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November 17, 2016
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July 13, 2000
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September 5, 1973
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Approved For Release 2000/08/27 : CIA-RDP75B0038OR000600130005-1 PROPOSED EXECUTIVE BRANCH POSITION/IMPLEMENTATION FOR RECOMMENDATION rr` 3-2 O THE REPORT OF THE COMMISSION ON GOVERNMENT PROCUREMENT Date: Approved For Release 2000/08/27 : CIA-RDP75B0038OR000600130005-1 Approved For Release 2000/08/27 : CIA-RDP75B003801~02Q96 0I1 0005-1 .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 Approved For Release 2000/08/27 : CIA-RDP75B0038OR000600130005-1 became known as the Truth in Negotiations Act. Approved For Release 2000/08/27 : CIA-RDP75B0038OR000600130005-1 2 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 Approved For Release 2000/08/27 : CIA-RDP75B0038OR000600130005-1 the Truth in Negotiations Act to civilian executive agency contracts. Approved For Release 2000/08/27 : CIA-RDP75B00380,6 QQ$09130005-1 (2) Arguments against: (A) The purpose, of the Truth in Negotiations Act have been applied to all civilian executive agencies by way of policies and procedures in the FPR. It is not necessary, therefore, to enact legislation compar- able to the Truth in Negotiations Act which is applicable to civilian executive agencies in order to achieve the objectives of such an act, with respect to such agencies. (B) The absence of such legislation has very positive benefits . These benefits take the form of desirable flexibility in connection with the issuance of related policies and procedures. (b) Develop coordinated regulations for interpretation and application of its provisions (1) Regulations comparable to those in ASPR have been and will continue to be adopted in the FPR. (2) Coordination of these regulations in the future should be by the organization or organizations (currently GSA and DOD) having primary responsibility for Government-wide regulations. (3) Current regulations are adequate. However, nothing in the field of Government procurement regulations is. static and interpretations and additions will be forthcoming, from time to time, as the need arises. Approved For Release 2000/08/27 : CIA-RDP75B00380R000600130005-1 Approved For Release 2000/08/27 : CIA-RDP75B00380R00060O005115 4 VIII. PROPOSED IMPLEMENTATION (a) Include the Truth in Negotiations Act in the Proposed Uniform Procurement Statute to be developed under recommendation A-2. (b) H. R. 9061 has been introduced which would repeal the present provisions of the Armed Services Procurement Act of 1947 (10 U. S. C. , Chap. 137) which includes the Truth in Negotiations Act (10 U. S. C. 2306). Section 10 of the Bill sets provisions comparable to the latter statute. ) No further implementation is necessary. IX. DISSENTING VIEWS Task Group Leader Philip G. Read Approved For Release 2000/08/27 : CIA-RDP75B0038OR000600130005-1 k- pgWjgd For m n-0100/08/27: CIA-R~7P 515QQj$Q fp?Q;Q600130Q-1-- e OL mNkG AND U7--CORD D #X"LZK';' i'i:,OM: EXTENSION NO. PMS/OL Chief , 1226 Ames Center Building 13046 DATE TO: (Officer designation, room number, and building) DATE OFFICER'S COMMENTS (Number each comment to show from whom RECEIVED FORWARDED INITIALS to whom, Draw a line across column aitcr each comment.) iL AGC/OL Recomiend concu.crence ?t~U f~. f l. urar,c;~ in proposed executive ition to extend tie Tru.~~l position D/ L in Negotiations Act by lcg lation to all Govex nice.;, pr curement agencies not r,?sc: 3.OGC '1 covered. PMS/OL wil pre n re 7D01 Headquarters forii to G SA or response in them of our position. h a. OLC 7D43 Headquarters ?' STA ILLEGIB 7. PMS/ 0L 1226 Ames Bldg. n 1; . 15. Approved For Relea a 2000j 08/27 : CIA-RD 75B0038OR000600130005-1 l'SF FREYICIUS r f"1 c {. .F- vc I t 0"1' C Approved For Release 2000/08/27 : CIA;RDP75B00380 00600130Q 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 Approve For elec e(20:00/08/27 : CIA-RDP75B0038OR000600130005-1 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 $ .... ... ., _.. ._ _ _. . .