of the same document were prepared in order to accommodate changes arising from various reviews and levels of management inputs. In addition we produced numerous verbal reports, monthly periodic reports, and data analyses. We have recently been a successful bidder on a contract with a Federal agency which will require this firm to make field site industrial hygiene surveys and reports thereon of compliance with occupational safety and health requirements at a large number of Federal facilities. Included in at least one such contract is a requirement for a daily report of observations and findings to the technical project manager.

The point I am trying to make here is that this section as now written will require government agencies (technical program managers, not the contract officer) to either resort to a simple check list or to spend a considerable amount of time in preparing these evaluations. In fact, the magnitude of the requirement for preparing evaluations may very well require substantial increases in the number of employees in some agencies. It is entirely feasible that the evaluation report be as long if not longer than the report itself.

Recommendation.-This section be clarified so as to eliminate the problems discussed above.

Section 208. Performance appraisal

Including compliance with rules, regulations, and procedures relative to contracting and compliance with the policies set forth in the Consulting Reform Act of 1980 as part of the performance appraisal for Federal employees is a good idea. However, this does not fully address the fact that many appointed officials coming into the government with each new administration become involved in the contracting out of agency functions. Similarly, many officials who are in the government under the new Federal Executive Service will not have background in Federal procurement procedures. Mere reading of the revisions of this bill and attempting to understand the complex procurement regulations without some specific guidance thereon will not suffice.

Recommendation.-Section 208 should include a requirement that the Director of Office Personnel Management shall establish procedures and a training program to ensure that any government official (a Presidential appointee or Federal Executive Service) shall receive specific training with regard to the policies set forth in the Consulting Reform Act of 1980 and appropriate rules, regulations, and procedures relating to contracting out of agency functions. This would be done prior to such officials' undertaking any contracting actions. I further recommend that the section be amended to include a requirement that the Director of Office of Personnel Management establish procedures to ensure that all Federal employees in the regular Federal Personnel System whose duties involve preparation of proposals for contracting out of agency functions or who have technical contract management functions have an understanding of rules, regulations, and procedures and the policies set forth in Section 2 of the Consulting Reform Act of 1980 and other provisions therein. This latter could be accomplished by several means, including the development of tests and examinations for persons already in the Federal Personnel System and training programs and periodic upgrading programs for new and existing personnel. The Director of Personnel Management would be directed to establish these procedures within one year of the enactment of the Act. He should also be directed by amendment to this section to periodically conduct evaluations of the adequacy of personnel performance and of agencies' compliance with these requirements.

I am most pleased to have had the opportunity to provide these suggestions. They were prepared with much thought and constructive intent. I hope they will assist the subcommittee in this important task.

NOTE.-Mr. Alvin F. Meyer, Jr. is President and Chief Executive of A. F. Meyer & Associates, Inc., a small business firm engaged in consulting services in environment, safety and health matters. Mr. Meyer served in the U.S. Air Force for 282 years, retiring as Chief of the U.S. Air Force Biomedical Sciences Corp and Head of the Department of Defense Environmental Pollution Control Committee, for which services he received the Distinguished Service Medal. Following retirement, he headed the Governor of Hawaii's Environmental Advisory Committee; served as Director of Legislative Affairs of the U.S. Consumer Protection and Environmental Health Service, U.S. Department of Health, Education and Welfare; and as A Deputy Assistant Administrator of the U.S. Environmental Protection Agency. A. F. Meyer and Associates provides contract consultant services to both government and private sector clients and has undertaken a wide variety of assignments in its specialized areas since its organization in 1975.

Mr. HARRIS. That concludes our hearings this morning. We will stand adjourned until 9:30 a.m., Thursday, August 28, to continue the hearings on H.R. 7674.

I would make the comment that the first witness that day is Admiral Rickover. He has some ideas which he will probably express in his usual diplomatic way. I look forward to hearing him and, Mr. Dannemeyer, I know you do, too.

[Whereupon, at 11:50 a.m., the subcommittee was adjourned.]

CONSULTANT REFORM ACT OF 1980

THURSDAY, AUGUST 28, 1980

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON HUMAN RESOURCES,

COMMITTEE ON POST OFFICE AND CIVIL SERVICE,

Washington, D.C.

The subcommittee met at 9:30 a.m., pursuant to call, in room 311, Cannon House Office Building, Hon. Herbert E. Harris II (chairman of the subcommittee) presiding.

Mr. HARRIS. The subcommittee will come to order.

As we know, today we are continuing the legislative hearings on H.R. 7674, legislation designed to remove the cloak of secrecy surrounding the Government's use of consultants.

I will not reiterate the clear evidence of serious and pervasive problems in the Federal Government's use of consultants and contractors.

This subcommittee, Senator Pryor's subcommittee, GAO, the Washington Post, and others have clearly documented these problems.

During the first year of the subcommittee's investigation, the administration denied there was a serious problem. On July 2 of this year, however, a directive was issued by OMB which said, "The President has directed that immediate action be taken to correct the lack of adequate control over procurement practices. This lack of management control has led to various abuses in Federal contracting activities."

In April 1977, the President, in a handwritten note to then OMB Director Lance, ordered that he "expedite" his actions to provide the "total fee being provided to consultants" by the Government. Over 3 years later, OMB can still not provide that information. OMB cannot or will not act to force compliance with regulations. OMB cannot or will not act to stop the appearance of widespread conflict of interest in the use of consultants to influence the policies of the Government.

I can assure the President that when H.R. 7674 is enacted, he, this Congress and the American people will know how much of the taxpayers' moneys are being spent on consultants and other contractors.

He, this Congress and the American people will know who, in fact, is making and implementing the policies of this Government. It is time for this Congress to act. We will be held responsible if we continue to allow the uncontrolled expenditure of billions of dollars through a system which obscures responsibility and invites abuse.

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It is a particular pleasure to us this morning to have as our first witness Admiral H. G. Rickover, father of our nuclear-powered Navy and an expert in a variety of related matters. For almost 60 years he has served his country as a naval officer. For more than a quarter of a century he has headed the naval nuclear propulsion program, a joint undertaking by the Navy Department and the Department of Energy, which is responsible for the development and application of nuclear power in naval warships.

From this unique position, Admiral Rickover has acquired vast experience in dealing with large defense contractors and the Federal bureaucracy.

He has been an outspoken critic of waste and inefficiency in Government programs and, Admiral, we are honored by your presence and look forward to your testimony.

Please understand the honor a former lieutenant junior grade has in welcoming you to the subcommittee.

STATEMENT OF ADM. H. G. RICKOVER, DEPUTY COMMANDER, NUCLEAR POWER DIRECTORATE, NAVAL SEAS SYSTEM COMMAND

Admiral RICKOVER. Mr. Chairman, I am glad you mentioned that you were a (jg.) but I hope not to treat you as such. This is a case where a former (jg.) now outranks a four-star admiral and I congratulate you for having achieved that position, and for the wisdom of your electorate in recognizing your inherent genius.

Mr. HARRIS. It is widespread knowledge that I have the most intelligent electorate in the country, Admiral.

Admiral RICKOVER. You are very fortunate, sir.

I believe your opening statement contains succinctly what I am going to say in my long testimony. All I can do is embellish upon what you have said.

Thank you for inviting me to testify on H.R. 7674, a bill aimed at eliminating abuses that have been brought to light by this committee, the General Accounting Office, and others, regarding the Government's use of consultants. Among these abuses are:

One, contracting for useless or unnecessary work.

Two, showing favoritism in the award of contracts—particularly in contracts to former Government employees.

Three, using consultants to perform agency functions or to circumvent agency personnel ceilings.

Four, commissioning studies to buy time while creating an impression of action.

Five, paying excessive rates for consultants.

These problems are not new. I observed many of them_before World War II when I first came to Washington to run the Bureau of Ships electrical section. Even in those days there were selfproclaimed experts with impressive credentials who could be hired to perform studies and give advice. After a few encounters with these so-called experts, I decided I would be much better off taking advantage of and, where necessary, developing in-house Government expertise to provide the supervision and technical direction for my programs.

I now limit contracts under my cognizance to bona fide equipment manufacturers and shipbuilders, for research and develop