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ECONOMY IN GOVERNMENT PROPERTY MANAGEMENTPROCUREMENT OF DATA PROCESSING EQUIPMENT

91-2

HEARING

BEFORE THE

SUBCOMMITTEE ON ECONOMY IN GOVERNMENT

OF THE

JOINT ECONOMIC COMMITTEE CONGRESS OF THE UNITED STATES

NINETY-FIRST CONGRESS

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For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $1.25

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JOINT ECONOMIC COMMITTEE

[Created pursuant to sec. 5(a) of Public Law 304, 79th Cong.] WRIGHT PATMAN, Texas, Chairman

WILLIAM PROXMIRE, Wisconsin, Vice Chairman

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CONTENTS

Proxmire, Hon. William, chairman of Subcommittee on Economy in
Government: Opening remarks..

Bulletin No. 70-9, dated February 2, 1970, Executive Office of the
President, Bureau of the Budget_.

CHRONOLOGICAL LIST OF WITNESSES

JULY 1, 1970

Staats, Hon. Elmer B., Comptroller General of the United States, accom-

panied by Edward J. Mahoney, Deputy Director, Office of Policy and

Special Studies (OPSS); Harry J. Mason, Jr., Assistant Director (OPSS);

and James Hammond, Associate Director, Defense Division; U.S.

General Accounting Office (GAO) -

Johnson, Hon. Robert L., Office of the Secretary of Commerce, accom-

panied by James P. Nigro, Chief, Division of Information Processing

Technology, National Bureau of Standards (NBS)_.

Sanderson, Hon. Albert F., Office of Emergency Preparedness (OEP),

Executive Office of the President..

Ink, Hon. Dwight A., Assistant Director for Executive Management,

Office of Management and Budget, Executive Office of the President,

accompanied by Joseph F. Cunningham and Clark R. Renninger,

automatic data processing staff.

Abersfeller, Hon. Heinz A., Commissioner, Federal Supply Service,

General Services Administration (GSA), accompanied by George W.

Dodson, Jr., Assistant Commissioner, Office of Automated Data Man-

agement Services, Federal Supply Service.

Warren, Col. Joseph B., U.S. Air Force, Deputy Comptroller for Data

Automation, Office of the Secretary of Defense, accompanied by Comdr.

Jan S. Prokop, U.S. Navy, Assistant Deputy Comptroller; Robert A.

Raup, Director for Automation Policy; and Henry Lichstein, Director

for Advanced Computer Techniques--

Caveney, L. Richard, president, Computer Peripheral Manufacturers

Association (CPMA).

Harmon, George O., president, Comma Corp., New York, N.Y.........

STATEMENTS AND EXHIBITS

Staats, Hon. Elmer B., Comptroller General of the United States:

Oral statement:

GAO recommended better inventory of automatic data processing

equipment (ADPE)..

Need for better data to improve reutilization of ADPE.....

Need for current and reliable information on ADPE..

Common practice to procure all ADPE from systems manufac-

turers

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Staats, Hon. Elmer B., Comptroller General of the United States-Con.
Prepared statement of Elmer B. Staats---

Reports to the Congress on ADPE..

Government inventory practices regarding ADP equipment...

Potential savings available by the acquisition of peripheral equip-
ment from independent peripheral manufacturers__

Report recommendations..

Interrogation:

Staffing needs of NBS..

NBS basically agrees with GAO on staffing needs..

Current use of NBS staff__

Savings on magnetic tapes in millions annually.

GAO estimates ADPE annual costs $4 to $6 billion..

$4 billion to $6 billion-a fantastic spread_

Government contractors not required to furnish costs on Gov-
ernment-owned ADPE....

ADPE cost breakdown for DOD, AEC, and NASA.

DOD costs are 62 percent of in-house total_

ADPE purchases by contractors.

Contractors pay rent for industrial plant equipment (IPE) used
commercially..

When does contractor take title on purchase-rental equipment?_
ADPE procured under various types of contract_

BOB and GSA inventory of Government ADPE.
ADPE inventories of DOD, AEC, and NASA__

Use of ADPE for commercial work_ _ _.

ADPE used part-time Government and commercial not in in-
ventory_

Regulations controlling use of ADPE_

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ADPE in hands of contractors not covered by OEP Order 8555.1.
Acquisition of ADPE by contractors___

Statement that contractors get title to Government computers.
Cost of ADPE for DOD___.

Over buy and use of computers..

Need for good planning before buying ADPE..

Quality of management of $47 billion stores in DOD...

Chairman of House Appropriations Committee interested in
ADPE costs__

GAO authority to set controls over Government property -
Remuneration to Government by contractors..

GAO followup study.

Machine-by-machine use records opposed by some companies __
Kind of records kept by companies__.

What top agencies exert management control?_

Followup collection action on contractors using Government
equipment---

GAO to check into rental-purchase agreements.

OEP Order 8555.1 does not cover ADPE (only IPE)

OEP is amending Reg. 8555.1 to forbid use of Government-owned

IPE held by contractors more than 25 percent commercially__
NBS budget request for interface research_-

Responsibility for budget request.

NBS has failed to get a standard by consensus_

NBS has program in 1972 budget cycle_

Possibility of a supplemental request?_

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Interface problem of particular importance_

Ink, Dwight A., Assistant Director for Executive Management, Office of

Management and Budget:

Oral statement:

New Office of Management and Budget (OMB).

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ADPE inventory system for Government_

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Ink, Dwight A., Assistant Director for Executive Management, Office of
Management and Budget-Continued

Oral statement-Continued

Conference conclusions_

BOB Bulletin 70-9_.

Amended BOB Circular No. A-11.

Prepared statement of Dwight A. Ink.

Recommendations No. 6 and 7 of Subcommittee report_.
Total Federal inventory of ADPE.......

Distribution of Federal inventory according to supplier.
Equipment in hands of contractors.

Conference convened by BOB.

Conference recommendations.
Comments on recommendations_.

Interrogation:

NBS resources inadequate_

NBS appropriation cut for ADP work
Justification for funds for interface_

Total expenditure for ADPE..

$1.9 billion spent for ADPE in Government inventory_

Communications ADPE, etc., not included in inventory.
Costing ADPE in systems..

Overall cost of ADPE__

BOB puts total ADPE cost-$2.19 billion.

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Inventory report of Government ADPE filed with committee_
Reliability of ADPE costs_

Government-owned ADPE only included in inventory.

85 percent of ADPE costs for ĎOD, AEC, and Space_
ADPE included and omitted from DOD figures_.

Weapons' systems ADPE not included..

General purpose ADPE on ships are included_

Military process computers omitted..

History of Government participation in use of ADPE.
Growth in use of computers--.

Suppliers of ADPE to the Government.
Impact of delay on interface problem – –

Records kept by subcontractors vs prime contractors_

Use of breakout idea for other equipment purchases_
Lack of in-house capability in Government_
Need to know item costs..

Possible foot-dragging on interface standards.
Influence of industry in making standards__

Private industry has no veto... ....

Government know-how in making standards.

Dependence on external ideas by NBS.

Need for computer costs and analyses.

Role of Office of Management and Budget (OMB).

Government equity in ADPE procured by contractors

Potential savings from interface standards.

National Census of ADPE by selected years.

Federal inventory of ADPE by suppliers...

Government ownership versus private ownership of ADPE.

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Government owned 12 to 15 percent of National Census in 1962.
Government impact on industry development-

Steps taken by agencies in renting or buying ADPE.

Decisions by OMB_

Expertise in OMB.

Staff in OMB...

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Lack of data on total Government ownership of ADPE..
IBM's new 370 series_

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