In general, we believe special justification is required before the Federal Government undertakes to produce an end product in Federally constructed, owned and operated pilot plants. The objectives of most Federal programs would be better served by the usual approach of contracting with private industry for the desired end product, even in experimental quantities. Such contracting avoids additional expense or difficulty in transferring plants or "know how" to the industry that could result if production processes are developed in Federal pilot plants. Contracting with industry, after competitive bidding, will bring about a sharing, between the Federal Government and industry, of the risk of developing production processes; Federal pilot plant construction and operation places the entire risk upon the Federal Government. In general, it is more appropriate for private industry to share experimental development risks because of the benefit industry will receive if the experimental program is successful. In many cases, the successful bidders may be able to develop a commercial market while meeting their contract, thus providing earlier commercial benefit to the industry than would be available if Federal funds are devoted to Federally owned plants. Contracting for operation of production plants will not as effectively transfer "know how" to industry, will not have the potential benefit of attracting private capital, and will not have the potential benefit of simultaneous development of a commercial market. However, this instance differs from ordinary production processes because the end product must be fit for humans to eat. In order to protect the public interest, as this new and promising source of protein is being developed, it may be desirable for the Federal Government to experiment with fish meal production processes. The knowledge gained from such experimentation could be used in establishing performance standards for all commercial production of fish protein concentrate for human consumption. Therefore, we have no objection to authorizing an intermediate experimental plant for the production of fish protein concentrate. Accordingly, we would have no objection to enactment of this legislation if it is amended to authorize the Secretary of the Interior to build a single experimental plant, at a cost not exceeding $1,000,000, for the production of fish protein concentrate. Please consider the above comments as also expressing the views of this Department concerning H.R. 12269 and H.R. 14699, related bills in this same area. We have been advised by the Bureau of the Budget that there would be no objection to the submission of our report to the Congress from the standpoint of the Administration's program. Sincerely, ROBERT E. GILES, B-157927. Hon. EDWARD A. GARMATZ, COMPTROLLER GENERAL OF THE UNITED STATES, Chairman, Committee on Merchant Marine and Fisheries, DEAR MR. CHAIBMAN: This is in reply to your letter of February 7, 1966, requesting our comments on H.R. 12269, 89th Congress, a bill to authorize the Secretary of the Interior to develop, through the use of experiment and demonstration plants, practicable and economic means for the production by the commercial fishing industry of fish protein concentrate. Section 2(a) of the proposed legislation would authorize the Secretary of the Interior to provide for the construction, operation, and maintenance of not to exceed five experiment and demonstration plants for the production of a fish protein concentrate, which is intended for human consumption. In producing fish protein concentrate for human consumption the use of whole fish is contemplated. However, it appears from the hearings on Fish Protein Concentrate before the Subcommittee on Merchant Marine and Fisheries. Senate Committee on Commerce. 88th Congress, 2nd session, page 18, that the Food and Drug Administration initially expressed an opinion that fish protein concentrate from whole fish would violate section 402(a)(3) of the Federal Food, Drug, and Cosmetic Act, and that on January 25, 1962, the FDA issued a modified defini tion and standard of indentity for fish protein concentrate that did not permit the use of whole fish. It is our understanding that as of February 15, 1966, the Food and Drug Administration has not approved whole fish protein concentrate for human consumption. Accordingly, you may wish to consider amending this section of the bill to provide for deferment of plant construction until such time as the Secretary of the Interior shall ascertain that the Food and Drug Administration will approve a whole fish protein concentrate for human consumption. Section 2(b) authorizes the Secretary to enter into a contract or contracts for the construction of the plants and for the operation and maintenance thereof. Each operation and maintenance contract is to provide for the compilation by the contractor of complete records with respect to the operation, maintenance, and engineering of each plant constructed. We understand the term "complete records," as used in the section, to include financial records relating to the cost of operation and maintenance; however, to remove any doubt in the matter, we suggest amendment of the section to specifically require the contractor to maintain appropriate cost records. We further suggest the section be amended to provide that the Comptroller General of the United States or his duly authorized representative shall have access to all pertinent records for the purpose of audit and examination. Section 2(e) of the bill states that fish protein concentrate produced under this act may be sold under title I or IV of Public Law 480, Eighty-third Congress, which provides for the sale of surplus agricultural commodities in foreign countries. In the absence of language in section 2(e) providing for the disposition of funds received from sales in foreign countries, the applicable provisions of Public Law 480 would appear to be controlling. Should your Committee desire to otherwise provide for the disposition of the funds thus generated. specific provisions therefor should be included in section 2(e). Chairman, Committee on Merchant Marine and Fisheries, DEAR MR. CHAIRMAN: Pursuant to request of Mr. Ned Everett of your committee's staff there is set forth below a suggested amendment to H.R. 12269, for the purpose of including an access to records clause recommended in our report of February 21, 1966 (B-157927), The proposed amendment would on page 3 of the bill, section 2, redesignate subsection (c), (d) and (e) as (d), (e) and (f), respectively, and add a new subsection (e) as follows; “(e) All contracts entered into pursuant to subsection (b) of this section shall include a clause to the effect that the Comptroller General of the United States or any of his duly authorized representatives shall until the expiration of three years after final payment have access to and the right to examine any directly pertinent books, documents, papers, and records of the contractor or any of his subcontractors engaged in the performance of and involving transactions related to such contracts or subcontracts,” Sincerely yours, FRANK H. WEITZEL, Acting Comptroller General of the United States. COMPTROLLER GENERAL OF THE UNITED STATES. Washington, DC., May 13, 1966. Hon. EDWARD A. GARMATZ, Chairman, Committee on Merchant Marine and Fisheries, House of Representatives, DEAR MR. CHAIRMAN: Your letters of April 1, April 7, and May 2, 1966, transmitted copies of H.R. 14145, H.R. 14268, HÄR 14699), and H.R. 13722, respectively. and requested our views and recommend. hereon. The bills would author ize the Secretary of the Interior to develop through the use of experiment and demonstration plants, practicable and economic means for the production by the commercial fishing industry of fish protein concentrate for human consumption. The bills are similar to each other and to H.R. 12269, subject to our report to you dated February 21, 1966, B-157927, and our supplemental letter of March 11, 1966, B-157927. We have no firsthand information as to the necessity for or desirability of promoting experimentation in and the development of production of fish protein concentrate for human consumption. Hence, and since the legislation, if enacted, would not affect the functions and responsibilities of our Office, we have no comments with respect to its merits or recommendations regarding its enactment. However, we have the following comments concerning specific provisions of the bills. Section 2(a) of H.R. 14145 would authorize the Secretary of the Interior to provide for the construction, operation, and maintenance of not to exceed three experiment and demonstration plants for the production of a fish protein concentrate, which is intended for human consumption. Section 2(a) of H.R. 14268 and H.R. 13722 provides for one such plant for the same purpose, while H.R. 14699 provides for "a sufficient number" thereof. In producing fish protein concentrate for human consumption the use of whole fish is contemplated. However, it appears from the hearings on Fish Protein Concentrate before the Subcommittee on Merchant Marine and Fisheries, Senate Committee on Commerce, 88th Congress, 2nd session, page 18, that the Food and Drug Administration initially expressed an opinion that fish protein concentrate from whole fish would violate section 402(a)(3) of the Federal Food, Drug, and Cosmetic Act, and that on January 25, 1962, the FDA issued a modified definition and standard of identity for fish protein concentrate that did not permit the use of whole fish. It is our understanding that as of April 14, 1966, the Food and Drug Administration has not approved whole fish protein concentrate for human consumption. Accordingly, you may wish to consider amending this section of the bills to provide for deferment of plant construction until such time as the Secretary of the Interior shall ascertain that the Food and Drug Administration will approve a whole fish protein concentrate for human consumption. Section 2(a) of the H.R. 14145 further provides that the plants authorized to be constructed thereby shall be designed "to produce at least one thousand tons of such fish protein concentrate for large-scale nutritional projects addressed to human protein malnutrition as soon as possible, in order to meet the needs, in line with the resolution adopted by the Food and Nutrition Board, Advisory Committee on Marine Protein Resource Development, National Academy of Sciences-National Research Council." Since the bill does not identify a specific resolution, we informally contacted the Bureau of Commercial Fisheries and were advised that the resolution shown on page 2975 of the Congressional Record, 89th Congress, dated February 16, 1966, was probably the resolution referred to in the bill. This resolution, which was adopted by the National Academy of SciencesNational Research Council on October 14, 1965, recommended the construction of a suitable pilot plant for fish protein concentrate and stated that: "The Committee recommends that the United States Government, through the appropriate agency or agencies, fund and arrange for the production of a fish protein concentrate suitable for human consumption to the extent that 3,000 tons of such product will have been made available for large scale nutritional projects addressed to human protein malnutrition within 2 years from this date, or as soon thereafter as possible. The Committee believes that this can be done most effectively by the construction and operation of an experimental pilot plant scale installation, based on the Bureau of Commercial Fisheries process, which can produce about 10 tons of product a day from whole hake. The plant and the production should be under the operational control of the Bureau of Commercial Fisheries, Department of the Interior. This size of plant is also required for further experimentation on the technology of the process so that scale up to an industrial scale by private industry can be more readily accomplished." Since the provision of the bill, when read in conjunction with the above resolution, could be misinterpreted in regard to the number of plants to be constructed, the capacity of each plant, and the period of time that each plant is to operate to produce the desired tonnage of concentrate, the committee may wish to delete the reference to the resolution and incorporate the essential portions of the resolution which would state the committee's intent. Section 2(b) of each bill authorizes the Secretary to enter into a contract or contracts for the construction of the plant or plants authorized to be constructed by section 2(a) and to enter into a separate contract or contracts for the operation and maintenance of such plants. Each operation and maintenance contract is to provide for the compilation by the contractor of complete records with respect to the operation, maintenance, and engineering of each plant constructed. We understand the term "complete records," as used in this section, to include financial records relating to the cost of operation and maintenance; however, to remove any doubt in the matter, we suggest amendment of the section to specifically require the contractor to maintain appropriate cost records. This may be accomplished by inserting "(including cost data)" in the second sentence of section 2(b) of each bill, between the words "complete records" and "with" (line 3, page 3, of H.R. 14145; line 17, page 2, of H.R. 14268; line 21, page 2, of H.R. 13722; line 22, page 2, of H.R. 14699). We further suggest that section 2 of each bill be amended to provide that the Comptroller General of the United States or any of his duly authorized representatives shall have access to all pertinent records for the purpose of audit and examination. This recommendation could be satisfactorily effectuated by adding a new subsection (c) to section 2 of each bill as follows, and appropriately relettering the existing subsection (c) and succeeding subsections of section 2: "(c) All contracts entered into pursuant to subsection (b) of this section shall include a clause to the effect that the Comptroller General of the United States or any of his duly authorized representatives shall until the expiration of three years after final payment have access to and the right to examine any directly pertinent books, documents, papers, and records of the contractor or any of his subcontractors engaged in the performance of and involving transactions related to such contracts or subcontracts." Section 2(e) of H.R. 14145 states that fish protein concentrate produced thereunder may be sold under title I or IV of Public Law 480, Eighty-third Congress, which provides for the sale of surplus agricultural commodities in foreign countries. In the absence of language in section 2(e) providing for the disposition of funds received from sales in foreign countries, the applicable provisions of Public Law 480 would appear to be controlling. Should your committee desire to otherwise provide for the disposition of the funds thus generated, specific provisions therefor should be included in section 2(e) of this bill. Section 2(e) of H.R. 14699 provides that the concentrate produced thereunder may be sold in accordance with the provisions of the Food for Freedom Act of 1966. Since none of the four bills bearing this title which have been introduced to date (H.R. 12785; H.R. 13441; H.R. 13667 and S. 2933) has been enacted into law, the committee may desire to consider amending this section to specifically state therein the method of disposition desired, together with the method of disposing of any funds obtained thereby. H.R. 14268 and H.R. 13722 contain no provision for the disposition of the fish protein concentrate to be produced in the plant authorized thereby to be constructed. The committee may wish to amend these bills by stipulating the method of disposing of the concentrate, together with the disposition of any funds resulting therefrom. Sincerely yours, Assistant Comptroller General of the United States. Hon. EDWARD A. GARMATZ, COMPTROLLER GENERAL OF THE UNITED STATES, Chairman, Committee on Merchant Marine and Fisheries, DEAR MR. CHAIRMAN: By letter of July 1, 1966, you requested our views on H.R. 16095, 89th Congress, and S. 2720, an identical bill passed by the Senate. The bills would authorize the Secretary of the Interior to develop, through the use of experiment and demonstration plants, practicable and economic means for the production by the commercial fishing industry of fish protein concentrate. They are similar to H.R. 14145, H.R. 14268, H.R. 14699 and H.R. 13722, subject to our report to you dated May 13, 1966. While we have no special information as to the desirability of this measure and, therefore, make no comments regarding its merits, we bring to your attention certain matters for your consideration. Section 2(b) of the bills authorize the Secretary to enter into a contract or contracts for the construction of the plants authorized to be constructed by section 2(a) and to enter into a separate contract or contracts for the operation and maintenance of such plants. Each operation and maintenance contract is to provide for the compilation by the contractor of complete records with respect to the operation, maintenance, and engineering of each plant constructed. We understand the term "complete records," as used in this section, to include financial records relating to the cost of operation and maintenance; however, to remove any doubt in the matter, we suggest amendment of the section to specifically require the contractor to maintain appropriate cost records. This may be accomplished by inserting “(including cost data)" in the second sentence of section 2(b) between the words "complete records” and “with.” We further suggest that section 2 be amended to provide that the Comptroller General of the United States or any of his duly authorized representatives shall have access to all pertinent records for the purpose of audit and examination. This recommendation could be satisfactorily effectuated by adding a new subsection (c) to section 2 as follows, and appropriately relettering the existing subsections (c) and (d). "(c) All contracts entered into pursuant to subsection (b) of this section shall include a clause to the effect that the Comptroller General of the United States or any of his duly authorized representatives shall until the expiration of three years after final payment have access to and the right to examine any directly pertinent books, documents, papers, and records of the contractor or any of his subcontractors engaged in the performance of and involving transactions related to such contracts or subcontracts." Our comments of May 13, 1966, suggested that the Committee may wish to consider deferment of plant construction for the production of a fish protein concentrate until the Secretary of the Interior determines that the Food and Drug Administration will approve a whole fish protein concentrate for human consumption. It is our understanding that as of July 26, 1966, the Food and Drug Administration has not yet given its approval. The bills contain no provision for the disposition of the fish protein concentrate to be produced in the plant authorized thereby to be constructed. The Committee may wish to amend the bill upon which favorable action is taken by stipulating the methods of disposing of the concentrate, together with the disposition of any funds resulting therefrom. Sincerely yours, FRANK H. WEITZEL, Assistant Comptroller General of the United States. GENERAL SERVICES ADMINISTRATION, Hon. EDWARD A. GARMATZ, Chairman, Committee on Merchant Marine and Fisheries, House of Representatives, Washington, D.C. DEAR MR. CHAIRMAN: Your letter of January 27, 1966, invited any comments the General Services Administration may care to offer on H.R. 12269, 89th Congress, a bill "To authorize the Secretary of the Interior to develop, through the use of experiment and demonstration plants, practicable and economic means for the production by the commercial fishing industry of fish protein concentrate.”. The purpose of the bill is stated in the title. Section 2(c) of the bill would provide that each plant and its equipment constructed by the Secretary pursuant to the measure would, upon the expiration of a period deemed adequate by the Secretary for experiment and demonstration purposes, but not to exceed ten years from the enactment of the bill, be disposed of in accordance with the applicable provisions of the Federal Property and Administrative Services Act of 1949, 63 Stat. 377, as amended. GSA has no objection to the enactment of H.R. 12269. |