PROPOSED EXECUTIVE BRANCH POSITION/IMPLEMENTATION FOR RECOMMENDATION # J-2 OF THE REPORT OF THE COMMISSION ON GOVERNMENT PROCUREMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000600130005-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 9
• Document Creation Date: November 17, 2016
• Document Release Date: July 13, 2000
• Sequence Number: 5
• Publication Date: September 5, 1973
• Content Type: REPORT

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PROPOSED EXECUTIVE BRANCH POSITION/IMPLEMENTATION FOR
RECOMMENDATION rr` 3-2 O THE
REPORT OF THE COMMISSION ON GOVERNMENT PROCUREMENT
Date:
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.Position Paper
,I. TITLE
Recommendation J-2 of the Commission on Government
,Procurement (COGP).
II. STATEMENT OF COGP RECOMMENDATION
Extend the Truth in Negotiations Act to all Government procurement
agencies and develop coordinated regulations for interpretation and appli-
cation of its provisions.
III. PROPOSED POSITION
Adopt Recommendation J-2.
IV. BACKGROUND
(a) The Commissions report recognized thaL Lhe Federal Pro u1 e-
ment Regulations had extended the Truth in Negotiations Act to all civilian
executive agencies. It went on to note that extension of the Act would give
the requirements statutory standing and permanence and greater legal
force and effect. The latter remark identifies the primary objective of
the recommendation.
(b) As noted elsewhere, alternative means of satisfying the objective
were considered.
,V. FINDINGS
Public Law 87-653 was enacted on September 10, 1962, and amended
the provision of Title 10 of the United States Code, which is referred to
as the Armed Services Procurement Act (ASP Act) P . L. 87.653
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became known as the Truth in Negotiations Act.
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The ASP Act applies only to DOD, NASA, and the Coast Guard. Accord-
ingly, the Truth in Negotiations Act also is limited in its application to
those agencies. The Act requires prime contractors and subcontractors
to submit certified cost or pricing data in connection with the award of
negotiated prime contracts, subcontracts or contract changes or modifi-
-----------------
cations which exceed $100, 000. Certain exce i_oi1aar.e .-spec-ified -with
respect to this requirement.
Implementing procedures, with respect to the Truth in Negotiations Act
were promulgated in the Armed Services Procurement Regulation (ASPR).
In the interest of prescribing uniform Government-wide policies and pro-
cedures, the Administrator of General Services prescribed similar poli-
cies and procedures in the Federal Procurement Regulations (FPR) in
1964. The FPR's have been modified from time to time to keep it on a
common footing with ASPR.
VI. CONCLUSION
The reasons for adopting outweigh the reasons for rejecting the
recommendation.
VII. DISCUSSION
(a) Extend the Truth in Negotiations Act to all Government agencies.
(1) Arguments for:
(A) The presence of a statute would remove any lingering
doubts that may remain regarding the applicability of the provisions of
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the Truth in Negotiations Act to civilian executive agency contracts.
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(2) Arguments against:
(A) The purpose, of the Truth in Negotiations Act have been
applied to all civilian executive agencies by way of policies and procedures
in the FPR. It is not necessary, therefore, to enact legislation compar-
able to the Truth in Negotiations Act which is applicable to civilian
executive agencies in order to achieve the objectives of such an act, with
respect to such agencies.
(B) The absence of such legislation has very positive benefits .
These benefits take the form of desirable flexibility in connection with
the issuance of related policies and procedures.
(b) Develop coordinated regulations for interpretation and application
of its provisions
(1) Regulations comparable to those in ASPR have been and will
continue to be adopted in the FPR.
(2) Coordination of these regulations in the future should be
by the organization or organizations (currently GSA and DOD) having
primary responsibility for Government-wide regulations.
(3) Current regulations are adequate. However, nothing in the
field of Government procurement regulations is. static and interpretations
and additions will be forthcoming, from time to time, as the need arises.
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VIII. PROPOSED IMPLEMENTATION
(a) Include the Truth in Negotiations Act in the Proposed Uniform
Procurement Statute to be developed under recommendation A-2.
(b) H. R. 9061 has been introduced which would repeal the present
provisions of the Armed Services Procurement Act of 1947 (10 U. S. C. ,
Chap. 137) which includes the Truth in Negotiations Act (10 U. S. C. 2306).
Section 10 of the Bill sets provisions comparable to the latter statute.
) No further implementation is necessary.
IX. DISSENTING VIEWS
Task Group Leader
Philip G. Read
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10*nmGRESSiON i INDEX 1tV
THE WEEK IN CONGRESS (34)
October 5, 1973
Washington, D. C.
TRADE REFORM
The House Ways and Means Committee gave
final approval to the Trade Reform Act of 1973,
H.R. 10710. The Committee ordered the bill re-
ported by a vote of 20 to 5. Most Committee
members stated their satisfaction with the bill
and the Administration indicated only strong
displeasure with the provision tying most-
favored-nation trade status to a foreign coun-
try's emigration policy.
Before giving final approval to the bill
the committee agreed to language that would re-
quire the Tariff Commission and the Treasury
Department to make a finding that a foreign
nation is using unfair trade practices that
results in a domestic producer having a sub-
stantial reduction in sales before the Presi-
dent can utilize the provided for reliefs.
This provision would also give the Congress
veto power over such actions taken.
SOCIAL SECURITY INCREASE VOTED
The Senate Finance Committee, meeting in
executive session this week on H.R. 3153, a
bill to make technical and conforming changes
in the Social Security Act, tentatively
agreed to an amendment raising social security
benefits seven percent. The increase would
become effective upon enactment of H.R. 3153
?nd would be in lieu of the recently enacted
5.9 percent increase scheduled to take effect
in June of 1974. The seven percent increase
would increase benefits by approximately
$2 billion.
Some of the provisions Hickman sug-
gested be modified include: the termination
insurance provisions, which he admitted.-go
to remedy tragic pension plan failures but
could result in otherwise uncalled for bank-
ruptcies and thus unemployment; the vesting
provisions, here Hickman said the Rule of
50 would be a fairer and a more efficient
way to vest covered employees; and the pro-
visions which would end the income tax de-
duction for certain nonqualified plans,
which he urged be deleted.
GAO AUDITS OF FRB ACTIVITIES
The House Banking and Currency Commit-
tee; held hearings on and subsequently ap-
proved H.R. 10265, a bill providing for
auditing of Federal Reserve Board activi-
ties by the General Accounting Office. The
main controversy over the bill developed
over whether the GAO's authority should ex-
tend to the FRB's Open Market Committee.
The Committee reached a compromise on this
provision by allowing audits only every
three years and by allowing the FRB to de-
lay audits of operations concerning open
market transactions and discount policy for
at least one fiscal year when the FRB de-
termines that they are sensitive.
URBAN MASS TRANSPORTATION
BILL PASSES
PENSION BILL
The House Ways and Means Committee began
consideration of pension reform legislation.
Treasury Deputy Secretary Frederick Hickman
briefed the committee on the various bills
before it and said that although the Senate-
passed bill, which was attached as an amend-
ment to H.R. 4200, is riddled with errors, it
is the best bill available. He suggested
that the Committee take more than just a few
weeks in its deliberations so that taxpayers,
The House despite strong indications
of an impending Presidential veto passed by
a vote of 219 to 195 its version of S. 386,
which would provide $800 million over the
next two fiscal years for operating sub-
sidies to urban mass transportation systems.
The bill had been held from floor consider-
ation since it was reported by the Banking
Committee last April.
The House struck from the bill a sec-
tion providing for the establishment of
State and local Mass Transportation Advisory
Councils. These councils were to assist
State or local public bodies or agencies in the
establishment of policies and the making of
actuaries, and other pension experts can come decisions affecting mass transit service in
forward and point out changes necessary to their respective areas. The House also
make the Senate version more workable. He said prohibited the expending of the bill's funds
to proceed A OrS%tdrF8tcge` g e 06W08/27 : C?ArRiDp7r;moe 4 asom age( l4ted
astrous.
 Language tha 'wa~VindcorpoxRa l et 00P/91Y.2-17 : CYlie' eR 17q~'tifQ;t$P'o'I"'%O@9t l~P9 1 health
Highway Trust bill, which is now public law, insurance plan, a medical assistance plan,
and a voluntary certification program for
WILLIAMS INTRODUCES SECURITIES MEASURE private basic health insurance to encourage
the availability ofadequate private health
The Senate Banking Committ:ee's Securities insurance.
Subcommittee Chairman Harrison A. Williams, Jr. The catastrophic health insurance would
introduced this week legislation, S. 2519, the cover all persons covered by the socia:L
National Securities Market Syst:em Act of 1973, security system, their spouses, and depen-
which is designed to facilitate the development: dents. It would pay for medical brills after
and regulation of a national market system. a family has incurred $2,000 in medical bills
Sen. Williams said that S. 2519 is the fourth in a year and would cover hospital costs
measure to be introduced as a result of the after 60 days. The medical assistance plan
Subcommittee's study of the securities industry. would provide basic hea:Lth benefits coverage
The other bills are S. 2508, S. 2474, and with uniform national eaigibility standards
Senate-passed S. 470. for all low-income individuals and families.
The bill among other things would: facil-
itate the development of a national market Sys-- BRIEFS
t:em by giving the SEC authority over all secu-
rities-related communications system; require The Senate and House passed and cleared
the SEC to remove and prevent barriers to for the President S.J. Res. 160, which
competition and to otherwise perfect the mecha-- places a ceiling on interest rates paid on
nism of a national market system; and strength-- 4-year certificates of deposit of less than
en the SEC's ability to regulate all market $100,000. ... The Senai:e passed the m:ili-
makers to insure that regulatory authority will tary procurement authorization bill, H.R.
be available to back up the competitive pressure 9286. ... The Senate alter adopting numer-
to make tight and continuous markets. ous amendments passed S. 2325, the Foreign
Aid bill.
SOCIAL SERVICES AMENL1ENTS The House Agriculture Committee an-
nounced that it will begin hearings on
Senators Mondale, Javits, Bentsen, and Oct. 16 on operations of the Commodity Ex-
Packwood introduced legislation this week, change Authority Act and include in its
S. 2528, the Social Services Amendments of review the possibility of creating an in-
1973. Sen.Mondale stated that the legislation dependent Commodity Exchange Commission
is designed to resolve what he termed the basic modeled after the SEC. ... The Senate Anti-
problems that remain in the HEW social services trust Subcommittee began hearings on the ~A
regulations issued January 16. impact of U.S. antitrust laws on American ,
The legislation includes the following pro- companies transacting business abroad.
visions that would: guarantee that private con- The Senate pasaed the $33.4 billion
R
'
.
s share appropriations bill for HEW-Labor, H.
V t; %?
tributions may be included in the State
for federal matching; allow the States to serve 8877. ... The Senate after modifying pro- /V
past recipients who have been on welfare within visions dealing with the distribution of ~
two years, and potential recipients likely to funds for State and local education passed ?J
be on welfare within five years; and provide H.J. Res. 727, making further cont.inuip
additional flexibility to serve potential wel- appropriations for fiscal 1974.,__.).''Sena-
fare recipients and add child -protective ser- tors Lawton Chiles and William V. Roth.
vices to the list of services available to the announced that the first bill to be con-
working poor as well as those on welfare. j sidered by their ad`-hoc subcommittee on
.In a related development, the Senate Fi- federal procurementlof the Senate Govern-
nance Committee tentatively agreed to postpone ment Operations Cominittee will be S. 2510,
HEW social services regulations, currently which would create-`an Office of Federal
scheduled to become effective November 1, 1973, Procurement Policy.'
for two months until January 1, 1974.
IiEALTH INSURANCE PLAN INTRODUCED
Senate Finance Committee Chairman Long and
Sen. Ribicoff introduced a three-part, $8.9
billion national health insurance bill this
week, S. 2513, the Catastrophic Health Insu.r-
ance and MAIllxrbVGdiF1MnR@l a 2OO@ 8P2 .: CIA-RDP75B0038OR000600130005-1
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HA,goc
FEDERAL PROC:,URI MhNT OIlIC:Is,1)EL.AYED?
The plea for a deferral of .3 Lion on
the proposed Office of Federal Procurement
Policy (OFPP) made last summer by a nrber
of executive agencies before the House 'Com-
mittee on Government Operations was echo~4
in tiie opening two-days of hearings on S.
2510 held before the newly-formed Senate
Ad Hoc Subcommittee on Government Procure-
ment.
Testifying on the companion bill to
Ii. R. 9059, spokesmen from the 0MB, HEW,
the AEC, NASA, DOT and the Department of
Agriculture agreed that the executive branch
should he given further opportunity to make
key changes in the procurement process, as
suggested by the Commission on Government
Procurement, without legislative interfer-
ence. Citing their conviction that the
0MB/GSA team management arrangement begun
last spring will prove a satisfactory sub-
stitute, the spokesmen said they fear an
OFPP that would become "another unwieldy/
slayer of bureaucracy", to result in "fuf-
taer confusion, duplication, and comp?eti-
'
ti
b.qt for authority."
F L N INDEBTED S?S-"f0 U. S.
The Senate Finance and Resources Sub-
committee held a one-day oversight hearing
this week on foreign indebtedness to the
U.S. Sidney Weintraub Deputy Assistant
Secretary for International Finance and
Development, Department of State, testified
that the vast majority of the indebtedness
to the U.S. is honored and repaid on sched-
ule, only two percent of the outstanding
debt is delinquent by 90 days or more, and
an even smaller percentage has been re-
scheduled or otherwise renegotiated.
.John M. Hennessy, Assistant Treasury
Secretary for International Affairs said
that international debts owed the U.S. is
a matter of considerable importance, af-
fecting our.budget, our balance of payments
and our bilateral relations with other coun-
tries. He added that the collection of for-
eign debts has been of serious concern to
the executive branch and over the past four
years a vigorous effort has been undertaken
to improve performance in the area.
on consumer credit protection that she waE
in the near future going to introduce an
omnibus bill amending the consumer Credit
Protection Act of 1968, which would be muc
more comprehensive than-any of the bills
now pending.
Both FDIC Chairman Frank Wi:Lle and
FHLBB Chairman Thomas R. Bomar voiced thei
opposition to a proposal made by the Natio
Commission on Consumer Finance that an in-
dependent agency be established to supervi.
examination and enforcement functions undo
the Consumer Credit Protection Act. Both
said that an additional layer of bureaucra
for this purpose is not necessary. Both
felt that these functions could be adequa L,
carried out by existing regulatory agencies
although Wille did suggest that perhaps ou of the regulatory agencies could be mandatt
to issue substantive regulations in the ar of consumer protection with enforcement
residing in the appropriate agency.
TRADE NAMES AND PRESCRIPTION DRUGS
Legislation that would outlaw trade
names on prescription drugs, S. 2633, was
introduced this week by Sen. Nelson. He
said the purpose of the bill was to drive
down consumer'drug prices and to provide an
additional safeguard against a drug tragedy
such as the Thalidomide disaster.
S. 2633 would amend the Food, Drug,
and Cosmetic Act to prohibit the labeling,
advertising, or promotion of,a drug by any
name other than its established, generic,
name. According to Sen. Nelson, Food and
Drug Administration figures show some 20,001
prescription drug products on the market bu only 700 different drug compounds causing a
multiplicity of names and a wide price rang:
for the same drug.
BRIEFS
The Senate by a vote of 54 to 42, two-
thirds of the Senators present and not votir
in the affirmative, failed to override the
President's veto of S. 1317, authorizing
funds for activities of the U.S. Information-
Agency for fiscal year 1.974. ...The House
passed H.R. 9456, which would extend the
Drug Abuse Education Act and include al-
coholism -A---f-4
o
l
t
n o L. Ae act.
CONSUi+fER CREDIT
The House Rules Committee obliged the
A 4yr>" Fgr ffel~%ase 30Qk0/08/27 : CIA-RD
6~#2m38 A02fimfk'~ @Q i-deferred actio a o t e ouse an king Commit- on the Education and Labor committee's pens;
tee's Consumer Affairs Subcommittee Rep. roforui bill, R.R. 2, until earl December.
rtritte) r I- PI..1 1 $ .... ... ., _.. ._ _ _. . .