OFFICE OF FEDERAL PROCUREMENT POLICY ACT OF 1973 REPORT OF THE COMMITTEE ON GOVERNMENT OPERATIONS UNITED STATES SENATE TO ACCOMPANY S. 2510 TO CREATE AN OFFICE OF FEDERAL PROCUREMENT POLICY WITHIN THE EXECUTIVE OFFICE OF THE PRESIDENT,

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000600130002-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 54
• Document Creation Date: November 17, 2016
• Document Release Date: July 13, 2000
• Sequence Number: 2
• Publication Date: February 26, 1974
• Content Type: REPORT

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V511i,
93D CONGRESS
2d Session
} e ~1 ,668
REPORT
No. 93-692
OFFICE OF FEDERAL PROCUREMENT
POLICY ACT OF 1973
REPORT
COMMITTEE ON GOVERNMENT OPERATIONS
UNITED STATES SENATE
TO ACCOMPANY
S. 2510
TO CREATE AN OFFICE OF FEDERAL PROCUREMENT POLICY
WITHIN THE EXECUTIVE OFFICE OF THE PRESIDENT,
AND FOR OTHER PURPOSES
FEBRUARY 26, 1974.-Ordered to be printed
U.S. GOVERNMENT PRINTING OFFICE
29-143 WASHINGTON : 1974
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COMMITTEE ON GOVERNMENT OPERATIONS
SAM J. ERVIN, JR.. North Carolina, Chairman
JOHN L. McCL:E1,LAN, Arkansas CHARLES H. PERCY, Illinois
HENRY M. JACKSON, Washington JACOB K. JAVITS, New York
EDMUND S. MUSKIE, Maine EDWARD J. GURNEY, Florida
ABRAHAM RIBICOFF, Connecticut WILLIAM V. ROTH, JR., Delaware
LEE METCALF, Montana BILL BROCK, Tennessee
JAMES B. ALLEN, Alabama
LAWTON CHILES, Florida
SAM NUNN, Georgia
WALTER D. HUDDLESTON, Kentuc',iy
ROBERT BLAND SMITH, Jr.. Chief Counsel and Staff Director
ELI E. NOPLEMAI, Counsel
W. P. =GOODWIN, Jr., Counsel
JANET GAY IIOLLIDAY, Chief Clerk
J. ROBERT VASTINE, Minority Counsel
BRIAN CONBOY, Jlpeciel Counsel for the Minority
W. THOMAS FOXwELI,, Staff Editor
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CONTENTS
Page
Amendment------------------------------------------------------ 1
I. Summary of the act------------------------------------------ 8
H. Need for the legislation--------------------------------------- 10
III. Cost estimates---------------------------------------------- 12
IV. Legislative history------------------------------------------- 13
The Commission on Government Procurement--------------- 13
Basis of the Commission's Recommendations---------------- 14
The Need for Central Leadership-------------------------- 14
Procurement Commission Conclusions---------------------- 15
Bills Introduced:
House of Representatives----------------------------- 16
Senate---------------------------------------------- 16
V. Section-by-section analysis of the bill--------------------------- 16
Section 1-Short Title------------------------------------ 16
Section 2-Declaration of Policy--------------------------- 16
Section 3-Findings and Purpose-------------------------- 17
Section 4-Definitions------------------------------------ 17
Section 5-Office of Federal Procurement Policy------------- 18
Section 6-Authority and Functions------------------------ 18
Section 7-Administrative Powers-------------------------- 21
Section 8-Responsiveness to Congress--------------------- 22
Section 9-Effect on Existing Laws------------------------ 24
Section 10-Effect on Existing Regulations------------------ 24
Section 11-Authorization of Appropriations---------------- 24
Section 12-Delegation----------------------------------- 25,
Section 13-Annual Pay------------------ ..--------------- 25
Section 14-Access to Information------------------------- 25
Section 15-Repeals and Amendments---------------------- 25
VI. Hearings---------------------------------------------------- 26,
Summary of Testimony----------------------------------- 26
Realignment of Authority--------------------------------- 26
General Accounting Office --------------------------------- 27
Non- Government Witnesses------------------------------ 29,
Executive Branch Positions------------------------------- 32'
VII. Discussion of key issues--------------------------------------- 36
Location of the Office------------------------------------- 37
Authority of the Office------------------------------------ 38
Size of the Office----------------------------------------- 40,
Responsiveness to Congress------------------------------- 40'
Procurement by Grantees--------------------------------- 41
VIII. Changes in existing law--------------------------------------- 42,
Appendices-------------------------------------------------- 45
(A) Extracts from the Report of the Commission on Govern-
ment Procurement------------------------------- 45
(B) Witnesses-Hearings by the Ad Hoc Subcommittee on
Federal Procurement------------------------------- 51
cm)
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~.a~e
93D CONGRESS
2d Session
SENATE
REPORT
No. 93-692
OFFICE OF FEDERAL PROCUREMENT POLICY ACT
OF 1973
Mr. GrimrES, from the Committee on Government Operations,
submitted the following
REPORT
The Committee on Government Operations, to which was referred
the bill (S. 2510), to create an Office of Federal Procurement Policy
(OFPP) within the Executive Office of the President, and for other
purposes, having considered the same, reports favorably thereon with
an amendment in the nature of a substitute and recommends that the
bill as amended do pass.
The amendment is in the nature of a substitute, as follows :
A BILL To ere ate an Office of Federal Procurement Policy within the
Executive Office of the President, and for other purposes
Be it enacted by the Senate and House of Representatives
of the United States of America in Congress assembled, That
this Act may be cited as the "Office of Federal Procurement
Policy Act of 1973".
SEc. 2. It is declared to be the policy of Congress to promote
economy, efficiency, and effectiveness in the procurement of
goods, services, and facilities by and for the executive branch
of the Federal Government by-
(1) establishing policies, procedures, and practices
which will require the Government to acquire goods,
services, and facilities of the requisite quality and within
the time needed at the lowest reasonable cost, utilizing
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competitive procurement, methods to the maximum extent
practicable;
(2) improving the quality, efficiency, economy, and
performance of Government procurement organizations
and personnel;
(3) avoiding or eliminating unnecessary overlapping
or d iiplication of procurement and related activities;
(4) avoiding or eliminating unnecessary or redun-
dant requirements placed on contractor and Federal
procurement officials;
(5) identifying gaps, omissions, or inconsistencies in
procurement laws, re?;o:lations, and directives and in
other laws, regulations, and directives, relating to or
affecting procurement;
(6) achieving greater uniformity and simplicity,
whenever appropriate,, in procurement procedures;
(r) coordinating procurement policies and programs
of the several departments and agencies;
(8) conforming procurement policies and programs,
whenever appropriate, to other established Government
policies and programs;
(9) minimizing possible disruptive effects of Govern-
ment procurement on particular industries, areas, or oc-
cupations;
( 7.0) improving understanding of Government pro-
curement laws and policies within the Government and
by organizations and individuals doing business with the
Government;
(11) promoting fair dealing and equitable relation-
ships among the parties in Government contracting; and
(12) otherwise promoting economy, efficiency, and
effectiveness in Government procurement organizations
and operations.
1INDINGS AND PURPOSE
i c. 3. (a) The Congress finds that economy, efficiency,
and effectiveness in the procurement of property and services
by the executive agencies will be improved by establishing an
agency to exercise responsibility for and direction over pro-
curemenr policies and regulations.
(b) The purpose of f is Act is to establish an Office of
Federal P rocurement Policy to provide overall leadership and
direction, through a small, highly qualified and competent
staff, for the development of procurement policies and regu-
lations for executive agencies; in accordance with applicable
laws.
r>EF12UTIO:PTS
1;c.4. (a) As used in tFis Act,-
1) the term "executive agency" means an executive
department as defined in section 101 of title 5. United
States Code, an independent; establishment as defined
by section 104 of title, 5 United States Code (except
that it shall not include -tie General Accounting Office),
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a military department as defined by section 102 of title 5,
United States Code, a wholly owned Government cor-
poration, and, subject to the provisions of subsection (b)
of this section, the District of Columbia;
(2) the term "Office" means Office of Federal Pro-
curement Policy;
(3) the term "Administrator" means the Adminis-
trator of the Office of Federal Procurement Policy; and
(4) the term "Federal assistance" means the provision
of money, services, or property to a State, political sub-
division, or person for the purpose of supporting, stim-
ulating, strengthening, subsidizing, or otherwise pro-
moting non-Federal activities benefiting a State, politi-
cal subdivision, third party, or the public generally.
(b) The Council of the District of Columbia, established
by section 401(a) of the District of Columbia Self-Govern-
ment and Governmental Reorganization Act, is authorized,
on or after the date its legislative powers under such Act
become effective, to pass an act making the provisions of this
Act inapplicable to the Government of the District of
Columbia.
OFFICE OF FEDERAL PROCUREMENT POLICY
Si~c. 5. (a) There is established within the Executive Of-
fice of the President an agency to be known as the Office of
Federal Procurement Policy. Functions exercised by the Of-
fice shall be subject to such policies and directives as the Pres-
ident shall deem necessary to effectuate the provisions of
this Act.
(b) There shall be at the head of the Office an Adminis-
trator of the Office of Federal Procurement Policy, who shall
be appointed by the President, by and with the advice and
consent of the Senate.
(c) There shall be in the Office a Deputy Administrator of
the Office of Federal Procurement Policy who shall be ap-
pointed by the President, by and with the advice and con-
sent of the Senate. The Deputy Administrator shall perform
such functions as the Administrator shall designate and shall
be Acting Administrator during the absence or disability of
the Administrator and, unless the President shall designate
another officer of the Government, in the event of a vacancy
in the Office.
AUTHORITY AND FUNCTIONS
Svc. 6. (a) The Administrator shall provide overall guid-
ance and direction of procurement policy, and to the extent
he considers appropriate and with due regard to the program
activities of the executive agencies, shall prescribe policies
and regulations, in accordance with applicable laws and, sub-
ject to section 8 (c), which shall be followed by executive
agencies (1) in the procurement of-
A) property, other than real property in being;
and B) services, including research and development;
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(C) construction, alteration, repair, or maintenance of
i eat property ,
and (2) in providing for or in connection with procurement
of items specified in (..). (.L), and (C) above, to the extent
required for herformancc of Federal assistance programs.
(b) Nothing i.n subsection (a) (2) shall be construed-
(1) to grant the Administrator authority to authorize
p+?s)cuiernent or supply support, either directly or indi-
rectly. to any recipient of Federal assistane.e; or
(2) to authorize any procurement contrary to State
an-i local laws,- in the case of programs to provide as-
i e to States and political subdivisions-
(c) ',"lie functioni; of the Administrator shall inchrde-
(1) nronitorilrg an1l revising as necessary policies and
regulations concerning the, role of the Federal Govern-
rnent and its reliance on the private sector in providing
go1rcLS and services required to meet public needs;
2) monitoring and revising as necessary policies and
re -rrlitions to protect the interests and integrity of the
1mi,li( and private s,eeto:ns in the procurement of goods
services;
and
(3) establishing a ay stem of Government-wide coordi-
ii fed and. to the extent feasible, uniform procurement
rc.! ul) prescribe policies and, regulations to be followed by execu-
tive agenc_i.es in the procurement of needed goods, services and
facilities.
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In exercising this authority, the Administrator of the Office shall
carry out the, following specific functions :
(1) monitoring and revising policies for reliance on the private
sector;
(2) monitoring and revising policies to protect the interests
of both the government and private sector;
(3) establishing a government-wide system of uniform pro-
curement regulations ;
(4) promoting the improvement of personnel programs for the
procurement work force;
(5) sponsoring research in procurement policies and practices;
(6) developing and disseminating government-wide procure-
ment, data;
(7) establishing criteria and procedures for soliciting the view-
points of all interested parties;
(8) consulting and using the capabilities of concerned execu.-
tive agencies in the development of policies and regulations.
The authority of the Administrator is specifically restricted with
respect to :
(1) authorizing procurement by recipients of Federal assist-
ance from Federal supply sources;
(2) becoming involved with individual contract award or
procurement decisions ;
(3) prescribing procedures and forms, except when necessary
for effective implementation of policies and regulations author-
ized by the Administrator ; and
(4) regulating procurement by the military departments when
financed with nonappropriated funds.
The Office is to be located in the Executive Office of the President to
enhance its effectiveness and stature. To insure responsiveness to the
Congress, S. 2510 includes several important provisions :
(1) both the Administrator and Deputy Administrator of the
Office must be confirmed by the Senate ;
(2) no officer or employee of the Office may refuse to testify
before or submit information to the Congress;
(3) the Administrator shall keep the Congress "fully and cur-
rently informed" of activities through annual reports, special re-
ports, and advance notification of proposed major policy changes;
(4) the Congress may reject any proposed major policy or reg-
ulation through a resolution passed by either Rouse; and
(5) authorization of appropriations is limited to $4 million
for the first year and to such sums as may be necessary for each
of only four years thereafter, at which time the Government Op-
erations Committee in the Senate must review the accomplish-
ments of the Office before authorizing legislation to continue its
operation.
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The bill declares that it is the. policy of the Congress to promote
economy, efficiency and effectiveness in the procurement of goods, se:?v-
ices, and facilities in the executive branch and provides a set of prin-
ciples to be followed in carrying out this policy. This is the same pot.cy
enacted in Public Law 91-129, which served the Procurement Com-
mission so well in planning and -,onducting its study of the procure-
ment process for the Cougresss.
In addition, the bill, through the creation of an Office of Federal
Procurement Policy, would provide a focus for follow-through on the
implement.ati.on of the report of the Commission on Government Pro-
curement, w:itn its 149 recommendations. The OFPP is specifically
mentioned in. 19 of the,Commiss.on recommendations, and would be
directly concerned with many more of them.
II. NEED FOR THE LEGISLATION
Despite the magnitude of the expenditures by the Federal Govern-
ment for needed goods, services and facilities (almost $60 billion an-
nually irc recent years), there is no single point in the executive branch
responsible for the policies that govern the procurement process. or
is there a focal point to meet the demands for information, guidance
and assistance from such diverse factions as small business firms, other
business interests, Government agencies, or the Congress on matters
involving government-wide procurement policies. Many segments of
Government, operating to a large extent in an uncoordinated manner,
make or strongly influence procurement policy, but there is no strong
central leadership of the segments.
The concerns voiced by the public over the past decade about the
integrity and. effectiveness of Federal procurement need no elabora-
tion. In recognition of these concerns, the Congress by passage of Pub-
lic Law 91-129 in 1969 initiated the program that led to the introduc-
tion of legislation (S. 2510) to fill the void in procurement policy
leadership and responsibility that exists in the executive branch.
The extensive hearings preceding enactment of Public Law 91-129
demonstrated beyond doubt that patchwork solutions to such perennial
procurement problems as cost overruns, poor quality, and excessive
paperwork would no longer suffice-that a comprehensive blueprint
for brinaring about fundamental reforms in the procurement process
was essential. The Commission on "Tovernment Procurement gave Con-
gress the blueprint it sought. The establishment by law of an Office of
Federal Procurement Policy, as called for in the legislation, was char-
acterized by the Chairman of the House Government Operations Coin-
mittee as the "'centerpiece" of the Procurement Commission plan for
improving tha procurement process. The Procurement Commission put
it this way :
We have placed creation of a central policy office first
among our recommendations because of its overall importance
in achieving the improvements we propose in the procure-
ment process.
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The Office is fundamental to orderly, timely implementation of the
plan provided to Congress.
The General Accounting Office, in monitoring the progress of the
executive branch in responding to the 149 Procurement Commission
recommendations, cited the long, laborious processing of the recom-
mendations. GAO referred to the executive branch program as a part-
time effort that would take at least several years to complete and rec-
ommended several steps be taken to accelerate the program. In his
testimony in support of S. 2510, the Comptroller General observed that
the evidence amassed by the Commission indicates that an effective
leadership role cannot be credibly satisfied by a low-key revitalization
of the present structure. Accordingly, it is his recommendation that
the OFPP be established by legislation now in order to provide the
executive branch with the necessary mandate, stature, authority and
continuity so essential to basic procurement reform.
Even more revealing of the need for the legislation is the statement
by the Administrator of the General Services Administration during
Senate hearings on the bill that there is no alternative to a legislatively
established OFPP. He concluded that without such an Office, the re-
forms in government procurement advocated by the Procurement Com-
mission would change from maybe 5 to 7 years to maybe 100 years.
The conclusion reached by the Committee after five days of hearings,
during which testimony was received from twenty-three witnesses,
is that legislation is essential to the establishment of an office with
sufficient stature and stability to bring about the required improve-
ments in the procurement process. Additionally, legislation is needed
to insure a high degree of responsiveness to Congress.
Basically, the legislation prescribes an organizational arrange-
ment to provide the executive branch with a focal point of leadership
and coordination where fundamental procurement policies could be
developed, debated, coordinated and, finally, published and imple-
mented by the some 20 procuring agencies with reasonable consistency
and authority. There are no direct savings associated with its estab-
lishment; however, the potential for savings as a result of the impetus
it would provide to the implementation of basic reforms in the way
procurement is done in Government is unlimited. For example, a one
percent improvement in Federal procurement would yield annual
savings of a half billion dollars, and implementation of only one of
the Commission's recommendations-increasing the small purchase
dollar ceiling for use of simplified procedures would save approxi-
mately $100 million annually.
The need for the legislation is further illustrated by the following
examples of things the OFPP could do to improve Federal procure-
ment operations :
(1) Arrest the proliferation of laws and diverse regulations and
achieve desirable uniformity.
(2) Initiate legislation to reform the presently fragmented
and outmoded statutory base for procurement policy and at the
same time consolidate or repeal the many redundant and obsolete
laws.
(3) Bring about government-wide exchange of successful ideas
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and thereby vlcreas efliciencv and economy in government op-
( at.ions.
(4) 11uild pul:lic coniidnncc in Federal procurement practices
wiu Li a vi;:ible inlproven>eni. program responsive both to the
l'residellt and the Congress.
Primarily the, needs tint have been cited for the legislation cover
h) t(le executive J rand1 a,nd the recipients of its procurement
d1o119rP. ('orlgres , too, has sevendirect and prey ,ng needs for an
OFI'P. I Uere n e five ad, rlitages t11~ t s~reh an Office would provide for
C or gr ess i sel 1.
it ,?c,,_!ulations -,w?oultl continue--tine difference would be that they
would be consistent. Under the operating concept prescribed for the
OFPP in the bill, the niajor orocuringg agencies, and particularly the
Pepartairent of Defense, could have an expanded role in setting p:co-
curemeirt policy in that the OFPP will employ them to develop pol-
icies and ra,~llations having multi-agency or government-wide
a pphcatioir.
4 r~Tn:ciitu,ATlci.r~ t>t' _Lel'EOPJUATIOXS
Section 11 n laces a limitation on the appropriations to support the
)(fide (bi inY the first; a ar after ena,?rnient of this legislation; estab-
li ;hes a snlalimitaticur cirr fruuh; 'teed for research during that year;
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be appropriated for only five year_s. Subsequent proposals for author-
ization of funcls to be appropriated are to be referred to the Govern-
ment: Operations Committed. and will be contingent on a conclusion by
the Government Operations Committee that the Office has and will
continue to promote the economy, efficiency, and effectiveness of Gov-
ernment procurement. Fiscal year funding for the Office will be a
concern of both the Government Operations and the Appropriation
Committees.
Section 12 authorizes the Administrator to delegate his functions to
personnel in his office or to executive agencies with their consent or
with the approval of the President, provided he does not delegate the,
final policy-making decision to other agencies. The Adzniiiistrator is
expected and encouraged to use the executive agencies to develop
policies and regulations, but the final approval authority cannot be
delegated. Subject to this restriction, deegation to other agencies of
technical and detailed aspects of policy development is considered a
necessary option if the Office is to operate with the small staff
envisioned by the Commission.
Section 13 places the salary of the Administrator at Executive Level
III, presently $40.000 a year. No provision is incluclcd for the salary
of the Deputy Administrator, but he is expected to be a GS-18.
ACCESS TO INFORMATION
Section 14(a) provides for the General Accounting Office to obtain
information from the OFPP and have access to its records,
Section 11(b) requires the Administrator to open to the public for-
mal, scheduled meeting, to promulgate procurement policies and reg-
nlatiolls, specifies that a ten.-day notice will be given of such meetings,
and giver, him the, authority to determine those policies and regula
tions to which this requirement is applicable. These meetings will give
the public an. additional opportunity to express their views on highly
sensitive or Significant issuances of the OFPP. This subsection corn-
plements the provisions of the bill calling for the timely, effective solic-
itation of the viewpoints of interested parties. In general, it is intended
that the affairs of the Office will be conducted so as to give maximum
practical public visibility to its rule-making activities.
REPEALS AND AMENDMENTS
Section 15 contains amendments to subordinate the General Services
Administration (GSA) and the Federal Procurement Regulations
(FPR), administered by it, to the policy direction of OFPP. The pur-
pose is to bring GSA, along with the Department of Defense (DOD),
under the authority of the OFPP.
To accomplish this, Section 15(a) of the bill amends Section 201(c)
of the Federal Property and Administrative Services Act (FPASA)
(40 U.S.C. 481(c) , which provides for agencies to exchange used for
new property "under regulations to be prescribed by the (GSA) Ad-
ministrator." Section 15(a) would add "subject to regulations pre-
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scribed by the Administrator of the Office of Federal Procurement
Policy." ,
Section 15(b) would amend Section 602(c) of the FPASA which
provides that the GSA authority "shall not be subject to the pro-
visions of any law inConsisten.t. herewith." Section 15(b) adds "except
as provided by the Office of Federal Procurement Policy Act."
VT. HEARINGS
Five. days of public hearings were held by the Ad Hoc Subcom-
mittee on Federal Pro(urement, October 31 and November 1, 2,14, and
15, during which the twenty-three witnesses shown in Appendix B
testified.
Statement, submitted for the record were received from the follow-
ing organizations :
Automotive Services Industry Association
Committee on Federal Procurement of Architect-Engineer
Services
National Office Products Association
National School Supply and Equipment Association
Smaller Business AssociatiorrL of New England
All of these statements endorsed the concept of the Office of Fed-
eral Procurement Policy as embodied in S. 2510.
Summary of Testimony: All witnesses, representing public, pri-
vate and academic viewt)oints, supported the need for an "OFPP" of
one kind or another to exercise leadership in formulating and coordi-
nating procurement policy. While there were differences as to location,
size and authority, there was agreement that improved leadership or
coordination is needed.
Industrial, professional, employee union, and independent witnesses
all supported legislation " an immediate necessity.
While agreeing with the objectives of the legislation, executive agen-
cies said it is either not necessary or should be deferred, except for
Mr. Sampson, Administrator of General Services Administration and
a member of the Commission on Government Procurement, and
Mr. Parker, Associate Administrator for Procurement and Manage-
ment Assistance, Small Business Administration, who said it would
be necessary. With those two ~-xceptions, all other executive agency
spokesmen felt that the objectives of the legislation should be accom-
plished through executiv ; branch action. This is not surprising in
view of the statement by Mr. Zarb (Office of Management and Budget)
that OMB did orchestrate the point of view of the executive agencies
in that these agencies had the benefit of OMB's testimony.
The views of :till the witnesse,3 on the key issues are summarized in
the table on page 27.
Realignment of Authority: In May, 11973, the President, by Execu-
tive Order 11717, transferred to GSA authority for a number of func-
tions, including procurement. This order established the General Serv-
ices Administration as the President's "principal instrument," under
the policy ovenii,!,ht of OMB for the development of procurement
management systeips. This was done despite the fact that GSA itself
is a major procuring agency and does not enjoy the organizational
stature or authority to give policy direction to some agencies, especially
the Department of Defense.
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27
Need Strong
Central
Need
Leadershi ?
Le illation?
When?
Location
General Accounting Office
Yes
Yes
Now
EOP
EXECUTIVE BRANCH:
Office of Management
and Bud et
Yes
Def
2
Mar.'74
OMB/GSA
De artment of Defense
Yes
3.1
01
Nov. 74
OMB
General Services
Administration
Yes
Yes
Mar.'74
EOP
Department o Health,
Education and Welfare
Yes
Defer
---
OMB/GSA
National Aeronautics and
Space Administration
Yes
Defer
---
OMB/GSA
Atomic Energy Commission
Yes
Defer
-
OMB GSA
Department of
Trans ortation
Yes
Defer
---
OMB/GSA
De artment o Agriculture
Yes,
Defer
---
Small Business
Administration
Yes
yes
-
INDUSTRY AND PROFESSIONAL
ASSOCIATIONS:
Aerospace Industries
Association
Yes
Yes
Now
EOP
ire
_ctronic Industries
Yes
Yes
Now
EOP
National Security
Industrial Association
Yes
Yes
Now
EOP
Technical Services
,Industries
Yes
Yes
Now
EOP
Pro essional services
Yes
Firms
Yes
Yes
Now
EOP
Office Machine Dealers
Yes
Yes
Now
FOP
Wholesaler- istributors
yes
Yes
Now
EOP
Scientific Apparatus
Manufacturers
Yes
Yes
Now
EOP
FEDERAL EMPLOYEE,UNIONS:
AFGE
Yes
Yes
Now
Outside EOP-
Agent o
NFFE
Yes
Yes
Now
Congress
INDEPENDENT WITNESSES:
Regulatory
American Bar Association
Yes
Yes
Now
Agency
John Cibinic (George
Washington University)
Yes
Yes
Now
EOP*
Regulatory
Matthew Perlman
Yes
Yes
Now
Agency
The proposed executive branch arrangement for achieving govern-
ment-wide direction of procurement policy is shown in Figure 1
(p. 28). This figure, which was prepared by the General Accounting
Office, also shows the structure proposed by the Procurement Commis-
sion. As will be noted from the footnote on the figure, S. 2510 would
locate the Office in the Executive Office of the President rather than
specifying OMB as the favored location. Other differences in the Pro-
curement Commission and OMB proposals are also applicable to
S. 2510.
GENERAL AGCOTINrING OFFICE
The Committee felt that key testimony was rendered by the Honor-
able Elmer B. Staats, the Comptroller General of the United States,
because of his experience on the Commission on Government Procure-
inent and GAO's government-wide perspective on procurement.
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28
COMPARISON OF MANAGEM ENT! TRIICTUBE$ PROPOSED BY COMMISSION AND OMO FOR
EXECUTIVE BRANCH IEADERSHP/COOROIWATION OF PROCUREMENT POLICY
1111! PREIII)EN1
I XEi UTIVE OFFICE OF TI{L PRESIDENT EXECUTIVE OFFICE
OF THE PRESIDENT
OMB
DIRECTOR
-
UM
W
I
FFDlRAI COUNCIL
}
'
!Mead, .f melr
~Ii1ErvY DEPUTY
-
~
'
DEPUT
Y
AIt T11~NITV
~
DRFOROR
1$
A'SIST
ANT
OF
PP
91ao MsEe
nd er1
DEP
Y. ASSISTANT
Q~mr
. rime)
TY
DIRECTOR
II, e
N.. y Ilor ru ;
.' nwr
, _J
~_1 INTERAGENCY PRCr JRFMEr.T
~-- 1 POLICY ADVISORY crzoDP_
GSA
AOMINI 11 BATOR
DEPUTY
ASSOCIATE
AUTHORITY/ ff I'ONSIVEMES,
RESI'ONSIAILITY: TO TEE CONGRESS;
rr,m eI ,RU,e.~.. minor n. M1;aa,eR Oe.a.na:
mved b; NEenAdl.'.I_.CCOS ubcnnMmm.
,Iv.r.I?. ,h. t1FPP In u?,
wxv~+innrvl m Se appinted by Ibe Pr_dmr
a tleder.l l'rv..~reni.n1(S. 15101
and M1evJs .iIM1?
n ulvl a entl cvns,en~IV1 IM1e Smsre.
fionlce: General Accounting Office Lepori to the Committee on Government Operation,,
House of Represontntlves, on the Pro;re5- of Executive Branch Action on Reeoenluend.E-
fiom of he Commission in Gov:rrnment Pr-nreinrnt, January 31. 1974.
Mre Staats strongly supported S. 2510 and stated:
The Administration acknowledges that legislation may
eventually be needed to clarii:f y the authority to issue regula-
tions binding on all agencies but feels this should be deferred
(at least until. next March) while revitalization steps pro-
ceed-including the building of an OMB staff and further
review of the. Commission's 149 recommendations e . .
It is our position, Mr. Chairman, that a clear congressional
mandate, with the stature and continuity which this would
confer, is es eutiaL
Later, Mr. Staats gave what he thought to be the "three vital con-
clusions" for corlgressiona1 consideration in these words :
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AA statutory OFPP appears essential, both to obtain
adequate action on Procurement Commission recommenda-
tions and to build public confidence in the procurement
process.
B. Senate Bill 2510 has incorporated revisions proposed in
House Bill 9059 and meets the Commission's objectives.
C. The strong leadership role to which OMB is committed
should be encouraged and would be greatly enhanced by Sen-
ate bill 2510.
Mr. Staats also pointed up a central fact that was becoming increas-
ingly apparent to the Committee:
Witnesses outside the executive branch generally feel that
further delay is not warranted and that the executive branch
will not, in fact, act unless a congressional manadate is
provided.
NON-GOVERNMENT WITNESSES
John Cibinic, Jr., an expert in contract law and Director of the
Government Contracts Program, National Law Center, at the George
Washington University, called for the immediate enactment of S. 2510.
Dr. Cibmic chastised the Congress for having taken a "wait and see"
attitude for so long, as follows :
As I sat here this morning, listening to the testimony that
has gone before and immediately preceding as well, the feel-
ing I had is that we are supposed to wait and wait and wait.
The purpose of my statement is to indicate that I think we
have waited too long already.
It was in 1966 that the Congress in a House report first rec-
ommended to the: executive branch that it do what this bill is
now stiggesting be done, I mean, ordering to be done. And I
haven't seen any action yet taken by the executive branch to
respond to those recommendations back in 1966 to establish a
Presidential group to centralize policy-making or to estab-
lish an Office of Federal Procurement Policy as recommended
by the U.S. Commission on Government Procurement. Every-
thing that I have seen and heard after the Procurement Com-
mission's report has been issued appears to me to be more of
what I like to term "the regulatory reaction syndrome." It
goes something like, do something when, somebody points a
finger at you and then when they start pointing the finger at
somebody else then you don't have to do anything more.
I just don't see any reason why Congress should wait and
be put off any longer.
The subject of Federal government contracts is so complex
and so important that an independent, centralized, on-going
policy group with authority to require procurement agency
adherence to its promulgations is absolutely necessary.
Professor Cibinic also recommended that the Committee consider
establishing the Office of Federal Procurement Policy as an independ-
ent agent of Congress if it becomes an "unwanted stepchild" in the
Executive Office of the President.
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George Al. Coburn, Secretary of the Public Contract Law Section
of the American Bar Association (ABA), stated that the policy-
making body of the ABA endorsed S. 2510 in principle. Mr. Coburn
called for legislation immediately, stating that :
. wE cannot agree that action by the President or OMB
without enabling legislation, can overcome the problems of
the procurement regulations so well identified by the report
of the Procurement Commission.
Matthew Perlman, a Washington attorney and Charles O'Connor
III, the legsi: counsel for the Sc,'entijlc Apparatus Manufacturers As
socz.at;ora both offered suggestions regarding legal terminology in the
bill. However, both agreed to the need to legislatively establish an
Office of Federal Procurement Policy. Mr. Perlman recommended that
the Committee give thought to creating the Office of Federal Procure-
ment Policy in a like manner to the Federal Power Commission or the
Federal Communications Commission in an effort to make the Office
as non-political and professional as possible.
Michael Forseey, Legislat+ve Council of the National Federation of
Federal I'm ployees, raised questions about the present executive
branch plan, stating :
Presently, two Federal agencies have primary responsi-
bility for procurement matters--the Office of Management
and Budget and the General Services Administration. For
different reasons each is uniquely unsuited to perform the
function envisioned by the Procurement Commission.
We believe the Congress has no intention of permitting
the continuation of the status quo in the procurement field by
permitting OMB to revitalize the program. But you must ask
yourself if establishing a p ?ocurement office in the executive
branch merely changes the form but not the substance.
r_7/de 31. TVebber'. President o! the dmericanFederation of Govern-
wen,t Kmido-r/ees. likewise raised the question of where to place the
OFPP. Mr. Webber's views. presented by Stephen Koczak, pinpointed
past drsagreeement with ON 13 and GSA, particularly in the area of
c?ontr^eetictrc out of support services. In his opinion, only an office out-
;,id(' the h,secutive Office of the Iresident could operate in an impartial
and objective manner.
Industrial associations which offered testimony on the creation of
an Office of Federal Procurement Policy all agreed with the objec-
tives of th,' lecislatioir. V..1.._1da' e;, President of the Electronic
Indus r ec Association, stated :
For many years we have been concerned with the prob-
loms affecting, Federal procurement. Almost four years ago
we test fied in support of the bill which established the Com-
mission en Government Procurement, and we supported its
eil'orts by nominating personnel from our industries to serve
on the study groups.
Ojw of the most important recommendations of the Com-
Wissioti--integral to many of its other recommendations-is
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that calling for the establishment of an Office of Federal Pro-
curement Policy. Many of the difficulties involved in govern-
ment procurement were attributed to both a lack of leader-
ship and to the lack of a central point of authority on basic
procurement policy. The Commission unanimously recom-
mended that such an office be established.
Other industry leaders and association representatives reiterated
Mr. Adduci's position of support. An expression of the need for an
executive branch focal point for government procurement was found
in the testimony of each industrial representative.
The President of Aerospace Industries Association of America, Inc.,
Idyl I-Iarr, Jr. repeated his commitment to procurement reform in the
government when he stated :
As I testified four years ago, the extensive complexities of
the vast buyer-seller interface emphasize the need for con-
stant reevaluation, in depth, of the basic principles which
govern the government/ industry relationship and the most
careful application of these principles to specific matters. In
short, the aerospace industry believed in 1969 that this mat-
ter alone was ample justification for the establishment of the
Commission. Now, more than ever, we feel that the procure-
ment system warrants specialized attention, both in the Con-
gress and in the executive branch.
Dice-Admiral J. M. Lyle (retired), President of the;National Se-
curity Industrial Association, called the establishment of the Office of
Federal Procurement Policy as outlined in S. 2510 "a desirable im-
provement in the government procurement process."
Admiral Lyle also suggested that, as a matter of guiding principle,
the Office should strive to achieve and maintain a proper balance be-
tween the special needs of public accountability (public officials
spending public money) and the advantageous forces of the free en-
terprise system and the commercial market place. Admiral. Lyle
concluded:
The Office should be appropriately linked with action to re-
vise the basic procurement statutes along the lines recom-
mended by the Commission on Government Procurement.
TT%illiam C. MCCamant, Executive Vice President _o f the National
Association. o f Wholesale-Distributors, stated :
Because wholesale distribution serves as a major channel
for the procurement of goods and commodities for Federal
agencies, our association has been long concerned with gov-
erninent procurement policies and practices...
Mr. McCamant urged Congress to establish an Office of Federal
Procurement Policy and to establish the concept of "lowest economic
cost"' in all procurement decisions.
John F. Ella notti, Jr., the Secretary-Treasurer of the National
Council of Professional Services Firms, stated during his testimony :
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The Office of Federal Procurement Policy would be estab-
lished within the Executive Office and thus be independent
of an,y agency with operating and procuring responsibilities.
This is essential if the Offr.-2is to function effectively. By es-
takrlish:uug the Office of Federal Procurement Policy within
the Executive Office, above the plane of operating agencies,
S. 2iI(' enhances its capability to develop a meaningful and
effective policy of reliance upon the private sector.
Edward Leeson, h'reeuti zee Ilireefor, National (,'ouncil, of Tech-
nical A'ervices Industries, declared:
Our council. solidly supports enactment of this bill. Mr.
('liai rman, and member, of the Committee, as we see the situa-
tion today, there is unanimity of 09 opinion by industry, the
Comptroller General of the T nited tates and the Commis-
sion on Government Procurement that a need exists for im-
provement in this important area of Federal procurement
policy.
N. Davie? Palmeter, the 1t'ashit?gton counsel, for the National
Office Mach-ine Dealers Association. cited the fact that the Govern-
ment is:
... a major customer for NOM DA members. We are there-
fore vitally interested in the procurement process ... Accord-
ingly, we strongly endorse the creation of an Office of Federal
Procurement Policy . . . as set forth in S. 2510.
Mr. Palmeter also recorded a "strong preference" for the creation
of an independent. Office outside GSA or OMB.
EXECUTI\E BRANCH POSITIONS
O fj`ice of Management and Budget,- During House hearings in
July, Mr. Dudley C. Mecum. Assistant Director of OMB, who was re-
sponsible for OMB's procurement efforts, requested a delay in legi~la-
tion to give the executive branch an opportunity to implement its plan,
Ile said this would be done by the end of August. Shortly thereafter,
Mr. Mecum left OMB, and his duties were incorporated under another
Assistant Director, Mr. Frank Zarb.
1)uring Senate hearings on October 31, Mr. Zarb appealed for a
delay in legislation until March, 19 1,74 so that the executive branch
could implement its plans which remained unfulfilled. Since that time,
Mr. Zarb has been reassigned.
The Chairman of the Procurement Subcommittee sumrnarized the
situation in questioning the OMB witness :
Senator CIInFs.In testimony of OMB before the house in
July, the statement, was made that the executive branch con-
cept of the Office of Federal Procurement Policy would be
fully implemented by the end of August. Your request at
that tine was that you be piven some time to prove out your
approach before legislation is considered.
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It is now almost November. How much still remains to be
implemented in your plan?
Mr. ZARB. Mr. Chairman, there has been some delay, par-
ticularly in the -area of recruiting our top team, not because
of a lack of activity on our part, but because of the rigorous
process which we are following to attempt to find the most
appropriate people to do the job.
In short, what I am saying is, our commitment is there;
our allocation of resources is there. We are moving forward
in interviewing the appropriate people and developing the
appropriate policy statements of the people who will be work-
ing primarily in my office. W have not let that delay the on-
going work of reviewing the Commission's recommendations.
GSA has continued along its road and made significant
strides in that area.
Senator C111 1M. I do not quite get from that an answer.
First you said it would be fully implemented by August,
I still do not have a date.
Mr. ZARB. Mr. Chairman, it is our objective to have our
stop man on board by the end of November. I hesitate in giv-
ing a specific date because much depends on the final selec-
tion of a candidate and his acceptance and the time it might
take him to separate from whatever "responsibility he has. We
Are close to several candidates and that is clearly the spark
plug for our on-going program at OMB.
Senator Cran,ns. You are still a long way. from your pre-
diction that you would have the program fully implemented
by August?
Mr. ZARB. We are a long way from that goal.
At the end of January, 1974,
The Procurement Council had not been established;
The Deputy Assistant Director for Procurement Policy had not
been appointed;
Mr. Zarb had been assigned to another position in OMB ; and
In the absence of a congressional mandate, other national prob-
lems and priorities prevent any full time attention to this
matter in OMB.
Aside from the repeated delays in implementing the executive
branch plan, the plan itself will not meet. the 'need for effective cen-
tralized direction for procurement policy. The above sequence of prom-
ises, unfulfilled commitments, and. displaced personnel that has
occurred verify the need for a firm statutory base if the Office is to
enjoy the stature and continuity necessary to provide government-
wide leadership. The General Accounting Office concluded this point
in the following extract from their September, 1973 quarterly report
to Congressman Holifield on executive branch implementation of Com-
mission recommendations:
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We understand that, implementation has been delayed
because :
There have been difficulties in clearly establishing re-
sponsibilities for parts of the management structure.
(013 staffing of its part of the management structure
has been deferred pending internal budget approval.
It. is considered premature to establish the Procurement
i Council before the new OMB Deputy Assistant Direc-
tor for Procurement -Policy is available to help oversee
i.ta, formulation.
Continued delay in establishing this management striie-
ture and the lack of assurance that this approach can achieve
the objectives sought by the Procurement Commission con-
firms the opinion we and others expressed during your Com-
mittee's hearings in July that a statutory mandate is required
at the earliest practical time.
We therefore strongly recommend that congressional ac-
tion be taken at an early date authorizing and directing the
President to establish an Office of Federal Procurement
Policy either in the Office. of Management and Budget or
elsewhere within the Executive Office of the President.
During questioning of Mr. Zarb on the proposed OMB/GSA orga-
nization plan, as displayed in Figure 1 of this report, Senator Nunn
concluded that the arrangement has very little application to any
kind of set up that would really centralize procurement. He pointed
out that OMB had only ratified the status quo.
The GAO, in its aforementioned September, 1973 report, made the
same point in this way :
... i hybrid office located partly in GSA, OMB, and pro-
curement; policy groups represents the situation which has
generally existed for years and the arrangement under which
the present-day confusion exists. It provides several layers
of approval for policy guidance and fragments the responsi-
bility of a newly emerging organization in need of clear-cut
and manifest authority.
Testifying for the Departmenr of De fense, Assistant Secretary A. I.
Mendolia, asserted that department-wide regulations from DOD
would possibly serve as a model for government-wide adoption and
that DOD is very much in favor of increased cooperation and coordi-
nation on a. government-wide basis to improve the procurement process.
Calling for a year to see if an interagency council could successfully
deal with the Commission cn Government Procurement reco-
mendations. Mendolia said that The establishment of an Office of Fed-
eral Procurement Policy should be undertaken only if the execurive
branch fails to deal with the matter adequately.
The position of the Department of Health., Education, and Welfare
was essentially that the General Services Administration (GSA) is
already effectively coordinating proposed executive branch positions
on the issues raised by the Procurement Commission. Testifying for
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HEW, Assistant Secretary Robert II. Marik declared that the depart-
ment had already begun to implement the Commission's recommenda-
tions, to some extent, within the department.
Witnesses representing the Atomic Energy Commission, National
Aeronautics and Space Administration, Department of Transporta-
tion and Department of Agriculture echoed OMB's basic position
that, although a government-wide procurement policy is highly de-
sirable and sorely needed, legislation should be deferred until the Ad-
ministration has had an opportunity to fully implement its own plans
pursuant to Executive Order 11717.
Mr. Marshall J. Parker, Associate Administrator for the Small
Business Administration, cited the problems that small . businessmen
usually have in procurements involving different agencies. Ile said
that a government-wide system, under the direction of a central au-
thority, would be of great benefit to small businessmen.
In response to questions by Senator Iluddleston, Mr. Parker agreed
with the need for an Office of Procurement Policy and stated that
legislation would be needed to give the Office a proper base.
Senator IIUDDLESTON. T know in my State, Kentucky, we
frequently, under the auspices of the State government, con-
duct seminars to try to give small businesses and other busi-
nesses too the necessary information on how to compete for
or bid for or seek government contracts.
Do you think this situation would be alleviated if we had
a central department that could feed out to them the proce-
dures for the entire government at one time?
Mr. PARKER. Yes, sir, I do . . . we try to do the same thing
nationwide with small businesses, introducing them to govern-
ment procurement and to competitive bidding procedures and
telling them how to do it. And we have, if you will pardon
the expression, a heck of a time. trying to educate them on all
of the different myriads of regulations that the different agen-
cies have.
Senator IIUDDLESTON. And you feel the government would
benefit by being able to purchase, at least with no additional
cost, those services and goods if the procedures were simpler
so that more businessmen could actively seek business .with
the government?
Mr. PARKER. Certainly there would not be or should not be
any additional costs, and it would certainly tend.toward lower
costs because more competition would be developed because
more would be encouraged..
A lot of small businesses today, and perhaps some of the
larger ones, are turned away by the complexity of the poli-
cies of the procurement regulations.
Senator IIUDDLESTON. I understand that the administra-
tion wants to upgrade GSA's responsibility in this field. What
is your judgment? What impact would that have,?
Mr. PARKER. We would welcome any improvement in the
situation toward obtaining a centralized source"of policy and
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direction and leadership. We think that it could do nothing
but help.
,motor HZrnni.ESTON.'io you feel that a separate agency or
separ_tite office would be m,)re effective?
Mr. P Axon,. Yes, sir, we do. Quite personally, we favor
that it be by statute.
Adrninistrator of en.eral, S`a; 2 i.ce Ad7rainist~^atian and lormer~nem
ber o -F the Procurement Commission, the Honorable Arthur Samp-
son. also departed from the GMIB position to call for legislation to
deal with procuremeiit problems and to create an Office of Federal
Procurement Policy.
M S, sPSON. Mr. Chairman? I submit my prepared state-.
ment. for the record, but I would like to state strongly that I
air- for an Office of Federal Procurement Policy. It has tc
have directive authority.
Sampson,
he.nator Cr-rrrrs. Mr. Sampson, we are aware of your back-
as a Commissioner on the Commission on Govern-
ment Proenremeltt. Do you feel that legislation might be
rrcedeci_ to implement t0( objectives of the Commission
heport; ?'
Mr. ~,~nrr,~Orr. Yes, Air, Chairman. I see nothing incon
about going on with what, you have here (S. 2,510). By
he time the legislation is finished, the executive branch will
have had tithe to form its position.
';4 1 V tor C~Tr,rs. What Ave arc talking about then is early
sp.rin a~ ?
yfr. ;3~~~~rsr> J. Yes.
Conclusion Overall, the hearings left a convincing record of sup-
port for the legislation and its immediate enactment, The Ranking
Minority Member, Senator Roth. concluded :
l reel that the witnesses made a very strong case, frankly,
for the need for legislaton. When I first came in, I had a
question in my own mind whether it was essential, but I will
say at this juncture I feel very strongly that we ought to
move ahead.
Changes suggested by each witness received specific consideration
during Subcommittee markup. Most of these are discussed in the next
section of this report.
VII. DISCUSSION OF KEY ISSUES
The principal issues which surfaced during the hearings and the
Committee deliberations concerning this legislation to establish an
Office of Federal Procurement; Policy are outlined in the chart of
witnesses in the Hearings section or are discussed in this part of the
report. The Positions of the witnesses with repect to the need for
an OFPP, whether it should be established by legislation, and if by
legislation, when it should be enacted have been discussed. Issues to
be covered here are :
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37
Location
Authority
Size
Responsiveness to Congress
Procurement by Grantees
It should be noted that the first four issues address the major at-
tributes the Procurement Commission said the Office should possess.
These are :
(1) Be independent of any agency having procurement respon-
sibility.
(2) Operate on a plane above the procurement agencies and
have directive rather than merely advisory authority.
(3) Consist of a small, highly competent cadre of seasoned
procurement experts.
(4) Be responsive to Congress.
Location: S. 2510 locates the Office in the Executive Office of the
President (EOP), which includes the Office of Management and
Budget (OMB). The Procurement Commission preferred placement
in the Office of Management and Budget, but thought the President
should have the latitude to place the OFPP anywhere in his Executive
Office. Other locations recommended by witnesses included an inde-
pendent regulatory board or commission or an office in the legislative
branch like the Cost Accounting Standards Board.
Placement of the OFPP in the Executive Office of the President is
consistent with three of the aforementioned attributes that it be :
(1) Independent of any agency with procurement responsi-
bility.
(2) On a plane above procurement agencies.
(3) Small in size.
The fourth attribute-Responsiveness to Congress-will be discussed
in detail later in this part.
The Committee recognized that placement in the EOP should make
the Office effective in dealing with executive branch procurement ac-
tivities, the General Accounting Office, Congress, and the public. Ad-
ditionally, placement in the EOP would give the Office a government-
wide perspective and place it in a position to consider procurement
policy in an objective manner.
Should the President locate the OFPP in OMB, it is imperative that
the Administrator be at the Deputy Director level with no other re-
sponsibilities. This is necessary to ensure the identity, level of au-
thority, and continuity of effort necessary for effective leadership of
the procurement function. S. 2510 specifies that the Administrator will
be at the Executive Level III, presently $40,000 a year. Recent ex-
perience of OMB in assigning leadership for procurement at a level
lower than Deputy Director to an official with other duties verifies the
need for placement as set forth here-two officials assigned the pro-
curement responsibility in OMB have left this position in the past few
months. Both of these officials experienced difficulty in recruiting a
full-time nationally known procurement expert at the contemplated
Deputy Assistant Director level.
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s
Representatives of the Federal employee unions and the Barr asso-
ciations expressed the fear that tl:te OFPP could not function in an
objective manner if located within the EOP. They said that it should
be placed in as professional and non-political setting as possible. Their
suggestions were to establish it as a regulatory conunission with 3-5
members or as an independent agent of Congress. The Committee rec-
ognized the merits of these arguments but did not adopt these sugges-
tions because they are not compatible with the testimony of most
witnesses or the Procurement Commission recommendation. There
was a real concern in'the Committee: that setting the Office up as a com-
mission. would lead to yet another large bureacracy.
The Committee will follow closely the actions of the executive
branch to create the kind of organization defined by legislation and
described in this report. The annual reports and the comprehensive
review precedent to appropriating funds at the end of five years pro-
vide a mechanism for this oversight.
Authority: Directive authority is fundamental to the leadership
role assigned to the OFPP. This authority is provided in several
ways. First and foremost, S. 2510 sets forth a clear congressional
mandate that the OFPP is the President's agent to bring about long
overdue and fundamental improvements in the procurement process.
The bill gives the Office the stature and authority necessary to carry
out its mandate.
Second, placement of the Office in the Executive Office of the Presi-
dent in a position between the President and the procuring agencies
gives it the stature and "clout" exercised by the executive. Unlike
many EOP offices, the OFPP would be bolstered by a firm statutory
base.
Third, the bill defines in considerable detail specific authorities and
functions of the OFPP and their limitations.
Following are the more significant questions and concerns regard-
ing the authority and functions of the OFPP which surfaced dur-
ing the hearings and the Committee deliberations :
(a) Perhaps the most often expressed concern of witnesses was
that the extension of the authority of the Administrator to re-
cipients of Federal assistance would permit the Administrator to
reverse current policy and authorize executive agencies to provide
procurement and supply support to Federal grantees. Such was
never intended. In response to these concerns, a prohibition was
added to make the intent of the Committee clear in sect:on
0(lr) (1).
(b) Another subject of great interest and concern to the wit-
nesses was the national policy to rely on private enterprise to
satisfy the needs of government for goods and services. In con-
orrnance with the general rule followed in drafting this bill that
it would t e "organiration.ally" oriented, the Committee informed
these witnesses that the Procurement Commission's recommenda-
tions on this subject would be considered in full at an early date.
The bill says ony that the OFPP will monitor and revise as necE;s-
sary this policy. The policy itself is set forth in OMB Circular
A-7E;.
(e j A basic thrust of ,his legislation is to enable business ~ o
be more efficient in supplying; government. The cost of govern-
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ment procurement is increased by unnecessary regulations and
too much paperwork. Unfortunately the tendency is to add a new
regulation every time someone complains about a bad contract.
The Committee had two thoughts in mind-first, confine regula-
tions to those that are going to promote efficient purchases and,
second, simplify unduly complex regulations so that government
and industry are not unnecessarily burdened. The Committee ex-
pects the OFPP to review selected old procedures of the agencies-
adopt the good and discard the bad. One of the most valuable
things the Office can do is to examine the costs of the various
agencies in awarding contracts. Studies of agency procurement
systems the OFPP may conduct relative to this point should be
for the purpose of determining the effectiveness of basic procure-
ment policies for which the Office is responsible and not for evalu-
ating agency operations and procedures. Some things that would
reduce costs government-wide are covered in a recent report of the
General Accounting Office (B-168450) entitled "Ways For The
Department of Defense To Reduce Its Administrative Cost of
Awarding Negotiated Contracts."
(d) The industry witnesses were universal in calling for early
solicitation of their viewpoints in the formulation of policies and
regulations. They generally did not feel that they had an oppor-
tunity to participate early enough in the process to be effective.
The Committee's sympathy with these concerns is reflected by the
inclusion of the word "timely" in describing this function in the
bill. The manner in which this solicitation will be accomplished
is to be developed in the course of implementation of a specifically
related Procurement Commission recommendation.
(e) Working in close coordination with the Small Business Ad-
ministration (SBA), the Office should be of great assistance in
achieving the desires of Congress with respect to the small busi-
ness community. This cooperative effort should be especially pro-
ductive in implementing the Commission recommendations re-
lated to small business. Heretofore, there has not been a focal
point in the executive branch with whom the SBA or small busi-
ness representatives could deal on procurement policies having a
multi-agency application. While the Committee believes that the
OFPP should be open, accessible and informative in all of its rela-
tions with the private sector, this is particularly important where
small business is concerned. One way in which the OFPP might
improve its accessibility is through periodic regional meetings
with business. Most small business firms simply cannot afford to
come to Washington, but they are entitled to be heard. There is
little question that government activities in the field would be
equally receptive to regional meetings with the OFPP.
(f) Some concern was expressed by one of the witnesses that
the Administrator is required to consult only with the executive
agencies affected and not with industry. In amending the legisla-
tion, the functions of the Office were revised to make it clear that
there is no such intent. Section 6(c) (7) speaks to timely solicita-
tion of viewpoints of interested parties, and Section 6(c) (8)
deals with both consultation with affected executive agencies and
solicitation of their views in developing policies and regulations.
These are considered parallel sections, providing for inclusion of
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40
n~ the r?overrtrnent and private sectors in the rule. riaic.in
) 'U1-.:M ggesti,nr, was nraela to the Comr..ittee that the 01 PP
n ?d 1 fi ol;-ed in the'. draiing of specifications employed in
r c __zr? .na_nts. On(, w fnesss proposed that the Once shou_d be