Equip
ment prices ranged from 20% to 43% lower than original equipment manufacturers' prices and disk pack prices from 31% to 61% lower than those manufactured by the original equipment manufacturer. The FY 70 estimated volume for these contracts is $350,000 which compares to $89,500 for FY 69.
These contracts identify the equipments with which these peripherals are compatible and packs that are replaceable. We have also issued notices to all Federal agencies advising them of these contracts and identifying on a comparative basis the prices, discounts, and compatibility features to assist agencies in making decisions on the evaluation and selection of these system components.
While we now have Federal Supply Schedule contracts for disk packs at considerably lower prices than that offered by computer manufacturers, these contracts were issued pending the development of a Federal specification and a Qualified Products List for six high disk packs to permit competitive procure. ments for future use requirements.
SPECIFICATION AND QUALIFICATION TESTING
We feel that the use of the specification and qualification testing will provide a better quality product at lower prices. We have required the agencies to determine and report to GSA their replacement and additional Fiscal year 71 requirements. We have prepared an appropriate solicitation for this governmentwide requirement which we expect to issue within the next week to ten days. We plan to do the same thing for eleven high disk packs as soon as we complete work on the development of a Federal Specification.
We have also taken certain other actions. In August of 1969 we sent a letter to the several agencies pointing out the recommendations contained in the Comptroller's General Report to the Congress on a "Study of the Acquisition of Peripheral Equipment for Use With Automatic Data Processing EquipmentJune 24, 1969, and offered GSA assistance in putting recommendations into effect pending issuance of more specific policies by BOB and GSA. We delegated procurement authority to the Veterans Administration to competitively procure plug-to-plug compatible replacements for 75 original computer manufacturer tape drives. This action has been completed with a reported savings of $300,000 annually. We also delegated procurement authority to Defense Supply Agency for replacement of 57 tape drives. This action has been completed with a reported savings of $220,000 annually.
Further, in the area of plug-to-plug compatibles, the Bureau of the Budget sponsored a conference held at the Federal Executive Institute in September 1969. One of the conclusions reached at the conference indicated the need for an immediate replacement program for installed leased equipment wherever it could be determined that plug-to-plug compatibles were available at lesser costs. As a result the Bureau of the Budget issued Bulletin No. 70–9 subject, "Acquisition of Peripheral Components for Installed ADP Systems."
This issuance was implemented by the General Services Administration, using the inventory data in the ADP Management Information System as a source. Listings were furnished to agencies containing the entire federal inventory of different types and models of tape drives and disk drives installed and being leased from computer manufacturers. There were 2,867 such units identified, and if each item was determined to be replaceable with less costly plug-to-plug compatibles, the estimated potential cost reduction in annual leases would at least equal $5.0 million estimated by the Comptroller General in his report to the Congress. Each agency was required to review these listings and identify those items, which could be replaced in consideration of the then current equipment retention plans and/or current component substitution plans. We have received the agencies' statement of requirements, and are currently reviewing this matter in order to develop a solicitation to be issued to industry and/or other action that may be necessary. In the meantime, as a part of the 2,867 units identified above, we have delegated procurement authority to the Department of the Navy to replace 858 tape and disk drives and the Department of the Air Force to replace approximately 140 tape and disk drives due to immediate needs. These agencies have issued solicitations for their requirements.
In Testimony before your committee in 1968 it was brought out that it was possible for the Government to separate central processing unit from peripheral computer system requirements in order to offer individual components for quota