and facilities at the former Bethlehem Shipyard in Quincy, Mass. The yard had been purchased from Bethlehem by General Dynamics. Unfortunately, General Dynamics refused to pay the sum the GSA Administrator concluded was the fair market value for the Government property, despite extensive negotiations. The subcommittee objected to the sale on the basis that the price was inadequate.

(b) Benefits. After a delay of about a year, General Dynamics agreed to pay the estimated fair market value, thus increasing the Government's return on the property in the sale in the sum of $500,000. IV. Committee Prints

None.

V. Prior Activities of Current or Continuing Interest

1. Federal Internal Audit Systems.

(a) Summary.-Under a working relationship with the Comptroller General, a Government-wide review of internal audit systems is underway. Upon completion of General Accounting Office field work, the subcommittee will undertake necessary hearings or whatever other action is necessary to bring all Federal internal audit systems up to optimum level of efficiency.

(b) Benefits.-The subcommittee continues to maintain an active interest in the development of more effective internal audit systems in the departments and agencies of the Government. Specific estimates of savings resulting from subcommittee action in this area cannot be made. However, as these management control systems work directly to improve the effectiveness and efficiency of the organization of which they are a part, it is manifest that the activities of the subcommittee in this field bring about substantial savings annually through increased efficiency throughout the Federal Government.

2. FAA Air Traffic Control Operations.

(a) Summary.-For the past 14 months, the subcommittee has devoted a substantial portion of its time in preparation of a fundamental review of FAA air traffic control operations. An effective air traffic control system is crucial to the economy of the Nation and the lives of thousands of people depend upon such a system operating at optimum efficiency. For the past 8 years, FAA has been developing a new automated air traffic control system to meet the increasing traffic flow of the 1970's. This program is years behind schedule and is confronted by extremely difficult technical problems which have yet to be resolved. (b) Benefits.-Aside from a more efficient and effective operation of air traffic control with financial benefits that cannot be estimated at this time, the principal value of this investigation is the lives of the people who might be saved through improvements in the air traffic control system.

3. ADP Management

(a) Summary. Following approval of Public Law 89-306 in October 1965, significant savings in Federal funds accrue annually as a result of increased efficiency in the management of Federal computers. Implementation of this business-like system of computer management continues with emphasis changing to the more efficient exploitation of

computer usage as contrasted to the management of computers. With improvements in the management, broader areas involving the more efficient application of computers have thus come within the purview of the subcommittee.

(b) Benefits. Total annual cost reductions flowing from Public Law 89-306 are in the order of $450 million annually. The cost reductions that have accumulated up to this time, including the period of the subcommittee's investigation prior to passage of the bill, fall into the area of between $1.2 and $1.7 billion.

As computer usage continues to grow in Government, Federal outlays for computer services will reflect the increasing impact of the basic efficiencies of this legislation. Even under the most optimistic circumstances, giving every consideration to other forces that might have developed to push Federal procurement management in the proper direction, it can be said with almost absolute certainty that but for the work of the Government Activities Subcommittee and the enactment of this legislation, the present budget would be from $200 to $400 million higher as various agencies through uneconomic leasing arrangements continued to pay for computer systems over and over again and agencies began to acquire additional systems when computer capacity to meet their needs already existed in the Government.

VI. Projected Program for Remainder of 91st Congress

During the last session of Congress, the subcommittee undertook a program by program review of all the activities of all the departments and agencies under its jurisdiction. Following this review, areas requiring priority of investigation were determined. These were as follows:

1. Air traffic control in the Federal Aviation Administration. 2. The operations of the Renegotiation Board.

3. The management and exploitation of computers in the Federal Government.

4. The development of more effective internal audits in Federal departments and agencies.

5. Development of an effective program in the Department of Transportation covering the transportation of hazardous

materials.

During the remainder of the 91st Congress, the subcommittee will continue to work in these priority areas as well as develop other areas of study and investigation that circumstances suggest merit subcommittee consideration.

INTERGOVERNMENTAL RELATIONS SUBCOMMITTEE

Hon. L. H. FOUNTAIN, CHAIRMAN

I. Investigations

A. INVESTIGATIONS RESULTING IN FORMAL REPORTS

1. "Deficiencies in Administration of Federal Insecticide, Fungicide, and Rodenticide Act." House Report 91-637, November 13, 1969. Eleventh Report by the Committee on Government Operations. (a) Summary. This report examines administration by the Department of Agriculture of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). The act, which provides for regulation of pesticides by the Department of Agriculture (USDA), was enacted in 1947. The act prohibits shipment of pesticides in interstate commerce unless they are registered by the Department; pesticide products may not be registered unless there is adequate evidence they are safe and effective when used as directed. The law authorizes seizure and removal from the market of products which are not registered or otherwise in violation of the act, and provides criminal penalties for persons responsible for interstate shipment of such products.

Primary responsibility for administration of the act is assigned to the Pesticides Regulation Division (PRD) of USDA's Agricultural Research Service. PRD has separate branches for Registration and Enforcement activities.

The report concludes that the Pesticides Regulation Division had "failed almost completely" until mid-1967 to enforce provisions of FIFRA intended to protect the public from illegal marketing of hazardous and ineffective pesticides. Prior to mid-1967, the report found, no attempt was made to systematically remove illegal pesticides from marketing channels when PRD inspectors located samples of such products. Despite evidence of repeated violations by some shippers, not one criminal prosecution had been initiated for more than

10 years.

The report found that significant improvements in enforcement procedures had been made since the appointment in 1967 of Lowell E. Miller as PRD's Assistant Director for Enforcement. These included establishment of procedures for recall action and multiple seizures to remove illegal products from marketing channels and adoption of operating guidelines for initiation of criminal prosecution.

While enforcement procedures have been improved, the report found that serious deficiencies in registration procedures and related activities still existed. Specific findings included the following:

Numerous pesticide products were approved for sale by PRD over unresolved safety objections of the Department of Health, Education, and Welfare. The exact number of such products now on the market

is not known because PRD kept no record and failed or even refused to inform HEW of the action taken on objections.

Although an interdepartmental agreement provides for unresolved objections by HEW to be referred to the Secretary of Agriculture before the product involved is registered, not one of more than 1,600 such objections over a 5-year period was so referred.

PRD has approved pesticide products for uses which it knew or should have known were practically certain to result in illegal adultera

tion of food.

Pesticide products have been approved for marketing with inadequate labeling; in some instances, directions for using pesticide products directly contradicted warning notices on the same label.

Although PRD regarded its arrangements for obtaining information on pesticide poisonings as working well, it received reports on only 163 pesticide poisonings in 1968. Other Federal agencies received about 5,000 such reports and the total number of pesticide poisonings is estimated to be as high as 40,000 or 50,000 annually.

PRD has had specific authority for more than 5 years to cancel registrations of pesticides believed to be unsafe or ineffective, but has never secured cancellation of a registration in a contested case. Until late 1969 PRD did not even have procedures for conducting hearings in cancellation proceedings; when registrants receiving cancellation notices requested hearings, cancellation action was halted indefinitely and the product left on the market.

In some instances, PRD knowingly left illegal and potentially bazardous products on the market.

PRD has no procedures for warning the public when it learns of possible hazards relating to particular pesticide products.

In addition to serious deficiencies in procedures for regulation of pesticides, the report found that the Agricultural Research Service had failed to take proper precautions to prevent possible conflicts of interest. It gives details of three separate situations disclosed by the subcommittee investigation involving possible violations of Federal conflict of interest laws. All three situations involve persons affiliated with the same private firm, and all three have been or are being referred by the Department of Agriculture to the Department of Justice.

The report makes detailed recommendations for action by the Department of Agriculture to correct the deficiencies disclosed by the subcommittee investigation.

(b) Benefits. It is anticipated that the report will result in significant improvement in administration of the act by the Department of Agriculture, thereby providing the public with substantially greater protection against hazardous and ineffective pesticides. It is further anticipated that the report will result in strengthening of procedures designed to guard against conflicts of interest.

(c) Hearings. Two days of hearings were held on May 7 and June 24, 1969. The hearings have been printed.

2. "Accident and Injury Data (Adequacy of Arrangements by Federal Departments and Agencies for Collecting and Utilizing Accident and Injury Data)". House Report No. 91-775, December 19, 1969. Nineteenth Report by the Committee on Government Operations.

(a) Summary.-After a previous investigation disclosed serious deficiencies in arrangements used by the Department of Agriculture's Pesticides Regulation Division to obtain information concerning pesticide poisonings, the subcommittee initiated a further inquiry for the purpose of determining the nature and extent of information available concerning accidents and injuries resulting from other potentially hazardous substances or products. The subcommittee investigation disclosed that there was no central source for adequate information of this type within the Federal Government, and that data which was available was frequently not being used. It further disclosed that significantly more useful data could be obtained at little or no additional cost through minor changes in existing programs.

(b) Benefits. It is anticipated that the investigation will result in significant improvements in arrangements for collecting accident and injury data, thereby providing information needed by Federal agencies to provide greater protection to the public from injuries attributable to hazardous products and substances.

(c) Hearings. A public hearing was held on June 26, 1969. The hearing has been printed.

B. OTHER INVESTIGATIONS

1. Safety and Effectiveness of Drugs.

(a) Summary.-The subcommittee has conducted a comprehensive and intensive investigation of Government activities to assure the safety and effectiveness of drugs. Primary attention has been given to the activities of the Food and Drug Administration since that agency bears the major portion of the Federal Government's responsibility in this sphere. Attention has also been given to the relevant activities of other Government agencies as well as nongovernmental organizations and groups concerned with drugs, with particular emphasis on their relationship to the Food and Drug Administration.

The investigation has included a study of the roles of these agencies and organizations in assuring the safety of drugs and a detailed examination of the following activities of the Food and Drug Administration: (1) Monitoring the use of investigational drugs in humans; (2) evaluating the safety and effectiveness of new drugs for marketing; (3) maintaining surveillance over the safety of new drugs subsequent to their marketing; (4) implementation of the effectiveness provisions of the Kefauver-Harris Drug Amendments Act of 1962; (5) monitoring drug-manufacturing practices; (6) monitoring the advertising and promotion of prescription drugs; and (7) controlling drug abuse.

The subcommittee has also examined in detail the activities of the Federal Trade Commission to prevent fraudulent or deceptive acts in the advertising and promotion of nonprescription drugs.

The subcommittee has heard witnesses from the Food and Drug Administration, the Federal Trade Commission, the National Institutes of Health, the Department of Medicine and Surgery of the Veterans' Administration, the American Medical Association, the Pharmaceutical Manufacturers Association, the American Pharmaceutical Association, and individual drug companies.