COMMERCE PROPOSED TESTIMONY FOR 3/22/84 ON S. 1855 S. 1861 S. 2292

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90B01370R001101550027-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 11
• Document Creation Date: December 21, 2016
• Document Release Date: December 30, 2008
• Sequence Number: 27
• Publication Date: March 16, 1984
• Content Type: MEMO

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Office of legislative liaison
Routing Slip
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M
EXECUTIVE OFFICE OF THE PRESIDENT -/dsv
OFFICE OF MANAGEMENT AND' BUDGET r
~~~_ E
WASHINGTON. D.C. 20503 L Chrono
March 16, 1984
LEGISLATIVE REFERRAL MEMORANDUM
TO: Legislative Liaison Officer
Department of Agriculture
National Aeronautics and'Space Administration
Department of the'Interior
Office of Science and Technology Policy
Federal Communications Commission
General Services Administration
Dep tment of Justice
D artment of State
entral Intelligehce Agency
National Security Council
Department of Traz}-sportation
SUBJECT: Commerce proposed testimony for 3/22/84, on S. 1855,
S. 1861, S. 2292
The Office of Management and Budget requests the views of your
agency on the above subject before advising on its relationship
to the program of the President, in accordance with OMB Circular
A-19.
Please provide us with your views no later than
4:00 P.M. Tuesday, March 20, 1984. ORAL COMMENTS ACCEPTABLE.
Direct your questions to William A. Maxwell (3 5-3890), the
legislative analyst in this office.
Jam s C. I11utt for
Assistant Director for
Legislative Reference
Enclosures
cc:
S.
D.
T.
A.
R.
Gudes,
Taft
Sprehe
Donahue
Landis
N.
P.
B.
H.
Noonan
Sze.rvo
Hughes
Lilienthal
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STATEMENT
OF
WILLIAM P. BISHOP
CHAIRMAN, SOURCE EVALUATION BOARD
FOR CIVIL SPACE REMOTE SENSING
BEFORE THE
COMMITTEE ON COMMERCE, SCIENCE AND TRANSPORTATION
UNITED STATES SENATE
MARCH 22, 1984
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MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE:
MY NAME IS WILLIAM P. BISHOP. I AM THE CHAIRMAN OF THE
DEPARTMENT OF COMMERCE'S SOURCE EVALUATION BOARD FOR CIVIL
SPACE REMOTE SENSING (THE "SEB"). I AM PLEASED TO BE HERE
TODAY TO TESTIFY ON BEHALF OF THE ADMINISTRATION CONCERNING
S. 1855, 5..1861, AND S. 2292, TITLED LAND.REMOTE.SENSING
SATELLITE AUTHORIZATION ACTS OF 1983, OR 1984. I DO NOT INTEND
TO DWELL ON THE ACTIVITIES OF THE SEB DURING THE PAST SEVERAL
MONTHS EXCEPT TO SAY THAT THE RFP FOR COMMERCIALIZATION OF
LAND REMOTE SENSING WAS RELEASED ON JANUARY 3RD, 1984, AND
RESPONSES WERE RECEIVED ON MARCH 19TH, 1984.
MR. CHAIRMAN, I WOULD LIKE TO PUT ONE POINT CLEARLY ON THE
RECORD AT THE OUTSET. IN ORDER TO BE ABLE TO TESTIFY AT THESE
HEARINGS AND ANSWER QUESTIONS WHICH YOU MAY ASK, I HAVE
DELIBERATELY NOT READ ANY OF THE RESPONSES WHICH WERE RECEIVED
BY THE SEB NOR DISCUSSED THEM WITH THE OTHER BOARD MEMBERS. I
DO NOT KNOW WHAT THOSE BIDS CONTAIN, AND WILL NOT KNOW UNTIL
TOMORROW WHEN I FIRST SEE THEM. THEREFORE, MY DISCUSSION WITH
YOU TODAY WILL BE BASED ON INFORMATION DEVELOPED BY THE SEB
AND THE LARGER INTERAGENCY TEAM AND ARE IN NO WAY INFLUENCED
BY THE CONTENTS OF THE PROPOSALS.
I WOULD LIKE TO THANK THIS COMMITTEE AND THE MEMBERS WHO HAVE
INTRODUCED THE THREE BILLS FOR THEIR LEADERSHIP REGARDING THIS
ISSUE. THESE BILLS HAVE DEVELOPED THE BASIS FOR A PRACTICAL
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APPROACH TO COMMERCIALIZATION. WE HAVE ESPECIALLY APPRECIATED
THE OPPORTUNITY TO WORK CLOSELY WITH YOUR STAFFS ON THIS MATTER,
AND WE BELIEVE THAT A SOLID START.HAS BEEN MADE.
IT IS THE DESIRE OF THE ADMINISTRATION TO ACHIEVE COMMERCIALI-
ZATION OF CIVIL LAND REMOTE SENSING FROM SPACE AS SOON AS
POSSIBLE WHILE MAINTAINING THE U.S. LEAD IN LAND REMOTE SENSING
AND WHILE HAVING THE PRIVATE SECTOR MAKE MAJOR INVESTMENTS.
THESE BILLS, WITH SOME TECHNICAL CHANGES WHICH I WILL DISCUSS
BELOW, ARE AN APPROPRIATE FRAMEWORK FOR DISCUSSION OF HOW THESE
GOALS MAY BE ACHIEVED. OUR COMMENTS ON THESE BILLS REFLECT IN
LARGE PART THE EXPERIENCE OF THE ADMINISTRATION IN CONDUCTING
THE RFP PROCESS OVER THE LAST NINE MONTHS. ONE OF THE LESSONS
WE HAVE LEARNED IN THIS PROCESS IS WE DON'T WANT TO HAVE TO DO
IT AGAIN; AT LEAST NOT IN THE-NEAR FUTURE. IT IS THEREFORE, OF
EXTREME IMPORTANCE THAT LEGISLATION ENACTED BY BOTH HOUSES OF
CONGRESS AND THE RFP PREPARED BY THE SEB BE CONSISTENT ON
SUBSTANTIVE ISSUES. WITH SOME MINOR EXCEPTIONS, I BELIEVE THEY
ARE CONSISTENT.
THE PROCUREMENT PROCESS NOW UNDERWAY CONSTITUTES WHAT WE BELIEVE
TO BE THE MOST THOROUGH AND EXHAUSTIVE EFFORT TO DATE.TO DETERMINE
THE NEXT STEPS IN THE PROGRAM TO FACILITATE THE TRANSFER OF LAND
REMOTE SENSING OPERATIONS TO THE PRIVATE SECTOR. IT HAS BEEN
AN UNUSUALLY COMPLICATED AND TIME CONSUMING ACTION, AND IT IS
MY ESTIMATE THAT AT LEAST TWO MONTHS WILL BE REQUIRED FOR THE
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SEB TO SUBMIT ITS ANALYSIS AND RECOMMENDATIONS TO SECRETARY
BALDRIGE. A NUMBER OF FIRMS SPENT CONSIDERABLE TIME AND
CORPORATE FUNDS PREPARING THE RESPONSES TO THE RFP. IN OUR
VIEW IT WOULD BE EXTREMELY UNFORTUNATE IF THE WORK OF THE SEB
AND THESE PRIVATE FIRMS WERE TO BE DISCARDED OR REPEATED. IT
WOULD CERTAINLY RESULT IN SIGNIFICANT AND COSTLY DELAYS IN THE
COMMERCIALIZATION PROCESS. I AM VERY PLEASED, THEREFORE, THAT
WE ONLY HAVE MINOR CHANGES TO SUGGEST. OF THE THREE BILLS
MENTIONED IN YOUR LETTER OF INVITATION, S. 2292 IS THE MOST
EXTENSIVE, AND HAVING BEEN INTRODUCED LATER, IS THE MOST COM-
PLETE. IT APPEARS TO BE THE BEST VEHICLE IN THE SENATE FOR
ACCOMPLISHING THE ADMINISTRATION AND CONGRESSIONAL GOAL OF
ACHIEVING A COMMERCIAL LAND REMOTE SENSING SYSTEM. THUS,
S. 2292 IS THE PIECE OF LEGISLATION WHICH I WILL SPECIFICALLY
DISCUSS TODAY.
IN ADDITION TO THESE COMMENTS, WE ARE PREPARED TO DELIVER TO
YOUR STAFF TECHNICAL COMMENTS AS WELL AS SPECIFIC AMENDMENT
LANGUAGE FOR YOUR CONSIDERATION, WHICH WILL IMPLEMENT THE
SUGGESTIONS IN MY REMARKS HERE.
SCOPE OF-THE BILL:
FIRST, A WORD CONCERNING THE SCOPE OF THE BILL. THE SHORT TITLE
AND FINDINGS REFER TO LAND REMOTE SENSING, WHILE THE OPERATIVE
PORTIONS OF THE BILL APPARENTLY REFER TO BOTH LAND AND OCEAN
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REMOTE SENSING. THERE IS NO GENERALLY RECOGNIZED OPERATIONAL
CAPABILITY IN OCEAN REMOTE SENSING AT THE PRESENT TIME.
INCLUDING OCEAN SENSING WITHIN THE SCOPE OF THE BILL WILL HAVE
THE EFFECT OF SPECIFYING THE GOVERNMENT'S CONDITIONS FOR THE
COMMERCIALIZATION OF OCEAN REMOTE SENSING LONG BEFORE THE
PARAMETERS OF SUCH A SYSTEM OR THE NEED FOR COMMERCIALIZATION
HAVE BEEN ESTABLISHED. THIS MAY HAVE THE EFFECT OF INHIBITING
INNOVATIONS IN THIS AREA. IT IS THE ADMINISTRATION'S VIEW THAT
THE BILLS' APPLICATION SHOULD THEREFORE BE LIMITED TO LAND
REMOTE SENSING.
COMPATIBILITY WITH THE RFP AND SUBMITTED BIDS:
ONE OF OUR PRINCIPAL CONCERNS,.. AS I INDICATED ABOVE, IS THAT
LEGISLATION DO NOTHING THAT WOULD CAUSE US TO BEGIN AGAIN OR
TO SERIOUSLY DELAY THE PROCESS. SEVERAL OF THE PROVISIONS IN
THESE BILLS ARE MORE RESTRICTIVE THAN THE PROVISIONS IN THE
RFP. IT IS OUR INTENT IN MAKING THESE SUGGESTIONS TO SEEK TO
MODIFY THE LEGISLATION TO A POINT THAT IT IS CONSISTENT WITH
THE REQUIREMENTS OF THE RFP. IN SO DOING, WE HAVE TRIED TO
BE SENSITIVE TO THE INTENT OF THE LEGISLATION.
SECTION 201, DEALING WITH THE OPERATION AND DATA MARKETING OF
THE EXISTING LANDSAT 4 AND LANDSAT 5 SYSTEMS SPECIFIES THAT THE
UNITED STATES GOVERNMENT, SPECIFICALLY THE NATIONAL OCEANIC AND
ATMOSPHERIC ADMINISTRATION (NOAA), SHALL CONTINUE OWNERSHIP OF
THE SYSTEM AND THE UNENHANCED DATA AND HAVE DECISION AUTHORITY
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OVER OPERATION. HOWEVER, A CONTRACT WINNER IS ENTITLED TO SET
THE PRICES OF AND IN GENERAL MARKET'THIS UNENHANCED DATA AS HE
OR SHE WISHES. THIS SEEMS TO INTRODUCE SEVERAL CONFLICTS. THE
CONTRACT WINNER IS AUTHORIZED AND PERMITTED TO MARKET DATA WHICH
IS OWNED BY THE UNITED STATES GOVERNMENT. WE BELIEVE THAT
RETENTION BY THE GOVERNMENT OF TITLE TO THE DATA WOULD REQUIRE
PROVISIONS IN THE BILL PERMITTING THE GOVERNMENT TO COPYRIGHT
THE DATA AND THEREFORE LICENSES REPRODUCTION AND SALES BY THE
CONTRACTOR. THE RFP AVOIDS THIS REQUIREMENT BY PERMITTING
TRANSFER OF TITLE AS WELL AS ASSETS OF THE LANDSAT SYSTEM TO
THE PRIVATE SECTOR. OPERATOR, IF THIS IS DETERMINED TO BE IN THE
NATIONAL INTEREST. THUS, THE CONTRACTOR OBTAINS TITLE TO THE
DATA, IS FREE TO MARKET IT AND IS NOT SUBJECTED TO A COMPLICATION
OF THE GOVERNMENT STILL OWNING THE DATA.. WE BELIEVE THE BEST
WAY TO DEVELOP THE MARKET IS TO LET THE MARKETPLACE DRIVE THE
OPERATION. THEREFORE, WE RECOMMEND AN APPROACH IN THE LEGISLATION
SIMILAR TO THAT IN THE RFP. ALSO, SECTION 201(c) SPECIFIES THAT
NOAA MUST CONTINUE OWNERSHIP OF THE DATA, OWNERSHIP OF THE
SYSTEM AND THE AUTHORITY FOR OPERATIONAL DECISION. THE RFP
ALLOWS THE POSSIBILITY FOR A CONTRACTOR TO TAKE OVER BOTH OWNER-
SHIP AND OPERATION OF THE LANDSAT 4/5 SYSTEM. WE RECOMMEND THAT
THE BIDDERS BE ALLOWED THE SAME OPPORTUNITY. THE TRANSFER WOULD
REPRESENT THE FIRST STEP IN A TRANSITION TO A MARKET DRIVEN
SYSTEM. .
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SECTION 202(a) REQUIRES THAT THE "SECRETARY SHALL" CONTRACT FOR
THE MARKETING OF DATA. ALTHOUGH WE FEEL THAT BIDDERS SHOULD HAVE
THE OPTION, WE ARE CONCERNED THAT IF NONE ELECT TO MARKET LANDSAT
4/5 DATA, THEN ANOTHER RFP WILL BE REQUIRED. WE SUGGEST THAT
"SHALL" BE CHANGED TO "MAY."
SECTION 202(c)(1) SPECIFIES A VERY EXTENSIVE CONGRESSIONAL.
REVIEW AND APPROVAL PROCESS, WHICH GOES CONSIDERABLY BEYOND THE
REQUIREMENTS OF THE "BATEMAN AMENDMENT." IT IS OUR FEELING
THAT PASSAGE OF THIS LEGISLATION BY THE CONGRESS, WITHOUT THIS
SECTION, WOULD REPRESENT APPROVAL OF THE COMMERCIALIZATION
PROCESS. FURTHER SPECIFIC APPROVAL OF THE CONTRACT BY CONGRESS
IS INAPPROPRIATE. CONGRESS SHOULD SET THE POLICY FOR A TRANS-
FER; THE SECRETARY OF COMMERCE.SHOULD IMPLEMENT THE POLICY AS
THE SELECTION OFFICIAL FOR THE CONTRACT. WE STRONGLY REQUEST
REMOVAL OF 202(c)(1).
WE RECOMMEND THAT THE CLAUSE "AND OTHER FACTORS THAT THE SECRE-
TARY OF COMMERCE DEEMS NECESSARY" BE ADDED AS SECTION 203(3),
TO BE CONSISTENT WITH THE RFP. THIS ADDITION PERMITS THE
INCLUSION OF OTHER FACTORS IN THE ENTIRE EVALUATION PROCESS.
SECTION 303(a)(5) REQUIRES AN EVALUATION INCLUDING "PERCENTAGE
OF DATA SALES" TO THE FEDERAL GOVERNMENT. WE ALLOW THIS AS A
BID-OPTION BUT FEEL THE FINANCIAL PLAN SHOULD BE FLEXIBLE.
THUS WE RECOMMEND THE CHANGE OF THE SUBSECTION TO PERMIT OTHER
TYPES OF REPAYMENT OF THE FEDERAL INVESTMENT. -
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SECTION 303(b)(1) SPECIFIES THE SAME CONGRESSIONAL REVIEW OF
A CONTRACT DECISION AS I DISCUSSED IN SECTION 202(c)(1). WE
ARE OPPOSED TO THIS SUBSECTION FOR THE SAME REASON.
SECTION 305.3 DEALING WITH SALE OF DATA FROM THE FOLLOW-ON
COMMERCIAL SATELLITE SYSTEM STIPULATES THAT THE CONTRACT FOR
THAT ACTIVITY SHALL NOT PROVIDE FOR ANY GUARANTEED DATA PURCHASE
BY THE FEDERAL GOVERNMENT FROM THE CONTRACTOR. THE RFP CLEARLY
STATES THE GOVERNMENT WILL NOT ENTER INTO AN EXCLUSIVE DATA
PURCHASE ARRANGEMENT.. WE HAVE ALSO MADE IT CLEAR THAT THE
GOVERNMENT WOULD NOT NECESSARILY AGREE TO A PROPOSAL REQUIRING
A GUARANTEED DATA PURCHASE. HOWEVER, WE FEEL THAT FLEXIBILITY IS
TO THE GOVERNMENT'S ADVANTAGE IN THIS CASE, AND THIS RESTRICTION
IS NOT IN THE BEST INTEREST OF.-THE GOVERNMENT. A FINANCIAL
ARRANGEMENT OF SUPPORT TO THE CONTRACTOR WHICH INCLUDES SOME
DEGREE OR TYPE OF GUARANTEED DATA PURCHASE MIGHT BE OF INTEREST
BOTH TO THE PROPOSER AND TO THE U.S. GOVERNMENT. WE RECOMMEND
THE LESS RESTRICTIVE APPROACH.
SECTION 303.A DESCRIBES A CONTRACT PERIOD WHICH WILL EXTEND FOR A
PERIOD OF SIX YEARS, WHILE SECTION 307 SPECIFIES A TERMINATION OF
AUTHORITY TEN YEARS AFTER THE DATE OF THE BEGINNING OF A CONTRACT
ENTERED'INTO UNDER THE PROVISIONS OF THIS TITLE. THERE SEEMS TO
BE SOME UNCERTAINTY REGARDING THE INTENDED TIME SPAN, WHETHER 6
YEARS OR 10 YEARS. WE FEEL THAT A PERIOD OF TIME LONGER THAN 6
YEARS, MORE LIKELY AT LEAST 8 YEARS, WILL BE NECESSARY FOR A
CONTRACTOR TO REACH THE STATE OF FULL FINANCIAL VIABILITY. THE
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TWO TIMES SPECIFIED IN THE LEGISLATION MAY LEAD TO SOME DEGREE
OF CONFUSION IN THE AWARDING OF THE CONTRACT. WE PREFER THE
LONGER AUTHORITY OF UP TO TEN YEARS.
IN ORDER TO PERMIT FINANCIAL FLEXIBILITY ON THE PART OF A
BIDDER, AND TO ELIMINATE A PROCESS WHICH MIGHT JUST TAKE FUNDS
FROM ONE FEDERAL AGENCY'S POCKET AND TRANSFER IT TO ANOTHER, WE
RECOMMEND THAT THE PHRASE "SUCH AS LAUNCH SERVICES" BE REMOVED
FROM SECTION 604.
MR. CHAIRMANS LET ME CONCLUDE MY PREPARED STATEMENT BY RNITEMTI
WHAT I STATBD AT THE OUTSET, THAT THESE THREE BILLS AND IN'
PARTICULAR THE MORE DETAILED ONE, S. 2292, CONSTITUTE A MAJOR
STEP FORWARD TOWARD ESTABLISHING THE LEGAL FRAMEWORK FOR.A UNITE
STATES COMMERCIAL LAND REMOTE SENSING SYSTEM. WE LOOK FORWARD
THE PASSAGE OF THIS LEGISLATION BY THE SENATE, SIMILAR LEGISLAT:
IN THE HOUSE AND THE INITIATION OF THE PROCESS LEADING TO
COMMERCIALIZATION OF LAND REMOTE SENSING.
I WOULD BE VERY HAPPY TO. ANSWER YOUR QUESTIONS AT THIS TIME.
PLEASE BEAR IN MIND THAT I HAVE NOT READ ANY OF THE PROPOSALS
AS SUBMITTED, AND THEREFORE WOULD NOT BE ABLE TO ANSWER ANY
QUESTIONS DEALING WITH THE DETAILS OF THOSE PROPOSALS.
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