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* ? var.,- Approved For Release 2001/11/01: CIA-RDP72-00337R000300140012-8 . August 12, 1970 CONGRESSIONAL RECORD ? Si.INA'11 S 13317 try, and our world. Surely a war on II- The requirement for congressional no- performance should be performed by an legal drugs is a war worth fighting. =cation would not, however, apply to independent body. By placing this au- Mr. BYRD of West Virginia. Mr. Pres- modifications of standards or regulations thority in the board, to be approved by ident, I suggest the absence of a quorum. already promulgated. the Senate, I think we would have guar- The PRESIDING OFFICER. The clerk The Senate bill also contained a provi- amteed that independence. The provision will call the roll. sion limiting the loan guarantee author- in the pending bill, in my opinion, fails The assistant legislative clerk pro- ity under the Defense Production Act to because the independence of its Members ceeded to call the roll. $20 million and preventing any guaran- will have already been compromised Mr. BYRD of West Virginia. Mr. Pres- tees from being used primarily for the by their very appointment. While the ident, I ask unanimous consent that the purpose of preventing the insolvency or Comptroller General of the United order for the quorum call be rescinded, bankruptcy of a firm unless the President States remains chairman under both The PRESIDING OFFICER. Without certified defense production would be di- approaches, under the approach aP- objection, it is so ordered. rectly and substantially affected. The proved in the bill he himself will appoint House Conferees agreed to accept the the members of the board and, therefore, ORDER FOR RECOGNITION OF SEN- Senate language, they are subject to his pressure. Finally, Mr. President, the House bill The Comptroller General of the United ATOR GOODELL TOMORROW contained a provision giving the Presi- States, Mr. Elmer Stags, in testimony Mr. BYRD of West Virginia. Mr. Pres- dent standby authority to control wages, before the Senate Banking and Currency ident, I ask unanimous consent that at salaries, prices and rents. This authority Committee, opposed the provision which the conclusion of the vote tomorrow on would expire on February 28, 1971. This the bill finally contained. He argued that the amendment offered by the able Sena- provision was agreed to by the Senate members of the board should have been tor from Wisconsin (Mr. PROXMIRE) ? conferees. independently appointed by the Presi- Vich is presently scheduled for 12 Mr. President, I move the adoption of dent to represent the accounting pro- d' loc noon, I believe?the able Senator the conference report. fession, small business, as well as indus- in e York (Mr. GOODELL) be reco,g- Mr. BENNETT. Mr. President, al- try and government. But, by rejecting r not to exceed 20 minutes. though I was a conferee on the bill, I the position taken by the President, the The PRESIDING OFFICER. Without was unable to attend the conference; but Comptroller General?and, incidentally, 'osV? j ectiontit is so ordered. had I been there, I would not have signed by himself?the bill has now set up a ?the report. board which has no real independence. AMENDMENT Title II, which was in the House bill, Mr. President, I realize that under AMENDMENT OF DEFENSE PRODUC- to which the chairman referred last, the circumstances, these comments and TION ACT OF 1950?CONFERENCE .gives the President the power to impose criticisms of mine are more or less REPORT wage and price controls for a period of meaninglesss because we have gone too Mr. SPARKMAN. Mr. President, I sub- 6 months. That reminds me of giving a far down the legislative path to change mit a report of the committee of confer- fireman authority to use a water sup- that path. ence on the disagreeing votes of the two ply for only 30 minutes in case of a Mr. SPARKMAN. Mr. President, will Houses on the amendments of the House three-alarm fire. To me, that provision is the Senator from Utah yield? to the bill (S. 3302) to amend the De- entirely political, and it is interesting Mr. BENNETT. I yield. fense Production Act of 1950, and for that it will expire as soon as the 1970 Mr. SPARKMAN. With reference to other purposes. I ask unanimous consent elections are over, setting up the board, of course, the Sen- f or the present consideration of the re- The President has made it perfectly ator will remember that we discussed it port, clear that he does not believe that the use at length in the committee. I had some The PRESIDING OFFICER (Mr. of price, wage, and rent controls is the sympathy with his viewpoint, but the SenwEncEn). Is there objection to the way to solve the inflation problem which Senator will recall that the Comptroller present consideration of the report? he inherited. He has made it perfectly General particularly requested this kind There being no objection, the Senate clear that he does not intend to use this of setup. proceeded to consider the report, power which the bill forces on him. So But, so far as the conference itself was (For conference report, see House pro- it is obvious to me, at least, that the concerned, I do not recall that we had ceedings of August 10, 1970, pp. H8045-- purpose of writing this into the law is any choice, because the House had set H8046, CONGRESSIONAL RECORD.) so that the President's political oppo- up practically the same language. About Mr. SPARKMAN. Mr. President, a con- nents can say, "We gave you the power; the only change that was made in the ference committee between the House inflation is not solved; therefore, you are conference was that they had, I believe, and Senate met on Thursday, August 6 to responsible for the inflation." a provision in there that one of the ac- resolv the differences between the House I am certain that the President has counting members had to be a man who and Senate versions of S. 3302. courage enough to survive that kind of had experience in small business. We The Senate version of S. 3302 author- attack, but I am disturbed that we would accepted that. That is about the only ized the establishment of uniform cost write what to me is a completely political difference that prevailed between the accounting standards to be applied feature into a bill so far removed, whose two Houses so far as setting up the board to all defense contracts in excess of $100.000, purpose is to extend the defense produc- was concerned. The standards would be developed by ation act. Mr. BENNETT. I recognize that this ' Also, I am one of those who have not is a kind of expression of frustration on five-man Accounting Principles Board headed by the Comptroller General, agreed with the method contained in the my part, but I cannot let the conference The House bill established a similar Acbill to set up the accounting standards report be approved without expressing -') t board. I think it is a serious mistake, a my disappointment in these two lea- counting Principles Board; however, the compromise of sound constitutional tures; namely, the feature with respect accounting standards could not have been government and the separation of to which we picked up from the House powers, put into effect unless Congress enacted setting up the 6-month system, under subsequent legislation. 'When this matter was before the Sen- _ which the President may impose wage The conference committee agreed th ate Committee on Banking and Cur- and price controls which, I think, is for accept the Senate version with two rency, I offered an amendment which the purpose of embarrassing him politi- amendments. The first amendment re- would have set up a cost accounting cally; and then the feature? quired that one of the accounting mem- board consisting of the Comptroller Gen- Mr. SPARKMAN. Will the Senator bers of the Board have a background in eral and four members to be appointed by from Utah yield there further? the accounting problems of small busi- the President, subject to the advice and Mr. BENNETT. I yield. ness firms. The second amendment re- consent of the Senate. Mr. SPARKMAN. So far as the Sen- quires that Congress be notified in ad- My amendment was defeated in the ate is concerned, I think that I can say vance of all standards and regulations committee by a tie vote and come- we did not feel it was a political matter. knullittlguled by the -Boara and be given quently, when it was offered in the Sen- I think the Senator has heard me say a 60-day opporttlitUrthhoesoiolact tuarrrffeetiOn tlel standards or reg MIMS. t.ettpluypy 24gwa 7 mongol nova, d we would never have to have wage and price controls. It resolution of both Houses orCongress. I think that a review of contract cost is unsatisfactory from the standpoint of * ? Approved For Release 2001/11/01 : CIA-RDP72-00337R000300140012-8 CONGRESSIA,),N S.ILN E Augus6 1,2,, hini setting it up, and also unsatisfactory from the standpoint of ? administering the program. I therefore certainly hope that the President will not have to set up wage and price controls. I hope that inflation will start a downward turn so that we can get out of that problem. But that was the situation, and it was a practical situation that we were met with. We did not consider that in the Senate at all. ? Mr. BENNETT. No. Mr. SPARKMAN. We did not consider it at all. We did pass, a couple of years ago, a provision that gave the President the option to use credit controls, either voluntarily or mandatorily. The Senator will remember that. But we were faced with a realistic situation. The rollcall in the House, which appears on page H7547 of the CONGRESSIONAL RECORD Of July 31, 1970, shows that the vote was 257 for it and only 19 against. Only 19 Representatives voted against It. About a dozen of those 19 were Re- publicans, but nearly all the other Re- publicans joined in. I have forgotten what the total was, but the Republican leader over there voted for it, and the assistant leader over there voted for it?practically every one of the Repub- licans. ? Several of the 19 were Democrats. As I say, the majority leader and the assist- ant majority leader voted for it. So, who were we to question this being a political' matter? Mr. PROXMIRE. If the Senator will yield on that point, I should like to point out, furthermore, that of the three Re- publicans in the conference committee, two of them voted for the price-wage controls in the House vote, including the distinguished ranking member of the House Banking Committee, Representa- tive WIDNALL and Congressman MIZE, so that we were in a position in that con- ference where the House was overwhelm- ingly united on this particular position. Mr. BENNETT. That still does not pre- vent me from claiming the privilege of expressing my disappointment in the re- sults of the conference. I have talked at some length about this problem at other times. I have talked about it before the committee. I was try- ing to manage a business during World War II and part of the Korean war, try- ing to wrestle from that point of view with the wage,and price control problem. I discovered, and the record will bear me out, that wage and price controls do not control inflation; 'that there are so many ways to get around it, and that the rate of inflation during World War II, when those controls were in effect, was at exactly the same rate 5 years after the controls had been lifted. Thus, it is a delusion and a snare. Well, Mr. President, I have had the opportunity to express my disappoint- ment. I shall have nothing more to say about the report except to say that I should like to be recorded as opposing it. their leadership on the extension of the Defense Production Act and the provi- sion dealing with uniform cost account- ing standards. I was most gratified that the House-Senate conference committee agreed to adopt substantially the Senate provisions concerning uniform cost ac- counting standards. The bill passed by the Senate by an overwhelming vote of 69 to 1 would have required the adoption of uniform cost accounting standards on all Government contracts in excess of $100,000. These standards would have been promulgated by a five-man accounting board ap- pointed by the Comptroller General who would serve as its chairman. While the House bill established a similar accounting board, the regulations could not have been put into effect unless Congress enacted subsequent legislation. In my view, this provision would have completely negated the intent of the Comptroller General's report which con- cluded that uniform cost accounting standards on Government contracts were both feasible and desirable. In view of the billions of dollars a year being wasted by the Defense Department, it is time we put these standards into effect without further delay. In that connection, the bill agreed to by the House-Senate conference com- mittee authorizes the accounting prin- ciples board to promulgate regulations without the need for coming back to Con- gress for additional legislation. The bill also requires the board to report to Con- gress within 2 years concerning their progress in promulgating cost account- ing standards. In view of the urgent need to put these standards into effect as soon as possible, I would hope that the bulk of these regulations would be completed and issued within the 2-year period. No doubt, these regulations can be sub- sequently refined, modified and amended on a continuing basis; however, it seems entirely reasonable to assume that the major task of the accounting board can be completed within the initial 2-year period. Mr. President, again I wish to thank the distinguished chairman of our com- mittee and the able chairman of the Sub- committee on Production and Stabiliza- tion for their excellent cooperation and assistance in getting this long overdue reform enacted into law. Mr. TOWER. Mr. President, I must express my objections to the uniform cost accounting bill which we are voting on today. This measure has been char- acterized as totally impractical as a matter of accounting science because of the diversity of products, firms, and cost factors involved in defense contracting. I am not opposed to tightening up the procedures by which the Defense De- partment and the General Accounting Office assess the effectiveness of the ex- penditure of our tax dollars for defense procurement. But to require the General Accounting Office and the Accounting cases the GAO can determine costs adequately from their knowledge of the accounting practices of various types of contractors and product lines. To cause all of these contractors to change over their accounting systems to some "uni- form" system would be tremendously ex- pensive, and would cost the firms more than the system could save, therefore re- sulting in higher prices for defense products. Of the two versions of this bill, the House bill was much preferable because it gave Congress a chance to assess what- ever standards are arrived at by the Board, and to determine whether they were too detailed to be feasible to im- plement. The Senate version, which was adopted in conference, does not give Congress the chance to review these standards. I think this is a mistake. I intend to watch the developments that arise from this legislation closely in the coming months, and I hope that Congress will reconsider the wisdom of this measure at the beginning of the next Congress. The PRESIDING OFFICER,. The question is on agreeing to the conference report. Mr. BYRD of West Virginia. Mr. Pres- ident, I suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The legislative clerk proceeded to call the roll. Mr. BYRD of West Virginia. Mr. Pres- ident, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING Or.FICER. Without objection, it is so ordered. The question is on the adoption of the conference report. The report was agreed to. Mr. SPARKMAN. Mr. President, I move that the Senate reconsider the vote by which the conference report was agreed to. Mr. BYRD of West Virginia. Mr. Pres- ident, I move to lay that motion on the table. Mr. TALMADGE. Mr. President, I move to lay the motion on the table. The motion to lay on the table was agreed to. AUTHORIZATION OF APPROPRI- ATIONS FOR MILITARY PRO- CUREMENT AND OTHER PUR- POSES The Senate resumed the consideration of the bill (H.R. 17123) to authorize ap- propriations during the fiscal year 1971 for procurement of aircraft, missiles, naval vessels, and tracked combat ve- hicles, and other weapons, and research, development, test, and evaluation for the Armed Forces, and to prescribe the au- thorized personnel strength of the Se- lected Reserve of each Reserve compo- nent of the Armed Forces, and for other purposes. TUE C-5A Mr. PROXMIRE. Mr. President, I Board created in this bill to work out Mr. TALMADGE. Mr. President, the want to commend the fine work of the uniform standards for all defense con- distinguished senior Senator from Michi- chairman of the Senate Banking Com- tractors seems to be entirely impractical. gan was kind enough to send to my office mittee, Senatoih naravangtoige giumte ett?gosir; a g agok to o ent which he proposes to of- man of its Su6 Ipi4tPtary procurement act S. .1 It ! 4 and Stabilization, Senator MONDALE for flee testified that in 99 percent of the which relates to the C-54. A preliminary menu ofsuntygstfmr.,.13Alee tion0?to realize the ideals of liberty, equal- ity end justice. The "non-system" is near a breakdown at rf some points in government, he said, since it operates under cumbersome, outmoded, over- lapping procedures. A pillar of New Federalism is revenue- sharing. Richardson pointed out that local- ities face diminishing sources of tax reve- nues, while Uncle Sam has prospects Of in- creasing collections: This dollar mismatch would be corrected under the Nixon plan of sharing Federal wealth with local govern- ment. It would, Richardson declared, be a means of decentralizing government, moving the administrative authority closer to the areas in which problems exist. Richardson said the present grant system Is paralyzing government. Red tape requires hours of bookwork by grant applicants and a vast Federal establishment for processing. ?The solution, he stated, is not in retreat, but in reform. The Administration, he declared, is mov- ing on these four fronts to straighten out the labyrinthian maze that has frustrated the functioning of many Federal programs now in existence: Grant consolidation?The President has sought authority to consolidate existing giant-in-aid categories. Richardson noted that there are five library grant programs, seven medical library grant programs. There are nine vocational educational formula grant programs and six project grant ,au- thorizations. Fund transfers?This plan would allow Governors to transfer up to 20 percent of Federal grant funds from any one program to another of higher priority. Thus, funds could be directed to high-priority programs, instead of being spent where there is little need. Grant streamlining?Getting a Federal grant is a laborious process now. Processing 'involves 28 steps, with up to 60 actions re- quired under each step. The Administration already has cut out 807 man-years by eliminating some of these steps, Some 182 of the 516 steps Were cut out of 23 projects in a special HEW pilot study. Decentralization?The Administration has moved decisively in its effort to bring the Government back to the people, Richardson said. Regional officers are given more au- thority. The various domestic agencies now have the same regional boundaries with headquarters in the same cities, slashing travel time required. State and local leadership will be upgraded under the New Federalism, Richardson said. FISCAL RESPONSIBILITY ACT OF 1970 (Mr. BOW asked and was given per- mission to extend his remarks at this point in the Record and to include ex- traneous matter.) Mr, BOW. Mr. Speaker, today a ma- jority of the Republican members of the Appropriations Committee and the Republican leadership are joining to- gether to introduce the "Fiscal Respon- sibility Act of 1970." This act would establish a new limitation on spending for fiscal year 1971 that will enable Con- gress to control the results of its own ac- tions on individual appropriation bills. For the benefit of the Members I in- clude the following statement explaining the various sections of the bill: STATEMENT Section 1 of the bill would establish a limitation of $209,000,4190,000_ expendi- (Mr. MORSE asked and was given Mr. PATMAN submit ed the following tures andAtap ratv wowease) 2o0 inztiosknOwv4i4Emb17-ttfrOrktidnocffitErtillforeport and statement on the 2001/11/01,:CIA-RDP72-003371R0003001400138 been established in several recent fiscal years. Thefigure of $205,600,000,000 is the re- [Mr. MORSE'S remarks will appear vised estimate of budget outlays for fiscal hereafter in the Extensions of Remarks.] 1971 which was made by the President in his statement of May 19, 1970. It reflects in- creases, over the original February Budget estimate ($200,800,000,000), of $2.3 billion in uncontrollable programs and $2.5 billion in other programs. Section 2 of the bill would provide for in- creasing the limitation by the amount of increases, over the May 19 estimate, in cer- tain designated uncontrollable programs, such as Social Security benefits, interest, veterans' benefits, and farm price supports. Similar provisions for adjustments in limita- tions on outlays have been contained in com- parable legislation enacted in several recent fiscal years. Section 3 of the bill would provide for fur- ther adjustments in the limitation on out- lays in the event of a shortfall of estimated receipts from the sale or lease of certain Government assets, such as mortgaged prop- erties held by the Department of Housing and Urban Development and the Veterans Administration and leases of lands on the Outer Continental Shelf. Similar provisions for adjustments have been contained in other comparable legislation establishing limita- tions on outlays. Section 4 of the bill is intended to prevent the limitation on outlays, as adjusted for in- creases in uncontrollable items and shortfalls in estimated receipts, from being exceeded because of action by the Congress which would increase expenditures above the Pres- ident's estimates. This section would require the Director of the Office of Management and Budget, at the close of the current session of Congress, to report to the President and to the Congress his estimate of the effect of Congressional action on expenditures recom- mended by the President. If the Director's estimate indicated that expenditures would exceed the adjusted limitation, the Director 'would be required to specify the pro rata reduction in expenditures, for each activity Increased by the Congress, which would be necessary to bring total budget outlays within the adjusted limitation. Agencies would be required to manage their programs so that outlays would not exceed the reduced figures specified by the Director. There are , no exceptions. Section 4 thus provides a method by which Congress would control the results of its own actions on individual appropriation bills. This is in marked contrast to bills establish- ing outlays in previous years because such bills generally have established a limitation which was increased when Congress increased appropriations for individual activities be- yond the President's estimates, Section 5 of the draft bill relates to the method of distributing funds for activities which involve the application of a formula to the amount appropriated. As in the case of some of the previous statutes establishing limitations, this section would provide that the reduced amount available for any par- ticular activity?in accordance with the de- termination made by the Director of the Office of Management and Budget?be sub- stituted for the amount appropriated when applying the formula. This section also pro- vides that the Government shall not be liable for any difference between the amount ap- propriated and the amount as reduced to comply with the limitation. Section 6 would repeal Title V of the Sec- ond Supplemental Appropriations Act, 1970. That title establishes a limitation on outlays which would be increased whenever appro- priations by the Congress might be in ex- cess of the President's recommendations. Limitations of the eanie general nature lave traneous ma ter.) LEGISLATIVE REORGANIZATION ACT OF 1970 (Mr. SCHWE1VGEL asked and was given permission to extend his remarks at this point in the RECORD and to include extraneous matter.) Mr. SCHWENGEL, Mr, Speaker, I would like to paraphrase the lyrics from the musical play "1776" to indicate my feelings on the subject of congressional reform in 1970: On this humid Monday morning in this congressional incubator, We're waiting for the chirp, chirp, chirp, of Congress being reformed. We're waiting for the scratch, scratch, scratch, of that tiny fellow being born, God knows it's hot enough to hatch a stone, but will it hatch an egg, the egg of congressional reform? Dear God! For four solid weeks we've been sitting here. Four weeks! Doing very little on reform! I do believe .you've laid a curse on North America A curse that we once rehearsed in Phila- delphia. A second flood, a simple famine, plagues of locusts everywhere Or a cataclysmic earthquake I'd accept with some despair. But no! You send us Congress! - Good God, Sir was that fair? I say this with humility in Washington We're your responsibility in Washington If you don't want to see us hanging from some far-off voting booth, If you don't want the voice of independ- ency to be forever stilled Then God Sir?get Thee with it!! For Congress never will. You see, we piddle, twiddle, and resolve, not one damn thing do we solve or evolves that changes things Piddle, twiddle, and resolve?nothing's ever solved. In foul, feated, fuming, foggy, filthy, Washington. Good God! We may sit here for years and years in Washington. These indecisive grenadiers of Washing- ton. They can't agree on what is right and wrong or what is good or bad. I'm convinced the only purpose this Congress ever had Was to gather here specifically to drive Fred Schwengel mad! I You see, we piddle, twiddle, and resolve, not one damn thing do we solve In foul, feated, fuming, foggy, filthy, Washington. Dear God! Is anybody there? Does anybody care? AMENDMENT OF DEFE E PRODUC- TION ACT OF 1950? ONFERENCE REPORT wArved For Release 0110A E I f- ID-00337I 300140012 -8 Augt 10,mWE4164ENI10N brtrj3Avo fz i.o9 to amend the Defense Pro- ci CONFERENCE REPORT (H. REPT. 91-1386) The committee of conference on the dis- agreeing votes of the two Houses on the amendment of the House to the bill (S. 3302) to amend the Defense Production Act of 1950, and for other purposes, having met, after full and free conference, have agreed to rec- ommend and do recommend to their respec- tive Houses as follows: That the Senate recede from its disagree- ment to the amendment of the House and agree to the same with an amendment as follows: In lieu of the matter proposed to be inserted by the House amendment insert the following: TITLE I?DEFENSE PRODUCTION ACT AMENDMENTS ? 101. Extension of Act The first sentence of section 717(a) of the Defense Production Act of 1950 (50 U.S.C. App. 2166 (a) ) is amended? (1) by striking out "August 15, 1970" and inserting in lieu thereof "June 30, 1972"; and (2) by striking out "section 714" and in- serting in lieu thereof "sections 714 and 719". ? 102. Definitions Section 702 of the Defense Production Act of 1950 (50 U.S.C. App. 2152) is amended? (1) by inserting "space," after "stockpil- ing," in subsection (d) ; and (2) by adding at the end thereof a new Subsection as follows: "(f) The term `defense contractor' means any person who enters into a contract with the United States for the production of ma- terial or the performance of services for the national defense." 1 103. Uniform cost accounting standards Title VII of the Defense Production Act of 1950.1$ amended by adding at the end thereof a new section as follows. "COST -ACCOUNTING STANDARDS BOARD P ? "SEc. 719. (a) There is established, as an agent of the Congress, a Cost-Accounting Standards Board which shall be independent of the executive departments and shall con- sist of the Comptroller General of the United States who shall serve as chairman of the Hoard and four members to be appointed by the Comptroller General. Of the members appointed to the Board, two, of whom one shall be particularly knowledgeable about the cost accounting problems of small busi- ness, shall be from the accounting profes- sion, one shall be representative of indus- try, and one shall be from a department or agency of the Federal Government who shall be appointed with the consent of the head of the department or agency concerned. The term of office of each of the appointed mem- bers of the Board shall be four years, ex- cept that any member appointed to fill a vacancy in the Board shall serve for the re- mainder of the term for which his predeces- sor was appointed. Each member of the Board appointed from private life shall re- ceive compensation at the rate of one two- hundred-sixtieth Of the rate prescribed for level IV of the Federal Executive Salary Schedule for each day (including traveltime) in which he is engaged in the actual per- formance of duties vested in the Hoard. "(b) The Board shall have the power to appoint, fix the compensation of, and re- it move an exepUtlye pOcK9tar :and two addi- tional staff members Eit44.1.1 regard to Chap- ter 51, subchapters rit and I of cVapfer 53, and chapter 75 of 'title 5, United States Code, and those provisions of such title relating to appointment in the competitive service. The executive secretary and the two additional staff members may be paid compensation at rates not to exceed, the rate's prescribed for levels IV and V of the Federal :Executive Salary Schedule, respectively. "(c) The Board is authorized -be appoint and fix the compensation of such other personnel as the Board deems necessary to carry out its functions. "(d) The Board may utilize personnel from the Federal Government (with the con- sent of the head of the agency concerned) or appoint personnel from private life with- out regard to chapter 51, subchapters III and VI of chapter 53, and chapter 75 of title 5, United States Code, and those provisions of such title relating to appointment in the competitive service, to serve on advisory com- mittees and task forces to assist the Board in carrying out its functions and responsi- bilities under this section. "(e) Except as otherwise provided in sub- section (a), members of the Board and of- ficers or employees of other agencies of the Federal Government utilized under this sec- tion shall receive no compensation for their services as such but shall continue to receive the compensation of their regular positions. Appointees under subsection (d) from pri- vate life shall receive compensation at rates fixed by the Board, not to exceed one two- hundred-sixtieth of the rate prescribed for level V in the Federal Executive Salary Schedule for each day (including traveltime) in which they are engaged in the actual Per- formance of their duties as prescribed by the Board. While serving away from their homes or regular place of business. Board members and other appointees serving on an inter- mittent basis under this section shall be allowed travel expenses in accordance with section 5703 of title 5, United States Code. "(f) All departments and agencies of the Government are authorized to cooperate with the Board and to furnish information, appro- priate personnel with or without reimburse- ment, and such financial and other assist- ance as may be agreed to between the Board and the department or agency concerned. "(g) The Board shall from time to time promulgate cost-accounting standards de- signed to achieve uniformity and consistency in the cost-accounting principles followed by defense contractors and subcontractors under Federal contracts. Such promulgated standards shall be used by all relevant Fed- eral agencies and by defense contractors and subcontractors in estimating, accumulating, and reporting costs in connection with the pricing, administration and settlement of all negotiated prime contract and subcontract national defense procurements with the United States in excess of $100,000, other than contracts or subcontracts where the price negotiated is based on (1) established catalog or market prices of commercial items sold in substantial quantities to the general public, or (2) prices set by law or regulation. In promulgating such standards the Board shall take into account the probable costs of implementation compared to the probable benefits. "(h) (1) The Board is authorized to make, promulgate, amend, and rescind rules and regulations for the implementation of cost- accounting standards promulgated under subsection (g). Such regulations shall re- quire defense contractors and subcontrac- tors as a condition of contracting to dis- close in writing their cost-accounting prin- ciples, including methods of distinguishing direct costs from indirect costs and the basis used for allocating indirect costs, and to agree to a contract price adjustment, with interest, for any increased costs paid to the defense contractor by the United States be- cause of the defense contractor's failure to comply with duly promulgated cost-account- ing standards or to follow consistently his disclosed cost-accounting practices in pricing contract proposals and in accumulating and reporting contract performance cost data. Such interest shall not exceed 7 per centum per annum measured from the time such payments were made to the contractor or H 8045 subcontractor to the time such price adjust- ment is effected. If the parties fail to agree as to whether the defense contractor 02 sub- contractor has complied with cost-account- ing standards, the rules and regulations re- lating thereto, and cost adjustments de- manded by the United States, such disagree- ment will constitute a dispute under the contract dispute clause. 0(2) The, Board is authorized, as soon as practicable after the date of enactment of this section, to prescribe rules and regula- tions exempting from the requirements of this section such classes or categories of de- fense contractors or subcontractors under contracts negotiated in connection with na- tional defense procurements as it determines, on the basis of the size of the contracts in- volved or otherwise, are appropriate and con- sistent with the purposes sought to be achieved by this section. "(3) Cost-accounting standards promul- gated under subsection (g) and rules and regulations prescribed under this subsection shall take effect not earlier than the ex- piration of the first period of sixty calendar days of continuous session of the Oongress following the date on which a copy of the proposed standards, rules, or regulations is transmitted to the Congress; if, between the date of transmittal and the expiration of such sixty-day period, there is not passed by the two Houses a concurrent resolution stating in substance that the Congress does not favor the proposed standards, rules, or regu- lations. For the purposes of this subpara- graph, in the computation of the sixty-day period there shall be excluded the days on which either House is not in session because of adjournment of more than three days to a day certain or an adjournment of the Congress sine die. The provisions of this paragraph do not apply to modifications of oast accounting standards, rules, or regula- tions which have become effective in con- formity with those provisions. "(i) (A) Prior to the promulgation under this section of rules, regulations, cost-ac- counting standards, and modifications there- of, notice of the action proposed to be taken, including a description of the terms and substance thereof, shall be published in the Federal Register. All parties affected there- by shall be afforded a period of hot less than thirty days after such publication in which to submit their views and comments with respect to the action proposed to be taken. After full consideration of the views and comments so submitted the Board may promulgate rules, regulations, cost-account- ing standards, and modifications there of which shall have the full force and effect of law and shall become effective not later than the start of the second fiscal quarter be- ginning after the expiration of not less than thirty days after publication in the Federal Register. "(B) The functions exercised under this section are excluded from the operation of sections 551, 553-559, and 701-706 of title 5, United States Code. "(C) The provisions of paragraph (A) of this subsection shall not be applicable to rules and regulations prescribed by the Board pursuant to subsection (h) (2). "(j) For the purpose of determining whether a defense contractor or subcontrac- tor has complied with duly promulgated cost- accounting standards and has followed con- sistently his disclosed cost-accounting prac- tices, any authorized representative of the head of the agency concerned, of the Board, or of the Comptroller General of the United States shall have the right to examine and make copies of any documents, papers, or records of such contractor or subcontractor relating to compliance with such cost-ac- counting standards and principles. "(k) The Board shall report to the Con- gress, not later than twenty-four months after the date of enactment of this section, Approved For Release 2001/11/01 : CIA-RDP72-00337R000300140012-8 *++).. Approved For Release 2001/11/01 : CIA-RDP72-00337R000300140012-8 H 8046 CONGRESSIONAL RECORD -- HOUSE August 107-1970 by concurrent resolution block the proplei standards from taking effect However, minor and technical modifica- tions in already promulgated standards, rules or regulations which do not In effect con- stitute the issuance of new standards, rules or regulations would not have to be sub- mitted to Congress prior to promulgation. The compromise version also contained various administrative and enforcement pro- visions concerning uniform accounting standards contained in the Senate version of S. 8302. The House version of S. 3302 gave the President standby authority to stabilize prices, wages, salaries, rents and interest rates at levels not less than those prevailing on May 25, 1970, but adjustments could be made to avoid inequities. This authority would expire February 28, 1971. The Senate conferees receded to the House on this en- tire prevision except for the deletion of in- terest rates from the standby controls title. This amendment was aocepted by the House conferees because the President was already given standby authority to control interest races under Public Law 91-151 passed by the Congress in December, 1969. The House version of S. 3302 did riot con- tain any amendments affecting the Defense Production Act loan guarantee program. The Senate version limited these loan guarantees to a maximum of $210 million per contractor, except with Congressional approval. It also prohibits the use of the Defense Production Act loan guarantee program primarily to pre- vent insolvency or bankruptcy unless the President certifies In detail to Congress that such a business failure -would have a direct and substantially adverse effect upon defense _ production and presentee/nil Se/Intent-on at least ten days prior to such lean guarantee. The House receded to the Senate version en this prevision -beanie. otthe /Wet to prevent unwarranted use of DSA loan guatrantatee without adequate- nifelfunr4S? - Weimar Paanne, Lemma E. SULLIVAN, HENRY S. REUSS, THOMAS L. Asareme Managers on the Part of the Ito us'. concerning its progress in promulgatin cost- accounting standards under subsection (g) and rules and regulations under subeection (he. Thereafter, the Board shall make an annual report to the Congess with respect to its activities and operations, tcgether with such recommendations as it deems ap- propriate. "(I) There are authorized to be appro- priated such sums as may be. necessary to carry net the provisions of this section." S lee. Loan guarantees Section 301 of the Defense Production Act of 1950 (50 U.S.C. App. 2091) is amended by adding at the end thereof a new subsec- tion as follows: "(e) (I) Except with the approval of the Congress, the maximum obligation of any guaranteeing agency under any loan, dis- count, advance, or commitment in connec- tion therewith, entered into under this sec- tion shell not exceed 320,000,000. "(2) The authority conierred by this sec- tion shall not be used primarily to prevent the financial insolvency :or bankruptcy of any person, unless "(A) the President certifies that tee in- solvency or bankruptcy would have a direct and substantially adverse effect upcn de- fense production; and "(B) a copy of such certification, together with a detailed ju.stincation thereof, is tram,- mitteci to the Congress and to the Commit- tees on Banking and Currency of Ise re- spective Houses at least ten days prior to the exercise of that authority for such use." TITLE II---COST OP LIVING STABILIZATION 201, Short title This title may be cited as the "Ecc comic Stabilization Act of 1970'. 202. Presidential authority : The President is authorezed to issue such orders end regulations as he may deem ap- propriate to stabilize prices, .rents, wages, and salaries at levels not less than these prevailing on May 25, 1970. Such orders and regulations may provide for the making of such adjustments as my be necessery eo prevent gross inequities. S 208. Delegation The President may delegate the perform- ance of any function under this title to such officers, departments, and agencies of the United States as he may deem apprepri- ate. 204.. Penalty Whoever willfully violates any order or reg- ulation under this title shall be emit not more than 35.000. 205. Injunet i OHS Whenever it appears to any agency of the United States, authorized by the President to exercise the authority contained I i this section to enforce orders and regulations it- sued un.der this title, that any person has en- gaged, le engaged, or is about to engage in any act:3 or practices constituting a viciatioa of any regulation or order under this title, it may in. As discretion bring an action, in the proper district court of the United States or the proper United States court of any terri- tory or other place subject to the jurist iction of the United States, to enjoin such acts or practices, and upon a proper showing a per- manent or temporary injunction or restrain- ing order shall be granted without bond. Upon application of the agency, any such court may also issue mandatory injunctions commanding any person tc comply with any regulation or order under this title. 206. Expiration The authority to issue anti enforce orders and regulations under this title expires at midnight February 28, 1971, but such ex- piration than not affect any proceeding un- der section 204 for a violation of ane such order or regulation, or for the punishment for contempt committed in the violation of any injun otion issued under section 205, com- mitted prior to March 1, 1971. And the House agree to the same. WRIGHT PATMAN, LEONOR K. Sueervein Heresy S. Eruss, Tnomas L. ASILLEY, Managers on the Part of the House. JOHN SPARKMAN, WILLIAM PROXMIRE, EOM UND S. MOSKII , WALTER F. MONDALE, ERNEST F. 11OLLINGS, ? CHARLES E. GOODELL, Managers on the Part of the Senate. STATEMENT The managers on the part of the House at 'she conference on the disagreeing votes of *she two Houses on the amendment of the House to ehe bill (S. 3302) to amend the De- :ream Production Act of 1950, and for other purposes, submit the following statement in eesplanation of the effect of the action agreed upcn by ihe conferees and recommended In the aceonmanying conference report: GENERAL SUMMARY The effect of the conference substitute :na7 be summarized as follows: The licuse conferees agreed to recede to the Senate version concerning the provisions dealing with uniform accounting standards with two amendments. The Senate conferees agreed to recede to the House version as it relates to Title II on standby wage, price, salary and renernne, witb an amendriont. The House conferees agreed te 'the-Senate version as It relates to 1 platted on the use of Defense ProdUet aoan guarantees. DETAILED E X PLAN AT EON _ The House version of S. 3302 establiehed f - rite mber Cost-Accounting *tender& Board appointed and chaired by the Comp- treater General, and made up of two mem- bera of the accounting profession (one with knowledge of small business accounting prac- tices), one representative of industry and one representative of a Government agency, all serving four-year terms. The Board was given the power to recommend to the Con- gress by Tune 30, 1971. and each June 30 thereafter, cost accounting standards de- sigr ed to achieve uniformity and consistency for use by defense contractors and subcon- tractors for negotiated contracts. Tie version agreed to by the conferees would establish the same five-man Cost- Accounting Standards Board as created under the House version and would include the provision that one of the two professional accountants on the Board must have knowl- edge of sir all business accounting. The House cionSerees agreed to the Senate version that the Board would have the power to promul- gate cost accounting standards designed to achieve uniformity and consistency for use by ielense contractors and subcontractors for negotiated contraces, but these standards would not be applied to: ) contracts of 8100,000 or less; (2) negetiated contracts where prices are established by catalog or market price of commercial items sold in substantial quan- tities to the general public; (2) utility rates set by law or regulation; (4) where the Board finds it is not neces- sary to apply the standards to certain classes of contractors because of the size of the con- tracts or otherwise. Ir addition, the House conferees insisted that the Senate version be changed to require that any proposed standards, rules or regula- tion.s to be promulgated by the Board be 'transmitted to Congress for 60 days of contin- llot13 session, during which Congress could LEAVE OF ABSENCE By unanimous consent, leave of ab- sence was granted as follows: To Mr. Frivsir (at the request of Mr. Boons) for today, on account of official business. To Mr. RYAN (at the request, of Mr. Kocn) for the week of August 10, on ac- count of illness. To Mr. O'HARA (at the request of Mr. ALBERT) for August 10, 11, and 12, on ac- count of illness. To Mr. HAGAN (at the request: of Mr. ALBERT) for August 10, On account of of- ficial business. To Mr. MCKNEALLY (at the request of Mr. GERALD R. Pomo) for Auvust 10 and 11, on account of serious illness in family. SPECIAL ORDERS GRANTED By unanimous consent, permission to address the House, following the legisla- tive program and any special orders here- tofore entered, was granted to: Mr. FEIGHAN for 30 minutes? Tuesday, August 11, to revise and extend his re- marks and include extraneous material. Mr. Marrow for 5 minutes, today, and to revise and extend his remarks and include extraneous matter. (The following Members sat the re- quest of Mr. SOMEHOW to revise and Approved For Release 2001/11/01 : CIA-RDP72-00337R000300140012-8