INTERIM REPORT ON THE USE OF ELECTRONIC DATA PROCESSING EQUIPMENT IN THE FEDERAL AGENCIES COMMITTEE ON POST OFFICE AND CIVIL SERVICE HOUSE OF REPRESENTATIVES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP66B00403R000300330005-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 9
• Document Creation Date: December 23, 2016
• Document Release Date: March 6, 2014
• Sequence Number: 5
• Publication Date: August 1, 1963
• Content Type: OPEN SOURCE

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88th Congress, 1st Session
Union Calendar No. 259
- House Report No. 627
INTERIM REPORT ON THE USE OF
ELECTRONIC DATA PROCESSING EQUIPMENT
IN THE FEDERAL AGENCIES
COMMITTEE ON POST OFFICE AND
CIVIL SERVICE
HOUSE OF REPRESENTATIVES
AUGUST 1, 1963
AUGUST 1, 1963.?Committed to the Committee of the Whole House
on the State of the Union and ordered to he printed
U.S. GOVERNMENT PRINTING OFFICE
99006 WASHINGTON: 1968
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COMMITTEE ON POST-OFFICE AND CIVIL SERVICE
TOM MURRAY, Tennessee. 'Chairman
JAMES H. MORRISON, Louisiana
THADDEUS J. DULSKI, New York
DAVID N. HENDERSON, North Carolina
ARNOLD OLSEN, Montana
MORRIS K. UDALL, Arizona
DOMINICK V. DANIELS, New Jersey
LINDLEY BECKWORTA, Texas
HARLEY 0. STAGGERS, West Virginia
ROBERT N. C. NIX, Pennsylvania
JOE R. POOL, Texas
ALBERT W. WATSON, South Carolina
EDWARD R. ROYI3AL, California
CHARLES H. WILSON, California
ROBERT I. CORBETT, Pennsylvania
H. R. GROSS, Iowa
JOEL T. BROYHILL, Virginia
AUGUST E. JOHANSEN, Michigan
GLENN CUNNINGHAM, Nebraska
GEORGE M. WALLHAUSER, New Jersey
ROBERT R. BARRY, New York
KATHARINE ST. GEORGE, New York
EDWARD J. DERWINSKI, Illinois
ROBERT F. ELLS WORTH, Kansas
HOMER E. ABELE, Ohio
SUBCOMMITTEE ON CENSUS AND GOVERNMENT STATISTICS
ARNOLD OLSEN,
HARLEY 0. STAGGERS, West Virginia
JOE R. POOL,' Texas
ALBERT W. WATSON, South Carolina
EDWARD R. ROYBAL, California
CHARLES H. WILSON, California
Tom MURRAY, Tennessee
Montana, Chairman
AUGUST E. JOHANSEN, Michigan
GLENN CUNNINGHAM, Nebraska
KATHERINE ST. GEORGE, New York
ROBERT F. ELLSWORTH. Kansas
HOMER E. ABELE, Ohio
Ex Officio Members
ROBERT J. CORBErf, Pennsylvania
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LETTER OF TRANSMITTAL
HOUSE OF REPRESENTATIVES,
COMMITTEE ON POST OFFICE AND CIVIL SERVICE,
Washington, D.C., August 1, 1963.
Hon. JOHN W. MCCORMACK,
Speaker of the House of Representatives,
Washington, D.C.
DEAR MR. SPEAKER: At the direction of the Committee on Post
Office and Civil Service, House of Representatives, Tam transmitting
herewith a report oi our Subcommittee on Census and Government
Statistics.
This interim report provides information on the acquisition and use
of electronic data processing (EDP) in the Federal agencies. It points
out the need for certain improvements in the management of this new
technology and recommends that the President authorize the Director
of the Bureau of the Budget to evaluate the present EDP policies and
practices in the Federal agencies and to develop guidelines for future
policy on EDP.
Sincerely yours,
Tom MURRAY, Chairman.
UI
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LETTER OF SUBMITTAL
HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON CENSUS AND
GOVERNMENT STATISTICS,
COMMITTEE ON POST OFFICE AND CIVIL SERVICE,
- August 1, 1963.
Hon. Tom MURRAY,
Chairman, Committee on Post Office and Civil Service,
House of Representatives, Washington, D.C.
DEAR Mn. CHAIRMAN: The Subcommittee on Census and Govern-
ment Statistics, under authority of House Resolution 151 of the 88th
Congress, is continuing with its investigative studies of the use of
.electronic data processing (EDP) equipment in the Federal agencies.
This subcommittee first reported on, Federal agency use of EDP in
?the 86th Congress in its "Report on the Use of Electronic Data
Processing Equipment in the Federal Government," released in
August 1960.
The present report is an interim one and will be followed by a final
report to be issued later this year. This interim report summarizes
briefly the results of the subcommittee's findings based on hearings
held with all of the Federal agencies using EDP. The report concludes
with a recommendation to the President that he authorize the Director
.of the Bureau of the Budget to evaluate present EDP policies and
practices in the Federal agencies and to develop guidelines for future
-policy. The subcommittee also recommends that the Director of
the Budget submit a report to the President and to Congress on or
before June 30, 1964, making recommendations "for such adminis-
trative and legislative changes as are determined to be in the public
interest."
Sincerely yours,
ARNOLD OLSEN, Chairman.
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Union Calendar No.259
88TH CONGRESS HOUSE OF REPRESENTATIVES j REPORT
1st Session f No. 627
INTERIM REPORT ON THE USE OF ELECTRONIC DATA
PROCESSING EQUIPMENT IN THE FEDERAL AGENCIES
AUGUST 1, 1963.?Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. MURRAY, from the Committee on Post Office and Civil Service,
submitted the following
INTERIM REPORT
VII
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INTERIM REPORT ON THE USE OF ELECTRONIC DATA PROC-
ESSING EQUIPMENT IN THE FEDERAL AGENCIES, AUGUST
1, 1963
Our subcommittee first began its investigation of the use of elec-
tronic data processing in the Federal agencies during the 86th Con-
gress in connection with its investigative program relating to statistical
and data compilation activities. The subcommittee's "Report on the
Use of Electronic Data Processing Equipment in the Federal Govern-
ment," issued in August 1960, was the, first comprehensive study made
by any congressional committee of this subject and served to focus the
attention of Congress and the public at large on the rapidly growing
use by the Federal Government of EDP and the impact of this devel-
opment upon Federal data compilation activities and upon Govern-
ment personnel. The August 1960 report made some 21 recommenda-
tions to the Federal agencies concerning the general management and
planning of EDP systems and the personnel engaged in EDP occupa-
tions as well as the purchase, lease, utilization, and operation of these
equipments. Most of the subcommittee's recommendations were
incorporated into the Bureau of the Budget's Circular A-54 of October
14, 1961, which furnished the EDP guidelines under which the Federal
Government is operating at the present time.
The August 1960 report showed that as of June 30, 1960, the Federal
agencies had 524 electronic computers, exclusive of those used, for
tactical and classified purposes in the Department of Defense. As of
June 30, 1963, there were 1,248 such systems in use in the Federal
Government with a. total annual cost of $704 million. The range in
rental cost per month of one of these systems is from $1,000 to over
$100,000; the purchase price ranges from $25,000 to $7 million and
over. It is readily apparent from these figures that EDP has become
"big business" in the Federal Government, and informed opinion tells
us that by 1970 we can reasonably expect that this activity will triple
both in the number of installed systems and the annual cost to the
Federal Government. Essentially, what we are dealing with here is a
revolution, an electronic revolution, and there is widespread agreement
that EDP will have profound effect upon our society and our
institutions.
SUBCOMMITTEE HEARINGS
In its hearings during recent months, the subcommittee took testi-
mony from all of the Federal agencies using EDP and peripheral
equipment, as well as from private industry spokesmen representing
equipment manufacturers and equipment users. In holding the
hearings, the subcommittee set as its major purpose that of informing
the Congress about recent trends and developments in this rapidly
mushrooming activity with a view to identifying the principle areas of
difficulty encountered by the civil, military, scientific, and technical
agencies. Members of the subcommittee recognized the fact that a
1
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u yr .r...L.muinvIN intrA PROCESSING EQUIPMENT
number of mistakes had been made by the Federal agencies in attempt-
ing to develop and manage this new technology. But, of considerably
greater importance to members was the recognition of the need for
developing sound guidelines for the years ahead in view of the expected
growth of EDP applications in the Federal Government. Certainly,
it is of greatest importance that the Federal Government take a new
and high-level look at EDP now, so that past mistakes will not be
repeated in the future. It is imperative also that the Federal Govern-
ment's management of EDP be restructured so that this new science
will be accorded a higher level management direction that it has in the
past. The fact that the management of the executive branch will
depend increasingly upon EDP for decisionmaking will be a key factor
in upgrading management's organizational determinations concerning
EDP.
SPECIFIC PROBLEMS
Durinub the course of its hearings, the subcommittee's attention was
directed toward the principal trouble spots in Federal EDP manage-
ment and operations. Although the subcommittee gave considerable
attention to the much discussed problem of whether these machines
should be leased or purchased (lease versus purchase), it was quickly
recognized that excessive leasing was only one aspect of one problem
and was the result rather than the cause of poor management and
operations. Members of the subcommittee were impressed, for
instance, with the testimony of the vice president of a large insurance
company who stated that his company finds it more efficient to lease
EDP equipment. This testimony is somewhat at variance with
that of the Comptroller General who in his March 1963 report stated
that "very substantial amounts of money could be saved if the
Federal Government purchased more of its data processing equipment
needs."
In fact, in almost every, problem area identified during the sub-
committee hearings, contradictory testimony was given. Some
agencies, for instance, wanted more centralized control, others wanted
less. Some agencies testified that common machine languages
(COBOL, FORTRAN, etc.) were timesavers; others indicated that
they had not, as yet, found these languages particularly helpful.
Labor representatives told the subcommittee that EDP was displacing
large numbers of Federal workers, whereas the Civil Service Com-
mission representatives stated that "remarkably little unemployment
has been created in the Federal Government by automation!' On
the subject of standardization and compatibility, some witnesses
testified that the Federal Government was making substantial
progress in achieving greater compatibility, whereas other witnesses
believed that considerably greater Federal initiative and effort were
needed in this area.
In its hearings, the subcommittee identified a number of other
EDP problems, some of which may be only mentioned in this in-
terim report:
(1) There is a serious lack of communication between agencies
on EDP matters generally, but particularly on the manpower
and staffing problems which require special attention. i
(2) There s need for standardized auditing and reporting of
EDP utilization and performance in the agencies.
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.012.r.A.,.unviviu DATA PROCESSING EQUIPmENT
(3) Each department or agency's management approach to
EDP should be carefully reviewed; in. some cases, EDP systems
management should be placed higher in the organizational struc-
ture.
(4) Greater use should be made of competitive bidding in
EDP contracting, wherever feasible. A study is needed of sup-
pliers' pricing policies.
(5) Information available to the Government concerning de-
fense contractors' policies and practices relating to the acquisi-
tion and use of EDP equipments is not satisfactory. Since the
taxpayer pays for these costly machines, the Department of De-
fense should maintain strict control over contractors' acquisition
and use of EDP.
From the above, it will be apparent that this interim report will not
include recommendations for new legislation on EDP matters, prin-
cipally because (1) it is felt that any legislation at this time would be
premature in view of the wide disagreement both in and out of Govern-
ment as to how best to resolve a number of critical problems, and (2)
it is not clear that the executive branch does not now have ample
authority to carry through most, if not all, of the needed reforms.
It is for these reasons that the chairman and ranking minority member
of this subcommittee opposed H.R. 5171, which passed the House on
July 18, 1963.
Nonetheless, the subcommittee's findings have largely confirmed
the disclosures of the Comptroller General that the management and
utilization of EDP equipment in the Federal agencies is in need of
improvement and is sufficiently important to be called to the attention
of the President. It is pointless to attempt to place responsibility
for the present state of affairs since the mushrooming growth of this
new technology has engulfed even the best of Federal administrators.
It is of highest importance, however, that positive steps be taken at
once to bring to this problem advice and counsel of the highest author-
ity and competence. It is imperative that firm guidelines be drawn
now for the years ahead.
3
RECOMMENDATION
The subcommittee recommends, therefore, that the President
authorize the Director of the Bureau of the Budget to evaluate the
present EDP policies and practices in the Federal agencies and to
develop guidelines for future Federal policy on EDP. In conducting
the review, the Director should (1) consult widely with Members of
Congress and with representatives of the principal Federal agencies;
industry, business, labor, professional groups, and others concerned,
(2) cooperate fully with pertinent congressional committees and keep
Congress advised periodically concerning his progress, and (3) on Or
before June 30, 1964, submit a report and make recommendations to
the President and to Congress for such administrative and legislative
.changes as are determined to be in the public interest.
The subcommittee proposes. therefore, that aletter recommending
the above actions be sent by 'the chairman of the House Post Office'
and Civil- Service- Committee to ,thp:-Preaident. A draft of this pro-
poged ldthris;attitehed to this report.
The subcommittee submits this interim report for approval., for
printing as a House report and also the proposed letter to the President.
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4 USE OF ELECTRONIC DATA PROCESSING EQUIPMENT
THE PRESIDENT,
The White House,
Washington, D.C.
DEAR MR. PRESIDENT: There is enclosed a copy of House Report
No. ?, an interim report of the House Post Office and Civil Service
Committee, summarizing the results of a series of hearings conducted
by the committee's Subcommittee on Census and Government Sta-
tistics on the procurement and use of electronic data processing
equipment in the Federal Government. Your particular attention is
invited to the conclusions and recommendations set forth in the interim
report.
In 1951, there was one electronic data processing system in the
Federal Government engaged in business-type application at the
Bureau of the Census. At the close of fiscal year 1963, there were
3,248 such systems in use in the Federal Government (exclusive of
tactical and classified installations) with a total annual cost of $704
million Informed opinion tells us that by 1970 the number of
systems and the annual cost may be expected to triple. In other
words, although there has been a phenomenal growth in this activity
during the past 12 years, we are only at the threshold of startling ad-
vances and growth in this new technology. You may know that these
developments are being referred to as "the electronic revolution" and
some foresee greater impact upon our society and our institutions than
that of the 19th century industrial revolution.
The enclosed report emphasizes the need for improving the Federal
Government's management of electronic data processing and its
peripheral equipment, and for a coordinated, Government-wide
approach to the many problems faced by the Federal agencies. There
is widespread disagreement in Congress and among the agencies as
to how best to resolve such basic problems as central management,
employee dislocations, standardization and compatibility of equip-
ment and programs, the efficient utilization of installed computers,
and other matters. Because of this, this committee feels that the
enactment of legislation is undesirable at this time since it could
conceivably retard the development of this new technology especially
in its scientific and technical applications.
We believe that before Congress legislates on electronic data pro-
cessing, an opportunity should be given to the executive branch, in
the exercise of its management responsibility, to evaluate the present
system and to develop guidelines for future Federal policy. We are
therefore recommending that you request the Director of the Bureau
of the Budget to review these matters and to report to you and to
Congress, on or before June 30, 1964, with such recommendations for
management and administrative improvements, and for legislative
action, as are determined to be in the public interest. We further
recommend that, in conducting the review, the Director of the Budget
consult with Members of Congress and with representatives of the
principal Federal agencies, industry, business, labor, professional
groups, and others concerned.
Respectfully yours,
DRAFT?AUGUST 1, 1963.
TOM MURRAY Chairman.
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