ADMINISTRATIVE SERVICES REORGANIZATION PROJECT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-00759R000100150001-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 323
• Document Creation Date: December 12, 2016
• Document Release Date: November 6, 2001
• Sequence Number: 1
• Publication Date: February 7, 1979
• Content Type: MF

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FEB1979
MEMORANDUM FOR: Deputy Director for Administration
FROM: James H. McDonald
Director of Logistics
INTL
SUBJECT: Administrative Services
Reorganization Project
Enclosed as attachment are copies of letters and
memoranda concerning the President's Reorganization Project
and, more specifically, the Administrative Services Reor-
ganization Project. Four studies have been completed: Real
Property, Supply and Support Services, Telecommunications,
and Archives and Records. The first two topics were reviewed
by the Office of Logistics; Telecommunications, by the Office
of Communications; and the last, Archives and Records, by the
Information Systems Analysis Staff. For your convenience,
I've added copies of their comments on these topics, along
with those from the Office of Logistics.
Attachment
Distribution:
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-a - OL/PIPS Official w/* atts
1 - OL/RECD Watts
1 - EO/OL Chrono w/o atts
1 D L Chrono w/o atts
6_~
EO/OL: r (7 Feb 79)
OL 9-0535
STATINTL
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Preliminary Correspondence
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THE WHITE HOUSE
June 29, 1977
MEMORANDUM FOR THE HEADS OF
EXECUTIVE DEPARTMENTS AND AGENCIES
SUBJECT: Comprehensive Review of Administrative
Services Delivery
I have directed my Reorganization Project staff at the
Office of Management and Budget to begin a comprehensive
review of the management of administrative services within
the Federal Government. The project will be administered
jointly by'OMB and the Administrator of the General
.Services Administration.
A preliminary staff review indicates significant problems
with existing services. It has been 30 years since the
first Hoover study led to the creation of the General
Services Administration; it is time to reexamine the
objectives and benefits of our present system in light
of those years of operating experience.
A major objective of the study is to improve the delivery
of administrative services to Federal agencies. It will
assess the roles of the General Services Administration
and others in the provision of services related to real
and personal property, automated data processing, tele-
communications, and records management.
The Project will rely heavily on the advice and counsel
of the Congress, Federal Departments and Agencies, State
and local officials, interested private organizations,
and the public. Your agencies are the principal consumers
of Federal administrative services. You have expressed
your concerns about their quality. This is your opportunity
to help improve them.
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You may be asked to contribute time, resources, and staff
assistance to this effort. If so, I hope you will make
your best effort to ensure its successful completion.
My Reorganization Project staff will contact you or an
appropriate member of your staff shortly to discuss the
appropriate role of your department or agency in the
study.
I consider this to be a high priority matter. I know I
can count on your cooperation and assistance.
In order to inform all affected parties that this review
is underway, I have directed that this memorandum be
published in the Federal Register.
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 PREP BENT'S 1._1
ov car asp` l~1$r1 DP85-007598000100150001-9
PROJECT WASHINGTON. D.C./
October 25, 197,7
MEMORANDUM TO HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SUBJECT: Administrative Services Reorganization Project
The President in his memorandum of June 29, 1977, to you
stressed his personal interest in improving the delivery
of administrative services within the Federal Government.
We will assess the role of the General Services Adminis-
tration and other agencies in providing the goods and
services you need to manage your agencies' programs.
When we have collected and analyzed the data, we will
develop organizational and process alternatives aimed at
improving the management and delivery of supplies, space,
ADP equipment and services, telecommunications, transporta-
tion services, records management, and general administra-
tive support.
We want to begin our work with your views, problems, and
priorities clearly in mind. We want to focus our efforts
in those areas you feel are most in need of improvement.
We will seek options for improvement and come back to you to
discuss alternative solutions.
The National Aeronautics and Space Administration has loaned
us Joseph Malaga, Director of Management Operations,
Kennedy Space Center, to direct the day to day work on
this project. Joe and his staff will consult regularly
with your key headquarters and field staff as we go along.
However, we do want your initial thoughts to guide us in our
study design. Please send your ideas and comments to
Joseph Malaga, Executive Director, Administrative Services
Reorganization Project, Room 10235 NEOB, Office of Manage-
ment and Budget, Washington, D.C. 20503. We would like to 11 i
hear from you by November 4 on anything you want considered
in the study design phase of the project.
Wayn
irman Vic
inistrative Services Project Adm
G. Grthq
Chairman
nistrative Services Project
UL l 4 939
EXECUTIVE OFFICE OF THE PRESIDENT *OFFICE OF MANAGEMENT AND BUDGET
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C`N-I R!*AL_ IN - EL.l.IC:=---:-N < = AC" Nc:Y
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Mr. Joseph iaiaga, Executive Director
Administrative Services Reorganization ;=roject
Office of :`Management and Budget
itiashington, D.C. 20503
Dear 11.1r. Malaga:
The opportunity to provide information or your stud,
on organizational and procedural improvements to centrally
provided, federal administrative services is appreciated.
CIA is heavily reliant upon the General Services Adminis-
tration (GSA) for a variety of services, predominantly in
the Metropolitan Washinston Area. The Agency is also
dependent upon the support of the Department of Defense
for supplies, and services, although more so in relation
to foreign and domestic training activities. In both
instances, however, centralized support is made difficult
by the unique aspects of Agency operations.
As ou are probably well ai,are, the Director of Central
Intelligence is statutorily required to protect intelligence
sources and methods including organization, functions,
names, . . . or numbers of personnel . . . These require-
ments, as recorded in a specific CIA exemption within the
Federal Property and Adr-:inistrat.ive Services Act of 1949,
complicate the utilization of centralized federal services
in many functional areas. Because of V--is statutory require-
ment and the necessity to (irectly support sensitive foreign
act vities, the Agency: 7.-1.tains its own telecommunications
~'-r?a i1ity ; has a logistics o _ r.i ation providing supplies,
- h'1nistrative services, classified printing, and facilities
nnort; has a centralized security organization which, among
ctber responsibilities, coordinates Agency facilities protection
by GSA Federal Protective Service officers; and operates, in
coordination with the National Archives and Records Service,
a records management and storage system.
The Administrative Services reorganization Project
memorandum recuested views, Problems, 2nd priorities (and
the assumption is made that, as it affects CIA, GSA services
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Mir. Joseph ',alaga Page 2
are of primary concern). First, CIA's dependence on GSA's
administrative services should be reiterated. The Agency
does not have the size to perform all of these functions
for itself, nor, given the resources, would it be desired
to do so. On balance, GSA support of -:,ncy activities is
more than satisfactory and cooperation and responsiveness
by GSA senior managers can only be rate;: as excellent. It
is considered, however, that improvement i s needed in
GSA/CIA's joint efforts to acquire and ;,,-jintain and operate
facilities. This space acquisition/;,,aintenance function
is complicated by several factors: (1) the necessity to
vigorously screen and/or escort all GSA employees and GSA
contractors given access to Agency buildings; (2) the
occasional necessity for very rapid acquisition, relocation,
or modification of a facility either to house an impending,
"state-of-the art," technical collection system, for security
reasons, or to accommodate organizational change; (3) the
geographic isolation of the CIA Headquarters complex from
GSA's centralized professional staff and labor pool; (4) CIA's
necessity to install and operate, on a 24-hour basis, highly
technical, classified systems requiring dual, special utili-
ties systems for primary and backup operation; (5) the
necessity to provide expensive, structural modifications
to CIA facilities for physical security; and (6) the wide
distribution of small CIA recruitment and security investi-
gation facilities across the U.S. (with attendant "cover"
and physical security problems).
STATINTL
It is recognized that this area of pri-mars concern is
complex and that a substantial amount of additional informa-
tion may be required. Accordingly,
Executive Officer, Office of Logistics has been STATINTL
designated as the action officer for this initial phase and
will provide what further data your staff may need.
The provision of central administrative services is of
vital concern to CIA and of principal interest to this
Directorate. Please call me if I can he of personal assis-
tance or, if you have the opportunity, please let me arrange
a luncheon and tour of our Langley facility.
Sincerely,
/s/ Michael J. Malanick
Michael J. ''a] anick
Acting Deputy Director
i
Of
in s~-- -on
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Mr. Joseph Malaga
Distribution:
Orig - Addressee
c7 ER
2 - DDA
1 - OL Official
1s/ Tcunes H. McDonald
James H. Donald
Director o Logistics
Pa-e 3
4 NOV 1977
Date
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Real Property
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 Jost I .1MaI~ t;a
ZZ
Reorganization
Project
p
Appr(Pv6Q'8bdl~l~a& 2002/01/08 iC3~~-RQRj85- 94 17159R00
Administrative Services Reorganization Project
GS Buiidmg
18th&FSts. NW
Washington, DC 20405
MF JOR;\NDUM
MAY Z 4 1979
TO: heads of Executive Agencies and Establis}urents
FROM: Joseph F. Malaga, Executive Director
SUBJECT: Transmittal of Draft Reports - :1c}ninistrative Services
Reorganization Project
Last October 25, we asked for your views on }tow best to improv t
e he deliver;
of adainistrative services Within the Federal Government .
Since that ti:,e,
we have conducted an extensive study, and have prepared a series of service
improvement alternatives related to real
1,ropertIL, archives and records
supply and support services, and telecommunications .! Tie first of tour task
force reports to be issued in draft over the next several weeks - real pro-
perty - is enclosed. Others will be fort,;arded within the next 30 lays.
fifth rennort on our overall assessment and organizational alternatives '.:il,
be forthcoming after comments on the draft task force reports lave teen 're-
viewed.
Many of the largest departments and agencies have represented the Federal
interest during the project through the Assistant Secretaries' Mana;e::ent
Group and the General Services :1d.isorT Council. It is essential, howeler,
that all agencies be given adequate opportunities to review the work of th
project staff and register their views Vis-a-vis the alternatives presented.
Please review the enclosed draft on real property services and give us your
1%,ritten corrmnents by JLnie 7, 1978. Comments should be sent to the Adminis
trative Services Reorganization Project, GS Building, 18th and F Streets, `;h,',
Washington, DC 20405.
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4
AN
President's
Reorganization*
Project
Administrative Services
Reorganization Project
Real Property Task Force
Findings and Alternatives
May 19, 1978
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FXI?CU9 !',L SUMMARY
A number of statutes, Executive Orriors, and requlations
deal with the Federal Government's real property activities.
Many agencies have authority to lease, construct, operate
and dispose of real property. The General Services
Administration, which has the con teal role for the Executive
Branch, has delegated certain real property authorities to
agencies. Some agencies have their own statutory responsi-
bilities for real property. other agencies which obtain
real property services from the GSA have developed their
own staff capabilities in the real orooerty area. The
result is a proliferation of real nrocerty activities
throughout the Executive Branch. A recent study by the
Office of Federal Procurement Policy produced a list of
over 50 organizations in 22 Federal agencies conducting
more than $5.7 billion in construction effort during_ fiscal
year 1976.
The Real Property Task Force examined the oreanizat ion and
provision of real property services within the Executive
Branch. It considered all Federal real property used
primarily for office space and certain categories of
non-office space. While all agencies were included in the
review, the principal focus of the study was on 19 major
agencies that performed over 90 percent of Federal real
property services.
Three comprehensive issues were addressed by the Task Force:
o that is the aper:-oortate level of centralized and
decentralized authorities thr.ouc?hout the Executive
Branch to lease, construct, operate, and dispose of
Federal real property and to rec;ulate the exercise
of these authorities?
o Are there fixed limitations that inhibit the delivery
of real nronerty services unreasonably?
o What are the most effective funding mechanisms to
finance and dcliver real property services within
defined performance levels?
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 A TQ4C p1 RA~dr WRft~~ tQ,P
AND LIMITATIONS
Leasing
Two alternatives were doveloned to improve the leasing
activities of the Federal Government. One would vest total
authority in GSA to requlate leasing services and provide
or delegate the provision of these services. The other
alternative would vest total regulatory authority in GSA
and would have GS?. primarily pert-orm office-type leasing;
other agencies would be vested with non-office type leasing
authority. In both alternatives, agencies would be delegated
authority to ].ease office-L, ,pc space in areas of non-major
Federal space concentrations. '].'his authority would be for
up to 5,000 square feet for 5 years.
Five fixed limitations were identified in the leasing area.
The suggested alternatives ,oulci :
o Change the threshold for arlpplicability of the Economy
Act frorr $2,000 to 5,000 square feet and allow
deduction for real estate taxes in computing the
15 percent of fair market value rental limitation.
o Revise Executive Order 11512 of February 27, 19-'0,
to vest final authority to resolve space assignment
disagreements in the Administrator of General Services.
o Authorize GSA to pay for options to acquire interests
in real property.
o Authorize GSA to convey an interest in a C,overnment-
owned site for lease-construction projects.
o Revise the criteria for Congressional approval of
lease prospectuses from $500,000 to 125,000 square
feet for office-type space and to 300,000 square feet
for stora'-d }trntezic: an..', Critic;:t .'aterials
Stoc p le Tree have no co,^, ctt .
Iss.xe h 5-~): ^:ahlix Utilities Management - `-cost
dommstic uti ity services are provided to they Ag,ency as
part of the CSA. Stindar~d Lov,1 Charl;~~ (SLUG) system
wherein we pay a unit. rate for s?r,cG, including util-
iti.es. T here are cxcc;utirr.s, `,,,wcv:;r, an J11 utilities
for ASrericy spice loca; ec' on m11i t;;ry cm7pounds or not
0tlie rwi5a ctr.,jcct to the S,LUC sys e:;, arse paid for und>~cic s. ,'ce be7.icv;: *''.9t the present decen-
tralized system, in which t3:? 10,i1.it7ry -"'d
many' c5viiI: i
agciicios have independent authorities to arrange for
utility services based on their own uniquo needs, is
better than t':^ proposed Cer~tr~~lizec'. systeri under which
GSA, having 25 p.rcent or less of the total reguircruont,
would establish p701iCies all"" procedures for all Poder.al
agencies.
Issue No. fi-10. Coop crn ri.v-o ,upport Services - We
have no our ent .._.__ ..
Issue :do "-11: Motor ;'emclo ^lanagorent l e
agree t iat the reduction in replacerieut cycle tiro for
vehicles from six years to thrc'. years will be cost
effective in the ion^n run.
Issue No. 5-12 Transportation and Traffic Man age-
rnent - ~?~ ttie oiir -alternative reconrzondations for
transportation services, we would recommend the adoption
of Alternative A since the services and expertise of GSA
would become more available to the agency. Alternatives
and C arc considered impractical. with no changes of
adoption. s t'fe endorse an increase in FOB origin con-
tracting, since this would perrii.t the application of
traffic management expertise in the procurer cnt cycle
and result in transportation cost savings.
We are pica ,od to ':lave the opportunity to cornnent on this
excellent draft study.
,~'i.ncerely,
cc: ER
DDA
Distribution:
~~- Adse
OL/PF,PS (Official)
1 - OL/P$PS (Chrono)
1 - OL Files
1 - D/L Chrono
STATINTL OL/PFPS
>amcs ;1. tlcilor.alcl
Director of Logistics
(6 July 78)
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Telecommunications
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MEMORANDUM FOR: Mr. Joseph F. Malaga
Executive Director
Administrative Services
Reorganization Project
STATINTL FROM
SUBJECT Telecommunications Task Force Draft Report,
Findings, and Alternatives
REFERENCE Your Memorandum dated 31 May 1978
Members of this Office have reviewed the draft report
on the findings and alternatives of the Telecommunications
Task Force. Since that report does not include any con-
clusions or recomnmendations, and the communications activities
of this Agency are not discussed, the extent of our comments
is necessarily liriited. The activity of the Task Force
appears to have been oriented primarily toward telecommunica-
tions systems carrying administrative traffic. The
telecommunications systems of this Agency are provided and
maintained for the passage of command and control and
intelligence information and accommodate administrative
information only incidentally. In arriving at any conclusions
or making recommendations, we believe that the Task Force
should make a clear distinction between communications
activities such as those of this Agency and those which are
maintained primarily for the passage of administrative .
information. This should be considered with respect to any
of the eight issues identified by the Task Force. This
consideration should be borne in mind especially in the
discussion of the National Communications System, the assets
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SUBJECT: Telecommunications Task Force Draft Report,
Findings, and Alternatives
of which are primarily command and control and operational
networks rather than administrative ones. It is believed that
the study should also take into account that the nature of
the National Communications System has been consciously
modified since its inception with the result that it now
stands as a confederation of individually managed networks
rather than as one single network. In that context, it is
felt that the National Communications System is, in fact,
performing its functions appropriately and effectively.
STATINTL
STATINTL
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1 - OC-O Chrono
1 - OC-O/SOD File
1i- OC-O/SOD Chrono
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1 - DDA w/cy ref
1 - ER tiv/cy ref
STATINTL
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WASHINGTON, D. C. 20301
COMMUNICATIONS, COMMAND,
CONTROL, AND INTELLIGENCE
11JUL137
MEMORANDUM FOR DISTRIBUTION
SUBJECT: DOD Comments on Draft Report of Administrative Services
Reorganization Project
I have enclosed for your information the comments submitted by DOD on
the report of the Telecommunications Task Force of the Administrative
Services Reorganization Project. As you will note, our comments are
based in large part on the excellent inputs received from your agency:
Your efforts were sincerely appreciated.
D. L. 'Solomon
Deputy Assistant Secretary of Defense
(Technical Policy and Operations)
Distribution:
Manager, NCS
Dep. Dir., WWMCCS & Telecomms. J-3, OJCS
Director, DCA
Dir., Telecom & Cmd & Cont (DAMO-TCZ) Army
Dir., C3 Programs (NOP-094), CNO
ACS Comms & Computer Resources, USAF
cc:
Dir., Info Systems (C3 I)
Dir., Data Automation OASD(C)
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(Administration)
Mr. Howard H. Messner
Co-Cha i ma n
Assistant Socrstaries' Manage ant Group
Executive Office of the President
Washington, D. C. 20503
Dear Howard:
2 6 JUN 1978
In accordance with your ! 3U request, the Department of Defense
has reviewed the draft Findings and Alternatives of the Telsco=unicatiens
Task Force. Our general comments on the report are listed below and
specific observations and counts regarding the issues and alternatives
can be found in the enclosures:
1. The report falls to recognize the essentiality of mission
oriented caxtunica'LIons and to sake a distinction between such and pure
administrative co=unications. In this respect the report doss not
provide an adequate definition of administrative cocx!unications nor does
It recognize that there art nejor econonic~as well as operational benefits
in haying operational networks (e.g. AUTOYON and AUTODIN) handle adminis-
trative traffic-as well.
2. The report makes c-ost-effectiveness the determinant in deciding
whether a given situation is good or bad. Cost-effectiveness, while
always a DoD goal. is not the sole or necessarily the primary criterion
upon which DoD and other mission oriented co.rnications are designed.
Rather responsiveness to mission requirements is the primary concern of
operational coin uniutions. In the DoD this includes security, surviv-
ability, interface with tactical and foreign systems, reliability under
stress conditions, world-wide talking levels, 24-hour-a-day operation,
precedence and procmption arrangenents, anti-fan features and other
features which are of greater importance than cost-effectiveness alone.
3. Rala{.ad to the ccx ent above, the report is highly critical of
the redundancy which exists in the AUTOVON with respect to the FTS.
What the report fails to note Is that AUTOVON was not intended to satisfy
only routine subscribers as does the GSA's FTS notwork..- The AUTOYON was
...designed as a small network with high survivability characteristics.
The Military Services are sore concerned with high prtcadartct and time-
sensitive require nts. During peacatimt, ecor is Gained and the system
is exercised by allowing routine users onto the sy_tea. I.. .ever. the
network is sized for command and control; and when stressed, lo;: priority
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users are forced eff the -network. AUTOYOt1 is not configured Ilke a
Morra l t el epIr o. s,Xs t e e tad, therefore, 1 t i s premature to recommend
coosol 1 da ti on without clearly desmous tee t l n g that the needs of tbt
Strv l cos can be eat by the alternative.
4. TM report presupposes that centralized policy direction.
.'' ..&cquisitice, card,,consolidation of Federal agency assets will 1czd to
ec;oAoaies aad system efficiency. Frog an acade is viewpoint, this Idea
As appealing; however, the report Ignores the fact that both the execu-
tive and legislative branches are Involved in the policy making process.
We do not believe that 6SA or any other executive department is in a
position to effectively Justify nor defend DoD require~ennts before
Congress. The legislative process requires that DoD defend this budget
is the context of utional security. unl ik.e the other departments.
5. Tbt report is obsessed with the idea that the MCS, in order to
wcceed in its mission, must develop and bring into being, a single
Integrated tel eco can 1 ca t 1 o n system to sane the diverse comwn 1 ca d o ns
needs of all Federal agencies. It fails to rercognize that the single
integrated system concept, even if it were practical, is only one of
several mans that the NCS could employ to achieve its broader goals of
providing a survivable and interoperable multi-agency talecotsuncations
system capable of satisfying emergency and day-to-day,obverneent comu-
aication needs. The fact that MCS with EOP concurrence has chosen since
1972 to achieve its goals by the more pragmatic approach of evolving
into a confederation of interoperable but autonomous syst.ess, is mis-
t4kenly viewed in this report as a failure to achieve the mission. The
use of dated studies, 1.e., circa 1969 and 1971, by the Teleccxx uni-
cations Task Force obscures the success and products being obtained by
the KCS through this redirection. Had we stayed on the 'hard line"
course of?a "single integrated system" we would still be grappling with
a TICS concept'.- Fortunately, we chose to do otherwise and therefore
have been able to elicit the cooperation of the 1CS Operating Agencies
in such successful, goal-directed efforts as aaaargency and disaster
coe unicat1ons planning. secure voice planning. and the Federal tele-
communication standards program.
6. Another basic flaw in the report is Its apparent assumption
that the primary function of the goverment telecomcunication system
eoapri si ng the t1CS I s to handle the administrative co=uni cats ons of tho
MCS Operating Agencies. With the possible exception of GSA's FTS exactly
the opposite Is true. For exarple, it rauld be difficult to convince
any knowledgeable person that the primary purpose of NASA's NASCOti
wetwork is to handle NASA's administrative traffic rather than traffic
{ in direct support of their basic emission of space flight and exploration.
The sane could be said of the HC5 assets operated by STATE. COD, CIA,
? FAA, COMMERCE. EIIERGY. IMTERIOR, and the International C.omur ication
Agpency (ICA) since all of these are prirarlly abed at satisfying basic
,tscion requirements with the capability of handling routine adminis-
trative traffic being a necessary, but secondary r_rsideration.
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7. Certain key words (such as p,3olicy. planning, operations and
manageaesrt) lack definition within the text and in som+t cuss appear to
be used Intsrching,sably.
8. The decision process used by the Task Force is not clear in
terns of key factors, criterion, measure of cost, and msasurs of effec-
tiveness cased In reaching alternatives on issues.
9. The report goes well beyond the purpose of the Task Force which
was to examine GSA's talecar..unications eianage ent and develop recon-
sradations for iaprovment as stattd on pact 1-7 of the draft report.
10. Although complimentary of DoD's manageswnt of teleco vnications,
the report offers gratuitous recocnendations about DoD`s internal organi-
zation, the effect of trhich, if adopted, would weaken the successful
management arrangsaents In being.
In summary, although there are large portions of the draft report
which are useful, the deficiencies noted above reflect a docua-ent which
falls to be acceptable from the standpoints of direction and objectivity.
We recoaMend an extensive rewrite of the report to correct these short-
coal ngs. Further, we are convinced that Issue f8 relating to the RCS is
a non-issue and should be dropped frora the report in its entirety. We
have been unable to identify an office or agency in the Federal tale-
coarnunications co=unity which feels that Issue f8 has any substance and
we conclude that it exists s-olely in the mind of its creator.
Enclosure I provides counents on the alternatives set forth in the
report for Issues 1 through 6. we have no coc.nts on Issue 7. Because
of its Importance to the ccmouni ty, a detailed discussion on the TICS and
the alternatives in Issue 8 has been prepared and Is appended as En-
closure 2.
Sincerely,
D. 0. l,coti`~
D. 0. Cooke
Deputy Assistant Secretary of Defense
Enclosures Z
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COIMENTS ON TASK FORCE ISSUES 1 THROUGH 6
Issue #1. If GSA has been ineffective, there is no assurance that
enhanced management indicated by Alternative A would resolve that problem.
Clearly, Alternatives B and C would not be acceptable to DoD. Alternatives
D and.E are acceptable to the degree they are completely in consonance with
Alternative F. DoD supports Alternative F. Selection of any other Alter-
native by the ASRP may require new legislation to consolidate and clarify
existing authorities of GSA as reportedly recommended by the GSA Assistant
General Counsel's report dated 19 September 1975, entitled "Project LX100."
Issue 112. As indicated above, GSA authorities and responsibilities
are unclear and if GSA is to assume a more dominant role in telecommuni-
cations procurement, new legislation is required. But more importantly
there is little likelihood that GSA could succeed, as its prior performance
would lead to the opposite conclusions. Alternative A is not acceptable
to DoD. The DoD should continue to procure its telecommunications under
ASPR or the New Federal Acquisition Regulations (FAR), when published.
Further, no existing organization or procurement functions should be
transferred outside DoD. Therefore, Alternative D (with qualification)
would be acceptable to DoD. The qualification to recommending Alternative
D is that DoD will procure all telecommunications for its needs when
determined to be in the interest of national security.
Issue 113. It is important that the ASRP be reminded again that
AUTOVON is designed for other than administrative traffic and is not
ciassified as an administrative telecommunications system. If GSA could
design and implement a cost-effective administrative common-user tele-
communications system that will satisfy DoD's world-wide administrative
needs, we would be compelled to consider using it. However, there are
questions about GSA authority to provide. administrative telecommunications
outside the United States, and given the need for DoD to acquire its
mission networks there would appear to be no possibility of GSA being able
to supply a cost-effective separate network. Further the Task Force should
not be concerned with how DoD acquires, manages and operates its tele-
communications. Alternatives A4 and A5 are not acceptable to DoD and
Alternative A2 is impractical because of the difficult, if not impossible,
task of assuring interoperability. Additionally, we do not believe inter-
operability of all telecommunications networks would be worth the cost.
Alternatives Al and A3 are recommended. Alternatives B2 and B3 are not
acceptable to DoD. Alternative B1 is recommended with the qualification
that GSA and DoD should continue to assure that unnecessary duplication of
switchboards and costs are not incurred.
Issue /14. Without new legislation as discussed under Issue 111 above,
Alternatives B and D would not be acceptable to DoD. Alternative C would
not be a practicable solution to the policy issue. Alternative A is clearly
the only acceptable alternative with the qualification that DoD would also
have implementation policy for its telecommunications and that DoD is excluded
from GSA implementation policies.
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Issue 015. Integration of telecommunications, ADP, and word processing
technologies makes sense when the view is toward information systems.
However, it should be noted that there are needs for each of those tech-
nologies independent of the others to satisfy mission requirements, e.g.,
ADP is needed in weapon systems and may not involve telecommunications or
word processing.
In contrast to the growing technical similarity among ADP, tele-
communications and word processing, the respective systems for managing
these technologies continue to be markedly different. In accordance
with Public Law 89-306, government-wide policy for ADP is highly
centralized and oriented toward control of individual ADP resources
acquisitions. This results in a management process which is restrictive
and time-consuming. Relative to ADP policy, current policies governing
telecommunications and word processing appear to be considerably more
decentalized and flexible. In view of this condition, we oppose any
government-wide efforts to centrally direct the convergent ADP, tele-
communications and word processing functions in specific ways unless:
a. technologic convergence is matched by management systems
convergence; and
b. the nature of the management system convergence is oriented toward
mission responsiveness and flexible acquisition processes.
Issue 4/6. This issue impacts GSA only, except for Altesnative'D which
is unacceptable to DoD because the term "administrative telecommunications
services" has not been defined.
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COMMENTS ON TASK FORCE PRESENTATION ON ISSUE 8,
THE NATIONAL COMMUNICATIONS SYSTEM
In assessing the division of responsibilities resulting from EO
12046,
the report completely ignores the functions assigned to the Office
of
Science and Technology Policy, Executive Office of the President.
is an extremely significant omission since these functions include
This
executing the war power functions of the President under Section 606 of
the Communication Act of 1934 which were previously delegated to the OTP.
Pursuant to a Memorandum of Understanding between OSTP, NSC, and the
Executive.Agent, NCS, the NCS will assist OSTP in this effort by planning
for and executing the functions of emergency management of Federal Government
telecommunication resources under Federal Emergency Plan D. The omission of
this and other national security/emergency preparedness functions of the
NCS (which are the primary reasons for the existence of the NCS) is indica-
tive of a basic misconception by the authors that the primary purpose of
the NCS is to promote economy and efficiency of the government's admini-
strative telecommunication systems. The fact is that the primary purpose of
NCS is to ensure that the confederation of independently operated and
maintained, mission-oriented, telecommunication systems comprising the NCS
are planned, designed, and operated in such a way as to maximize their
utility as a national telecommunication resource particularly under national
emergency conditions. While it is reasonable to expect (in view of the
inherent mix of,mission-oriented and administrative communications in most
agency telecommuiication systems) some collateral improvements in economy
and efficiency, these are viewed as welcome bonuses rather than essential
prerequisites. Unfortunately the report fails to recognize that with the
varied missions of the NCS operating agencies any attempt to adhere to a
rigid policy of optimizing for maximum aggregate efficiency at minimum cost
will invariably compromise mission requirements in one or more agencies.
When this happens the natural response is to. leave the common user system
for a special purpose dedicated system (often outside the NCS) usually at
a significantly increased cost.
Of the seven "alternatives for the NCS" postulated in the Executive
Summary only Alternative G is worth serious consideration. The major
deficiencies of the other six are:
ALT A. Make NCS an independent agency.
Deficiency: Would require an extremely large increase in the size of the
NCS staff to assume the administrative, logistic, technical, ADP, and
operational support functions now provided by the DCA. Would also require
large expenditures of procurement, construction, and operating and main-
tenance funds to establish and operate on a 24 hour day basis, a separate
NCS Operations Center. (The NCS and DCA now share a cotnon operations
center). All of this seems to be a large price to pay merely to isolate
the NCS staff from a vaguely defined and unproven threat to its objectivity
and autonomy.
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ALT B. Abolish the NCS.
Deficiency: Would solve none of the perceived problems identified in the
report but would certainly create a few more. For example, the following
functions or resources, each of which are essential to the retention or
reconstitution of a national communications capability during periods of
national emergency or disaster, are among those that would be abandoned
if the NCS were abolished.
a. The NCS data base containing detailed information on every
inter-city circuit owned or leased by Federal departments and agencies.
b. The NCS Circuit Restoration Priority.(RP) System. The RP
system is absolutely essential to the orderly restoration of telecommuni-
cations service to essential users during periods of stress or national
emergency.
c. The interoperability-oriented Federal Telecommunication
Standards program. This program is one of the few effective means
available for systematically and painlessly dismantling the technical
barriers to interoperability of the evolving generation of government
telecommunication systems and increasing their utility as an emergency
telecommunications resource.
d. The only coherent plan, management structure, and resources
in existence for the management of the Federal gd'vernment's telecommunication.
resources during a Federal Plan D Emergency.
e. The only existing plan and management resources available for
providing telecommunication support to FDAA during Presidentially declared
emergency and disaster situations.
f.- The only forum in existence today where the ten NCS Operating
Agencies, as well as several other agencies, are willing to and frequently
do share information and advice on their respective telecommunication
problems and plans in a collegial, non-threatening atmosphere. This is
an asset which it has taken years to build starting with the abandonment of
the "unified single system" concept of the NCS.
ALT C. Reassign functions but not staff of NCS to NTIA
and
ALT D. Reassign both staff and functions to NTIA.
Deficiency: Approximately 2/3 of the resources of the NCS are an integral
part of the "mission essential" telecommunication resources of the DoD.
We are aware of no credible scenario for a wartime or peacetime emergency
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3
which would do anything except increase this percentage. It is, therefore
unrealistic to expect that the transfer of the Executive Agent NCS
responsibilities to any agency head not having control over the DoD tele-
communications policy and budget could have anything except a detrimental
effect on the NCS mission.
ALT E. Make the Administrator of GSA the Executive Agent, NCS,
except in time of national emergency at which time the Secretary of Defense
would assume this responsibility.
Deficiency: (1) Comments on alternatives C and D are equally valid here
(2) the idea that GSA is better equipped to plan the utilization of NCS
resources (2/3 DoD) for a national emergency but not equipped to carry out
these plans when the emergency arises is an interesting if not convincing
hypothesis.
ALT F. Make no organizational change but attempt to make NCS more
responsive to its original charter.
Deficiency: We agree that no organizational change is required-especially
in view of the recently concluded (MOU) between NCS, OSTP, and NSC. If
there is any merit in the idea of a "single unified system" concept of the
NCS, rather than the present concept of a "confederation of interoperable
systems," the' appropriate forum for assessing this merit and providing the
required policy guidance to the NCS, is the Executive Office of the President
(NSC, OSTP, OMB). Not only does the "single unified system" concept lack
the support of the Federal-telecommunications community but from GSA's
recent experience with the FEDNET appears to be at odds with relevant
congressional direction to major NCS operating agencies. In the GSA
FY 77 Appropriations Act (PL 94-363) the Congress specifically prohibited
GSA from expending funds. for the procurement of any new common user data
communication systems. While this prohibition does not apply to GSA's
common user telephone system (FTS) nor to DoD's common user data and
telephone systems, it does understandably serve to dampen any residual
enthusiasm for developing plans, for a "single unified system" type of
NCS.
The development of a "single unified system" type of NCS to serve'all the
diverse government telecommunication needs of the Federal government (DoD
as well as civil) is not and probably never was a realistic expectation.
This was formally recognized by the OTP in May 1972 when they concurred
in an Executive Agent, NCS, assessment that the evolutionary development
of a confederation of interoperable NCS component networks was a more
realistic and achievable goal: It was also a goal which was consistent
with the primary NCS mission of improving the emergency preparedness posture
of the Federal Government's telecommunication resources. It is unfortunate
that the report based a number of its conclusions regarding the NCS on
information contained in dated studies, i.e., circa 1969 and 1971 rather
than the successes gained by the NCS as a result of the 1972 re-direction.
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The wisdom of this redirection of goals has been proven many times over
since 1972. Instead of being perceived as a constant threat to the
operational and management autonomy of the various NCS operating agencies,
the NCS with the "interoperable confederation" approach, has been able to
make significant progress toward its goals.with the full cooperation of
the NCS operating agencies. The NCS operating agencies, today, are avid
supporters of the NCS initiatives in the areas of emergency and disaster
communications support planning, secure voice planning, the Federal
Telecommunication Standards Program, the NCS Restoration Priority System,-
etc.
The President, in his 1963 memorandum on the NCS, recognized that
achieving the goals stated for the NCS would be an evolutionary process.
We feel that this remains a valid and workable approach and that a
significant degree of cost effective integration can be achieved by a
step-by-step evolutionary process whereby the benefits and impact for each
step can be thoroughly evaluated. An example of such an evolutionary step
is the, current joint planning and. procurement of leased circuits in the
CONUS, the benefits of. which have been clearly identified. A comparable
situation prevails in the case of certain government satellite and secure
voice communications systems which are planned and provided on a joint
basis because of the identifiable benefits resulting therefrom. Another
promising step is the current consideration of the possible advantages and
problems of joint government multiplex planning for use on leased circuits.
We plan to continue the evolutionary development of the NCS along these
lines, implementing an appropriate degree of integration where it makes
sense to do so. Added to. this is the aggressive teleco~ununications standards
program we are pursuing which is focused on the goal of achieving inter-
operability of functionally similar networks. This will enable functionally
similar but separate networks . in. the NCS to be interconnected and function
as a system to the degree needed for satisfying normal day-to-day and
emergency requirements.
The report fails to recognize functions of the NCS that are being
performed to the benefit of the Government and all Federal agencies. The
study does a disservice to the NCS staff and misrepresents savings to the
Government if the NCS were abolished. Functions being performed by the
NCS are necessary and vital. They would need to be performed elsewhere in
the Government, if not by the NCS. A listing of the functions follow:
a. RP System Management
b. Plan D Telecommunications Support
c. Disaster Telecommunications Support
d. Secure Voice Comm Planning
e. Development of Federal Telecommunications Standards
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The cost of performing these fun n-tions -- if they could indeed be performed
elsewhere, would involve the creation and management of a new data base,
which alone could exceed the cost of the current NCS organiz,sl.i.,uu,
The report cites the emergence of two separate secure voice networks
(AUTOSEVOCOM) for the DoD and the ESVN for the civil agencies) as indica-
tive of the lack of overall government telecommunication planning and the
ineffectiveness of the NCS in this role. It ignores the fact that the
designs of the systems are different because of substantial differences
and constraints which each must satisfy. Contrary to the report's allega-
tions, the NCS has been very successful in eliminating unnecessary
differences between the CONUS elements of these two systems and identifying
and promoting the use of common terminal.
It is clear that the NCS collectively is in fact achieving its goals
in a systematic low-key way without raising the spectre of an emerging
centralized telecommunications super bureaucracy as implied by the
"single system" concept.
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Archives and Records
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2 . UN X97
Mr. Joseph F. Malaga, Executive Director
Administrative Services Reorganization Project (XRR)
GS Building
18th and F Streets, N.U.
_Washington,, D.C. 20405
Dear Mr. Mal aga:
We have., reviewed the draft report of the Ar^chivcos: and 1 Boor de
Task Force enclosed with your 6 June 1978 mere:yr'anduanr.. Via report
,,
is well bal anced,~-.and the findings and alternatives are pertinent
We have no speci fi c tbanges to suggest, but we would, like to make
a few general comments
In general, we favor the"*-Al ternatives that r. ecormrpwnd cunt i rued
placement of the archives and record function in NlkRS. as an element
of GSA. It would be counterproductive either to the function.
or to relocate it in whole or in part. It might. be helpful to give.
MARS more general autonomy within GSA, but the main need is for
appropriate staffing and funding to enable GARS to. perform it ,more
positive role. In this role, we favor the alternatives that P7roviide
for enhanced NARS standards, guidelines, training, and evaluations
of agency programs. We do not favor the al tar?nativos that r ecor ff e ld
central direction and control. Program Implementation is, best
accomplished through cooperation between federal agencies and. NAB,.
with the option that MARS report serious compliance problems to OMF
or Congress.
Regarding the proposals to make the General Records Schedules-
mandatory and to reduce the period for transfer of records to MARS
from 50 to 30 years, we note that two Acts recently passed by the
Senate successfully incorporate these provisions,
In reference to our own records managerrreni program and
participation in interagency programs relating to two major areas
of concern mentioned in the report: We are not oae- of the 1 agencies,
that have not met the requirements to schedule records, and we do not,
contribute to the federal paperwork burden on the p ubl i c. Howevc r?,
in fulfillment of MARS government-wide program. r czsponsibi! rues,
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 xvc "I c ri . 6 I 1 41.) .,v f+... ..... , r.- _- ... ; r . - r - ., -
studies, and information clearinghouse operations--to the extent
that theseactivi le re f s d n productive goals and provision
i s made ,z/~oR#-~~f09:1A4~lP~h~
methods information.
Sincerely,
Michael J.
John F. Blake
Deputy Director
for
Administration
DistributioI
Original Ado.ss
1 VDDA Kuiect
1 - DDA Chr Ol
1 - AI/DDA
1 - C/ISAS-
1 - RAB Subject
i - RAB Chrono
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 %3 Reorganization
Pr^e*,n t
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Gs dm e Reorizatlon Projet
18th & F Sts. Nw
wad*xjbm. 00 20405
JUN 15 1978
J",1~_~~ /.
MEMORANDUM FOR BEADS OF EXECUTIVE AGENCIES AND) STAF3J X;SHHMT NTS
SUBJECT Transmittal of Draft Reports - Administrative
Services Reorganization Project
Enclosed is the last of four draft task force reports of' the
Administrative Services Reorganization Project -,a Supply and
Support Services.
Please review the enclosed draft and give us your wtx:itt_e3n
comments by July 7, 1978'. Comments should be sent, to f_}icy
Executive Director, Administrative Services 1~tGC~z:can,ratic>i
Project (XS), CS Building, 18th and F Streets, I*4,
Washington, DC 20405. If you have questions or would
like additional information, please cont c:t the Supply and
Support Services Task Force Leader, Mr. David Phillips, att
235-2420..
Executive Direct
oseh F. Zdala ?
ga
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1 ..UN 197:
Mr. Joseph F. Malaga, Executive Director
Administrative Services Reorganization Project (XR)
GS Building
181th and F Streets, N.W.
Washington, D.C. 20405
Dear H. 14al aga:
We hava.,revie d the draft report of the Ar~chivcss? and Reeor d .
Task Force enclosed with your 6 June 1978 menr)~r ndum . The report
is well balanced';-and the findings and alternatives are pert:inert.
We have no specific` angel to suggest, but wwe would 111,1(s to make
a few general comments:
In general, we favor the`tial ternatives that r. ecomrrk4rid Continued
placement of the archives and record function i n NABS as an e'I errc rit:
of GSA. It would be counterproductive either to split the function
or to relocate it in whole or in part. It might. be helpful to give.
MARS more general autonomy within GSA, but the main need is 'b r.
appropriate staffing and funding to enable MARS to perf'orm it more
positive role. In this role, the favor the {lter^natives that pr?oviid
for enhanced MARS standards, guidelines, training, and eva)uations
of agency programs. We do not favor the al ternati ves- that rsecown-yund
central direction and control. Program impt ement:cat i on is best-
accomplished through cooperation between federal a< onc:i cis and HA RS s
with the option that UARS report serious compliance probl cans to (NMM#s
or Congress.
Regarding the proposals to make the General Records Schedules
mandatory and to reduce the period for tran-ter o?V records to NABS
from 50 to 30 years, we note that two Acts r e< ont'iy passed by the
Senate successfully incorporate these provisions.
In reference to our own records managerferit: program and
participation in interagency programs relat_thg to two major aroa.
of concern mentioned in the report: We are not one of t.:1rc 81; agencies
that have not met the requirements to schedule rocor?dss and we do not.
contribute to the federal paperwork burden on the public. However,
in fulfillment of MARS government' wide program r?osponsihi`f i t:i es s
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 we are willing to particlpdLe In inspection pt"UYVdi'I:>, 11"'I l-t u ?.I~~y
studies, and information Clearing House operations---to the extent
that then PKeY9 SR9KPS J 1 $ p ?R'~~- '1&RQCd~11gOrk~0~9'i
is made for our responsibility to protect i n tel l i nonce sources an
methods information.
Sincerely:
Sf Michael J. T~a).Ufli c4
. . John F. Blake-
Di stribution
Original Ad "ssea
i 'DDA St \iect
1 - DDA Chro
1 - AI/DDA
1 - C/ISAS ~`~..
1 - RAB Subject
1 RAB Chrono
Deputy i)i rectorr
for
Administration
-2-
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 Afthis~ SerACM R dzation Prod
GS Building
IM &FSts.NW
Warr ,, DC 2
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Reorganization
-~-~-~-----
Project
73
JUN 15 1978
MEMORANDUM FOR HEADS OF EXECUTIVE AGENCIES 200r) }1STA)3J,a:SJMFNa'S
SUBJECT: 'Transmittal of Draft Reports - Administrative
Services Reorganization Project
Enclosed is the last of four draft task force reports of the
Administrative Services Reorganization Project supply and
Support Services.
Please review the enclosed draft and give- us you tixi.tt:cn
comments by July 7, 1978. Comments should be sent: to thEe
Executive Direct?r, Administrative Services Reo gana,rat i.a)i
Project (XS) , GS Building, 18th and F Streets, NW,
Washington, DC 20405. If you have questions or would
like additional information, please contact the Supply Yana
Support Services Task Force Leader, Mr. David S'hi,l.la~ ps, cat
235-2420.
~r
oseph E. Malaga
_
Executive Eirectr
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President's
Reorganization
Project
Administrative Services
Reorganization Project
Supply and Support Services
Task Force
Findings and Alternatives
June 15, 1978
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PRESIDENT'S REORGANIZA'T'ION PROJECT
ADMINISTRATIVE SERVICES REORGANIZATION PROJECT
SUPPLY AND SUPPORT SERVICES
FINDINGS AND ALTERNATIVES
JUNE 15, 1978
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TABLE OF CONTENTS
SECTION
PAGE
Is,
SUPPLY AND SUPPORT SERVICES
1. EXECUTIVE SUMMARY . . . . . . . . . . . .
1
2. ISSUES
S-l: DESIGN CONCEPT FOR A
NATIONAL SUPPLY SYSTEM
S-2: CRITERIA FOR CONSOLIDATION
21
OF DEPOTS . . . . . . . . . . . . .
S-3: FSS SUPPLY OPERATIONS . . . . . . .
24
S-4: CUSTOMER SERVICES . . . . . . . . .
36
S-5: VENDORS AND THE FSS
53
PROCUREMENT PROCESS . . . . . .
S-6: PERSONAL PROPERTY UTILIZATION ? ? ?
59
S-7: PRINTING SERVICES . . . . . . . . .
64
S-8: STRATEGIC AND CRITICAL
70
MATERIALS STOCKPILE . . . . . . .
S-9: PUBLIC UTILITIES MANAGEMENT . . . .
73
S-10: COOPERATIVE SUPPORT SERVICES ? . . .
79
S-11: MOTOR VEHICLE MANAGEMENT . . . . . .
84
S-12: TRANSPORTATION AND TRAFFIC
92
B.
MANAGEMENT . . . . . . . . . . . .
REGULATORY AND ADVISORY SERVICES
1. EXECUTIVE SUMMARY . . . . . . . . . . . . 97
2. ISSUES
RA-1: GSA'S REGULATORY ACTIVITIES . . . . 100
RA-2: INTERAGENCY TRAINING . . . . . . . 109
RA-3: ADVISORY SERVICES TO AGENCIES . . . 122
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ADMINISTRATIVE SERVICES REORGANIZATION PROJECT
SUPPLY AND SUPPORT SERVICES TASK FORCE
EXECUTIVE SUMMARY
The First Hoover Commission led to enactment of the Federal.
Property and Administrative Services Act of 1949, which
established the General Services Administration (GSA), and
vested in its Administrator responsibility for developing
a comprehensive Federal system for the delivery of supplies
and related support services. This system was to be man-
datory for all agencies of the Executive Branch, except
that the Secretary of Defense could exempt the Department
of Defense from the provisions of the Act. Under the Act,
the Administrator was:
o Empowered to prescribe policies and directives
necessary to ensure compliance with the purposes
and goals of the Act.
o Granted broad latitude to determine whether to
perform functions or responsibilities within GSA,
or delegate them to other agencies.
o Granted similar flexibility in establishing or
revising GSA's internal organization.
o Directed to consult with other interested agencies
to secure their advice and assistance in implemen-
ting the Act.
To carry out the responsibilities related to supply and
support services, the Federal Supply Service (FSS) was
created as a key element in the new Administration. FSS
is responsible for the following major functions:
o Regulatory, covering responsibility for developing,
maintaining and revising Federal Procurement Regu-
lations, Federal Property Management Regulations,
Federal Travel Regulations and other Government-
wide regulations.
o Supply, encompassing the economical and efficient
procurement and supply of a wide range of common-
use, commercially available items and services for
all Federal agencies including the Department of
Defense.
o Support Services, including assistance in negotiating
long-term public utilities contracts and transportation
rates; representing the civilian agencies before
Federal, State and local transportation and utility
regulatory bodies; ensuring timely utilization,
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rehabilitation or disposition of excess or surplus
property; operating interagency motor pools and
providing centralized interagency traffic management
and transportation services; and auditing of all
agencies' transportation payments. It is also
responsible for acquisition, inspection, storage,
maintenance and shipment of materials for the
Strategic and Critical Materials Stockpile.
Although this system was established to be the central,
Government-wide supply mechanism, there is less than total
use of it by Federal agencies. Agency officials with respon-
sibility for administrative functions are critical of many
aspects of the current system. Clearly, the potential for
development of a Government-wide system for the delivery of
supplies and support services has not been fully realized.
SCOPE OF STUDY
A task force of the Administrative Services Reorganization
Project (ASRP) was established to examine the adequacy of
supply and support services on a Government-wide basis and
consider organizational options and management improvements.
The task force conducted extensive interviews and gathered
data from executives and operating personnel of Federal
departments and agencies; officials of GSA, GAO and OMB,
manufacturing, retailing and services industry executives;
state government officials; and representatives of trade,
special interest and professional organizations. The task
force listened to and evaluated the concerns of Government
contractors and vendors. It reviewed the constraints im-
posed on the delivery of services by legislation, Congres-
sional overview and the budget.
ISSUES
The issues described below were selected for study as having
the greatest potential for improvement in the delivery of
supply and support services. Issues 9-3, Supply Operations,
S-4, Customer Services, and S-5, Vendors and the FSS Pro-
curement Process, are GSA oriented. Alternatives and recom-
mendations included for these three issues are compatible
with the ultimate development of a National Supply System
as presently covered by issues S-1 and S-2. ASRP recommends
that the criteria for any future changes in the supply oper-
ation of FSS be based on the National Supply System plans and
policies. Review of issues S-1, a National Supply System, and
S-2, Consolidation of Depots, were jointly sponsored by the
ASRP and OMB's Office of Federal Procurement Policy (OFPP).
ASRP also recommends that work on these two issues be continued
on a systematic basis. The S-1 and S-2 issue summaries, there-
fore, do not represent final findings and alternatives, but
rather are current status reports.
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FINDINGS AND ALTERNATIVES
A. SUPPLY FUNCTIONS
S-1: A National Supply System - Major supply systems are
operated by numerous Federal agencies, including GSA, Veterans
Administration, Defense Logistics Agency and each of the mili-
tary services. Each system is essentially independent of the
others, resulting in significant duplication of policies,
procedures, data systems and corresponding overhead staffs.
A joint ASRP-OFPP task group was established to develop
a design concept for a National Supply System which would elim-
inate avoidable duplication among the existing systems and
reduce operating costs. The Task Group has prepared a
preliminary definition of a National Supply System, including
a description of its principal features and characteristics,
and has also developed a plan and schedule for further defining
and describing the system in all of its detailed policies,
programs and procedures. By reducing the redundancy in present
Federal supply activities, it is estimated that personnel
and related savings can eventually amount to $100 million a
year or more. After approval, the task group's reports will
serve as the basis for the work of an implementation task group
to be established. The latter group will develop a detailed
description of the National Supply System and a phased integrated
plan for implementing that system.
S-2: Consolidation of Depots - A total of 67 major wholesale
generaldepots are operated by 10 Federal agencies, primarily
the DOD, GSA, and VA. DOD and GSA have completed studies of
intra-agency depot consolidations. To promote further
Government-wide consolidations, a joint ASRP-OFPP task group
was established as an adjunct to the National Supply System
concept. The task group has prepared a comprehensive inventory
of the Government's wholesale depots and is completing its
work on criteria for further consolidating those facilities.
The DOD and GSA studies could result in as many as 20 fewer
depots. It is estimated that a substantially greater number of
depots could be consolidated through full implementation of
the National Supply System. A 20 percent reduction in the
current operating costs of the existing 67 common supply
depots for personnel, space and transportation activities could
eventually result in savings amount ni g to more than $200 million
a year. After approval, the task group's report on recommended
criteria will serve as the basis for the work of an implementa-
tion task group to be established. The latter group will de-
velop a detailed consolidation plan and a uniform, Government-
wide depot operation procedure.
S-3: FSS Supply_Operations - FSS supply policies are devel-
oped at the headquarters level by four different functionally
oriented offices. Supply operations are fragmented among
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several FSS offices in Washington, D.C., the ten GSA regional
offices and three commodity centers. Overall effectiveness
and responsiveness could be improved with a corresponding
reduction in costs by removing supply operations out of
Washington and by consolidating field operations. At the
central office level, another Deputy Commissioner position
responsibile for coordinating all supply management policy
should be established. At the field level, all procurement,
inventory management and specifications development operational
activities should be transferred into one or more commodity
centers or assigned to selected GSA regional offices. Aajor
process improvements recommended for FSS include: full cost
disclosure pricing; acceleration of civil agency particioatiorl
in the Federal Catalog System; stocking items closer to cus-
tomers; reduction of depots; improved ADP programs for dis-
tribution programs; and further refinement of the supply
economic decision making model.
S-4: Customer Services - Among the significant findings con-
cerning customer services are that: (1) insufficient resources
prevent the opening of additional GSA self-service stores,
although studies confirm the need and demand by agencies for
these popular retail supply outlets; (2) marketing activities
are not effective or responsive to customer requirements;
(3) the customer liaison function performed by customer service
representatives is decentralized to the GSA regions with little
central direction; and (4) ordering and order processing is
complex, fragmented and highly system-centered. Improvements
recommended are: (1) give customers the option of buying locally;
(2) expand the number of retail outlets for GSA supplies;
(3) strengthen marketing organizationally and functionally,
increase customer information sources and develop customer pro-
files; (4) establish a national customer liaison program with
strong central direction and increase the number of field customer
service representatives; and (5) adopt standard requisition forms,
implement a telephone ordering system for small users, and
centralize order processing at a single facility.
S-5: Vendors and the FSS Procurement Process - Federal procure-
ment procedures terns, and speciiicatioris are frequently
criticized by vendors as unnecessarily complex. Certain process
improvements have been initiated by FSS in concert with OFPP to
simplify regulations, contract forms, and contract language, and
to minimize the use of design specifications in favor of functional
specifications and emphasis on procurement of commercial products.
Further, the dollar levels for activating those requirements in
Government contracts which promote various Federal social and
economic policies lack uniformity and do not reflect changes in
economic conditions. A uniform $25,000 for application of all
such social and economic policies, with provision for future
adjustments, is recommended.
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B. SUPPORT SERVICES
S-6: Personal Property Utilization - GSA is responsible for
Government-wide utilization of excess personal property and
sale of surplus personal property. DOD is responsible for
internal screening of excess property generated by the military
services prior to referral to GSA and for worldwide sale of
surplus DOD personal property. Other Executive Branch agencies
sell certain types of property by separate legislative exemptions
or delegations of authority. The disposal of excess personal
property can be improved by assigning GSA Government-wide
responsibility for the domestic sales functions, thereby elim-
inating the duplication that now exists among GSA, DOD and other
Executive Branch agencies. DOD would continue to be responsible
for the disposition of DOD foreign excess property and demilitari-
zation of DOD material and equipment. In addition, the dis-
posal process can be facilitated by providing holding centers
for agency excess personal property awaiting disposition.
S-7: Printing Services - Present arrangements for printing and
reprographi- serv ces do not effectively meet the needs of the
Executive Branch. The Legislative Sranch, through the Joint
Committee on Printing and GPO, controls the total Government
printing program. There appears to be some redundancy of staff
between GPO and the larger Executive Branch agencies, and no-
where in the Executive Branch is there any central policy over-
view on printing matters. If the duplicative procurement
processes are eliminated, organization and operational respon-
sibilities clarified, the total printing and reprographic ex-
penditures could he substantially reduced. ASRP suggests two
alternatives: (1) a policy management and review office to
provide leadership and direction in the delivery of printing,
reprographic, and publication services; (2) reactivate the Inter-
departmental Committee on Printing and Processing. Both would
provide a single point within the Executive Branch for policy
development and standards work, needed legislative proposals for
Presidential consideration, program review and coordination of
requirements, technological assessments and market analyses.
S-8: Strategic and Critical Materials Stockpiling - National
Stockpile policy and goal setting functions are the responsibility
of GSA's Federal Preparedness Agency (FPA), which is being recom-
mended for consolidation with other Federal emergency preparedness
and response activities into a new agency. Remaining stockpile
operations are fragmented among GSA's Federal Supply Service
(acquisition, inspection, storage and maintenance), office of
Finance (inventory records keeping), and FPA (stockpile disposal).
Under the present arrangement, no single official below the level
of the Administrator is responsible for all stockpile operations.
To improve control, coordination and accountability, all GSA
stockpile operations should he consolidated into a single office
within the Federal Supply Service.
5
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S-9: Public Utilities Management - Public utilities services
to Federal agencies are reliable'and effective, but because
no there is no aggressive central management of Federal/public
utilities, policies, the Government probably has excess costs
of over $30 million annually. Emphasis should be placed on
aw procedures to eliminate late payment liability of utility
bills, reduce peak-demand costs through improved load-management
and conservation, and reduce total cost of utilities through rate
or tariff reductions in cost-of-service cases. It is recommended
that GSA's role be expanded and enhanced with a new charter to
develop Government-wide public utilities policies, procedures
and management systems.
S-10: Cooperative Support Services - Establishing centralized
support services-4for agencies located in the same building
or in close proximity is a viable alternative for delivery of
certain administrative services to Federal agencies. This con-
cept has not been fully implemented or supported by Executive
agencies. ASRP recommends that GSA, with the support of 0MB
and Heads of Departments and Agencies, vigorously pursue the
application of cooperative support services on a local basis
in buildings or complexes where large multi-agency populations
exist. ASRP also recommends that GSA conduct feasibility
studies for establishing cooperative support service agreements
on a nation-wide basis for selected services such as payroll and
voucher processing to smaller non-departmental organizations.
S-11: Motor Vehicle Management - The Federal domestic motor
vehicle fleet-approaches 400,000 with GSA motor pools consti-
tuting about 20 percent of ch total.,. Management and operation
of the fleet is fragmented among many agencies, with wide
variations in costs and effectiveness. Alternatives for im-
provement are to strengthen GSA's Government-wide fleet
management role through legislation and to consolidate
duplicative motor pools. Process recommendations to improve
management and reduce costs are: establish a separate working
capital fund for the Interagency Motor Pool System (IAMPS) with
authority for retention of earnings to meet new agency vehicle
requirements; depreciate IAMPS vehicles and establish user rates
based upon replacement costs rather than acquisition costs to
provide adequate reserves for scheduled replacements; capitalize
vehicles consolidated into the IAMPS at replacement cost less
current market value for the same reason; replace IAMPS sedans
and station wagons every 3 years or 50,000 miles; and establish
a uniform system of inventory and cost reporting. Savings up to
$60 million annually could be expected from these and other
improvements.
S-12: Transportation and Traffic Mana ement - GSA has not been
aggressive in exercising its statutory responsibilities for
Government-wide transportation and traffic management.
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The present organizational arrangement, which combines this
function with unrelated activities, tends to de-emphasize trans-
portation management. A separate organization to perform GSA's
present statutory responsibilities could improve management.
The following process recommendations could also result in cost
savings of up to S14 million annually: establishing a compre-
hensive routing control system for large civil agency shipments,
do iiore FOB origin procurement rather than FOB destination,
and additional transportation audits.
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I. INTRODUCTION
This is a status report on an interagency effort to define
and describe a National Supply System for use by agencies
of the Federal Government.
National Supply System Task Group No. 1 was formally
established on February 3, 1978, under the aegis of the
National Supply System Advisory Board in cooperation with
Administrative Services Reorganization Project. It was
charged with (a) preparing a preliminary definition of a
National Supply System, including a description of its
principal features and characteristics, and (b) developing
a plan and schedule for further defining and describing the
system in all of its detailed policies, programs, and proce-
dures. The task group is composed of representatives of
Treasury, DOD, GSA, VA, DOT, DUEW, OOFPP, and the ASRP.
II. BACKGROUND AND CURRENT STATUS
A "National Supply System", i.e., a single, integrated
Government-wide system for the procurement and supply of
materials used by Federal agencies, does not now exist.
Instead there is a proliferation of diverse, non-integrated
logistics procedures among Federal agencies. Many of these
procedures, developed on the basis of limited perspectives
and in response to immediate needs, are restricted in appli-
cation and redundant in terms of Government-wide supply needs.
Certain mechanisms, such as the Federal Catalog System,
offer the potential for Government-wide use, but this
potential has not been developed. In summary, the present
Federal logistics system is marked by duplication in
functions, inefficiency in operation and fragmentation of
responsibilities.
To eliminate these conditions and promote economy in Federal
procurement and supply practices, the Administrator for
Federal Procurement Policy established the National Supply
System Advisory Board in October 1976. The Advisory Board
is a high level, interagency forum consisting of representa-
tives from DOD, Interior, DOT, GSA, VA, and DUEW. In January
1978, arrangments were made to combine the Advisory Board
effort to define the National Supply System with closely-
related efforts of the ASRP.
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On March 14, 1978, Task Group No. 1 completed and forwarded
the preliminary definition of the National Supply System to
the National Supply System Steering Committee . On April 10,
1978, the Steering Committee, consisting of representatives
of DOD, GSA, VA, OFPP, and the ASRP, unanimously approved the
definition, as modified in minor respects, and forwarded it to
the Advisory Board for approval. (A copy of the preliminary
definition is attached as Appendix A). Pendinq final approval
of the definition by the Advisory Board and formal suo!nission
to the ASRP, Task Croup No. 1 was authorized to develop tie
proposed plan and schedule for further defining and describing
the National Supply System. On May 17, 1.97 8, Task Group No. 1
completed the proposed plan and schedule and forwarded it to
the-Steering Committee for review (copy attached as Appendix R).
It is expected that the Steering Committee and the Advisory .
Board will have completed their deliberations on the products
of the Task Group by July 1, 1978.
The concept of the National Supply System, as developed to
date, involves the establishment of Federal-wide uniform
policies and procedures that cover all the logistics
processes associated with the wholesale supply of items of
personal property: acquisition, supply distribution,
requisitioning, depot and warehousing processes, transpor-
tation, cataloging, financial procedures and automated data
processing. It envisions a single, .op-level executive
authority, reporting to the President, with responsibilities
for issuing uniform policies procedures and management standards
governing the operation of the system. Operational roles and
responsibilities of National Supply System participants will
be developed following approval of the functional aspects
(policies and procedures) of the National Supply System.
By reducing the redundancy in the present system, it is
estimated that personnel and related savings will. eventually
amount to an estimated $100,000,000 a year. The savings will
be realized over a period of several years as the proposed
policy, functional and ADP reforms are implemented.
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APPENDIX A
NATIONAL SUPPLY SYSTEM
PHASE I - PRELIMINARY DEFINITION AND DESCRIPTION
1. PREAMBLE
The purpose of this document is to provide a definition of a National Supply
System (NSS), along with a brief description of the principal features and
characteristics of that System.
II. DEFINITION
The National Supply System (NSS) is a single, uniform, integrated Federal-
wide system for the acquisition, supply, and distribution of personal property and
related services, with authority to establish, enforce, and monitor policies and pro-
cedures, world-wide in scope and application.
Ill. OBJECTIVES
The System will be one which is designed to accommodate both normal
peacetime, as well as emergency and defense-wartime requirements. The System
will seek to:
A. Eliminate overlap and duplication, improve cost-effectiveness and provide
for more effective utilization of existing Executive Branch personnel in the
management of acquisition and supply programs.
B. Establish a single, coherent, predictable, and responsive process for use
by Executive Branch agencies in acquiring supplies and related services
necessary for mission performance with flexibility essential to
accommodate the diverse needs and capabilities of the participants.
C. Provide for a greater degree of reliance on the private sector in meeting
supply and logistics needs so that:
1. Government duplication of private sector capabilities can be eliminated;
and
2. The Government's potential for benefiting from competition within the
private sector can be enhanced.
D. Establish a Government-wide comprehensive approach to the resolution of
acquisition and supply problems in the Executive Branch.
E. Create a single body of complementary procedures for use by manufac-
turers and suppliers in responding to the supply and service needs of Ex-
ecutive Branch agencies.
F. Facilitate the implementation, in a more rapid fashion, of technical and
systems improvements on a Government-wide basis.
G. Assure that policies associated with acquisition and supply reflect and
respond to the national security and other national interests, as directed by
the President.
NATIONAL SUPPLY SYSTEM STEERING COMMITTEE
TASK GROUP ANrov
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IV. FUNCTIONS
The System would encompass the following:
A. A single, unified body of supply policies, program directives, and related
central management activity.
B. A cataloging system for the identification, specification, and standardiza-
tion of items.
C. A standard system for the acquisition of material.
D. An item management system for designating managers for individual
items and/or classes of items which will optimize the one item/one
manager concept.
E. A standardized requisitioning and issue procedure with automated and
manual capabilities, and an order status tracking capability.
F. A standardized logistics communications system.
G. A system of contract administration to include quality assurance.
H. A single, integrated distribution system to accommodate the receipt, in-
spection, storage, issue, and movement of material in which the depot
facilities will be used on a common-use basis.
1. A single integrated system for the reutilization and disposal of excess and
surplus property.
J. A system for collecting, developing, communicating, and disseminating
acquisition and property management data which takes into account the
needs of the Congress, the Executive Branch, and the private sector.
K. Representation before appropriate Federal and State regulatory bodies.
L. Continuous close cooperation with the Central Personnel Management
Authority to promote programs for improved qualification and position
classification standards and similar activities towards improving the
recruitment, training, career development, motivation and performance
evaluation of acquisition and supply personnel.
V. STRUCTURE
A. The System will be applicable to each department, agency, committee,
commission, and board of the Federal Government. Each entity will par-
ticipate in the system as a manager, operator, or user, or in a combination
of these roles. Executive Branch entities will participate under a mandatory
charter; the Legislative and Judicial Branches may participate on a volun-
tary basis; however, if they choose to participate, they will do so within the
same parameters and restrictions as the Executive Branch. NATO and
other friendly foreign countries will also be participants in selected
aspects of the System. Contractors and quasi-governmental agencies may
become users of the System when sponsored by participants.
B. The System will include:
1. A single, top level, central, governing executive authority, designated by
and reporting to the President;
2. Full and continuing representation in major policy and program formula-
tion and key decision making by system participants, at the level of
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department/agency head, and in relation to the size and significance of
such participants' contributions to, and reliance on the System;
3. Consultative mechanisms to assure continuing advisory and supportive
inputs from recognized, knowledgeable private sector expertise to
assure that full consideration is given to commercial, industrial, and
socio-economic aspects and impacts of Federal supply activities; and
4. A policy and management structure to assure fulfillment of statutory
and Executive Branch requirements by developing standardized
policies, procedures and management standards governing the opera-
tion of the System, and to provide for evaluation and compliance. Opera-
tional mechanisms will assure that implementation of National Supply
System policies and programs associated with the acquisition and con-
trol of principal end - and related depot-level repairable - items of per-
sonal property which are mission-unique to a single department or
agency will be the responsibility of that department or agency unless
specifically excepted by law or Presidential direction.
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NATIONAL SUPPLY SYSTEM
PHASE II - PLAN AND SCHEDULE FOR COMPLETING
PRELIMINARY DEFINITION AND DESCRIPTION
1. INTRODUCTION
The purpose of this document is to provide a recommended plan and schedule
for completing the Preliminary Definition and Description of the National Supply
System which was submitted by Task Group No. 1 to the National Supply System
Steering Committee on March 14, 1978, and tentatively approved by the National
Supply System Advisory Board (NSSAB) on April 20, 1978.
II. SCOPE OF PLAN AND SCHEDULE
Completion of the definition and description of the National Supply System
(NSS) will include:
A. The further definition and delineation of the NSS, description of its
functions and their components, and, upon approval by the NSSAB,
development of the respective roles and responsibilities of the par-
ticipants, proposed policy setting authority, and organizational
structures;
B. The development of the implementing charter, policy statements, orders
and similar directives for bringing the National Supply System into
existence;
C. The clearance and coordination of such implementing documents with
all participants and other interested parties, including publication in the
Federal Register;
D. Revisions to such implementing documents, as required, on the basis of
comments received; and
E. The development and coordination of all transition plans, schedules and
other arrangements for phasing into the new National Supply System.
For each of the functions described in Part IV of this report, there has been
included a listing of examples of a number of significant components. Also noted,
are known projects or studies toward the enhancement of the National Supply
System objectives. In addition, specific reference is made to some activities
uniquely required to further define, describe and implement that function with
respect to the National Supply System. These should all become part of, and
integrated into, the plan and schedule of work for the development of the National
Supply System, and should be coordinated by the National Supply System Im-
plementation Task Force.
Unified policies, programs, directives, procedures and standard forms are re-
quired for all of the functions, as referenced in IV, A below, so these will not be
repeated as a required item under each function.
NATIONAL SUPPLY SYSTEM STEERING COMMITTEE
TASK GROUP NO. 1
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Ill. NATIONAL SUPPLY SYSTEM IMPLEMENTATION TASK FORCE (NSSITF)
The organization through and by which the work of completing the definition
and description of the National Supply System will be accomplished, will be known
as the National Supply System Implementation Task Force (NSSITF). This Task
Force should be staffed by personnel from Executive departments and agencies,
on full time detail assignments. Details would be based on the cooperation and
concurrence of the agencies affected, and with regard to the relative degree of par-
ticipation of each department or agency in the National Supply System, as well as
on the need for top level, functional expertise and analytical ability. The Task Force
will consist of a senior level Director, a Functional Coordinator for each major func-
tion identified in the National Supply System Definition, and Work Groups for each
function and/or major sub-function.
The Task Force Director and the Functional Coordinators, to the extent prac-
ticable, should be collocated to assure close coordination in development of
unified National Supply System plans and policies.
In addition to the staffing requirements referenced above, a budget allocation
should be provided for the operation of the National Supply System Implementa-
tion Task Force, for adequate support staff, and for all logistical and travel re-
quirements.
IV. FUNCTIONS
The specific functions, components, related ongoing and scheduled projects,
and activities uniquely required for each function, are indicated below:
A. A Unified Body of Supply Policies, Program Directives, and Other
Central Management Activity.
Components:
? Policies ? Management Concepts
? Program Directives ? Organizational Structures
? Plans and Schedules ? Budget and Accounting System Design
? System-Subsystem Designs ? Evaluation Plan
? Standard Forms ? Public Information Program
? Participant Role Definitions ? Transition/Phasing Arrangements
1. Currently Underway:
See listings of specific projects associated with Functions B through
L, below.
2. Scheduled:
See listings associated with Functions B through L below.
3. Required:
In addition to those National Supply System projects currently under-
way, or scheduled, as identified for Functions B through L below, it is
necessary to develop:
(a) Unified, Federal-wide policies, programs, systems, directives,
procedures, and standard forms for each of the functions, in
consonance with Section III, Objectives, of the Preliminary
Definition and Description of the National Supply System;
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(b) Specific plans and policy and program directives to assure a fully
integrated and consistent, phased implementation of each
system, program and procedure, as described in Functions B
through L.
(c) Unified Government-wide budget, finance and accounting
policies and procedures to assure orderly funds transfers,
property accountability, and other requirements associated with
common service acquisition and supply;
(d) Programs to improve understanding of Federal acquisition and
supply policies, both within the Service, and by organizations and
individuals doing business with the Government;
(e) Programs for identifying, evaluating and correcting, on a con-
tinuing basis, overlappings, duplications, inadequacies, incon-
sistencies, inefficiencies, and other errors or omissions in
Government supply policies, procedures, regulations and
directives, and in other policies, regulations, and laws affecting
supply;
(f) A detailed transition plan for the orderly phasing of sub-systems
into the National Supply System, and for reviewing such sub-
systems to identify excess system resources (facilities, equip-
ment, personnel, software).
B. A Cataloging System for the Identification, Specification and
Standardization of Items.
Components:
? Identification of items
? Assignment of National Stock Numbers
? Registration of all National Supply System participants in the
Federal Catalog System
? An integrated data base of cataloging data for common use by National
Supply System participants
? Item Management data
? Control of the entry and exit of items
? Standardization of items
? Cataloging publications to satisfy user needs
? NATO and other friendly foreign government participation
1. Currently Underway:
Office of Federal Procurement Policy/DoD/GSA joint project for
development of specification management improvement program.
2. Scheduled:
National Supply System Task Group #3 is to develop programs and pro-
cedures to assure systematic entry and control of items into the NSS,
and NSS Task Group #4 is to develop means to maximize Civil Agency
participation in the Federal Catalog System.
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3. Required:
Development of a program to require registration of items in the
Federal Catalog System.
C. A Standard System for the Acquisition of Material.
Components:
? Includes all functions associated with acquisition of material, other than
those listed elsewhere, ie:
? Requirements Forecasting ? Advertising
? Source Determination ? Solicitation
? Centralized/Decentralized Procurement ? Negotiation
? Schedules ? Evaluation
? Local Purchase ? Award
1. Currently Underway:
(a) A single, unified acquisition regulation (Federal Acquisition
Regulation). Also, see Function J.
(b) Unified policy guidelines for implementation of the Commercial
Products Acquisition/Distribution Program.
(c) Improved Multiple Award Schedule Contract Program.
(d) Market Research and Analysis Programs.
2. Required:
Specific procurement assignment criteria as required for Functions C
and D.
D. An Item Management System for Designating Managers for Individual
Items or Classes Which Will Optimize the One Item/One Manager
Concept.
Components:
? Standard Inventory management systems
? Inventory Management Assignments
? Supply Support Assignments
1. Currently Underway:
An effort by OFPP/DoD/VA/GSA/DHEW to establish a single
government wide system to procure and assure quality of medical and
nonperishable subsistence items.
2. Required:
Specific item and procurement assignment criteria as required for
Functions C and D.
E. Standardized' Requisitioning and Issue Procedures with Automated and
Manual Capabilities and An Order Status Tracking Capability.
Components:
? Requisitioning and Issue System
? Uniform Priority System
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? Reporting System
? Transportation System
? Intransit Item Visibility System
F. A Standardized Logistics Communications System.
Components:
? System-wide automated digital network
? System-wide automated addressing capability
? Standard Input/Output Codes and formats
? Communications systems dedicated to logistics traffic transmission
? Manual and mechanical Interface with the Digital Network
G. A System of Contract Administration to Include Quality Assurance.
Components:
? Standard quality assurance procedures
? Adherence to specifications, contract delivery dates, and production
schedules
? Pre-award and post-award audit of contractors
? Contractor compliance with affirmative action and socio-economic
program requirements
1. Currently Underway:
(a) Consolidation of contractor affirmative action compliance within the
Department of Labor
(b) Development of the Federal Acquisition Data System (See Function
J).
H. An Integrated Distribution System to Accommodate the Receipt,
Inspection, Storage, Issue and Movement of Material in which the Depot
Facilities will be Used on a Common-use Basis.
Components:
? Depot Operating Systems ? Depot Transportation Systems
? Receiving ? Expediting and monitoring
? Issuing ? Material marking
? Packing/Crating/Handling ? Consolidation/Staging
? Stock Control ? Material Movement
? Storage (Physical Inventory, ? Traffic Management
Warehousing, and Preservation) ? Positioning/Repositioning
? Retail Stores Operations
1. Currently Underway:
(a) National Supply System Task Group #2 is to develop criteria for con-
solidating wholesale government supply distribution facilities.
(b) The preliminary efforts of DoD in reviewing their thirty-four general
purpose depots for potential consolidation.
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(c) The preliminary effort and plans of GSA/FSS to reduce their
depots.
1. An Integrated System for the Reutilization and Disposal of Excess and
Surplus Property.
Components:
? Utilization Screening
? Reporting
? Repair, Rehabilitation and Reclamation
? Reutilization and Reassignment
? Donation
? Sales
J. A System for Collecting, Developing, Communicating, and Disseminating
Acquisition and Property Management Data Which Takes Into Account
the Needs of the Congress, the Executive Branch, and the Private
Sector.
Components:
? National Supply Data System
? Ability to provide required and recurring reports
? Additional related systems to program plans, budgets, costs, personnel
data and other information as required
1. Currently Underway:
A Federal Procurement Data System, including a Federal Data
Procurement Center, for assembling, organizing and presenting con-
tract placement data for the Federal Government, is to commence
operation October 1, 1978.
2. Required:
(a) An advisory group to recommend additions, deletions and changes
to the National Supply Data System.
(b) An interagency committee to determine required programs and data
elements, and to test, implement and oversee the development
of programs for the National Supply Data System.
K. Representation Before Appropriate Federal and State Regulatory Bodies.
Components:
? Represents the National Supply System participants in all matters
pertaining to transportation, public utilities and telecommunications.
L. Continuous Close Cooperation with Central Personnel Management
Authority to Promote Programs for Improved Qualification and Position
Classification Standards and Similar Activities Towards Improving the
Recruitment, Training, Career Development, Motivation, and Performance
Evaluation Of Acquisition and Supply Personnel.
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Components:
? Classification standards
? Qualification and performance standards and appraisal methods
? Analysis and development of recruitment sources for qualified
personnel
? Training and career development programs
? Recognition and awards programs
? Certification and Licensing programs
1. Currently Underway:
Federal Acquisition Institute is developing career programs for
acquisition and contracting personnel. These should be expanded, in
cooperation with GSA and CSC, to include all supply personnel.
2. Required:
A task group to develop a code of ethics, examination, licensing and
certification programs, and to develop an awards and recognition pro-
gram, for special achievements of supply, and acquisition personnel.
Note: Actions to be completed by the dates shown, but with full input and consultation
with agencies affected, and approval by National Supply System Advisory Board. It also
envisions continuing coordination with other related projects, studies and cost-benefit
analyses, underway elsewhere in the Federal Service, in the development of the products
needed to complete the definition and description of the NSS.
A. September 1, 1978
? Approval of the National Supply System Project Summary by the
President
? Charter for Task Force and appointment of Task Force Director
? Appointment of Functional Coordinators
? Organization of Work Groups including necessary administrative
support
B. January 1,1979
? Development of completed, formal National Supply System definition,
and of initial drafts of major policy and program directives
? Coordination of the above with NSS participants and other interested
parties
? Negotiation and resolution of comments by the National Supply System
Advisory Board
C. April 1, 1979
? Development of initial drafts of comprehensive descriptions and of
policy and program directives for each of the functional areas
? Coordination of the above with NSS participants and other interested
parties
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? Approval by the National Supply System Advisory Board of completed,
formal National Supply System definition, and final drafts of major policy
and program directives
D. July 1, 1979
Approval by the National Supply System Advisory Board, of final drafts
of comprehensive descriptions, and of policy and program directives for
each of the functional areas.
E. September 1, 1979
Subsequent to completion and approval by NSSAB, of comprehensive
functional descriptions, policy and programs directives, as per D above,
delineation of roles and responsibilities of NSS participants, and of
management authorities and organizational structures. Coordination with
all interested parties, negotiation and resolution of comments and
approval by the National Supply System Advisory Board.
F. January 1, 1980
Issuance of all policy, program and management directives, establishing
the National Supply System, with phased implementation to begin
April 1, 1980-this gives a six month lead in, transition period for actions to
be effected at the beginning of FY 81, le October 1, 1980.
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ISSUE NO.S-2: CRITERIA FOR CONSOLIDATING GOVERNMENT SUPPLY
DEPOTS
I. INTRODUCTION
This is a status report on an interagency effort to develop
a series of viable, realistic criteria for consolidating
Government wholesale distribution facilities.
National Supply System Task Group No. 2 was established on
March 2, 1978, under the aegis of the National Supply System
Advisory Board and the Administrative Services Reorganization
Project. It was asked to prepare an inventory of the Govern-
ment's wholesale distribution facilities in the 50 states
and to develop criteria for reducing the number of these
facilities. The task group is composed of representatives
of DOD, GSA, VA, NASA, DOT, OFPP and the ASRP.
II. BACKGROUND AND CURRENT STATUS
On January 10, 1978, the National Supply System Advisory
Board authorized the establishment of Task Group No. 2 as
the first step in a project to establish a single consolidated
network of Federal depot facilities for Government-wide use.
The National Supply System Advisory Board also directed that
the efforts of Task Group No. 2 be thoroughly integrated with
the work of the Administrative Services Reorganization Project
(ASRP) and that the work products of this task group, as
approved by the National Supply System Advisory Board, be
contributed to ASRP.
Scores of agency depots exist, many of which are located in
close geographical proximity, store and issue similar kinds
of items, and often issue these items to the same customers.
Some depot facilities are poorly located to effectively
serve their customers, are housed in overaged, obsolete
facilities, and utilize agency-unique procedures. Because
of the impact of the commercial product acquisition program
and other factors, future capacity requirements for depots
may be reduced. The GSA, for example, has reported that
nearly 60% of items stocked in depots have been removed from
stock since 1970. Moreover, both DOD and GSA have completed
consolidation studies of their respective facilities and, in
the case of GSA, have begun to implement their findings.
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On April 26, 1978, Task Group No. 2 completed and forwarded
its inventory of Government wholesale depots to the National
Supply System Steering Committee where it is presently under
review. That inventory, a summary of which is attached as
Appendix A, reveals that 67 general purpose depots are owned
and operated by 10 Federal agencies in the 50 states.
The task group is also completing its deliberations on
criteria for further consolidating those facilities. Cri-
teria under development relate to user responsiveness, cost
effectiveness, management considerations and numerous other
aspects of depot effectiveness. It is expected that the task
group report on criteria will be submitted to the Steering
Committee in early June, and subsequently to the Advisory
Board for approval. As soon as the consolidation criteria
are approved by the National Supply System Advisory Board,
a task group for transitional planning is scheduled to be
established. ASRP estimates that 6 months will be required
for this stage of the program.
The 67 common supply depots operated by the 10 Federal
agencies have annual operating costs of $1.2 billion. These
depots take up 190 million square feet of space and employ
22,946 people. The studies currently underway in DOD and GSA
could result in as many as 20 fewer depots. It is believed
that a substantially greater number of depots could be con-
solidated through full implementation of the National Supply
System and that a 20 percent reduction in current operating
costs for personnel, space and transportation would result.
Based on the 20 percent estimate, annual savings would be
$240,000,000. Projected savings have been rounded off to
$200,000,000.
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APPENDIX A
Wholesale Depot Consolidation Study
Task Grout #2
Depot Inventory Summary
Reporting
Agency
No. of
Depots
Space
rr.. Sq. Ft.
Inventory
Dollars
Depot
Personnel
Agriculture
Commerce
NOAA
45,050
118,363
$404,000
6,580,490
45
126,219,000**25,000,000,000**
21,000 est.*"
GSA
12,883,985
203,160,195
1,214
HEW
66,419
2,422,600
Interior
39,680
3,982,306
23
Justice
150,000
250,000
2
NASA
81,475
35,643,507
Contr.
DOT
863,144
187,900,000
286
VA
1,084,366
40,784,958
141,551,482
$25,481,128,056
22,946
*Excludes 81 Fuel Terminals and 15 Ammunition Depots
**Does not include Bulk Petroleum, Oils Lubricants; Ammunition;
Chemical, Biological, Radiological Materials; Perishable Subsis-
tence; Industrial Plant Equipment; or most Major End items.
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ISSUE -NO. S-3: FSS SUPPLY OPERATIONS
I. INTRODUCTION
This study memorandum provides an assessment of the GSA/FSS
organization and the policies, programs, and procedures employed
in providing supply support to civil and military customers.
The study involved a review of the entire FSS supply management
function. Nationwide interviews were conducted with FSS Central
-Office and regional staffs, as well as with officials of commer-
cial enterprise and state governments. Extensive reviews were
made of the GSA/FSS organization statements, FSS operating pro-
cedures, GAO reports, GSA Internal Audit Reports, consultant
studies, operating program surveys, reports of Congressional
Committee Hearings, and OFPP policy statements.
FSS supply management activities, in support of a central
supply mission, were authorized by Public Law 152, the Act
establishing GSA in 1949. In the intervening 29 years, the
scope, volume and complexity of activity has expanded markedly.
Support provided worldwide to civilian and military activities
amounts to approximately $3 billion annually. Many management
and operational improvements have been instituted over the years
to handle the increased workloads. Included were development
of more sophisticated procurement and inventory management con-
cepts and procedures, increased utilization of ADP systems,
installation of more mechanized equipment and internal movement
systems in depot operations, better management information sys-
tems, as well as some organization changes and advanced financial
controls. Review of the current FSS organizational structure,
including the Central Office and the regional offices indicated
that alternatives are available to improve system effectiveness,
improve responsiveness to the customer, and reduce costs in the
delivery of supplies and services. A cost/benefit analysis
should be made prior to implementing any of the alternatives.
II. I3ACRGRO`.JND AND CURRENT SITUATION
A. ORGANIZATION PROBLEMS
The organization of the FSS has been subjected to numerous
studies and adjustments over the years. Frequent changes in
top management have brought new management philosophy and
policy direction. However, pressures from political interests,
employee unions, and trade associations have sometimes thwarted
efforts to make other organizational adjustments considered
necessary.
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The supply management functions in FSS are performed by a
Central office with 7 major headquarters offices, 4 staff
offices, and 3 commodity centers reporting to the FSS Com-
missioner. The field organization consists of 10 regional
offices and 20 supply distribution facilities. Procurement
is accomplished by 17 separate elements located in 11 geo-
graphic areas, and inventory management operations are
performed by 12 separate activities throughout the FS3.
The FSS depot stocK program, which currently involvos approx-
imately 22,000 items, is subject to reduction as a result of
the OFPP "Commercial Products Policy", which would increase
reliance on the commercial distribution system. The degree
of impact is dependent on the results of current OFPP/FSS
negotiations to clarify the policy. Literal interpretation
of this policy would drastically affect the FSS depot stock
program as well as FSS supply policies and organizational
structure.
Washington level attention to the development of Policy in FSS
is reduced because of operational responsibilities assigned
to the central office. The present structure forces opera-
tional decisions to the level of the Commissioner or Deputy
Commissioner that should not be made at that level. 1ovina
supply operations from the Central Office to the field would
provide a clear division between policy development and opera-
tions and would promote rlore consistent and integrated supply
management policies. Assigning operational control to the
field organization would increase management control, improve
effectiveness of operations and improve responsiveness to
customers.
FSS as a major central supply support organization conducts a
number of management programs and operating functions includ-
ing planning, budaetinq, funding, program review, procurement,
method of supply determinations, logistics data management,
supply distribution, and inventory management. The effective-
ness of supply r:ianagement efforts is influenced by other
factors such as the Commercial Products Policy as sponsored
by the office of Federal Procurement Policy.
Review of the current FSS policies, programs, and procedures
indicates that although improvements have been made in recent
years, and others are planned, there are still a number of
areas which offer potential for improving supply system re-
sponsiveness and effectiveness, or reducing costs. Each area
is identified and discussed below.
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III. CRITERIA FOR IMPROVEMENT
Improve manaqerial control
Reduce costs
Improve responsiveness
Improve effectiveness
Improve FSS/customer relationships
IV. ORGANIZATIONAL ALTERNATIVES
A. CiNTRAL OFFICE ORGANIZATION
presently being per-
formed in the Central office to the F'SS field activities, retain-
inq only policy and procedures within the Central Office; create
a Deputy Commissioner for Supply Management responsible for the
total supply management function and a Deputy Commissioner for
Support Services heading up other FSS activities. This proposal
must be considered in conjunction with field
di
IureZ'
s uss d in paragraph B below.
Several operational functions are assigned to the Central Office:
all FSS cataloging operations; procurement of qeneral products,
office and photographic equipment, and office supplies and paper
products; some specification, standards
and qualit
c
t
l
,
on
y
ro
opera-
p tions; and all supply operations performed by the three commodity
centers
FSS supply management policy responsibilities are currently diluted
by supply operations activities in the Central Office and are split
among 4 Assistant Commissioners. Resolution of policy/program dif-
ferences in the best interest of the supply support system and the
customer must he resolved at the Cor.imissioner/1_)eputy Commissioner
level.
'iovinq supply operations from the Central Office to the field
.r and centralizing supply management
policy responsibilities under
a Deputy Commissioner for Supply Management would establish the
organizational structure needed to assure consistent and inte-
??+ grated system w1 de
li
po
cy quiciance on a continuinq basis. This
would increase management control of operations and improve ef-
fectiveness and responsiveness to customers. By having the policy
managers for the various supply management functions operating at
the same organizational level and reporting to the Deputy Cormmis-
sioner for Supply Management, who would integrate the various
policies involved, a more cohesive and balanced effort to carry
out the supply support responsibilities will result.
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Significant realignment of detailed functions at the office level
under the Deputy Commissioner for Supply Management is considered
necessary. The responsibilities of the Office of Procurement
would be limited to the procuring and acquisition of material.
The proposed office of Supply Operations would be established with
the responsibility for inventory management to include: require-
ments computations, related budget/financial responsibilities,
stock control, order processing., inventory adjustments, and method
of supply determinations. An Office of Cataloging would be estab-
lished for staff support of this function.
Customer service functions would support both Supply Management
and Support Services and would be established as a separate
organizational entity reporting directly to the FSS Commissioner.
Another alternative for the organizational placement of these
customer service and assistance functions is discussed in Issue
No. S-4, "Customer Services". This alternative would have the
Customer Service Office report to the GSA Administrator and pro-
vide service for all of GSA.
Pros:
Increased stability of workforce
Reduced total GSA personnel costs through lower average grade
Increased managerial control
Improved responsiveness to customers
Improved flexibility of workload planning and control
Cons:
Loss of some experienced personnel
Temporary degradation of performance during transition
period
Possible temporary personnel overstrength
Initial costs for relocating personnel, establishing new
systems, and revising communications network
B. FIELD ORGANIZATION
1. Establish a single National Commodity Management
Center (CMC) responsible for all operational functions; pro-
curement, inventory management, distribution, cataloging,
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specifications, standards, and. quality control. Eliminate
these operations at FSS headquarters and at the regional
offices and integrate the functions into the CMC. Disestab-
lish existing commodity centers and integrate the functions
into the CMC. Revise ADP system requirements to support FSS
supply operations. Establish direct communications links
between the National Center and each distribution facility.
Pros:
Improve management control
Reduce personnel and investment costs
Improve supply responsiveness and effectiveness
Cons:
Initial costs for relocating personnel, establishing new
systems, and revising communications network
period
Loss of some experienced personnel
Temporary degradation of performance during transition
2. Extend the current commodity center concept - Con-
tinue the present tools, furniture and automotive commodity
centers and establish additional centers for paper products and
general supplies and incorporate current Central Office opera-
tions and regional supply management operations into the centers,
all of which would be field activities.
Transfer operational functions for procurement, inventory man-
agement, distribution, cataloging, specifications, standards
and quality control, to be consistent with commodity management
by individual centers. Eliminate these operations at FSS head-
quarters and regional offices. Centers would assume supply man-
agement functions for assigned classes and would report to FSS
headquarters.
Pros:
Improve management control
Reduce personnel and investment costs
Provide commodity visibility and improve customer relations
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Cons:
Supply management remains decentralized and fragmented
Does not maximize responsiveness or effectiveness
Savings less than the centralized commodity management
center alternative
3. Strengthen and refine the regional structure - retain
the present 10 region structure; eliminate the present commodity
centers and assign their functions to the regions; and improve the
process and system in and among the regions.
Establish all supply management functions within a region for the
classes/items assigned to that region. Eliminate these functions
from FSS headquarters.
Eliminates fragmentation between regions and commodity
centers
Eliminates system duplications
Improves management control by separating policy and
operations
Concentrates inventory management and procurement respon-
sibility in each region for the class/items assigned.
Cons:
Continued fragmentation of supply management functions
Minimum savings from consolidation of commodity centers
No obvious increase in responsiveness to customers
4. Continue the present structure for the regions and
commodity centers with the supply management operation functions
presently performed in the Central Office assigned to the regions.
Existing procurement, standards, specifications, and quality
control operations would move from Central Office to the regions
or to a new commodity center or a combination of both.
Commodity centers would become field organizations.
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Pros:
Minimum disruption of personnel and systems
Provides separation of policy and operations
Cons:
Supply management functions remain fragmented
Minimum reduction in operating costs
No improvement in effectiveness or responsiveness to
customer
5. Reduce the number of regions - Consolidate the present
10 regional FSS supply support operations into a lesser number.
Should it be decided to perpetuate FSS supply operations in the
regional offices, savings could be realized by consolidation of
these functions in fewer regions. For example, the number of
regions involved in FSS supply support operations could conceiv-
ably be reduced from the current 10 to 3; one East Coast, one
West Coast, and one Mid U.S.
Pros:
Some reduced costs from consolidation
Some increased management control
Decreases system development and implementation problems
Cons:
Supply management functions remain fragmented
No improvement of responsiveness and effectiveness to
customer
Minimum reduction of operating costs
A limited procurement capability would be retained in the
regions to support retail operations and provide internal
regional local purchasing support regardless of the organi-
zational alternative selected.
V. PROCESS IMPROVEMENTS
A. FUNDING METHODS
FSS supply management operations are funded from 3 sources:
appropriations which cover all operating costs, a revolving
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account - the General Supply Fund which finances the cost of
purchases in both the stock and nonstock programs, and reim-
bursements from other agencies for special work performed.
By law, the General Supply Fund may be used only to recover
the purchase price of property and the transportation and
maintenance costs involved. FSS prices stock items to recover
those costs which for the period October - December 1977
amounted to a markup of 12.1%. For nonstock support, the
customer is charged only the amount billed FSS by the vendor.
One of the major recommendations of the Commission on Govern-
ment Procurement was that interagency supply support activities
should institute a program of industrial funding which would
recover all costs of supplying products and services which in
turn would foster efficiency in use of resources by both the
supplying activity and the user.
FSS, with the assistance of the Office of Finance staff, GSA,
prepared a study entitled "Full Cost Recovery for the FSS"
(November 15, 1973). The conclusion was that industrial
funding had advantages for FSS and that its stock, nonstores
and schedules programs would remain cost effective despite the
cost add-ons necessary. At that time, FSS would have had to
mark-up stock by 33%, and add a 5% surcharge for nonstores
and schedules products. Despite this, FSS prices would still
have been 16.3% below the commercial market prices on stocked
items and 13.6% below for nonstores and schedules. A compar-
able situation exists today.
Based on the indicated feasibility of implementing industrial
funding in FSS, a decision was made to prepare draft legisla-
tion to amend PL 152. During this period however, DOD voiced
opposition to using industrial funding in supply operations as
being a costly and unsatisfactory accounting method for DLA
items and agreed to FSS using it only if storage and distribu-
tion costs were funded by GSA appropriations and DOD had full
freedom to use alternate supply sources when more economical.
Since OFPP could not resolve the matter, FSS cancelled their
plans for introducing industrial funding.
FSS then proceeded to consider the possibility of applying
a system of full cost disclosure. It identifies costs of
the supply management operation for improved management
control but does not provide for collection of overhead and
imputed interest expenses from the customer. FSS expects
to have a complete cost disclosure system in use by FY 1980.
Recommended Process. Improvements
FSS should continue the revision of its accounting systems to
identify and collect all costs attributable to the supply man-
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aqement program (including ADP and telecommunications costs) as
a prerequisite to instituting full cost disclosure under present
funding arrangements.
Upon resolution of the roles of the various agencies under the
National Supply System, consideration should be given to initia-
ting legislation to provide for industrial funding of the supply
management operations of the NSS.
B. LOGISTICS DATA MANAGEMENT
The Administrator of GSA is authorized by law to establish and
maintain a uniform Federal Catalog System to identify and clas-
sify personal property under the control of Federal agencies.
Under this law, each Federal agency is required to utilize the
Federal Catalog System except as the GSA Administrator shall
otherwise provide. The Defense Cataloging and Standardization
Act authorized the Secretary of Defense to develop a single
supply catalog system for DOD. Both laws require coordination
to avoid unnecessary duplication.
Chapter 101-30 of the Federal Property Management Regulations
delineates Federal agency and GSA responsibilities in identi-
fying and recording items in the Federal Catalog System. These
regulations also prescribe the procedures to be followed by
Federal civil agencies in requesting exemptions from the program.
While substantial progress has been made in the identificatior-
and recording of items required by Federal civil agencies in
the Federal Catalog System since 1949, it is estimated that
374,000 items used by civil agencies have not yet been reviewed
for assignment of National Stock Numbers. Locally assigned
stock numbers and individual civil agency management of these
items negate the economies of a centrally managed system.
Review of these items for assignment of. National Stock Numbers
is also essential to realize a fully effective National Supply
System. The current staffing level of the FSS Logistics Data
Management Division has not permitted any significant progress
in reviewing these 374,000 items nor has it been possible to
initiate item reduction studies in the 69 Federal Supply Classes
assigned to GSA.
Another problem is the current FSS policy which results in
rejecting civil agency requests for supply support when pro-
jected annual demand is less than $25,000 for an item.
Recommended Process Improvements
FSS should continue its plan for prioritizing agency participa-
tion and seek the additional resources necessary to accelerate
review of the civil agency items not assigned NSN's and to con-
duct a more effective Item Reduction Program.
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FSS should pursue full agency participation in the Federal
Catalog System.
FSS should re-examine the current policy for rejecting civil
agency supply support requests when projected annual demand
is less than $25,000 and utilize the economic decision-making
model in determining the appropriate method of supply.
C. SUPPLY DISTRIBUTION
FSS supports agencies worldwide on some 22,000 common use items
from 20 facilities comprising 14.4 million square feet located
throughout the U.S. Sales for FY 1977 amounted to $697.9 mil-
lion. A number of problems were noted in reviewing the opera-
tions. Several facilities visited had substantial amounts of
underutilized space thought to result from recent item support
transfers to DLA, need for realignment of stocking patterns'and
reduction in number of stocked items. Actions to resolve this
situation include the application of a simulation technique to
determine the optimum number of facilities needed and an annual
Supply Distribution/Inventory Management effort to assure that
items are stocked in the facilities nearest the customers.
Another area for improvement is the need for separate ADP output
for controlling hazardous material shipments. Currently this
process is performed manually creating an unneccessary expense.
Adjustments were being made without verification to stock item
record balances by activities outside of the depot on the basis
of customer complaints indicating over or under shipments from
the depot. This increases the potential for erroneous
inventory balances.
There is also the possibility of increased costs of depot
operations if the FSS policy of accepting "commercial pack"
from vendors is widely implemented without further definition.
With the wide variances in unit packages by different vendors
for the same items under the same National Stock Number, errors
in receiving, inventorying and issuing can be expected.
Finally, improved ADP programs are needed for more effective
stock location control, compression of receipt processing time,
improved shipment consolidation and elimination of time delays
in delivering depot work packages from the distant computer
processing sites. These improvements are not scheduled for
inclusion in the ADP design effort scheduled for implementation
in 1980.
Recommended Process Improvements
FSS should pursue its plan
to
consolidate
the
number of
distribu-
tion facilities from 20 to
a
range of 8 to
12.
Central
Office
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Inventory Management should pursue early implementation of the
April 1973 item stocking plan.
Obtain a computer program change as soon as possible which will
provide separate documents for hazardous items so that required
packing and shipping controls can be applied automatically.
Establish a requirement that the Supply Distribution Inventory
Sampling Staff conduct an interim physical inventory before
making any adjustments to book balances now being made auto-
matically on the basis of customer reports of over or under
depot shipments.
FSS re-examine implementation of the commercial pack policy to
assure judicial and selective application.
FSS re-evaluate the urgency of need for major system improvements
in the distribution facilities. In the event required improve-
ments cannot be included in the ADP support system for 1980, the
Office of Supply Distribution should seek to achieve operational
improvements manually, if necessary, at the earliest practicable
date.
0. COMMERCIAL PRODUCTS POLICY
OFPP policy provides that Federal government activities are to
make maximum use of the commercial distribution channels to meet
requirements for common use type items. The need for complex
federal specifications will be reduced and the cost of government
storage and distribution will be minimized. The rationale is that
greater reliance on the commercial sector will result in lower
costs of doing business with no adverse impact on supply system
responsiveness. Pursuant to this policy, FSS subjected 2,296
items to the GSA developed computerized economic model for making
cost effective method of procurement and supply decisions. This
analysis recommended 1,529 or 66.6 percent be retained in the FSS
stock program, 746 or 32.5 percent be placed on supply schedules,
and 21 or 0.9 percent be designated for local purchase. FSS plans
to complete analysis of all of the stocked items in the next twelve
months.
The FSS analysis established that economic factors must be taken
into consideration in arriving at the optimum method of supply.
This position was included in a letter to OFPP dated April 3,
1978. If the OFPP policy is to be literally implemented without
reference to economic considerations on an item-by-item basis,
the FSS depot program would be virtually eliminated.
Recommended Process Improvements
FSS and OFPP should resolve policy concerning acquisition and
distribution of commercial products.
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E. METHOD OF SUPPLY DETFRMINATION
FSS uses a computerized program to assist management in reaching
item-by-item decisions regarding which method of supply would
produce the lowest total landed cost to the Government. A number
of constant data elements are stored on the system, such as costs
..r of item management, procuring, requisitioning, receiving, inspec-
tion, inventory holdinq, issue, transportation, billing and col-
lection. Different levels of cost are assigned for each of three
- major methods of supply: supply from stock, supply by Federal
Supply Schedule, and agency local purchase. (A fourth method
of supply used by FSS, called non-stores procurement, is not yet
included in the Economic Model.) Other constant data included
are information c
m
il
d
ll
h
i
p
o
e
annua
y s
ow
ng percentage price savings
obtained by FSS compared to prices which agencies would have to
pay locally. Variable data are run against the model including
anticipated demand, different cost levels by item depending on
the expenses applicable to receiving, inventory holding, method
of procurement selection, etc. The computer program matches these
data and indicates the cost for each method of supply.
Several problems were noted. Currently, the accuracy of the model
cannot be verified since detailed program documentation was not
compiled during construction of the model although detailed write-
ups will commence shortly. The model is currently used only to
determine the appropriate method of supply for items now in stock
or being considered for such type of support. Apparently, data
on Federal Supply Schedules, Non-stock Procurements, and local
buys by agencies are not sufficient to use the model in calcula-
ting whether a change in the method of supply for these millions
no of items would be economically desirable.
The model has not been formally reviewed by other Government or
Mr private sector activities although GAO has initiated an effort
in this regard and OFPP has also been provided a general descrip-
tion of the model for review and comment. FSS is refining the
model to replace a number of cost averages now used with more
fti meaningful data based on expense variances which exist among
supply items and among the methods of procurement used.
Recommended Process Improvements
Immediate action should be taken to fully document the current
economic decision making model as well as the refined approach
as it is developed.
FSS should establish an approach to review all assigned items.
Other non-GSA activities in Government and the private sector
should be requested to review and critique the economic decision
making model.
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ISSUE No. S-4: CUSTOMER SERVICES
I. INTRODUCTION
This study memorandum provides an assessment of GSA/FSS services
to its Federal customers.
Central supply systems of the federal government should serve
one basic purpose - effective support of the federal customer.
A gxowing communication gap, caused by increased GSA centraliza-
tion, inhibits customer feedback on system operations and design.
The system too often is perceived as not responsive to customer
needs.
Customer satisfaction has been assessed across all supply support
programs (Stores, Schedules, National Buy) at user and agency
level through questionnaires, interviews, and analysis
of objective and perceptive data. The analysis encompassed
all aspects of delivery of services from product selection
and availability through order and delivery processes, and
final acceptability or adjustment.
The principal bases for this analysis are:
o Review of the Federal Supply Service - This involved
r examination of the concepts, attitudes, knowledge and processes
of the central system as managed and operated by GSA.
o Customer Support Questionnaire (CSQ) - This questionnaire
was sent to more than 9,000 customer activities to obtain
their needs and perceptions. (See the Appendix for specifics.)
o Meetings with representatives of customer activities -
This provided additional insight on how the customer viewed
the central system.
o Outside visits - The basic management concepts of major
industries and several states were likewise examined and docu-
mented.
Overall, the analysis of GSA coupled with the meetings and CSQ
findings indicate a broad degree of customer acceptance and
satisfaction with the centralized system. However, a number
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of areas need significant modification and improvement
in order to be responsive to customer requirements. For
example, GSA operates on a regional mode, when, in fact,
several customer service activities should be a single
national effort. Currently, the system itself lacks
responsiveness and timeliness in terms of order processing
and customer delivery. Part of this is due to inadequate
resources and an outdated ADP system, which is not responsive
to either the customer or GSA management. Furthermore,
management relies on a regional management organizational
concept which perpetrates "production of economy measures"
causing a deterioration of the quality of responsiveness
to customers. In effect, this philosophy and management
process promote system-centered thinking resulting in customer
dissatisfaction with day-to-day operations.
The Customer Services issue is organized into 5 sections
each of which is a principal area of customer interaction
with the system. These are examined separately in the context
of recommended improvements to the management, process/system,
procedure and policy aspects of each. Conclusions and
recommendations are enumerated in detail under the following
headings in Sections A through E below.
A. General Customer Perspective
B. Retail Services and Systems
C. Marketing and Cataloging
D. Customer and Agency Liaison
E. Ordering and Order Processing
The criteria for improvement utilized in examining these
areas are:
o Increase responsiveness.
o Reduce operating costs.
o Simplify Federal customer tasks.
o Separate regulation from guidance.
o Separate policy from operations.
o Align responsibility and authority.
o Offer greater use of commercial products.
A. GENERAL CUSTOMER PERSPECTIVE
Too often the needs of the customer are overlooked in favor
of institutional requirements of the centralized supply system.
The different procedures and forms used by the individual
systems; the stringent, mandatory system requirements; manda-
tory use of specifications; and the need for compliance
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with system parameters (degree or lack of flexibility), all
affect upon the users.
The general customer perspective findings were developed
through meetings witri respresentatives of customer agencies
and through a "Customer Support Questionnaire" (CSQ)
which was mailed to 9,286 addressees world-wide. Analysis
of the comments and recommendations made during the
meetings and the responses to the questionnaire indicate
the following:
Regulations and Procedures - 90% of those responding
felt that Requisition/ordering procedures are complete
and understandable", but that they need to be consolidated
and simplified. Too much effort is required of agencies
to conform and comply with the regulatory and procedural
dictates. A "cross reference guide" employing generic
names of items arid products must be developed.
All forms in the system should be standardized.
Range of Products - Generally satisfactory, however,
additional coverage is needed in certain Federal Supply
Schedule areas.
Quality of Products - Complaint procedures regarding
quality of items do not produce satisfactory results.
The rtD/ivilLSPEC's are not kept current. Many are obsolete.
Few reflect current state-of-the-art.
Adequacy of Delivery - Delivery time received one of
the lowest overall ratings of the CSQ - 70% favorable.
Many of the standard commercial items have inordinately
long delivery times. Items which are readily available
on the open market have 60-90 day delivery times when
purchased through the system.
Follow-up on Requisitions - 76% gave an affirmative
rating to follow-up response - again not strongly favorable.
Requests should only be required to be sent to a single
organization representative.
Customer Assistance - Strongly negative evaluation,
particularly in response to the statement concerning
visits - 7616 gave an unfavorable rating.
Catalogs anu Price Lists - An 86% favorable rating was
given to adequacy of catalogs/ price lists. GSA needs
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to ensure timely delivery of contractor's catalogs
and price lists to customers.
Adjustments - The adjustment process is difficult and
very time consuming; there are too many forms and too
many contact points. The system should only require a
single report to be prepared and submitted to a single
servicing organization, regardless of the reason the
adjustment is being requested.
Special Order/Bying Procedures (SO/BP) - The SO/BP
has enormous potential; however, the lack of
attentiveness to the customers' needs has "turned
them off".
CONCLUSIONS/RECOMMENDATIONS
1. CONSOLIDATION OF REGULATIONS AND PROCEDURES:
Emphasize standardization, uniformity, clarity and sim-
plicity. Avoid jargon, codes and complex procedures.
Tone down mandatory aspects, emphasize guidance and
assistance.
This recognizes that many users are in low graded
non-professional positions and are not supply "oriented";
it also would reduce the time required for training
of user personnel and enhance users' view and use of
the system. Costs of development of a fully integrated
regulatory system must be carefully considered.
2. SIMPLIFY THE ADJUSTMENT/CREDIT PROCEDURE: Adopt a
"No fault - customer is always right" concept. Institute
a one-stop procedure. This would substantially reduce the
time, paperwork and confusion for the customer and the
consolidated support activity, however, it does require
some internal system adjustment.
3. ENSURE THAT THE CENTRALIZED SUPPORT AGENCIES ADOPT
A SERVICE ATTITUDE: Requires some internal system adjustment.
4. ESTABLISH CUSTOMER SERVICE REPRESENTATIVE (CSR) AS
THE SINGLE FOCAL POINT FOR CUSTOMERS OF THE CONSOLIDATED SYS-
TEM: Customers desiring follow-up information, general assis-
tance, resolution of problems (such as adjustment/credits,
quality complaints, delivery problems, etc.) should only be
required to make a single contact. The CSR should have the
authority to cross organizational and territorial boundaries.
The benefits include increased emphasis on the needs of the
customer, savings in time and resources and establishing a
means and focal point for the customer to easily communicate
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with the centralized system. Substantially increased CSR
costs and workload would result.
5. IMPLEMENT IMMEDIATELY THE RECOMMENDATIONS OF THE
GAO AND OF THE COMMISSION ON GOVERNMENT PROCUREMENT
WITH REGARD TO FED/MILSPEC SYSTEMS: Purge those that
are obsolete or unnecessary and update the remainder
to reflect the current state-of-the-art. More reliance
must be placed on competitive, commercial products.
This would allow customers to take advantage of those
products which best suit their needs.
6. EXPEDITE THE DELIVERY OF CATALOGS AND PRICE LISTS
T0- CUSTOMER AGENCIES: This would emphasize the service
aspects of the system and increase purchases through
the system which, due to a lack of such information,
are now made on the open market.
7. IMPROVE THE SPECIAL ORDER/BUYING PROCEDURE (SO/BP):
That portion of the system should be revitalized to make it
more responsive and visible to the customer. The requirements
of various customers referred to the centralized SO/BP activity
..r would be combined to produce the cost benefits available through
consolidated purchasing.
8. ABOLISH THE CURRENT "WAIVER" REQUIREMENTS AND
SUBSTITUTE WITH INTERNAL DOCUMENTATION: Current "waiver"
requirements are too cumbersome, time-consuming and unnecessar-
ily complicate the acquisition process. Internal agency
review, with appropriate notification to GSA, will suffice.
9. REMOVE "MANDATORY" REQUIREMENTS FROM FEDERAL SUPPLY
SCHEDULE CONTRACTS: FSS contracts should be "available for
use" as opposed to being "mandatory for use" by customer
activities.
10. RAISE THE DOLLAR CRITERIA FOR MANDATORY USE OF THE
STUCK/NON-STOCK SYSTEM: Amount should be increased from the,
current $10 (GSA) and $25 (DLA) limits to a more reasonable
level of $100 (possibly as high as $500 after thorough
analysis). Present limitations are considerably behind today's
cost of doing business. The cost to comply with the dollar
criteria may be more than value of item ordered.
B. RETAIL SERVICES AND SYSTEMS
Retail services and systems cover a range of activities to
assist users, particularly smaller units, in obtaining support
from the central system.
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RETAIL STORES PROGRAM
The program is well supported by customer agencies
from both an economic and convenience viewpoint. Increasing
demand exists for FSS to open additional stores.
GSA has not acquired nor identified resources sufficient
to open all the stores which studies have shown would be most
effective to the Government.
The CSQ indicated support for the retail stores and for
the expansion of facilities and services:
YES NO
Almost Almost
Always Often Sometimes Never
Locations convenient/
accessible 46% 20% 12% 22%
Required items
available 25% 38% 28% 10%
Personnel knowledge-
able/responsive . 47% 38% 10% 5%
Credit on returns/
adjustments made
promptly 52% 31% 10% 8%
Item range should be
expanded 49% 26% 16% 8%
Open market arrange-
ments would be
preferable 26% 21% 31% 22%
The stores are in an excellent position to offer ordering
assistance to the customer, both for schedule items
and items in GSA stock. Resource limitations, policy decisions
and management direction have tended to restrict these services.
No effort has been undertaken to identify the local
support potential and to promote interagency arrangements.
Effective interagency "interservicing" need not have a "resource
problem" since it relies on existing capabilities put fully to
use.
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FEDERAL RETAIL ORGANIZATIONS
Federal agencies have each developed a retail structure
without criteria or basic management and organizational concepts.
The structure reflects that agency's best effort to cope with
a basic requirement - the need to bring items carried in Govern-
ment wholesale inventories into the hands of the end user who
is in fact an operator or administrator and not a supply clerk
or officer. The retail system gives him tailored support in a
simple, direct arrangement.
OPEN MARKET/LOCAL PURCHASE PROGRAMS
The CSQ indicates a general customer preference for Government
sources as opposed to local purchase. This preference recognizes
that the government source offers an advantageous price. The
following table summarizes the customer attitudes on local
purchase (open market) as a source:
Open market sources
are available
Open market sources
are preferred
Open market prices
advantageous
YES
Almost
Always
Often
NO
Sometimes
Almost
Never
53%
28%
10%
8%
20%
20%
35%
25%
8%
15%
38%
38%
The customer preference for Government sources increases
the opportunity for customer satisfaction by leaving options
open. In effect, the customer will tend to use the system even
if he is given local options to purchase on the open market;
the system stands to lose little business and will gain increased
customer appreciation. For example, it is clear that the
local purchase option on stocked items could be raised from the
present $10 (GSA)/$25 (DLA) to a level on the order of $100 to
$500 with little impact on the system and with benefit in elimi-
nating small, uneconomic orders. The CSQ strongly supports an
increase in the exception criteria.
In the area of Federal Supply Schedules there is an
opportunity to give the customer a wider range of choice and
to promote greater use of commercial products. Improved
management of the schedule program has to be a prerequisite to
its optimum use by the customer. The major weaknesses indicated
in the CSQ are ease of understanding, vendor responsiveness,
and GSA responsiveness to waiver requests.
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CONCLUSIONS/RECOMMENDATIONS
1. EXPAND RETAIL STORE ACTIVITIES: Expand the number of self-
service stores and range of items and services offered, including
ordering assistance. This will greatly increase customer respon-
siveness, simplicity of customer operations and increase use
of commercial sources and products. This will increase the cost
of operations to GSA, but it will be more than offset by reduced
customer agency costs.
2. DEVELOP RETAIL SERVICES AND SYSTEMS: Promote the develop-
ment of retail services and systems and develop supporting
policies, practices, and systems. This recommendation would
reduce costs through better management and organization of
the multitude of fragmented user systems. On the other
hand, it involves a major effort on GSA's part to develop
and promote the program with attendant resources and management
support.
3. INCREASE INTERAGENCY SUPPORT: Promote the use of inter-
agency support arrangements among and between Government
agencies. This will reduce costs and increase responsiveness,
but it will require some initial effort by all parties to seek
out and make the initial arrangements.
4. IMPLEMENT GOVERNMENT-WIDE STORE CONSOLIDATION: Consolidate
all Government self-service stores under GSA. This concept
potentially reduces costs through consolidation and uniform
management systems/procedures. This will, however, cause
a loss of flexibility to the major agencies, particularly
in adapting to internal finance and accounting systems.
5. INCREASE LOCAL PURCHASE OPTIONS FOR STOCK AND SCHEDULE
ITEMS TO A MINIMUM OF $100 AND POSSIBLY TO $500 PER LINE
ITEM: This will greatly increase customer satisfaction
and responsiveness while reducing system costs. On the other
hand, it will increase costs to users for more expensive
commercial products.
C. MARKETING
An effective marketing management program which emphasizes
customer service and satisfaction offers large savings by as-
suring:
Better information on products and services to customers
and government/agency suppliers.
That the customer's perspective has the attention of
the highest organizational levels.
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That responding to customer and his needs is the
overriding organization-wide objective.
Increased system knowledge of customer needs and
requirements.
In the private sector, the "customer is always right".
Profit motivated companies invest a considerable
percentage of their resources in providing the customer
with information, ordering assistance, product
information and a variety of other types of support.
Currently, information about the Federal customer is
not available in a timely manner in a consolidated
location. The expenditures necessary to improve the
marketing capability of the central supply system are
not significant compared to the amounts of public monies
being lost as a result of more expensive open market
purchases by agencies. Improvements in the customer
support system will enhance the customer agencies'
ability to accomplish their missions.
Publications - GSA catalogs have been published only
airregular intervals and do not include all items
available from the various procurement and supply
programs. Information is not always well cross-referenced,
clear, concise, or easy to use. Continued improvement
and expansion of the catalogs is necessary.
Data Base - Data on customers, their buying practices,
preferences, and scope of operation, as well as data on
the potential existing in the Federal marketplace for
common commercial supply items is inadequate, often
outdated and unsatisfactory for marketing requirements.
Identification of customer requirements and capabilities
to deal with the central administrative services system
are paramount to the system's success.
Product/Support System Strategies - Identification of
the customer's product needs and the turning of those
needs into product availability must be improved. Product
knowledge encompassing marketing, merchandising, technical
and procurement aspects would allow a positive, aggressive
posture in merchandising, as opposed to the existing
"reactionary" approach.
The performance measurement of all elements of the central
supply system should reflect the customer emphasis rather
than divided internal considerations.
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CONCLUSIONS/RECOMMENDATIONS
1. STRENGTHEN THE MARKETING COMPONENT: Marketing should be a
component of customer service and support reporting to the
Commissioner, FSS, with increased resources. It should be
highlighted both organizationally and functionally, emphasizing
external, customer-oriented service and responsiveness rather
than internal system-oriented efficiency. The stress should
be on customers' satisfaction, not sales targets as the premier
measure of market system effectiveness.
2. ESTABLISH A COMPREHENSIVE CUSTOMER DATA BASE AND PROFILE:
A complete up-to-date profile and directory of Federal customers
should be maintained. This would provide capabilities similar
to those in private industry. There would, however, be increased
costs for "start-up" and continuing operations.
3. ENSURE THAT A SINGLE ORGANIZATION DISSEMINATES "EXTERNAL"
INFORMATION: This would bring together information on products,
services and methods of procurement/supply in catalogs, price
lists, and brochures to facilitate easier customer use of ordering
material.
o Upgrading information provided in the catalog; better
descriptions of items, illustrations, etc.
o Inclusion of Federal Supply Schedule publications and
information into a single package prepared by the central
marketing organization.
5. PUBLISH CATALOG AND ORDERING INFORMATION ON A FIRM, YEARLY
SCHEDULE.
6. DEVELOP SPECIFIC PROGRAMS TO MEASURE CUSTOMER SATISFACTION.
7. DEVELOP A SIMPLE SYSTEM WITH VISIBILITY AND INFLUENCE TO MAKE
MANAGEMENT AND OPERATIONS AWARE OF AND RESPONSIVE TO CUSTOMER
DISSATISFACTION SURFACED BY FEEDBACK.
D. AGENCY/CUSTOMER LIAISON PROGRAM
This highlights changes to the present system which will
improve customer responsiveness and deals specifically with
the agency/customer liaison activity. The objective is to
develop an effective customer liaison program that represents
GSA, not only FSS.
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The agency/customer liaison organization provides the primary
interface with FSS Federal customers on a day-to-day basis,
assists customers in using the central supply system for
commercial support requirements and in resolution of problems
encountered by the customer.
Seven National Liaison Representatives deal with the major
agencies and departments at the headquarters level, and 25
Customer Service Representatives throughout the 10 regions
support all Federal activities in the field for Federal Supply
Service programs and functions.
The basic agency/customer liaison functions are not properly
positioned within GSA's organizational structure. As a result,
GSA lacks a single "GSA service" concept. Currently, GSA's
customers must deal with several different organizational
entities within GSA as the CSR does not represent GSA across
the board. Additionally, customers receive varying degrees and
levels of service from region to region. The chart below clearly
illustrates the wide disparity regarding levels of customer
service visits (data from the CSQ).
RANGE OF POSITIVE RESPONSES REGARDING CSR VISITS
CUSTOMER
POSITIVE RESPONSES
lowest highest
AVERAGE
CIVILIAN
(except USPS)
8.4%
to
31.4%
17.8%
MILITARY
20.0%
to
47.8%
31.0%
TOTAL
15.5%
to
33.9%
23.4%
Although the customer service representative is known, ac-
cessible, and resourceful, the customer rarely sees the CSR.
Measuring levels of CSR effectiveness is extremely important,
but because the present liaison program is so highly decen-
tralized and fragmented, measurement is impossible. A single
centralized program with accountable objectives, action plans,
etc., will permit comparative measurement of CSR activity and
levels of GSA customer service.
CONCLUSIONS/RECOMMENDATIONS
Based on the analysis from the CSQ, field interviews, reports,
etc., the following recommendations are proposed for considera-
tion:
1. ESTABLISH A GSA-WIDE CENTRALIZED NATIONAL LIAISON PROGRAM:
This would enable the customer service representative to cross
functional organization lines and operate as a representative of
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the centralized activity. This will also provide a single point
of contact and improve the service-wide information and feedback
to the Office of the Administrator.
2. REALLOCATION OF MANPOWER TO INCREASE THE NUMBER OF CSR'S
(FROM 25 TO BETWEEN 60 AND 100): This will enable GSA to provide
greater attention/responsiveness to the customer; however,
that investment could cost nearly $2.5 million. Sufficient
resources must be allocated to actively pursue those Federal
agencies now purchasing from the open market (some $4.5 billion)
where direct cost savings can be attained.
3. REVISE AND STRENGTHEN CSR OBJECTIVES AND RESPONSIBILITIES:
This will improve their reporting, measurement, accountability
and effectiveness to the customer.
E. ORDERING AND ORDER PROCESSING
GSA customers are participants in a highly automated supply
system. Most military and some large civilian customers submit
requisitions through an automated communications network. Low
volume, non-automated customers, both military and civilian,
are required to place hard copy orders into the system in
FEDSTRIP/MILSTRIP format. The requisitioning process has been
described as complicated, cumbersome and non-responsive by
a number of customers.
The order processing operation is decentralized at ten (10) GSA
regional offices. The system appears to foster discontinuity,
evidenced by its inability to respond to immediate require-
ments and inquiries, proliferation of status, invoices, GBL's,
etc. The requisitioning procedure and order processing system
should be simplified to foster customer satisfaction through
responsive service.
No major programs have been mounted or efforts made to increase
the use of electrical/electronic transmission from civil agency
ordering activities, thus a major slowdown in placing
requisitions into the system exists. The implementation
of a national telephone ordering system for low volume non-
automated domestic customers could simplify ordering procedures
resulting in greater responsiveness and customer satisfaction.
Simplification of procedures and reduction in lead time could
be achieved if GSA would interlock their present system of
handling civilian off-line customers with their on-line com-
munications military network.
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The use of standard requisitioning forms for all civilian
agencies and the military would simplify coordination, eliminate
overlap and duplication and realize substantial cost savings.
The results of the CSQ indicate that customers understand and
can cope with the system. GSA could, however, simplify and
expand the customers' avenues of entering the system to obtain
current status of orders in process. The regional mode of
operation may be responsible for (1) the system being inacces-
sible to handle customer needs and (2) the lack of control and
reaction to the ordering system/process is tabulated below:
visibility as to where orders are in the system. Customer
CSQ EVALUATION OF REQUISITIONING PROCEDURES
Requisitioning/
ordering procedures are
complete and understandable
Status reports, when
requested, are received
on a timely basis
Shipping documentation
is adequate for receiving
purposes
Response to requisition
follow-up is adequate
Internal department/
agency ordering procedures
are published and adequate
YES
NO
Almost
Always
Often
Almost
Sometimes Never
52%
37%
8%
3%
46%
37%
13%
4%
64%
28%
6%
2%
39%
36%
18%
7%
52%
35%
10%
3%
ORDER PROCESSING
During the first six months of b'Y 1978, a total of 4.1 million
orders were processed. Nearly 500,000 of the 4.1 million
orders were submitted in hard copy form (mail, message or
telephone order). In each case, hard copy orders must be
manually converted to machine processable format (MILSTRIP/
FEDSTRIP) for processing.
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The present order processing system involves approximately
300 people in the GSA headquarters and regions. Centrali-
zation of this operation at a single processing point would
simplify the operation and realize cost benefits in terms
of efficiency, staff reduction and elimination of operations
at headquarters. This single processing point would also
buffer customers from GSA's internal system and enhance
relations.
CONCLUSIONS/RECOMMENDATIONS
1. TELEPHONE ORDERING: Implement pilot program with an
"800" telephone number similar to phone service offered to
customers by commercial type call-in ordering systems and
review Touchtone Telephone Requisitioning System. This
will eliminate preparation of manual requisitions for low
dollar volume customers and more timely responsiveness.
However, it will result in a cost to relocate and/or retrain
affected personnel.
2. QUICK ORDER SYSTEM: A simplified processing system for
small orders and repetitive customer orders with the goal
of 36-hour processing turnaround. The advantages will be
reduced labor costs for small orders and increased product-
ivity. The major disadvantage will be the cost of inventory
to assure responsiveness.
3. ELECTRONIC FACILITIES: Tie civilian customers to existing
electronic communication facilities. The autodin (DOD) network
has provided customer satisfaction. This will provide rapid
communication capabilities for system processing. Again, cost
of establishing and implementing programs linking each agency
with the military network could be significant.
4. ADOPT STANDARD REQUISITIONING FORMS: Standardization would
simplify coordination and eliminate duplication.
5. CENTRALIZE ORDER PROCESSING: The processing is now
performed by ten (10) regions and headquarters should be
no performed at a single processing point. The order processing
-
policy and procedures function should be in the same organiza
tion as inventory management. This will centralize and consol-
idate this function achieving substantial savings. In addition,
it relieves headquarters from the order processing operation
and provides greater customer satisfaction/efficiency and
responsiveness. However, it will have an impact on personnel
relocation.
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CUSTOMER SERVICES
CUSTOMER SUPPORT QUESTIONNAIRE (CSQ)
This Appendix furnishes background on the development of
the CSQ and records the. basic findings as reflected in over
2,400 responses. This is the first such comprehensive
survey of customer satisfaction and it is documented for
continued analysis.
The objective of the Customer Interest Group (CIG) was to
obtain information on who the "customers" are and how they
perceive: (1) the consolidated supply system and (2) the
products they receive through the system. The questionnaire
(a copy of which is enclosed) was developed in
three parts.
Part A was formatted to-provide data about the respondent,
i.e. the organization; location, size (in dollar volume of
business); major commodity usage; who they purchase/order
from; whether the respondent provides or receives supply
and/or procurement support; etc. This information would
permit the stratification of responses to Parts B and C to
determine if trends exist by state, activity, dollar volume,
etc.
Part B asked the respondent to evaluate support programs
or functions of the General Services Administration (GSA),
Defense Logistics Agency (DLA), and the Veterans Adminis-
tration (VA) systems. Part B was prepared in four (4)
sections; each section dealing with a different program or
functional aspect. Section 1 covered the stock/nonstock
programs of GSA, DLA and VA; Section 2 those agencies'
customer assistance programs; Section 3 the GSA Federal
Supply Schedules; Section 4 the GSA Self-Service Stores.
Part C asked the respondent to evaluate the commodities
received from each of the support agencies (GSA Stock/
nonstock, GSA Federal Supply Schedule, DLA and VA).
Nineteen major commodity groupings were identified. The
statements about each commodity grouping related to (1)
the range of products offered, (2) the quality/performance
aspects, (3) delivery times, (4) adequacy of catalogs and
price lists, (5) whether the requisitioning/ordering
procedures were complete and understandable, and (6) whether
open market sources are (i) available, (ii) preferred,
or (iii) more advantageous.
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Respondents were asked to use numbered ratings 1 through 5
to evaluate the statements in Parts.B and C.
1 - Almost always or definitely yes
2 = Often or yes
3 = Sometimes or no
4 = Almost never or definitely no
5 = Not applicable, no exposure or no experience
The CSQ also solicited written comments.
GENERAL
The overall response to the support programs of GSA,
DLA and VA was favorable, on the order of 80% satisfactory.
However, the favorable rating is not an indication that the
system does not need to be improved. To illustrate the full
magnitude of unfavorable ratings, it is only necessary to
apply the percentages to:
- the number of customers: If the system has 50,000
customers and 20% of those customers indicated dissatis-
faction, it would mean 10,000 customers are dissatisfied; or
- the number of orders processed: If 8,000,000 orders
are processed by the system, the 20% would mean 1,600,000
orders could have produced some unsatisfactory results.
The vastness of the system requires that the analysis give
consideration to the individual parts of the system as well
as to the whole.
The following table summarizes the overall response to the
major subject areas by the actual number of responses and
by the percentage of each response:
Subject Area
YES
NO
Almost
Always
Often
Sometimes
Almost
Never
Stock/Nonstock #
a
7,429
5,533
2,363
948
.
Programs (GSA, DLA %
& VA)
46
34
15
6
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Subject Area Responses
YES
Almost
Always
Often
Sometimes
Almost
Never
_
b. Customer Assis- # 2,865
1,854
1,304
1,995
tance Services
DLA and VA)
(GSA, % 36
23
16
25
c. GSA Federal
# 4,661
4,437
2,071
813
Supply Schedule
% 39
37
d. GSA Self-Service # 2,540
1,813
1,156
807
Stores 40
29
e. Range of Products # 9,481
10,427
4,014
1,763
is sufficient (GSA, % 37
41
16
4
DLA & VA)
f. Quality/Per- #10,282
10,976
2,729
805
formance is satis- % 41
factory (GSA, DLA
& VA)
44
11
3
g. Delivery Time 4 7,043
10,274
5,344
1,929
is adequate (GSA, % 29
42
22
8
DLA & VA)
h. Catalogs/Price 411,319
10,179
2,463
1,100
are adequate (GSA, % 45
DLA & VA)
41
10
4
i. Requisitioning/ #12,960
9,944
1,965
793
Ordering Procedures % 51
are complete and
39
8
3
understandable (GSA,
DLA & VA)
j. Overall commodity #51,066
51,784
16,510
6,383
5
evaluation (GSA, DLA
& VA.)
% 41
41
13
k.
Open Market
# 6,932
3,701
1,351
1,044
Sources are available
% 53
28
1. Open Market
4 2,358
2,468
4,217
3,043
Sources are Preferred
% 20
20
35
25
M. Open Market
# 959
1,754
4,372
4,307
Prices are Advanta-
geous
% 8
15
38
38
52
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ISSUE NO. S-5: VENDORS AND THE FSS PROCUREMENT PROCESS
I. INTRODUCTION
This paper summarizes the findings of an examination of the
relationship of the Federal Supply Service (FSS) with sup-
pliers. The discussion below explores two major problem
areas: contract complexity and complexity of specifications.
This study was focused primarily on policy, procedural, and
management matters rather than organizational adjustments,
which are dealt with elsewhere in the report. The study also
avoided duplicating the comprehensive three-year explorations
of the Commission on Government Procurement. The Office of
Federal Procurement Policy (OFPP) is rapidly implementing
the Commission's recommendations. In these circumstances
the task became one of verifying the needs for improvement
and evaluating ongoing actions in meeting these needs.
The literature on government-vendor relations was examined,
e.g., reports of the Commission on Government Procurement,
GAO reports, Congressional Committee hearings, and reports
of the Paperwork Commission. A questionnaire was sent to
248 vendors and to 60 trade and commodity associations, and
116 responses were received from vendors. Task Force members
also visited vendors, government agencies, and trade and
commodity associations in the field.
I+ II. CONTRACT COMPLEXITY
This section explores how Federal contracting methods affect
various types and sizes of suppliers and what might be done
to correct problems.
Most vendors sell only a small portion of their product to
FSS. Half of the respondents stated that they sold less than
5 percent of their production to the Government. Such firms
cannot become expert on Government contracting, so it makes
..+ sense to simplify contracts whenever possible to encourage
them to do business with the Government.
However, contract complexity problems appear to be more an
irritant than a major impediment to most vendors. The major-
ity of respondents indicated that organization and content
of bid packages had little or no influence on their willing-
ness to bid or their price. Still nearly nine percent of
respondents claimed that these issues precluded bidding.
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CONTRACT FORM SIMPLIFICATION
FSS is now experimenting with standard formats on a limited
basis. Government standard forms for solicitation, offer
and award have been revised to present a more attractive
and logical arrangement of provisions. This concentration
on format rather than forms may lead to some proliferation
of solicitation and award instruments. If combined with
improved readability, the overall result should be beneficial.
If FSS moves away from the use of standard forms, procurement
staff may need to consult the body of regulations more fre-
quently. A computer based regulation information retrieval
system could provide easier access.
For small purchases ($10,000 and under), the Paperwork
Commission concluded that standardization of forms can be
helpful. A single government small purchase form along the
lines of the FSS experiment' should be tried.
Recommendations:
The testing of the experimental format by FSS (GSA Form 1424 A,
B, and C) should be carefully reviewed by OFPP to determine
whether this approach is more useful than standard forms for
universal application.
The Federal Acquisition Institute (FAI) should conduct a
feasibility study of the applicability of ADP to management
of acquisition regulations.
There is a growing demand for using plain language in laws,
regulations, contracts, and other legal instruments. The
President recently directed that Federal regulations be
written in language a small business person can understand.
The National Institute of Education (DHEW) has solicited
proposals for research on clear writing and effective design
of documents. Several teams in GSA and DOD working on new
Federal Acquisition Regulation are giving careful consideration
to drafting simple, clear, and understandable requlations.
SOCIO-ECONOMIC PROVISIONS
Government procurement contracts are used to promote Federal
social and economic policies concerning such goals as fair
employment practices and improving our balance of payments.
In 1972 the Commission on Government Procurement recommended
that the thresholds for applying such policies to procurement
be raised to $10,000. The Paperwork Commission also recommended
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$10,000 threshold. Currently a threshold of $25,000
seems more appropriate, with future periodic adjustments.
The ASRP vendor questionnaire included the question, "How does
time required for invoice processing and payments influence
your approach on government contracts?". Respondents claimed:
No effect
49.1%
Inconvenient/No substantial
impact on bid price
20.7%
Bid price increased and/or
discourages bidding
18.4%
Precludes bidding
1.7%
A thorough GAO study (FGMSD 78-16) concluded that "Contrac-
tors were generally satisfied with the Government's (payment)
performance". Comparing the Government's payments with commer-
cial firms respondents stated that commercial firms pay:
Faster
43%
Slower
21%
Same
36%
The GAO did find room for improvement and recommended admini-
strative changes such as developing due date standards and
.04 increased use of imprest funds.
Though there is a common notion that the Government does not
pay its bills promptly, the conclusion of this study is to
the contrary. Potential vendors should be more widely
informed of the results of studies like these to counter
misapprehension about late payment by the Government.
III. COMPLEXITY OF SPECIFICATIONS
This section deals with criticism of Government specifica-
tions used in the procurement of commercial products. Vendors,
members of Congress, the Commission on Government Procurement,
the GAO and more recently the office of Federal Procurement
Policy have all found fault with various aspects of procurement
specifications. Many critics favor local purchasing or multiple
award contracting, which are said to make more efficient use
of existing commercial marketing and distribution facilities.
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Specifications are also criticized for:
o Length and complexity
o Excessive referencing of subordinate specifications and
standards
o Unnecessary divergence from current commercial product
characteristics (unique government item)
o Obsolete design or formulation manufacturing
technology specified
Fifty-seven percent of the vendor respondents to the ASRP
questionnaire reported substantial problems with specifica-
tions. This contrasts with twenty-five percent reporting-
major problems with bid package complexity. Interviews with
several industry associations confirmed this conclusion.
A PROPOSED APPROACH TO SPECIFICATION SELECTION
The organizations involved in developing specifications operate
somewhat in a vacuum and often fail to give proper considera-
tion to the needs of all elements interested in the procurement
process. In many instances complex rather than simplified
specifications are developed. Positive integration of all
supply management decisions is required to reconcile the diverse
needs of all interested customers, suppliers and supply manage-
ment officers. Through this improved coordination, the most
favorable selection can be made from the specification options
which range from brand name to the more complex design specifi-
cation forms.
As can be seen from Figure 1, different item and industry
characteristics should determine the appropriate specification
option. Merchandising (or supply management) decisions, however
should intervene and control this logical process. For example,
low aggregate volume, necessity for item choices or a logical
decision to decentralize an item for local purchase may dic-
tate some "lesser" form of item specification. When this
occurs the potential or actual capability to prepare and
maintain a detailed technical purchase specification should
be overridden.
For specification management to become a subordinate element
in a rational supply system, some changes are needed in present
productivity measurement and resource allocation practices.
This will encourage better specifications, cancellation of
unnecessary documents, and more externally developed speci-
fications.
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N
'+ PURCHASE SPECIFICATION TYPES
BRAND NAME
. Patented or Proprietary
x
0
X
0
0
0
0
0
X
0
0
0
BRAND NAME OR EQUAL
. Brands are comparable
Low aggregate demand
0
X
0
X
. Low risk of inferior item BID
0
X
0
X
X
0
0
X
L
BRAND NAME OR EQUAL WITH
SALIENT FEATURES
Not all brands comparable
0
X
0
X
. Low-to-moderate demand
X
X
X
X
X
0
X
Moderate Risk of Inferior Item BID
DESIGN/FORMULATION
. Moderate to high demand
High risk of inferior item BID
O
X
0
0
Stable production technology
X
X
X
R
O
X
X
Design-formulation Spec. Effective
PERFORMANCE
Moderate to high demand
High Risk of Inferior Item BID
0
x
0
0
. Dynamic or multiple production technology
X
X
X
X
O
X
X
X
Design-Formulation approach inefective
COMBINATION DESIGN/
PERFORMANCE
Moderate to high demand
0
X
0
0
High risk of inferior item BID
X
X
X
X
0
X
X
X
Dynamic/multiple production technology
Performance Spec/test difficult
0 4
~ Ti yr b i ~.
~~3ro stioAi tifi Q
o?Q?'ov./ gytiti
qj 4.1
'~' fiti fi 3-ctirc
PURCHASE SPECIFICATION
OPTIONS MATRIX
PREPARING
OPTIONAL ACTIVITY
PROCEDURES OPTIONS
00
ti
% GJ fi
0 `4
v tiWgv~ a,+~ ~i
SELECTION C,? q)~ y q uro\w~~
CRITERIA ?iqq ~oq~ gbaa?yy~SW
1,4 ,
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GREATER RELIANCE ON VOLUNTARY CONSENSUS STANDARDS ORGANIZATIONS
Many experienced procurement professionals believe that where
purchase specifications are appropriate, a better and more
acceptable commercial item specification could be produced by
voluntary consensus standards writing bodies such as the
American Society for Testing and Materials. Wider use of
such specifications would assure greater industry technical
support and would avoid some of the technical deficiencies of
today's Federal specifications.
More cooperative efforts among government specification
writers at Federal, state and local levels should enable
FSS to obtain satisfactory specifications at lower direct
cost. Even the limited information gathered in this survey
indicates that a great deal of fragmented technical effort
is underway. Though past efforts suggest that the task
of organizing such an effort is difficult, the potential
exists for more effective use of resources. The appropriate
forum for this coordinated effort may be the voluntary
standards process.
The Government, under current procurement statutes cannot
abolish Federal purchase specifications--nor does the evi-
dence suggest that this would be an optimum solution. There
is, however, substantial evidence that specifications can be
significantly improved both in format, content, and through
selective application of the appropriate level of specifica-
tion for each procurement. FSS should increase management
emphasis on the OFPP tasks, refine and update Government
specifications, improve application of technical resources by
developing better channels of communication with industry and
voluntary consensus standards groups, other Federal specifi-
cation components and state and local government specification
writers. In summary the recommendations are:
o Develop merchandising planning system to guide supply,
procurement, specification efforts, product mix, item entry,
item elimination
o Use brand name and other less complex descriptions
where possible
o Support ASTM purchase specification developments to
replace Federal purchase specifications
o Seek state/Federal cooperative specification development
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ISSUE NO. S-6: PERSONAL PROPERTY UTILIZATION
I. INTRODUCTION
is an assessment of personal property utilization and
hi
s
T
`r disposal activities in the Federal Government.
This study concentrated on GSA and DoD, the two largest man-
agers of personal property utilization and disposal activi-
ties. The study included research on applicable laws, regu-
tudies and correspondence; questionnaires
i
ous s
lations, prev
to 17 Federal cabinet and major independent agencies; inter-
New views with State government organizations; and, evaluation
of the solicited views of trade associations, professional
groups, other state and local government organizations and
private citizens.
II. BACKGROUND/CURRENT SITUATION
The Federal Property and Administrative.Services Act of 1949,
assigned the responsibility for the supervision and direction
of the disposition of excess and surplus property to the
Administrator of General Services. The Act further assigned
tion of the dis-
i
rec
the responsibility for supervision and d
position of DoD foreign excess property to the Secretary of
Defense. The responsibility for the sale of domestic surplus
property generated by DoD is accomplished through a delegation
of authority from GSA. Other agencies are authorized to sell
surplus property either by legislative exemption, delegation
of authority from GSA or by agreement with GSA. Examples of
agencies engaged in these activities are the U.S. Postal
Service, Department of. Energy, Tennessee Valley Authority,
and Department of the Treasury. Agencies engaged in sales
activities generally do so for selected types of property
only.
no
Within GSA, responsibility for utilization of excess and dis-
posal of surplus personal property is assigned to the Office
MW of Personal Property Disposal, FSS. The present organization
has an authorized ceiling of 580 positions including Wage
Grade and temporary positions. The actual end-of-year em-
ployment in Fiscal Year 1977 was 452 with an annual budget
'~ of $9,503,000. The Office of Personal Property Disposal
has division structures in the ten GSA regions. GSA operates
12 Personal Property Centers (PPC's) and two Sales Centers
(SC's).
The Office of Personal Property Disposal is organized by
program responsibility. The Utilization Program efforts re-
sult in the annual retention for Federal use of excess pro-
perty valued at over $1 billion (original acquisition cost)
out of approximately $3.5 billion of excess property each
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year which includes DoD reportable property. The Rehabili-
tation Program, is designed to preclude new procurement, by
extending the useful life of many common use items of pro-
perty. At present, there are approximately 2,600 small firms
contracted to perform repair and rehabilitation work under
this program. The Donation Program makes available to eli-
gible State and local donees property which has been deter-
mined surplus to the Federal Government's needs. Donations
currently average about $400 million out of a total annual
availability of approximately $2.4 billion (original acqui-
sition cost) declared surplus to the Federal Government's
needs. GSA, responsible for the general supervision of the
sale of all Government personal property, operates its Sales
Program with appropriated funds. Annual sales proceeds for
FY 1977 reached $30 million as a result of selling usable,
salvagable and scrap property.
In summary, out of $3.5 billion of excess property reported
in FY 1977, about $1.1 billion was reutilized, about $0.4
billion was donated and about $0.1 billion sold. The approxi-
mately $1.9 billion remaining (in terms of original acquisi-
tion cost), is either otherwise disposed of or remains in
inventories for future screening.
Within DoD, responsibility for the worldwide integrated man-
agement of the Defense Personal Property Disposal Program
is assigned to the Defense Logistics Agency (DLA). The De-
fense Property Disposal Service (DPDS), an element of DLA,
is assigned the operational and organizational responsibil-
ity. The DPDS has five Defense Property Disposal Regions
(DPDR's), three in the continental U.S. and one each in the
Pacific and Europe. There are 156 Defense Property Disposal
Offices (DPDO's) and 73 Defense Property Holding Activities
(DPHA's) which although separately located are part of the
DPDO's. The three DPDR's in the United States employ approx-
imately 3,431 civilians. DoD accounted for over $4.8 billion
in excess personal property generations in FY 1977. This
figure includes both reportable (to GSA) and non-reportable
property. It does not include $620 million of overseas excess
personal property. During FY 1977, $278 million in DoD excess
personal property was made available for the GSA operated
Donation Program. During this same period sales totaled
$121.8 million (including approximately $21.2 million from
overseas sales).
GSA and DoD both operate personal property sales activities.
Duplication exists in personnel, mailing and printing costs,
warehousing and storage, advertising, market research and
evaluation, automated systems, conduct of sales and associ-
ated activities.
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The Departments and agencies that responded to ASRP inquir-
ies concerning personal property utilization and disposal
brought forth three principal conclusions: (a) screening
and disposal actions take too long; (b) agencies frequently
incur excessive storage costs for property being stored
while awaiting disposition; and (c) central "holding facil-
ities" or "one-stop property centers" should be established
in areas with large Federal populations or where large volumes
of excess/ surplus are generated.
III. CRITERIA FOR IMPROVEMENT
o Minimize fragmentation and overlap of domestic sales
of personal property.
o Reduce overhead and operations cost.
o Reduce total time requirements for disposal cycle.
o Establish improved systems and processes to increase
efficiency and savings.
o Improve services to the buying public and to other
agencies of the Executive Branch.
IV. ALTERNATIVES
A. TOTAL CENTRALIZATION OF DOMESTIC SALES FUNCTIONS
Consolidate and transfer all domestic sales functions per-
formed by GSA, DLA and other Executive Branch agencies to
the office of Personal Property Disposal, GSA. The required
transfer of personnel and other resources from the Defense
Property Disposal Service (DPDS), DLA would not interfere
with DPDS's continuing accomplishment of its missions re-
lated to demilitarization of Defense property and foreign
excess property. GSA would, under this alternative, propose
necessary legislative changes, rescind its delegation of
authority to DoD for domestic sales, and revoke existing
agreements with other Executive Branch agencies based on
h 11 art-
a time-phased implementation plan worked out wit a p
ies concerned. The essence of this recommendation is that
GSA should assume appropriate responsibilities for the
domestic sale of all Government-owned personal property.
1. Advantages
Increased efficiency and effectiveness of sales
activities.
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Reduced costs through the elimination of dupli-
cation of efforts, facilities, systems and overhead.
Offers a central source of information to the
buying public.
Can conduct sales under a standardized
set of procedures and practices.
Provide a single organization responsible for
market research, analysis and sales evaluation.
Provide a single organization (DoD) responsible
for foreign excess personal property.
2. Disadvantaqes
Personnel turbulence resulting from reorgani-
zation transfers from DoD to GSA.
Increase cost to deliver goods to a central
point.
Resistance by Executive Branch agencies perform-
ing own sales activities.
Loss of efficiency during transition phase.
B. PARTIAL CENTRALIZATION OF DOMESTIC SALES ACTIVITIES
Transfer to and consolidate in GSA carefully selected domes-
tic sales activities performed by GSA, DLA and other Execu-
tive Branch agencies. Transfers would be contingent upon a
comprehensive feasibility study, under GSA's leadership, to
determine whether consolidation of sales activities and the
delegation of certain sales authorities to agencies are eco-
nomically justified on an installation-by-installation basis.
1. Advantages
Increased efficiency and effectiveness of sales
activities.
Reduced costs through the elimination of dupli-
cation of efforts, facilities, systems and overhead.
Offers reduced number of sources of informa-
tion to the public.
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2. Disadvantages
Personnel turbulence resulting from reorgani-
zation transfers.
Resistance by Executive Branch agencies per-
forming own sales activities.
Loss of efficiency during transition phase.
1. Establish GSA operated property utilization
and disposal centers to provide a facility for all Federal
agencies for: temporary storage; screening for utilization;
display for inspection by Federal, State and local agencies
and other eligible donees and the general public; rehabili-
tation; and sales activities... Locations would be based on
proximity of large Federal agency populations and/or large
volumes of excess generations. Upon physical transfer of
property to a center GSA would accept accountability
for same.
2. Accelerate the implementation of a standard-
ized automated. management information system in GSA; insure
its compatibility with existing systems of DoD and other
agencies. FSS-23 (GSA's Excess/Surplus Personal Property
Disposal System) is not fully operational.
3. Provide for greater availability by inter-
regional utilization screening where feasible rather than
restricting to present regional screening.
4. Make rehabilitated excess personal property
available to agencies on a reimbursable basis to avoid new
procurements.
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ISSUE NO. S-7: PRINTING SERVICES
I. INTRODUCTION
This is an assessment of the printing and reprographic func-
tion in the Executive Branch and an exploration of suggested
organizational and management improvements.
The study included interviews with State Government officials
and solicitation of opinions from Executive Branch agencies
by both interviews and questionnaires. Major reprographic
equi.pment manufacturers and other industry representatives
were interviewed. Historical research was undertaken to
identify the evolution of Federal printing policy and regu-
latory documents.
The estimated cost in FY 1978 of total Federal printing and
reprographic services is $1.49 billion. It is believed that
substantial annual savings could be achieved through proced-
ural and operational changes.
II. BACKGROUND/CURRENT SITUATION/PROBLEM AREAS
The legal basis for Federal printing is Title 44 of the U.S.
Code. This basic legislation was enacted in 1895, and has
been updated and revised through the years; it was last
codified in 1968.
Title 44 provides for a Congressional Joint Committee on
Printing. It is chartered to use "any measure it considers
necessary to remedy neglect, delay, duplication, or waste
in the public printing and binding and the distribution
of Government publications."
The Joint Committee on Printing issues the Government Print-
ing and Binding Regulations for the guidance of Federal agen-
cies, controlling items of equipment and production processes
as well as the sources of printing production and procurement.
There are four principal sources of procuring printed matter
for the Executive Branch: agency internal plants; Government
Printing office; direct commercial procurement; and GSA
plants. The total annual cost for printing and reprographic
services is not precisely known due to a variety of funding
mechanisms and inconsistent accounting procedures. However,
a summary of agency costs by source is as follows:
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Agency internal
$752 million
GPO
A) Commercial (75%)
258
B) Plants (25%)
86
Agency direct procurement
55
GSA
7
Estimate of indirect
overhead cost for agency
plant operations
X1,158 million
TOTAL
$1,498 million
The total number of JCP-authorized printing plants is ap-
proximately 300, with agency internal plants accounting
for 281, GPO 7, and GSA 12.
The above summary indicates an emphasis on the utilization
of in-house production sources. Agency responses to a survey
questionnaire confirmed this situation. in addition, the
following comments were noted:
(a) Thirteen agencies ($347M) said all four
sources of printing were required; five agencies (including
most of DOD) ($333M) did not use GSA, as a source.
(b) The first consideration in selecting a
printing source is time.
(c) Each of the printing sources provides dif-
ferent levels of service in terms of time and complexity
with GPO handling the majority of contract printing; agen-
cies producing urgent and classified printing and duplica-
ting as provided by law; and GSA providing Standard Forms
and reprographic services.
(d) Six large agencies of those sampled,
identified a necessity for change in the current structure
and a clarification of the roles of the Joint Committee on
Printing/Government Printing Office and the Executive
Branch. Chapter 5, Title 44, USC requires that:
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"All printing, binding, and blank-
book work for Congress, the Execu-
tive Office, the Judiciary, except
for the Supreme Court of the United
States, and every independent office
and establishment of the Government,
shall be done at the Government
Printing Office, except...
(1) classes of work the Joint Committee
on Printing considers to be urgent
or necessary to have done elsewhere;
and
(2) printing in field printing-plants...,
and the procurement of printing, if
approved by the Joint Committee on
Printing."
"Printing or binding may be done at
the Government Printing office only
when authorized by law."
Although waivers are issued in certain situations, the GPO
is essentially a mandatory source of printing supply, es-
pecially in the area of commercial procurement. Although
many agencies support both the utility and economy of GPO,
the mandatory aspect of its role has caused operational
difficulties and excessive costs in some instances.
The Legislative Branch, through the JCP and GPO, controls
the Executive Branch printing program (vested by Title 44).
President Wilson's veto of an appropriations bill on May 13,
1920 recognized that legislative control of Executive print-
ing could be a violation of the separation of powers clause
of the Constitution. The controversial provision stipulated
that no journal, magazine, periodical or similar government
publication could be printed, issued or discontinued by any
branch or office of the government service unless authorized
under regulations prescribed by the Joint Committee on Print-
ing. His veto message stated, in part that, "the Congress
and the Executive should function within their respective
spheres. Otherwise efficient and responsible management will
be impossible and progress impeded by wasteful forces of
disorganization and obstruction..."
Control by the Legislative Branch has caused operational
difficulties in the Executive Branch:
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(a) JCP controls the procurement of printed
products and printing equipment, resulting in inefficien-
cies in both the purchase and production of printed matter.
(h) The JCP regulates only specific items of
equipment and production processes and does not provide
an optimum means of evaluating and implementing state-of-
the-art developments in word processing, reprographics,
micropublishing and computer driven printing devices.
There is no central point in the Executive Branch for pro-
viding agencies with coherent policy or program guidance
in the printing and reprographic areas:
(a) Technological assessments and market analy-
ses are conducted autonomously. Many agencies are expending
management resources to evaluate identical systems or proce-
dures.
(b) In the reprographic area some individual
agencies have attempted to manage an effective copying/dupli-
cating program. The costs of reprographics (conservatively
estimated to be $478 million) are controlled only to the
extent managed by individual agencies. Each agency performs
individual-cost studies, analyses and hardware evaluations.
Savings in this area could be as high as 20% with a coordin-
ated effort and sufficient funds to purchase rather than
lease when economies so dictate.
(c) A comprehensive Federal Government clear-
ing house (or information system) does not exist to collect
government-generated material nor to index, abstract, or
advertise its availability.
(d) The impact of emerging technologies on
the way information is handled, generated, duplicated, dis-
tributed and stored is not coordinated within the Federal
Government.
(e) A wide range of printing and lithographic pay
rates and classifications presently exists which should be
rationalized. Additionally, the GS-1654 Printing Management
Series has not been revised in 20 years. It fails to re-
cognize technological developments and program management
requirements.
(f) There have been difficulties in applying
the provisions of Circular A-76 to the procurement of print-
ing in Executive Branch agencies.
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(g) Previous studies which reflected potential
savings through management improvements have not been im-
plemented due to procedural difficulties. The savings from
central guidance could accrue in: (1) improved procurement
and use of reprographic equipment, (2) modernization of in-
ternal agency printing plants, (3) establishment of standards
for storage, warehousing and other related distribution pro-
cesses, (4) reduction of overhead costs, and (5) technical
assistance in printing management processes.
III. CRITERIA FOR IMPROVEMENTS
o Reduce costs of printing.
o Improve the kind and quality of printing.
o Improve delivery and service for printing.
IV. ALTERNATIVES
A. Establish a policy management and review office in
the Executive Branch for the purpose of providing leader-
ship, coordination and guidance in the delivery of printing,
reprographic and publication services.
1. Advantages
This office would provide a single central and
responsive point within the Executive Branch for:
Development of legislative proposals for
Presidential consideration designed to clarify Legislative/
Executive roles.
Development of policy and standards.
Coordinating and reviewing program require-
Making state-of-the-art or technological assess-
ments and market analyses.
Developing a comprehensive clearing house
(information system) to index, abstract, identify and control
distribution of government-generated material.
2. Disadvantages
There would be initial costs of creating a small
office staff. (Cooperative arrangements with Departments and
major Agencies could be used to start the program.)
There may be Legislative Branch opposition.
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B. Reactivate the Interdepartmental Committee on Print-
ing and Processing (Executive order 7999 of October 29, 1938)
and give it a suitable Secretariat and resources for policy
management and review of printing, reprographic and publica-
tion services in the Executive Branch.
1. Advantages
No new Executive or legislative action required
to establish this committee.
This Committee and its Secretariat would pro-
vide a single central control point within the Executive
Branch for:
Developing policy and establishing standards
Coordinating and reviewing program requirements
Making state-of-the-art or technological assess-
ments, market analyses, and new product reviews.
Developing a comprehensive clearing house (in-
formation system) to index, abstract, indentify, and dis-
tribute Government-generated materials.
2. Disadvantages
Initial start-up costs and ongoing program
costs.
Functional management problems which are endemic
to committees (this maybe overcome to some extent if a strong
Secretariat director can be installed).
Legislative Branch opposition.
Committee would not have authority to modernize
internal agency printing plants, improve other printing costs,
or reduce printing overhead.
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ISSUE NO. S-B: STRATEGIC AND CRITICAL MATERIALS STOCKPILE
I. INTRODUCTION
This is an assessment of GSA's organizational arrangement
for carrying out certain residual operating responsibil-
ities of the Strategic and Critical Materials Stockpile.
This study assumes the implementation of a recommendation
by the Federal Emergency Preparedness and Response Project
that the stockpile policy and planning functions now per-
formed by GSA's Federal Preparedness Agency be transferred
to a proposed Civil Emergency Management Administration.
Under this concept, all stockpile operations, including
FPA's Office of Stockpile Disposal, FSS's Office of Pro-
perty Management and the Office of Finance's Stockpile
Inventory Branch, would continue to be performed by GSA
under authorities contained in the Strategic and Critical
Materials Stock Piling Act of 1946.
The assessment required an examination of all organizational
responsibilities for the full spectrum of stockpile opera-
tions from stockpile acquisition through disposal. This
effort included meetings with concerned Congressional com-
mittee staffs, assessment of prior studies and reports on
this subject, meetings with key Federal agency representa-
tives, review of Federal statutes concerning stockpile man-
agement and polices, consideration of involvement with the
Federal Emergency Preparedness and Response Project, and
review of pending legislation.
The project, however, did not review the economics or ef-
fectiveness of the present warehousing and locations or the
alternatives to physically stockpiling needed materials as
a means of supporting the stockpile qoals. In addition, the
project did not look at other stockpiling related activities
performed by other agencies such as the Commodity Credit
Corporation and the stockpiling of oil reserves under the
Energy Reserve Act of 1974 by the Department of Energy.
II. BACKGROUND AND CURRENT SITUATION
Although the United States has a wealth of natural resources,
experience has established that it is far from self-suffici-
ent in a variety of raw materials necessary to conduct a
major war. Therefore, the U.S. stockpiles strategic and
critical materials in sufficient quantities to protect it-
self against a dangerous and costly dependence upon foreign
sources of supply in time of national emergency as an essen-
tial element of national security.
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The responsibility for the management and operation of the
Strategic and Critical Materials Stock Piling Act is assigned
to the Administrator of GSA. The Administrator has redele-
gated these functions to the Director, Federal Preparedness
Agency, the Commissioner, Federal Supply Service, and the
Director, Office of Finance, Office of Administration.
As of March 31, 1978, the estimated market value of strategic
materials held in Government inventories amounted to $8.6
billion. The materials are being stored at 115 locations:
34 military depots, 28 GSA depots, 14 other Government-owned
sites, 10 leased commercial sites, and 29 industrial plant
sites.
During the period from World War II to July 1973, the opera-
ting responsibility was carried out in a single mission-
oriented organization. On July 1, 1973, the organization was
abolished and the Office of Property Management was function-
ally transferred to the FSS, while the Office of Stockpile
Disposal was concurrently reassigned as a staff function to
the office of the Administrator and later transferred to the
Federal Preparedness Agency.
As a result, the operating responsibility for the National
Stockpile is currently fragmented within GSA among the
Federal Supply Service, the Federal Preparedness Agency, and
the Office of Finance. FSS's Office of Property Management
has physical custody of the stockpile and is responsible for
acquisition, inspection, storage, maintenance, and shipment
of all stockpile materials. Within the FPA, the Stockpile
Policy and Objectives Division determines the commodities to
be included in the stockpile, and the quantities of each. In
addition, the office of Stockpile Disposal, which. is located
in FPA, is responsible for selling or otherwise disposing
of stockpile materials which are no longer required. The
Office of Finance operates and maintains both the stockpile
financial general ledger accounts, as requried by law, and
the inventory records of materials in the stockpile.
Under GSA's present organizational alignment, the operating
responsibilities of the National Stockpile have several
drawbacks: (1) no single individual below the level of Admin-
istrator of GSA has overall responsibility or accountability
for all aspects of the stockpile program; (2) coordination
between FSS, FPA, and Office of Finance is frequently cumber-
some and incomplete; (3) some redundance in overhead staffs
exist; (4) competing organizational objectives are difficult
to resolve due to communications and coordination problems;
and, (5) maintenance of out-of-date inventory records due to
difficulties in coordination between organizations.
4
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III. CRITERIA FOR IMPROVEMENTS
o Minimize fragmentation and overlap of operating
responsibilities.
o minimize potential for stockpile management con-
flicts.
o Increase accountability for management of stock-
pile operations.
o Improve national emergency response capability.
o Minimize program disruptions.
o Reduce overhead costs.
IV. PROCESS IMPROVEMENT
.r Consolidate functions of the Stockpile Inventory Branch of
the Office of Finance, the Office of Property Management
of FSS, and the Office of Stockpile Disposal of FPA into a
single office of stockpile management which would be respon-
sible for all stockpile activities.
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ISSUE NO. S-9: PUBLIC UTILITY MANAGEMENT
This is an assessment of the Public Utility Services aspects
of Contracting, Management, and Rate Intervention, provided
by GSA to other Federal user agencies.
The study included interviews of selected Federal user agen-
cies, utility company suppliers, State Regulatory Commissions,
the Federal Energy Regulatory Commission, State Governments,
private sector users, and GSA personnel.
The Federal Government spends an estimated $2.4 billion for
purchased public utility services and for operations costs
for Federally-owned heating and generating plants (exclusive
of utility services supplied under total building leases).
II. BACKGROUND AND CURRENT SITUATION
Section 201 of the Federal Property and Administrative Ser-
vices Act (FPASA) of 1949, as amended (40 USC 481), provides
that the Administrator of GSA shall procure and supply non-
personal services for the use of the executive agencies and
perform functions related to procurement and supply and that
he shall represent other agencies in negotiations with public
utilities and in proceedings before Federal and State regula-
tory bodies. The Secretary of Defense may exempt DoD when-
ever he determines it in the best interest of national secur-
ity.
The procedures by which public utility services are acquired
for Federal agency users is quite varied. Approximately
25% of purchased utility services are paid by GSA for build-
ings operated by GSA. These utility charges are included
in the GSA Standard Level User Charge (SLUC) system wherein
tenant agencies pay a total unit rate for space. The remain-
ing 75% represents usage by military and civilian agencies
with large self-contained installations.
The military services arrange for public utility services,
usually by negotiating a contract with a utility supplier
under provision of Supplement 5 to the Armed Services Pro-
curement Regulations (ASRP), or by a contract based upon
an Area-wide Agreement (negotiated by GSA) which may be in
existence for the service area of interest. A delegation
of authority signed between the Administrator of GSA and
the Secretary of Defense on October 11, 1954 allows DoD to
handle its own utility requirements.
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Several agencies have authorities for procuring utility
services (and other services as well) under their original
agency authorizations, or under Section 602 of the FPASA
(40 USC 473). Examples include the Federal Aviation Admini-
stration (now a part of the Department of Transportation),
Veteran?s Administration, Federal Reserve Board, U.S. Depart-
ment of Agriculture, DHUD, TVA, CIA, the Bonneville Power
Administration, the U.S. Postal Service, and NASA. In some
instances a contract may be negotiated with a public util-
ity company using much of an existing GSA Area-Wide Agree-
ment; in others the commercial utility company commercial
service forms may be used. In some instances, the GSA con-
tracting process causes extended delays to agency programs.
The GSA Area-Wide Agreement is a comprehensive contract
negotiated with utility companies for their entire service
area, usually for a ten-year term (or for one-year renewable
terms), and provides for the inclusion of various Federal
users by the completion of a contract-appendix form, which
resembles a utility company commercial agreement.
The outstanding feature of the GSA Area-Wide Agreements
(and of the military service contracts) is the inclusion
of some 17 mandatory clauses and seven optional clauses
(FPR 1-4,410-4,5; GSA Form 1685). These clauses cover a
variety of socio-economic subjects which have been man-
dated by Federal law and by Executive Order for inclusion
in Federal purchase or supply contracts. These clauses
are now being interpreted to also apply to various levels
of sub-contractors and suppliers and that a utility company
or contractor must enforce compliance upon its suppliers.
This requirement for contractor enforcement of mandatory
clauses upon sub-contractors is causing problems and incurs
added costs, which State commissions are concerned about.
These added costs are discriminatory to other customers of
the utility company. There are also serious questions of
contract law and performance thereunder which must be re-
solved.
As a result of recent enforcement actions against utility
companies, many utilities are refusing to sign or to renew
the GSA Area-wide Agreements or to accept GSA contracts for
services. This makes it necessary for GSA to sign the com-
mercial form to receive service. In these instances, the
Public Buildings Service/GSA makes up monthly purchase
orders (as obligating documentation) which the utility com-
panies would prefer not to receive.
Officials of the Federal Procurement Regulation staff cite
existing legislation (31 USC 200 (a)(1)) as requiring a
written agreement between Federal agencies and suppliers.
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The text of this statute reads:
"(a) After August 26, 1954, no amount
shall be recorded as an obligation of
the United States unless it is supported
by documentary evidence of --
(1) a binding agreement in writing
between the parties thereto,...or"
(Followed by 7 alternatives or exceptions).
The Federal Procurement Regulation staff has not accepted
subsection 7 of this same statute which cites as an excep-
tion
"(7)... services performed by public
utilities...".
This appears to provide that the approved tariffs of State
public service commissions and the service agreements of
public utility companies are acceptable as "documentary
evidence" of an obligation by the United States Government.
There are additional cases now pending in the Supreme Court
(U.S. vs. New Orleans Public Service, Inc., and U.S. versus
Mississippi Power & Light Co.) that may further complicate
the contractural situation between the Federal Government
and public utility companies (both energy and transportation
companies). Since it has been well established that utility
companies are covered by the Federal law, simplifying the
contracting process by legislation that affirms the intent
of 31 USC 200 (a)(7) would make it possible to use commer-
cial utility contract forms in many cases.
Inquiries disclosed that the only documentation relating to
utility service arrangements used in private industry and by
State government institutions were copies of approved rate
and service tariffs and the utility company service agree-
ment form. Auditors will accept this documentation as suf-
ficient support for checks drawn in payment of utility
bills.
The Commission on Government Procurement in its Recommenda-
tion 18 stated that Federal procurement should --
"Encourage procuring activities, when it is
deemed in the best interest of the Government,
to purchase supplies or services from public
utilities by accepting the commercial forms
and provisions that are used in the utilities'
sales to industry and the general public,
provided that the service contract provisions
are not in violation of public law."
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There is a periodic requirement to review tariff schedules
to assure that the most advantageous rate or rate combin-
ation is being used. A consulting service for agency users
would be helpful in this review.
The-paLyment of utility bills involves a phenomenon. endemic
to public utilities - the need for bill-payment cash flow
to finance continuing operations. Utility companies are
financed by their customer payments to furnish working
capital.
This need for cash flow has resulted in short payment times
for utility bills -- 10, 15, 20, or 25 days are common. More
recently, Staff j commissions have approved late-payment charges
for customers who are tardy in making payments. These are in
the order of 3% or 3-1/2% for a first month and additional
amounts up to 5% per month, or 1-1/2% per month with no limi-
tation on the interest amounts on unpaid balances. Also, State
commissions permit the cessation of service for chronic late-
payment or nonpayment of bills (This has happened to Federal
user agencies).
Some Federal user agencies incur late charges on their util-
?r ity bills
Late-
a
t
h
.
p
ymen
c
arges are paid largely as a result
of not really understanding the nature of utility bills and
not having a system to accomodate them. The Department of
Agriculture handles utility bills from over 4,000 points
across the United States at their National Finance Center
in New Orleans. They have averaged less than four da
s from
y
receipt to final action. U.S. Postal Service bills are paid
on time.
Precise data on Federal late-payment charges are not avail-
able, but from various sources including sample studies under
way in several agencies it appears likely that obligations
of $7 to $10 million per year are now being accrued by Fed-
eral agencies. Much of this can be avoided, as demonstrated
by those agencies who have developed systems to cope with it.
Load-management systems are being used in many areas of the
United States for both residential and commercial-building
energy load control. Home air-conditioners and hot-water
heaters are equipped with remote activated switches in
Georgia, Michigan and Ohio. The Georgia Building Authority
is installing a computer controlled load-management system
for the Georgia State Capital Building complex. GSA has
several test installations in various parts of the United
States.
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This concept of peak-demand reduction through load-manage-
ment - "peak shaving" - is a very significant technique
that merits strong emphasis. The savings are attractive
and can be widely achieved.
Public utility service rates are established after hearings
and presentations before State and Federal Regulatory Com-
missions. Utility companies and utility users present cost-
of-service or rate-of-return information with economic, en-
gineering, accounting, or financial data relating to the
utility services provided.
Many States have a People's Utility Counsel to represent re-
sidential and non-commercial users. Representatives of the
Federal Government sometimes appear at such rate hearings.
and proceedings, either as observers, or as intervenors re-
presenting the Federal Government as a large user. As a
general rule, any one with an interest may be an intervenor
is such hearings.
The effectiveness of GSA and other Federal Government parti-
cipants in regulatory intervention cases appears to be mixed.
Performance ranges from the GSA appearance in the Arkansas
hearings on automatic indexing for utility costs (the pro-
posal was denied, but whether it was achieved by reason of
the GSA intervention is not certain) to recent hearings be-
fore the Florida commission in which two sets of Federal
Government witnesses presented diametrically opposite views.
For the most part, it appears that participation is limited
to observing or questioning expert witnesses. GSA has made
full-scale rate-of-return presentations at past hearings.
o Improved Federal management practices to reduce
costs of utility services.
To enhance the public utility management function GSA should
expand the existing public utilities management activity
with a new charter to develop policies, procedures, and man-
agement systems. There is a need for the Administrator to
work closely with industry/Government experts to identify
various aspects of public utility management, organize a
program of work, and provide an ongoing reference for for-
ward progress.
Agencies should assure that public utility bills are paid
within stated payment periods on a schedule which is most
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advantageous to the Government. There may be need to revise
existing systems or establish new ones to provide for pay-
ing utility bills prior to making adjustments.
Agencies should make post-payment audits of utility bills.
This is a new function that would parallel the present post-
audit function for transportation bills. Review would cover
the tariff schedule used, special rates, and the like.
GSA should seek better rates to reduce total cost of utili-
ties. The Federal Government as a large user requires a con-
tinuing block of energy from many utilities that could war-
rant a base block rate lower than other rates by virtue of
economies of size.
Agencies should use systems that reduce peak-loads. The
peak-demand for any given instant that is greater than at
any other period in the year will establish the demand rate
for the next annual period. There are several techniques for
managing (controlling) and reducing this peak demand. These
controls also may reduce the total annual load and cost.
GSA should develop recommendations to Congress to improve
the method for Government utility contracting. The Commis-
sion on Federal Procurement recommended Federal contracting
for public utility services should be reserved for rare, ex-
ceptional cases, and commercial forms and procedures should
be used to the greatest extent possible.
Expected Benefits:
Reduced peak-demand costs
through load-management and other conser-
vation programs
Reduced total costs through
management -- improvements such as rates
or tariffs (cost-of-service cases)
$15 - 16 million
10 - 14 million
Paying utility bills on a
scheduled basis 7 - 10 million
Total Annual Savings
$32 - 40 million
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ISSUE NO. S-10: COOPERATIVE SUPPORT SERVICES
I. INTRODUCTION
This is an assessment of the potential for delivering cer-
tain administrative services more efficiently and at reduced
cost. These services will be called "cooperative support
services". It replaces the former title "common services" as
it more accurately describes the intent and nature of the
concept.
Two cooperative support service concepts are discussed in
this. study: (1) central administrative support services and
facilities provided to agencies in a common building/complex
in lieu of each agency providing the same services or facil-
ities for its own use; and, (2) centralized services provided
on a nation-wide basis to smaller agencies with inadequate
resources to provide the same services individually.
The study included examination of applicable laws, regula-
tions, previous studies and correspondence; questionnaires
to 17 Federal cabinet and major independent agencies; visits/
interviews with small Federal agencies and State government
organizations; and evaluation of the solicited views of
trade associations, professional groups, other state and
local government organizations and private citizens.
II. BACKGROUND/CURRENT SITUATION
The Bureau of the Budget, now OMB, on August 28, 1964 pub-
lished Circular No. A-68, "Establishment of central sup-
porting service facilities in headquarters and field office
locations". The Federal Property Management Regulations
(FPMR), Part 101-5, "Centralized Services in Federal Build-
ings", implemented Circular A-68.
Although Circular No. A-68 was the initial movement by the
Federal government towards centralized service centers, the
real push did not come until 1971 when GSA's Office of Man-
agement Services established a pilot project at the Arcade
Plaza Building in Seattle, Washington.
The Seattle Federal Regional Council was utilized to provide
the needed framework. Seattle seemed an ideal site to estab-
lish the pilot "cooperative support services" project because
the Arcade Plaza Building housed the five FRC charter agen-
cies; the Department of Health, Education, and Welfare (DHEW);
the Department of Housing and Urban Development (DHUD), the
Department of Labor (DOL), the Department of Transportation
(DOT), and the Office of Economic Opportunity (OEO). Follow-
ing two years of planning the project became operational in
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1971 with six initial services (mail and messenger; procure-
ment; receiving and shipping; laboring services; self-service
supply room; and library) being provided to a population of
975. It was estimated that the centralization of these serv-.
ices would result in a 25% reduction in costs.
An evaluation of the pilot project was conducted in 1972 by
GSA in cooperation with OMB. This evaluation concluded that
the pilot project was efficient, economical, and provided
a high level of customer satisfaction. The evaluation team
recommended that the Arcade Plaza arrangement be made per-
manent and the concept be extended to all locations where
feasible.
In early 1973, 0MB Circular No. A-68 was cancelled when cen-
tralized support services and other government-wide functions
were transferred to GSA. Subsequently, GSA issued Federal
Management Circular (FMC) 73-4, Central Support Services.
Within FSS the responsibility was levied on the Office of
Customer Service and Support, which intended to establish a
Common Services Branch, but never pursued it when applica-
tion of the program was not supported outside of the Seattle
project.
In 1975, only three of the original five participants re-
mained in the Seattle pilot project, i.e., DHEW, DHUD, and
CSA (formerly OEO). A new review of the project was requested
by the Working Group on Administration, composed of repre-
sentatives of the three remaining agencies, in May.1975.
The National Archives and Records Service (NARS) of GSA con-
ducted the study and recommended common services should con-
tinue in its present form, at least in the short run. Ulti-
mately, the transfer of DOL and DOT out of the Arcade Plaza
did lead to the discontinuance of common services except
for library services which may also be terminated due to
funding cutbacks in FY 79.
The current thinking of those who participated in the Seattle
experiment is that cooperative support services would work
effectively and economically on a localized basis provided
that understanding and support of cooperative support serv-
ices in philosophy and resources exist at all levels in
headquarters and the field.
GSA tried to initiate agreements at new Federal installa-
tions in Honolulu, San Diego, and Fort Worth. However, the
resistance encountered in trying to work out a means of
obtaining manpower ceilings for the consolidated services
was never overcome and all new initiatives were dropped.
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Also reviewed was the Kluczynski Building in Chicago, a
large Federal building occupied by several Federal agencies.
The intent of this review of the delivery of administrative
services was to determine if duplication existed in 23 se-
lected types of services. It was concluded that duplication
did exist and a feasibility study would be warranted.
The potential for a national approach to the delivery of
certain kinds of administrative services to smaller agencies
was examined. The model chosen for study was the USDA's con-
solidated payment center in New Orleans. In 1970, the USDA
estimated that by consolidating the processing of payment
vouchers a reduction of 473 man-years of effort and $3,845,000
in t
t
l
o
a
costs could be realized. The National Finance Center
was fully implemented in 1977 with the addition of nine more
systems. Projected savings for 1977 with the total system
operational is $4,345,630.
Using the USDA voucher processing feasibility study format
from 1970, statistics were collected for the same activity
in ACTION, FCC, ICC, NSF, and TVA. The results show that
approximately 236 man-years are being devoted to voucher
.r processing. Although no firm conclusions about efficiency
of operations can be derived from this limited statistical
sampling, the figures do indicate that duplicative voucher
processing systems exist and that there is considerable
volume in smaller Federal organizations. This could be ana-
logous to what existed in the USDA prior to establishment
of the National Payment Center.
Mli
Agency responses to the ASRP inquiries indicate that they
generally agree with the theory of economy that cooperative
support services projects, but there is great disparity in
their views about what services should be included/excluded
and the advantages/disadvantages involved.
A recent example of centralization of administrative services
is the establishment of a Office of Administration in the Ex-
ecutive Office of the President (EOP). The Office of Admini-
,W stration consolidated services previously being supplied
from many different sources with a wide variation in the qual-
ity and completeness of services. Services included were:
personnel, accounting, mail, library facilities, computer
operations, messengers, payroll, etc. Previous fragmentation
of these services produced: numerous service duplications;
inconsistent distribution of services; excess capacity in
some units and deficiencies in others; missed opportunities
for economies of scale; and lack of cost control.
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Three of the advantages expected from the establishment of
the Office of Administration were: estimated savings of
approximately $1.1 million and 40 positions; an administra-
tive base on which to develop service; a management focus
for accountability, responsibility and monitoring of admini-
strative services in EOP.
Accounting, the first service fully centralized in the office
of Administration, is meeting with great success in terms of
increased customer satisfaction, improved management inform-
ation and more expeditious service.
III. CRITERIA FOR IMPROVEMENT
o Eliminate duplicative costs for the delivery of
support services.
o Improve the delivery of support services.
o Identify actual costs of support services.
o Upgrade the efficiency and quality of support
services required by non-departmental agencies.
o Reduce excess capacity and fill deficiencies where
they exist.
IV. PROCESS IMPROVEMENTS
A. Have GSA, with the firm support of OMB and Heads
of Departments and Agencies vigorously pursue the applica-
tion of cooperative support services on a local basis in
buildings or complexes where large multi-agency populations
exist. This effort should be accomplished through full and
complete coordination and cooperation with the Federal Ex-
ecutive Boards and Federal Regional Councils.
B. Have GSA, with the firm support of OMB, and the
necessary resources from appropriate agencies, investigate
the feasibility of esta'Dlishinq cooperative support service
agreements on a National basis for non-departmental agencies.
This alternative would entail an in-depth feasibility study
for selected services such as payroll, voucher processing,
property accounting, etc.
C. Revise the FPMR, Part 101-5 to reflect the local
and national basis concept of cooperative support services,
and specify in detail the accomplishment of feasibility
studies, the roles of the Federal Executive Boards (FEB's),
the Federal Regional Councils (FRC's), OMB and the Depart-
ments and Agencies.
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D. Establish flexible cooperative support service
agreements, which permit addition of new services, and
elimination of services which cease to be cost-efficient.
E. Provide for annual reviews of all cooperative
support service agreements.
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ISSUE NO. S-11: MOTOR VEHICLE MANAGEMENT
I. INTRODUCTION
This is an assessment of the management and operation of
motor vehicles used in the Federal Government.
The Federal fleet for the purposes of this report is clas-
sified as commercial type, general purpose vehicles such
as sedans, station wagons, ambulances, buses, and trucks
operated by the Executive Branch agencies. Excluded are
military tactical vehicles, special purpose vehicles such
as fire trucks and trucks with permanently mounted special
equipment, motorcycles, trailers, trailer vans, and some
law enforcement vehicles. The domestic Federally-owned fleet
as of FY 1976 consisted of 392,000 vehicles with a current
capitalized replacement value of approximately $3.3 billion.
The annual operating and maintenance cost of this fleet was
approximately $600 million.
GSA operates 78,000 vehicles; other civil agencies 75,000;
USPS 123,000; and DOD 116,000. This report concentrates on
those vehicles operated by GSA and other civilian agencies,
and DOD vehicles operated off-base. It excludes vehicles
operated by USPS.
The study involved interviews with OMB, GSA, GAO, LISPS, and
other Federal agency personnel; members of Interagency Motor
Equipment Advisory Councils in three GSA regions; officials
of three state governments; officials of corporations invol-
ved in the leasing and management of vehicles; manufacturers
of vehicles; and responses to questionnaires sent to Federal
agencies.
Customer agency dissatisfaction with the level of motor equip-
ment support services provided by GSA has been on the increase
and is substantiated by agency interviews, questionnaires and
letters. Contributing to this situation are: age, condition,
and availability of vehicles in the GSA fleet; GSA's need to
better understand customer agency mission requirements; and
inadequate funding for motor equipment services.
The study examines the economies of centralized motor vehicle
fleet management for the civilian and off-base military domes-
tic fleet. Once the deficiencies in the Interagency Motor Pool
System (IAMPS) have been corrected, motor pools and vehicles
should be consolidated as determined feasible.
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II. BACKGROUND/CURRENT SITUATION
0MB and the GSA General Counsel believe that PL 81-152 does
not grant GSA authority to establish standards for agency-
owned fleets.
Legislation proposed by GSA in 1976 to designate GSA as the
Government-wide motor vehicle fleet management authority was
not pursued because funding restraints precluded the assump-
tion of further responsibilities by GSA. A 1977 proposal was
not acted upon because it was GSA's opinion that the merits
of the proposal were a matter for consideration by the Presi-
dent's Reorganization Project.
In 1954, PL 83-766 and E.O. 10579 established the Interagency
Motor Pool System and gave GSA (Subject to economy, effici-
ency or service considerations and with due regard to the
program activities of agencies concerned) the authority to
consolidate, take over, acquire, or arrange for the operation
by any executive agency of motor vehicles for the purpose of
establishing, maintaining, and operating Interagency Motor
Vehicle Pools or Systems.
PL 83-766 exempted military vehicles used principally with-
in the confines of a post, camp, or depot. However, these
vehicles can be consolidated into the IAMPS if the agency
operating the vehicles so requests. However, requests for
consolidation into the IAMPS have been denied by GSA, re-
cently due to lack of funds. PL 83-766 also exempted Postal
Service vehicles.
1. Fleet Management
GSA does not have legislative authority to prescribe Govern-
ment-wide fleet management practices such as utilization and
assignment criteria; operations; maintenance; cost and inven-
tory controls; procurement standards and options; or author-
ity to conduct Government-wide fleet management surveys or
reviews and, as a result, prescribe corrective actions.
There is no standard or uniform motor vehicle management
system within the Government. The lack of a standardized
or common measurement system has resulted in fragmentation
and duplication of the various motor vehicle services re-
sulting in overall increased expense for the Government.
GSA does not now provide fleet management assistance to other
agencies. The FPMR presently contains management directives
relating to replacement criteria; vehicle identification and
licensing; reporting certain fleet inventory data, limited
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operational data and statistics; preventive maintenance ad-
visory guidelines; storage advisory guidelines; and use of
the U.S. Government National Credit Card.
2. Interagency Motor Pools
GSA operates an Interagency Motor Pool System (IAMPS) con-
sisting of 100 motor pools in major metropolitan areas or
areas where there is a concentration of Federal activity.
These pools provide assigned vehicles as well as dispatch
vehicles to individuals and organized elements of the Gov-
ernment for essentially exclusive use. These pools range
in size from 2,549 vehicles in the Washington, D.C. Motor
Pool (assigned and dispatch) to 155 in the Parker Arizona
Motor Pool. All of these pools have some maintenance and
repair capability. Often vehicles in a IAMPS pool are not
operated near the pool headquarters, but are assigned to
customer agencies over a wide area.
There is no uniform application of a vehicle recondition-
ing prior to sale program among the IAMPS. The judicious
reconditioning of vehicles can substantially increase net
proceeds from vehicle sales.
Replacement of IAMPS vehicles has been deferred due to lack
of funds. At the end of fiscal year 1977, 30,000 vehicles
out of 78,000 in the IAMPS fleet were eligible for replace-
ment. GSA allocated $66.8 million from the General Supply
Fund to purchase about 15,000 vehicles during FY 77. This
situation has also been aggravated by higher vehicle acqui-
sition costs. For example, the base cost of a sedan has in-
creased from about $1,700 in 1969 to $2,700 in 1977. The
average delivered cost (options & transp.) is now $3,750.
Due to a lack of resources only limited action has been
taken by FSS/GSA to meet increased customer agency needs
created by Congressionally or Presidentially mandated pro-
grams assigned to the customer agencies. Of the 16 agencies
which responded to the questionnaire concerning the effect-
iveness of GSA motor vehicle services, more than two-thirds
replied that GSA's service is "poor". Agencies also indicated
that service was erratic, and varied from region to region.
Operational dependability declined as over-age/mileage vehi-
cles required frequent additional maintenance.
GSA reported that it turned down agency requests for about
9,000 vehicles during 1976. As a result, customer agencies
were forced to acquire vehicle support through more costly
alternatives such as commercial leases, agency funded pur-
chases and privately-owned vehicles (POV).
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In FY 76 there were approximately 4,800 vehicles being
leased by Government agencies. This number increased to
approximately 10,500 in FY 77. This includes 5,800 sedans
and station wagons leased by GSA in support of agency needs.
All sixteen of the agencies responding to the agency quest-
ionnaire said they leased vehicles "because the vehicles
needed were not available from GSA".
A GAO study "Opportunities to Reduce the Cost of Government
Operations", LCD-77-215 February 28,1978, and a May 1977 GSA
study -- Government Ownership vs. Centralized and Decentral-
ized Leasing -- showed that Government ownership was far
less expensive than commercial leasing. Basic capital cost
per vehicle per month for GSA-owned vehicles was $52.15;
centralized GSA lease cost was $71.36; and decentralized
agency leasing cost was $123.49.
Agency funded purchases 'result from IAMPS inability to pro-
vide vehicles. This forces agencies to either seek a sup-
plemental appropriation or reallocate existing funds. This
circumstance frequently results in the agency not being able
to submit a requisition to the GSA Automotive Center in time
for inclusion in a consolidated purchase, resulting in higher
vehicle price.
The increased use of privately-owned vehicles (POV) in lieu
of Government-owned vehicles is an expensive alternative.
The permissible reimbursement rate for POV has risen from
11 cents a mile in FY 73 to 17 cents per mile in FY 77 (pro-
jected to go to 18.5 cents in FY 79) versus 12.2 cents per
mile for a GSA sedan in FY 77. Except for immediate manager
control, there are no systems currently available which can
be used to collect data and monitor POV use. POV also can
become an unreliable source of transportation due to factors
such as: employee refusal, union action, energy crises, and
insurance.
3. Repair and Service Contracting
GSA mandatory repair and service contracts have created ser-
ious problems for both the IAMPS and customer agencies be-
cause of the poor quality of service and contractor accessi-
bility. Twelve of the seventeen Federal agencies which replied
to the agency questionnaire concerning GSA mandatory contracts
stated that the quality of repairs and the responsiveness of
the contractors were poor. Commercial organizations minimize
these problems by contracting with national repair and main-
tenance firms which offer simplified billing procedures and
standardized rates -- as well as good service.
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III. CRITERIA FOR IMPROVEMENT
o More responsive and better service to agencies.
o Reduced cost of operating motor vehicles
o Creation of management data bank for better control
of costs and vehicle inventory.
IV. ALTERNATIVES
A. Establish a new organization in GSA with a specific
charter to develop a Government-wide fleet management system
and expand the IAMPS.
1. Advantages
Increased management control and effective-
ness leading to quantitative savings.
Correct existing fragmentation/duplication
of vehicle management throughout the Federal fleet.
Savings through: uniformity of policies,
procedures, guidelines; vehicle inventory reductions;
facility reductions; vehicle inventory and operating
data.
Improved service to user agencies.
Lower Government fleet costs (approximately
$400 per pooled vehicle per year based on IAMPS costs
compared with prior to pooling costs developed in GSA
feasibility studies).
Elimination of duplicative fleet inventories,
facilities, equipment and personnel.
2. Disadvantages
Legislation required
Will require reallocation of resources when
facilities and manpower are transferred from other agencies
to the IAMPS.
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3. Expected Benefits
Expanding IAMPS $44 million
Reduce Commercial Leasing $ 9 million
Change Sedan/St. Wagon
Replacement Criteria 6 yrs./60,000 to
3 yrs./50,000 miles
$ 5 million
Vehicle prior to sale
reconditioning program $ 2 million
B. Secure all or some requirements commercially
1. Advantages
Reduction of Government capital outlays
Provide tax income to Federal Government
Reduce operational personnel
2. Disadvantages
Increased costs
Loss of controls
Mass reorganization and agency impact
C. Decentralize operations to using agencies (No IAMPS)
but with GSA policy direction.
1. Advantages
Greater flexibility for agencies in securing
motor vehicle support.
2. Disadvantages
Loss of control
Increased costs
Expensive duplication and fragmentation
Special problems for small agencies
Legislation required
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D. PROCESS IMPROVEMENTS
Legislation needed to:
1. Assign to one agency authority for Government-
wide fleet management if alternative A is selected. This
authority would include but not be limited to:
Prescribing of Government-wide policy on vehicle acquisi-
tion, utilization, operation, maintenance, replacement and
disposition; management reviews to evaluate and correct
vehicle management and operational inefficiencies; and
energy conservation measures and programs.
Establishing a common management information inventory and
reporting system. (In a report "How Passenger Sedans In The
Federal Government Are Used and Managed" B-158712, dated
September 6, 1974, GAO reported that most Federal Agencies
did not have central records showing, by location, the number
and types of light vehicles in use throughout the agency.
Similarly, GAO reported that "GSA does not have any manage-
ment control over these vehicles". The data furnished GSA
by the agencies is "incomplete and inaccurate".)
2. Establish a separate motor vehicle working
capital fund (WCF) for the IAMPS to segregate LAMPS finan-
cial operations from the procurement/supply financial
operations to allow:
Retention of surplus earnings in the IAMPS WCF to provide
for the acquisition of vehicles to meet agency needs.
Depreciation of vehicles and establishment of user rates
based upon replacement cost rather than original acquisition
cost. This would correct the financial difficulties created
by inflationary factors over the vehicle replacement cycle
and insure that adequate reserves are created for the pur-
chase of replacement vehicles. (The U.S. Forest Service
presently has the authority to depreciate vehicles on a re-
placement cost basis.)
Capitalization of vehicles consolidated into the IAMPS at
replacement cost less current value.
3. Eliminate the statutory price limitations im-
posed on the purchase of sedans and station wagons. The
current base price limitation of $2,700 for sedans and
$3,100 for station wagons has not kept pace with inflation
and other cost factors.
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4. Increase the appropriated capital of the General
Supply Fund in the amount of $100 million to provide for ac-
quisition of additional vehicles in the IAMPS to meet require-
ments of customer agencies and to replace vehicles eligible
for replacement. This would be a temporary measure pending
approval of legislation to establish the separate IAMPS
working capital fund in the manner described herein.
Administrative action is needed to:
1. Reduce operating costs of IAMPS vehicles by
changing current sedan/station wagon replacement cycle
from 6 yrs./ 60,000 miles to 3 yrs./50,000 miles. Various
GAO and GSA studies have substantiated that the current
6 year/ 60,000 mile replacement standard is clearly not the
most economical. A 3 year/50,000 mile replacement cycle vs.
a 6 year/60,000 mile cycle would produce annual savings of
approximately $2.2 million in depreciation, maintenance, re-
pair, and tire costs; a 6,-year saving of $21 million in fuel
cost; and the conservation of 28 million gallons of gasoline.
2. Reduce costs by establishing a Government-wide
prior-to-sale vehicle reconditioning program. Judicious re-
conditioning of vehicles by the IAMPS could increase net
sales proceeds by an estimated $1.1 million annually; govern-
ment-wide implementation would result in an additional $1.3
million in net sales proceeds annually.
3. Establish interagency motor pools after feasibi-
lity studies have proven pooling to be cost beneficial. A
recent GAO study of 20 motor pools operated by agencies shows
that 8 of the 20 pools should be consolidated into the IAMP
system, at an actual dollar savings of $743,000 annually.
Establishment of motor pools in other areas would save an
additional $780,000 annually through a reduction in facili-
ties and manpower, as well as better vehicle inventory con-
trol and utilization.
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ISSUE NO. 5-12: TRANSPORTATION AND TRAFFIC MANAGEMENT
I. INTRODUCTION
This is an assessment of domestic transportation and traffic
management practices, including transportation audit and rate
intervention, of the civilian executive agencies.
The annual expenditure for domestic transportation procured
from carriers is about $3 billion, of which $700 million is
civil agencies. This paper concentrates on the latter.
The study involved questionnaires and interviews with offic-
ials of Federal agencies; visits to commercial concerns such
as J.C. Penney, Sears Roebuck, Mobil Oil, and Montgomery
Ward; and contacts with transportation carrier associations,
e.g., the Transportation Association of America, Household
Goods Carriers Bureau, Middle Atlantic Conference, Rocky
Mountain Motor Tariff Bureau, Movers and Warehousemans
Association of America, and Air Transport Association of
America.
The results of the study substantiate that the application
of traffic management expertise to civilian agency passenger
and freight movements could result in substantial annual
savings and should provide improved services to the executive
agencies.
II. BACKGROUND/CURRENT SITUATION
GSA has authority for Government-wide traffic management
policy, under the Federal Property and Administrative Serv-
ices Act of 1949 (PL 81-152) with exceptions such as DoD,
USDA price support programs, DOE, and USPS. GSA has not
fully executed the authority or responsibilities of PL 81-
152. Traffic management lacks central direction; does not
have sufficient program emphasis; and is not adequately
funded to perform the full range of functions specified in
PL 81-152. GSA issues advisory rather than mandatory FPMR's
and provides assistance on a request basis. There is little
policy direction on an affirmative basis.
Traffic management liaison with executive agencies is an
integral part of GSA's Government-wide responsibility as
traffic manager. This liaison program has been placed in
GSA's Region 3 for agency headquarters liaison.
The traffic management function in GSA has achieved measur-
able savings of over $15 million per year on traffic moving
under GSA's supply system; on traffic managed by GSA for a
few agencies such as the Bureau of the Mint and Department
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of Agriculture Food Stamp Program; and by transportation
contracts for office relocations and other special types
of movements. However, since GSA does not have detailed
data on the majority of the civil agencies' traffic, pot-
tential savings are not realized through shipment routing
control opportunities for rate negotiations and other traf-
fic management actions.
The civilian executive agencies of the Federal Government
procure a large volume of supplies on a delivered basis,
i.e., FOB destination. Hence, the Government is not able
to control the transportation costs related to such pro-
curement. Civilian agency FOB destination procurement
potentially subject to GSA transportation management is
$6 billion annually. A minimum of 5% of the procurement
dollar on FOB destination prices is estimated to be trans-
portation cost or $300 million annually. The application
of traffic management expertise in the procurement cycle
could yield minimum savings of $3 million per year.
Civil agency expenditures for passenger transportation on
Government transportation requests are approximately $100
million annually. A management system to identify instances
where interagency group or charter ticketing are feasible
could result in significant annual savings.
GSA represents the civil agencies as users of transportation
services in proceedings of transportation regulatory bodies
such as the Interstate Commerce Commission and in docket
actions of carrier rate bureaus. In this capacity, in FY
1977, GSA reviewed 122 thousand carrier docket proposals for
rate or rule changes, filed 871 docket actions with carrier
rate bureaus, and participated in 51 regulatory agency pro-
ceedings.
Before 1940, payments to transportation carriers were pre-
audited by fiscal officers and post-audited by GAO, with
certifying officers liable for incorrect payments. This sys-
tem presented few problems until shipments volume exceeded
the pre-audit capabilities of certifying officers. The Trans-
portation Act of 1940 provided that carrier bills were to be
paid on presentation without pre-audit by certifying officers.
The transportation audit function was transferred from GAO to
GSA in 1975. The function was placed in GSA's Federal Supply
Service, Office of Transportation and Public Utilities.
Audits are made of payments to carriers of all modes of trans-
portation by all executive agencies (civilian and military)
for shipments of material on Government Bills of Lading (GBL)
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and movement of persons on Government Transportation Requests
(GTR). Federal Property Management Regulations (FPMR) are pre-
pared which provide direction to Executive agencies and car-
riers in the format and preparation of GBL's and GTR's; vouch-
ering and payment of bills for services rendered by carriers
and filing of claims by or against carriers. These regulations
place the audit function in a highly visible and sensitive
position vis-a-vis the multi-billion dollar transportation in-
dustry. The value of payments audited in FY 1977 were $1.8 bil-
lion; overcharges recovered from carriers were $11.3 million.
At the time of the transfer of the transportation audit func-
tion to GSA, GAO transferred 417 employees to GSA. The pre-
sent staffing level. is 323. The reduction of staffing ceilings,
inability to hire technicians from the carrier industry, and
loss of technicians through retirement has reduced the tech-
nical staff of the transportation audit activity.
Where audit systems cannot be computerized, the audit of
payments below certain minimum amounts is not cost benefi-
cial. The practice of a secondary audit by an independent
auditor, paid a percentage of money recovered, is employed
by many private companies, but has never been used by the
Government.
III. CRITERIA FOR IMPROVEMENT
o Reduced cost of transportation services.
o Increased cost effectiveness through enhanced
audit effort.
o Improved services to customer agencies.
IV. ALTERNATIVES
A. Establish a new organization in GSA with a specific
charter and expanded resources to develop a Government-wide
transportation program to include policies and procedures,
management systems and audit. Operational control would re-
main with the agencies except where a small agency requests
GSA to perform these functions for it. Program management
would include policy; regulations; rate intervention; rate
negotiations; maintenance of a tariff library; furnishing
rates, routes and technical assistance; management reviews
and training; and rate audit. Operations would include ship-
ment planning; obtaining rate and routing information from
the central traffic manager; shipment documentation; ordering
equipment from designated carrier; filing of claims; bid/
contract evaluation (FOB origin vs. destination) using rate
data furnished by the central traffic manager.
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1. Advantages
Increased management control and effectiveness
leading to significant savings.
Better service to civilian agencies.
A pre-shipment control system.
Capability of establishing a data management
base from audit function data which-will generate savings.
Capability of establishing a passenger traffic
management system which should result in considerable sav-
ings, the magnitude of which has not been identified.
2. Disadvantages
Perception by agencies that increased controls
would delay shipments.
3. Expected Benefits
Pre-shipment Routing Control System $10 million
Use of FOB Origin Contracts 3 million
Secondary Audit 1.6 million
B. Centralize both management and operations in GSA.
1. Advantages
Advantages of centralized operations would
accrue only to small agencies.
2. Disadvantages
Centralized operations would require that
many functions best performed at the site of shipment
be removed to a more distant location with resulting
reduction in support response.
.r C. Combine civil and military in GSA. It is inadvis-
able to combine civilian and military traffic management
because the DoD mission responsibilities override any poss-
ible benefits that would be derived. The Second Hoover
Commission of March 1955 stated that "The transportation
functions of DoD are so vast and so different from those
of the civilian agencies that they should be handled separ-
"? ately." While the Second Hoover Commission also recommended
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that DoD perform its own transportation rate audit, DoD at
the time of the transfer of the audit function from GAO to
GSA in 1975, took the position that the audit function was
sufficiently removed from its mission that DoD need not per-
form its own audit.
1. Establish a pre-shipment routing control system
to determine the best cost mode and carrier.
2. Establish a post-shipment evaluation system to
ensure compliance with routing specified on particular
shipments and to develop data on traffic not included
in the routing control system.
3. Institute a secondary audit procedure using
contractors on a shared reimbursement basis through
legislative action or 0MB direction.
4. Make FPMR's mandatory for appropriate trans-
portation functions.
5. Establish a passenger travel management system
to determine the best cost mode and carrier including
group and charter arrangements where feasible.
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ADMINISTRATIVE SERVICES REORGANIZATION PROJECT
SUPPLY AND SUPPORT SERVICES TASK FORCE
REGULATORY AND ADVISORY TASK TEAM
EXECUTIVE SUMMARY
The Federal Property and Administrative Services Act of 1949
assumed that the General Services Administration (GSA) would
exercise a Government-wide leadership role in the delivery of
administrative services. To carry out its mission, GSA has
issued guidance to agencies in the form of Federal Property
Management Regulations (FPMR), Federal Travel Regulations
(FTR), and Federal Procurement Regulations (FPR). In a more
service-oriented view, GSA provides assistance to agencies
by offering training programs and conducting consultant-type
advisory studies.
The study involved extensive interviews with GSA and customer
agency personnel, interviews with officials of large corp-
orations and state governments, analysis of questionnaires,
and review of existing statutes, GSA and agency regulations.
The adequacy of three principal activities were addressed
by the Task Team:
o GSA regulatory activities
o Interagency training
o Advisory services to agencies
With respect to the FPMR and the FTR, there is no consistent
institutionalized system for obtaining customer participa-
tion in the development of regulatory material. There is
evidence of overemphasis on intra-GSA coverage versus inter-
agency guidance. In varying degrees, required changes to
regulations are not timely, language is overly complex,
implementation of changes by the Federal establishment is
costly, and there is no adequate system for either agency
feedback or determining the level of agency compliance.
Organizational Alternatives. The structure of GSA has inhib-
ited its ability to present a strong, coherent and service-
oriented regulatory image to the Federal agencies it was
created to serve. Three alternatives were considered:
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o Centralize development and control of regulations
on the staff of the GSA Administrator.
o Centralize coordination and monitoring of regula-
tions on the staff of the GSA Administrator.
o Strengthen staff of each GSA service to develop and
control regulations.
Process Improvements. GSA should make the following
improvements:
o Increase agency participation in regulatory develop-
ment and feedback.
o Establish an improved compliance system.
o Simplify regulatory language.
o Write regulations which minimize the need for dupli-
cative agency implementation.
INTERAGENCY TRAINING
Training and motivation of personnel are an integral element
of administrative services. The quality and quantity of
training provided to administrative services personnel varies
by GSA Service. Moreover, some duplication of training
effort between the Civil Service Commission and GSA requires
resolution. Department of Defense training courses and the
Federal Acquisition Institute are excellent models to emulate
in establishing training and career development programs for
administrative services personnel at all grade levels.
Alternatives. The fragmented approach to training within
GSA lends itself to the following options to improve service
delivery:
o Consolidate administrative services training effort
in GSA on the staff of the Administrator.
o Consolidate administrative services training effort
in the Civil Service Commission.
o Continue current fragmented approach and work on
product improvement.
o Contract-out training.
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Process Improvements. Initiate action within GSA and work-
ing with other agencies to:
o Initiate a Government-wide career development program
for administrative services personnel.
o Establish a system to receive customer agency input.
o Insure strong ties between training and program
operations.
o Improve training evaluation.
Based on customer agency response, there is a place in the
GSA for an institutional group of high-quality consultants.
The current approach to providing this type of service
varies considerably among the GSA Services.
Organizational Alternatives.
o Establish an organization on the Administrator's
staff to plan, control and monitor advisory services.
o Establish an organization within each GSA Service
to plan, control, and monitor advisory services.
Process Improvements. Initiate action within GSA and working
with other agencies to:
o Conduct market surveys to pinpoint customer demand.
o Establish a customer feed-back system.
o Make program fully reimbursable and emphasize
quality performance.
o Avoid the audit image in providing advisory services.
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ISSUE RA-1: GSA'S REGULATORY ACTIVITIES
I. INTRODUCTION
This paper presents an assessment of GSA's role in the
development and issuance of, and monitoring agency compli-
ance to the Federal Property Management Regulations (FPMR),
Federal Travel Regulations (FTR), and Federal Procurement
Regulations (FPR). FPMR's are the primary means by which
GSA manages the Government's property management practices
and are applicable to almost all executive agencies. The
FT"R governs all travel by civil service employees. FPR's
prescribe procurement policies and procedures and, are
applicable to almost all civilian agencies. The study
included interviews with GSA and other agency personnel,
interviews with officials of several large corporations
and state governments, analysis of responses to several
questionnaires sent to major departments and agencies,
and review of existing statutes, applicable GSA regulations,
and agency implementing regulations. The results of this
assessment indicate that GSA has not adequately fulfilled
its regulatory role as envisioned in enabling legislation.
II. BACKGROUND/CURRENT SITUATION
A. FEDERAL PROPERTY MANAGEMENT REGULATIONS (FPMR)
GSA authority for the FPMR can be found in the Federal
Property and Administrative Services Act of 1949, Section
205.(c).
The FPMR system is the vehicle by which GSA prescribes
regulations, policies, procedures and delegations of
authority pertaining to property management and records.
FPMR's are applicable to all executive branch departments
or agencies, with a few legistative exemptions. The FPMR
system is the primary method used by GSA to regulate the
Government's property management practices and covers
Federal Travel, Archives and Records, Defense Materials,
Public Buildings and Space, Supply and Procurement, Tele-
communications and Public Utilities, Transportation and
Motor Vehicles, and Utilization and Disposal.
All four GSA Services contribute to the FPMR. 'Federal
Supply Service (FSS), for example, has cognizance over
regulatory coverage dealing with federal travel, defense
materials, supply, public utilities, transportation and
motor vehicles, and utilization and disposal.
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Since many subjects have a direct or indirect impact on
all Services, a significant amount of coordination effort
is required. In addition to multi-Service preparation and
coordination of regulations, numerous offices within a
Service contribute to the development of the FPMR?. In the
National Archives and Records Service (MARS), eight offices
draft FPMR material. Table 1 identifies the number of offices
and people involved in FPMR development for each GSA Service.
GSA INVOLVEMENT
IN FPMR
GSA
Service
No. of GSA
Divisions
No. of Persons
PBS
10
43
ADTS
1
4
NARS
8
30
FSS
19
81
TOTAL
38
158
Each of the GSA Services developing Government-wide
regulations also has responsibility for GSA operational
programs. Even within a Service, an office developing FPMR
material may also have cognizance over an operating program.
For example, the office of Personal Property Disposal in
FSS operates a Government-wide utilization program and, at
the same time, develops regulations governing utilization
of property within an executive department or agency. Much
of the FPMR prescribes procedures applicable to the use of
GSA services rather than policy and procedures pertaining
to the management of other agencies' internal property
management practices. For example, of 145 pages in the
FPMR dealing with supply and procurement, 100 pages
involve procedures relative to obtaining FSS material
and services.
Agency involvement in the development of regulations is
typically minimal, and there is no standard procedure for
user participation. For example, a recent regulation on
first-class air travel was not coordinated with agencies,
while a regulation concerning shipment of household goods
was fully coordinated with agencies through an interagency
committee. The implementation of the FPMR by other agen-
cies ranges from zero to the extensive use of implementing
documents. These documents are issued in a variety of
publications including handbooks, department orders, admini-
strative manuals and the Code of Federal Regulations (CFR).
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Depending on how thoroughly the FPMR prescribes policies
or procedures on a specific subject, agency implementing
procedures maybe brief or extremely detailed. For example,
the Federal Travel Section of the FPMR is 100 pages in
length; Department of Transportation's implementing manual
is 300 pages long. Table 2 is based on data from several
agencies and indicates typical agency involvement in
implementing the FPMR.
AGENCY IMPLEMENTATION
OF THE FPMR
FPMR Subtitle
FPMR
Pages
Average
No. of Pages
of Agency
Instructions
Average
No. of Persons
Involved in
Implementati
Average
Cost of
Agency Changes
on
FY 1977
General
55
105
10
$ 4
768
Federal Travel
104
671
11
,
57
901
Archives &
Records
1,481
,
139
190
Public Bldgs.
& Space
262
,
30
207
Supply &
Procurement
661
,
29
997
Telecommunica-
tions & Public
Utilities
105
13
,
8
410
Transportation
& Motor Veh.
Utilization &
Disposal
157
n 'l O
153
18
,
,e-.7 r J `3 V
18,985
695
3,656
120
$318,988
There is no Government-wide system for monitoring agencies'
property management practices or implementing regulations. GSA
neither receives nor reviews the implementing procedures of
other agencies. For the most part, GSA does not review agencies
property management practices. Agencies, responding to a
questionnaire, identified their internal audit and/or GAO as
activities that are, and should be, responsible for monitoring
property management practices. These audits typically focus on
specific operating problems as opposed to systems reviews.
GSA neither' . receives nor reviews agency internal audit or GAO
reports relative to agencies' property management practices.
Some agencies conduct "management reviews" which involve
review of all aspects of property management for a specific
activity.
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B. FEDERAL TRAVEL REGULATIONS (FTR)
Before 1971, OMB was responsible for development and
issuance of travel regulations. This authority was exer-
cised on behalf of the President pursuant to Public Law
89-554, dated September 6, 1966. By Executive Order No.
11609, dated July 22, 1971, this authority was transferred
to GSA. The Administrator of General Services was empowered
to exercise the authority of the President to prescribe
regulations relating to travel, subsistence and certain
transportation expenses, and mileage allowances.
Federal Travel Regulations are published in handbook format
in Part 7 of the Federal Property Management. Regulations.
The FTR is applicable to all civil service employees. Travel
entitlements for uniformed service personnel are covered in
Vol. 1 of the Joint Travel Regulations, which are published
by DOD's Per Diem Committee. The State Department issues
regulations prescribing travel entitlements for Foreign
Service personnel. In addition, GSA delegated responsibility
to the State Department for determination of per diem rates
for overseas locations.
1972, decision concerning reimbursement for
cost
of
travelers
checks was not implemented in the FTR until
June
1,
1977.
Federal Travel Regulations are prepared in one of the four
branches of the Transportation Services Division in the FSS
Office of Transportation and Public Utilities. The other
three branches are responsible for negotiating transportation
contracts, providing traffic management services, and repre-
senting the Government before transportation rate-setting
agencies. Numerous levels of review are required before
issuance of an FTR: five offices in FSS, one in the office
of Administration, and one in the Office of General Counsel.
Changes to the regulations are not made in a timely manner.
In 1977, at least five changes, proposed in 1972, were
finally published, e.g., the Comptroller General's March 27,
There is no standard system to provide for agency partici-
pation in development of the regulation. GSA's decision
to solicit agency comments or approval is purely judgmental.
Forty-five percent of the agencies responding to study group
inquiries indicated that current participatory mechanisms are
inadequate. Agency implementation of the FTR is extensive.
The FTR is approximately 100 pages in length while Department
of Treasury's implementation-totals over 1,200 pages. As a
specific example, per diem is covered in 5 pages in the FTR
and 30 pages in Department of Transportation regulations.
Much of this implementation is required because the FTR:
(1) does not provide examples applicable to specific travel
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situations; and, (2) uses extremely complex language and
sentence structure.
With respect to monitoring compliance to the FTR, the dis-
cussion of monitoring compliance to the FPMR is applicable.
C. FEDERAL PROCUREMENT REGULATIONS (FPR)
GSA authority to issue regulations pertaining to procurement
is contained in Section 205(c) of the "Federal Property Act".
This authority is subject to regulations prescribed by the
Administrator of Federal Procurement Policy pursuant to the
Office of Federal Procurement Policy Act, Public Law 93-400,
dated August 30, 1974. The FPR is applicable to all execu-
tive agencies except the Department of Defense, NASA and
the Coast Guard. The Armed Services Procurement Regulations
(ASPR), developed by DOD, generally governs procurement by
these three agencies.
The FPR is developed by the Federal Procurement Regulation
Staff which is on the staff of the Commissioner, FSS. Changes
to the FPR are coordinated with agencies through the Inter-
agency Procurement Policy Committee. Agencies responding
to study group inquiries indicated that this type of partici-
pation is satisfactory. Agencies are generally satisfied
with FPR content. However, a number of agencies indicated
that guidance concerning procurement of non-personal services
was inadequate. With respect to monitoring compliance to the
FPR, the discussion of monitoring compliance to the FPMR,
above, is applicable.
Public Law 93-400 authorized the Administrator of Federal
Procurement Policy to establish "a system of coordinated,
and to the extent feasible, uniform procurement regulations
for the executive agencies". On January 31, 1978, OFPP
requested that DOD and GSA "play a lead role to assist in
developing a single Government-wide procurement regulation",
entitled the Federal Acquisition Regulation (FAR). The
primary objectives of the FAR project are to consolidate
and replace ASPR, FPR, NASA PR and other acquisition regu-
lations containing material applicable to more than one
agency; create a new single regulation that is understandable
and comprehensive; and, provide new material not currently
in the basic procurement regulations. OFPP, through DOD
and GSA, plans to have all revised sections available for
public comment no later than January 31, 1979, and to have
a completely reviewed FAR ready for publication August 30,
1979. To date, no plans have been made to develop mechanisms
for maintenance of the FAR subsequent to its planned publication
date in 1979.
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III. CRITERIA FOR IMPROVEMENT
Recognize GSA's statutory responsibility for developing
and issuing regulations, through adequate professional
staff resources, and enhanced acceptance of GSA leadership
in property management, travel and procurement matters.
Distinguish between a staff role in the development of
regulatory coverage for user agencies and an internal GSA
line operating role.
Reduce organizational fragmentation of responsibilities
for development and issuance of regulations, to facilitate
communication and increase uniformity of policy.
Promote early user participation in the development of
regulatory coverage to facilitate coordination, increase
user understanding, and enhance cooperation.
Promote prompt resolution of policy or procedural conflicts
and timely issuance of changes to regulations.
1. Establish an organization, on the staff of the
Administrator, responsible-for development,~coord nnat oiof n,
control and promulgation of all regulatory material. Appro-
priate Service personnel responsible for this function would
form the core of this organization.
a) Advantages:
Enhances organizational recognition of GSA's regulatory
role.
Provides separation of staff and line operating responsi-
bilities and reduces organizational fragmentation of
responsibility for development and issuance of regulatory
material.
Promotes uniformity in the regulations issued by GSA and
implementing procedures issued by the agencies and facili-
tates timely issuance of regulatory change.
Enhances the opportunity to provide uniform and effective
mechanisms for agency participation in regulatory develop-
ment and improves the opportunity to establish uniform
and effective mechanisms to monitor agency compliance.
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Improves lines of communication for customer agencies and
the Administrator.
b) Disadvantages:
User agencies may prefer existing system, which is relatively
lax and permits wide latitude in developing, issuing, and
monitoring implementing regulations and procedures.
GSA Services may be reluctant to relinquish their tradi-
tional role in the regulatory area.
Separates the regulatory function from the technically
knowledgeable personnel in the GSA Services.
2. Establish an organization, on the staff of the
Administrator, responsible for coordination, control and
promulgation of all regulatory material. Development of
regulations would continue to be the responsib y of
each GSA Service.
a) Advantages:
Improves lines of communication for customer agencies
and the Administrator.
Provides the opportunity to oversee development of effective
mechanisms for agency participation in regulatory develop-
ment and improves opportunity to oversee development of
effective mechanisms to monitor agency compliance.
b) Disadvantages:
Organizations responsible for regulatory development would
continue to be responsible for both staff functions and
operational programs.
Organizational fragmentation of responsibility for regulatory
development would continue.
Timeliness of issuing changes to the regulations is adversely
affected by the addition of review levels.
Impairs resolution of policy conflict because personnel
knowledgeable in content of the regulation are located in
several operational organizations separate from the organi-
zation that is the focal point for communications with
agencies and the Administrator.
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3. For each Service, consolidate the regulatory
functions into one o _anization.-Each organization would be
responsible for the development, coordination, control and
promulgation of all red ulatorLy material ap icable to the
functions performed by that Service.
a) Advantages:
Improves separation of staff and line responsibility at
the Service level.
Reduces organizational fragmentation of responsibility
within each Service. Lines of communication for agencies
would be improved in that a single organization in each
Service, instead of several organizations, would be the
focal point of communication.
Concentration of authority to issue regulations within a
Service will provide for more uniform policies, eliminate
duplication of functions, and lead to development of a strong
coordinated top-management team.
Enhances opportunity within each Service to provide effec-
tive mechanisms for agency participation in regulatory
development and to install effective mechanisms to monitor
agency compliance.
Facilitates staff coordination with the technical experts
in the Service.
b) Disadvantages:
Organization would be located in an agency that is primarily
a "line" operation.
Multiple lines of communication for the Administrator.
Dispersion of authority in the separate Services fosters
opportunity for non-uniform policies and duplication of
effort.
Mechanisms within GSA for agency participation in regulatory
development and for monitoring agency compliance may vary
between Services.
B. PROCESS IMPROVEMENTS
1. Institute a formal committee structure for
development of regulatory material. Committee members would
include representatives from GSA operational programs and
customer agencies.
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2. Establish a project which has as its objectives:
(a) a review of existing regulatory coverage to determine its
completeness and implement appropriate changes designed to
reduce redundant implementation by all users, (b) improvement
in the readability of the material, and (c) adoption of a
uniform format.
3. Staff the regulatory function with exceptionally
well-qualified personnel who will provide the leadership
required. Staff personnel should be rotated periodically
to retain currency of subject matter expertise.
4. Adopt state-of-the-art processing techniques for
the publication and issuance of regulations.
5. To insure uniformity in agency implementing
regulations, agencies should publish their implementation
in Title 41 of the Code of Federal Regulations. Until such
time as agencies begin to publish their implementation in
the CFR, they should send copies of their implementation
to GSA.
6. Agencies should provide GSA with copies of
appropriate audit material covering those aspects of pro-
perty management, travel management, or procurement under
the purview of GSA regulations. GSA would use this infor-
mation to identify problem areas requiring regulatory
change.
7. GSA, in cooperation with the other agencies,
should institute a system of agency-conducted management
reviews to evaluate the functions of property management,
travel management, and procurement. Agencies should pro-
vide appropriate findings to GSA so that GSA can resolve
any problems requiring regulatory change.
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ISSUE NO. RA-2: INTERAGENCY TRAINING
I. INTRODUCTION
This paper presents an assessment of GSA's role in providing
training for Federal employees whose work involves supply
and procurement, transportation and traffic management,
travel, motor pool management, space management, and records
management.
The study involved interviews with GSA and other agency offi-
cials in Washington and in the field, analysis of responses
to questionnaires submitted by major departments and agencies,
and review of existing statutes, Executive Orders, and Civil
Service Commission (CSC) Regulations.
The results of this assessment indicate that the interagency
training now being provided by GSA is meeting many critical
training needs of Federal agencies. However, customer agen-
cies who sponsor employees for the program say it is deficient
in several respects.
II. BACKGROUND/CURRENT SITUATION
A. GSA TRAINING
At the present time, interagency training is fragmented
within GSA. No single organizational unit has responsibi-
lity for promoting, coordinating, or administering "the
program". However, the Director, Training and Development
Division, Office of Administration, serves as liaison
with CSC. He collects information about courses to be offered
and statistical data on training provided by GSA Services to
customer agencies.
Federal Suy~Service (FSS). The Training Division of the
FSS offers nine five-day courses in the supply and procurement
field on a reimbursable basis. The courses are taught by a
staff of eight instructors who work out of Washington. The
program is growing to meet the demand for it--over 5,000
trainees will probably participate in FY-1978. FSS' Office
of Transportation and Public Utilities offers 15 short inter-
agency seminars relating to transportation, traffic management,
and travel on a non-reimbursable basis. Most of the seminars
are 2 - 3 hours in duration; a few are 8 - 10 hour's long. The
seminars usually are led by local FSS Transportation personnel.
National Archives and Records Service (NARS). NARS offered 20
"paperwork management" courses, from 267--7 80 hours, on a reim-
bursable basis in FY 1977. Some of these courses were scheduled
for interagency participation and others were conducted by
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special arrangement for individual agencies in both
Washington and the field. These courses are taught
by local NARS personnel.
Automated Data and Telecommunications Service (ADTS).
ADTS offered only 2 one-hour "courses=' in FY~~7. Both
courses were offered on a non-reimbursable basis and were
tied to the installation of FTS systems in a few locations.
Although these programs meet the definition for interagency
training, they are really "orientation" programs designed
to acquaint agency personnel with newly installed telephone
systems.
Public Buildings Service (PBS) and Federal Preparedness
A 9enc (FPA). PBS and the FPA reported no administrative
services interagency training in FY 1977.
Officials of NARS and FSS' Office of Transportation and
Public Utiities point to the value of using "program
practitioners" as instructors in their courses. They value
the close linkages between people who run their programs,
provide advice and assistance to agencies, and who serve
as instructors in their training courses. Often the same
people do all of these things, or, at a minimum, work
closely together. These kinds of linkages are valuable.
B. CSC TRAINING
CSC offered 20 reimbursable interagency courses in the
procurement field in FY 1977 including two courses relating
to grants administration. Course offerings vary from 2 - 10
days in length and are offered in Washington and in the field.
Most of the courses are taught for the CSC by contract instruc-
tors.
Three of the CSC procurement courses cover the same
subject matter that is covered by FSS Training Division
courses. The CSC also has a space management course which
it offers infrequently and a new "Travel Regulations and
Procedures" course which it has offered twice in FY 1978
in Washington and plans to conduct in the regions. FSS'
Office of Transportation and Public Utilities helped the
CSC develop this course. This latter course seems to dup-
licate a similar course offered by GSA Regional Offices.
(NOTE: Statistical data on FSS, NABS, and CSC interagency
training is summarized in Appendix A. Cost data is sum-
marized in Appendix B).
C. DEPARTMENT OF DEFENSE (DOD) TRAINING
DOD has extensive training programs in administrative
services fields, especially supply and procurement. All
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of these courses are designed for DOD civilian and mili-
tary personnel. DOD is doing a good job of meeting its
needs. DOD makes extensive use of the supply and procure-
ment courses offered by GSA and the CSC. DOD admits some
trainees from the non-Defense agencies (1 - 2 percent of
the total number trained by DOD). These spaces are eagerly
sought as DOD courses are considered to be better than GSA
and CSC courses. The civilian agencies which use DOD courses-
get far fewer "slots" than they want. DOD does not charge
agencies tuition, but travel and per diem expenses usually
exceed what it would cost to send a trainee to a local GSA
or CSC course.
D. FEDERAL ACQUISITION INSTITUTE (FAI)
FAI is an interagency organization administered by DOD
under the guidance of an interagency board of 'directors.
It has responsibility for upgrading the quality of the
Federal procurement work force. This responsibility
includes the coordination of Government-wide career
programs for procurement personnel. It is not respon-
sible for conducting all Federal procurement training
as is widely believed.
Although FAI is a new organization, it has a number of
programs underway which should result in the improvement
of procurement training. For example, it is working on a
task analysis of the major procurement occupations. This
project will provide detailed information on what procure-
ment personnel do, how they do it, how long it takes, how
often they do it, and what "tools" they use. This informa-
tion will be used to redesign existing procurement training
so that it relates precisely to the needs of the procure-
ment work force. This information will be shared with GSA.
The FAI is also working on programs which will help DOD
and civilian agency procurement schools improve their
training through more effective course evaluation. This
will be especially beneficial to civilian agencies. FAI's
work on career programs for procurement personnel will be
a major step forward. It should do for civilian agency
procurement personnel what has already been done for DOD
personnel--i.e., provide for systematic training and
development. A similar program is needed for other
personnel in administrative services occupations. Agency
managers of administrative services are almost unanimous
in their call for such a program. They think GSA should
take the lead, with help from CSC. One of the issues
addressed by the newly created General Services Council
relates to this need.
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Interviews with agency managers of administrative serv-
ices organizations (17 agency Central Office managers in
Washington and approximately the same number in the Regions
were interviewed), disclosed numerous criticisms of GSA
and CSC conducted interagency training. A number of the
managers thought GSA courses left something to be desired.
A lesser number criticized CSC courses.'It should be noted
that the criticisms generally did not include NARS courses.
The supply and procurement courses received the most cri-
ticism, although transportation and traffic management
seminars were also criticized. The most frequent criticisms
are listed below.
o Course content is too general and too basic
(directed toward procurement and transportation courses).
o In some courses, too much emphasis is placed
on GSA procedures and not enough on the customer agency
needs (directed toward procurement courses).
o Courses are not offered often enough in the
field (directed toward all subject matter areas).
o The quality of instuction is inconsistent.
o There are additional training courses which
should be offered by GSA. These training courses are
listed in Appendix C.
The Supply and Support Services Task Force questionnaire
responses yielded similar results, although agency comments
were generally less specific than the oral comments obtained
in interviews. More than half of the questionnaire respon-
dents rated GSA training as deficient. Some rated it
"satisfactory", but only two agencies called the training
"good" or "excellent".
It should be noted that the FSS Training Division, which
offers supply and procurement courses, regularly collects
participant evaluation data from its attendees when they
complete training. This data indicates that the majority
of participants are satisfied with the training they receive.
It should be noted, however, that experts in the training
field put little stock in 'these so called "happiness" sheets.
They are useful, but tend to be misleading.
Most interagency Government training is accomplished on a
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reimbursable basis. The CSC, which operates the largest
interagency program in Government operates on this basis
for the following reasons:
o Training is designed primarily to meet operating
program needs; it should therefore be treated as a program
cost chargeable to program operations.
o If customers have to pay for training out of
their own funds, they will tend to sponsor only essential
requirements.
o The use of a reimbursable system provides
flexibility to meet changing requirements.
Provide enhanced recognition to the importance of training
and career development of administrative services personnel.
Reduction of organizational fragmentation.
Courses should be offered in all subjects which meet the
essential training needs of the target population.
The needed courses should be offered on a timely basis.
The courses should be available in geographic locations which
minimize travel costs for the largest number of trainees.
Course content and coverage should be relevant to the trainee
work situation.
The training provided should have a positive benefit/cost ratio.
IV. OPTIONS
A. Consolidate all administrative services interagency
training now being provided by-GSA and CSC into one central-
ized organization on the staff of the GSA Administrator. The
centralized organization would have a Te-TTvery capability
in each GSA Region. All training delivered by the new organi-
zation would normally be reimbursable.
1. Advantages:
Would assign responsibility for promoting, developing and
conducting administrative services interagency training
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to one organizational unit in GSA. This step should
improve program administration, and could lead to
improvements in course quality. It would also provide
a focal point for customer agency input to the program--
an essential step to facilitate improvement.
Would increase the perceived status of interagency
training in GSA.
Would aggregate resources now devoted to interagency
training thereby enhancing the opportunity to increase
organizational efficiency and effectiveness.
Would tend to eliminate duplication in course develop-
ment and delivery, as well as in program administration.
Savings achieved could be used to upgrade the quality of
the program and increase course offerings.
2. Disadvantages:
Would remove training from GSA sub-units which have
functional responsibility related to the training.
Would require establishing a field delivery capabi-
lity; therefore, reassignment of some personnel would
be necessary.
B. Transfer all GSA interagency training to some
other agency, probably the CSC. The training would be
centralized in that agency and would be reimbursable.
Except for an increase in the perceived status of GSA
training, would have of the advantages cited for option
A above.
In the case of CSC, would assign the training respon-
sibility to an agency which has more experience conducting
interagency training and which has an existing delivery
system.
2. Disadvantages:
Would have the disadvantages cited in Option A.
Would remove the training from the organization in
Government which has functional responsibility for
administrative services and place it in an agency with
no functional expertise in the subject matter fields
covered.
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In the case of CSC, would place the training in an agency
whose "track record" for administrative services training
has been criticized. In addition, the CSC would oppose
the option as it conflicts with stated CSC policy, i.e.,
interagency training should be done by the agency with
functional responsibility.
Would deny GSA an opportunity to improve its image by
improving its training programs.
C. Leave administrative services interagency training
where it is now, i.e., in the various GSA Services and the
CSC, and continue to offer it on the same terms. Concen-
trate on improving the program in terms of better quality
and quantity of course offerings.
1. Advantages:
Would leave the training? development and administration
in close proximity to the Service with the functional
responsibility it relates to.
Minimal personnel disruption.
2. Disadvantages:
Existing, dispersed staffs would be too few, and in some
organizational units, not qualified, to bring about the
improvements needed.
Does not provide a top management focal point.
D. Discontinue some, or all GSA and CSC administrative
services interagency training, and contract it out to the
private sector.
1. Advantages:
Would permit diversion of GSA and CSC personnel now working
on administrative services training to other program areas.
Would permit coverage of tra.ining subject-matter areas
that are not now covered without adding additional staff
resources.
Would assign the training to organizations which do not
have functional responsibility for the program areas
covered and which would need considerable help from either
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GSA or the user agencies in developing the training. The
CSC now uses contract instructors for most of its pro-
curement courses and there is considerable criticism of
their work.
Greater costs--CSC analyses have consistently demonstrated
that interagency training is far less costly than training
provided by the private sector.
In order to be effective, would require that one or more
GSA units monitor the program, thereby further increasing
the cQst.
Would deny GSA the opportunity to improve its image by
improving its in-house training programs.
V. CONCLUSIONS, PROCESS IMPROVEMENTS, COST IMPLICATIONS
In this paper, it cannot be proven conclusively that a given
increase in the quantity and quality of training for the
Federal administrative services work force will result in
a given increase in the efficiency and effectiveness of
that work force. But, it is reasonable to assume that more
and better training will result in better work force per-
formance. American public and private investments in educa-
tion have made major contributions to increases in product-
ivity in our society--these investments have reaped returns
which far exceed the amounts invested.
As the administrative services training needs of most agen-
cies are similar, it is economical and efficient to meet
these needs on an interagency basis.
-:.There is a considerable amount of interagency administra-
tive services training being accomplished by GSA and CSC.
Howev.er,i'th;e..criticism directed at this training indicates
that.,i-t:'.'i`s:hot nearly as effective as it should be. This
training must be improved.
Although some additional financial and staff resources
would be needed to achieve full program effectiveness,
some improvement could be achieved by reorganizing
resources. Consolidation of GSA and CSC interagency
training could result in savings of $150,000 - $200,000
per year, while at the same time improving program admini-
stration and delivery. These savings should be "plowed
back" into the program to achieve further quality improve-
ment and provide new course offerings.
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1. A resource enhanced centralized organization
should be funded to conduct a series of task analyses for
the major administrative services occupations (other than
procurement). These task analyses should be similar to
those now being planned by the FAI for the procurement
occupations. Data obtained from these analyses could then
be used to improve existing courses and to develop needed
courses.
2. A Government-wide career development program
for administrative services personnel should be developed.
The FAI is developing such a program for procurement personnel,
but similar action is needed for the other administrative
services occupations. The new centralized administrative
services training organization should be assigned responsibi-
lity to administer this program. However, the program should
be developed in cooperation with the recently established
General Services Council. That Council has already decided
to consider GSA's role in such a program.
3. Course content must be reviewed and revised
where necessary, and different methods of instruction should
be considered. The centralized organization should employ
or contract for specialists who are well-qualified for
instructional development. CSC and DOD can provide this
assistance.
4. The new consolidated training organization should
establish an effective system for improving course evaluation
to ensure that its course offerings are responding to the
needs they are designed to meet. The CSC has a staff of
well-qualified consultants who should be able to help in
establishing the evaluation system.
5. Steps must be taken to ensure that linkages
between program operations and training are maintained.
For example, GSA and customer agency personnel should
be routinely used in the development of the training
program. They should help to decide what courses to
offer and should serve as advisors in developing course
content. They should also be used as instructors. Some
functional specialists could be rotated through the train-
ing office on two - three year assignments. This latter
practice is now being used by several excellent Government
training organizations. Agency and GSA operating programs
input to the centralized training program would also be
enhanced by establishing two "advisory boards", one made
up of customer agency managers of administrative services,
perhaps a committee of the new General Services Council;
and the other made up of managers from the GSA Services.
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Appendix 13 indicates that GSA Services and the CSC spent
about $1.9 million for interagency training for the admini-
strative services in FY 1977 (all but $70,500 of this was
reimbursable). That amount will probably increase to
about $2.1 million in FY 1978 and $2.3 million in FY 1979
if the program continues to operate without change.
Although significant program improvement can be achieved
without additional funding, the interagency training pro-
gram could be made more effective if additional funding
were provided at the outset. These additional funds would
be used to further improve course maintenance, to develop
new courses, to develop new course delivery systems (e.g.,
programmed courses, correspondence courses, etc.), to con-
duct task analyses, and to develop a career system.
The following is a five-year projection of costs:
Additional Appropriated Funding
in thousands of dollars
FY 1979-1983
FY-79
FY-80
FY-81
FY-82
FY-83
New Course Development
100
New Delivery Systems
100
100
100
50
Task Analyses
Career System Develop-
ment and Maintenance
35
25
25
25
25
Totals
$385
$375
$375
$225
$25
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An Overview of,.-Training offered by GSA and
CSC in the Administrative Services, FY-1977
No. Of
Courses
No. of Sessions
Wash/Field
No. of Partic.
Wash/Field
Reimb./
Non-Reimb.
Staff
Size
Operating
Cost
FSS - Training Div.
9
53/63
1,875/2,200
Reimb.
14.0
$426,000
FSS - off. of Trans.
and P.U.
15
61/19
530/1,678
Non-Reimb.
3.7
70,500
20
9/91
268/1,482
Reimb.
10.0
572,000
20
63/117
2,100/1,314
Reimb.
13.8
822,000
Totals
64
186/290
4,773/6,674
N/A
41.5
$1,890,500
NOTES:
o CSC uses contractor instructors extensively, therefore, staff figures are deflated.
o DOD figures not included, as DOD training is designed to meet DOD needs, and not interagency
needs (however, some non-DOD employees (about 2%) do participate in DOD courses).
o ADTS not included because its interagency training is really orientation training.
o PBS and FPA not included because they offered no interagency training in FY-1977.
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Analysis of Program Costs (in thousands) in FY-1977
Course
Ad
i
i
i
Course
Devel. &
m
n
strat
on
Delivery
Maintenance
Totals
FSS - Training Division
$61.0
(14%)
$221.0
(52%)
$144.0
(34%)
$426.0
(100%)
FSS - Office of Trans.
& PU
10.3
(15%)
38.0
(54%)
22.2
(31%)
70.5
(100%)
NARS
60.0
(11%)
482.0
(84%)
*30.0
(5%)
572.0
(100%)
57.5
(7%)
608.3
(74%)
*156.2
(19%)
822.0
(100%)
$188.8
(10%)
$1,349.3
(71%)
$352.4
(19%)
$1,890.5
(100%)
* NARS and CSC course development and maintenance costs were abnormal in FY-1977; therefore, the
H actual figures were adjusted to depict a "normal" year.
N
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Appendix c
Courses Needed to Meet Needs of
Federal Administrative Services Workforce
1. Interviews and questionnaire responses revealed some adminis-
trative services training needs that are not now being met.
The list includes:
o
:Energy Conservation
o
Personal Property Management
o
Real Property Management
and
Administration
o
Transportation Management
(as
opposed to operations)
o
Contracting for Research
and
Development
o
Space Management*
o
Administrative Officer Training
o
Administrative Services Manager Training
*
Now offered periodically, but not nearly enough.
2. Most administrative services managers had not analyzed
their staff training needs and could not identify specific
needs. They had a vague belief that needs existed and
could be identified if systematic analyses were made. In
fact, this is true. Systematic task analyses of the
various administrative services occupations would identify
other training needs.
3. One of the major responsibilities of the proposed consoli-
dated interagency training organization would be to keep
abreast of training needs as they develop and to design
and offer training to meet these needs. An interagency
committee (perhaps a subcommittee of the newly established
General Services Council) should be set up to advise the
training organization on training needs.
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ISSUE NO. RA-3: ADVISORY SERVICES TO AGENCIES
This paper presents an assessment of GSA's role in
providing advisory services to other Government depart-
ments and agencies. Most advisory services consist of
management consultant-type studies of administrative
functions. These studies typically result from an agency
request for GSA experts to solve a particular problem or
improve a management system.
The ASRP study involved interviews with GSA and other agency
personnel, interviews with officials of large corporations
and state governments, analysis of responses to question-
naires submitted by major departments and agencies, and
review of existing statutes and regulations.
This assessment suggests that, with limited exceptions,
GSA has not adequately fulfilled its advisory role.
II. BACKGROUND/CURRENT SITUATION
The GSA Services have provided consultant-type services
to other departments and agencies since the early 1950's.
In replies to a study questionnaire, the majority of
agencies replying indicated a continuing interest in
being able to obtain these services.
The involvement in providing advisory services varies
considerably within GSA. Data on consultant services
provided by each GSA Service in FY-1977 are shown in the
attachment.
FPMR coverage relating to the availability of consultant-
type services and how to obtain the services varies by
GSA Service. Coverage relating to the functions of NARS,
ADTS, and PBS is extensive and provides information on
the advisory services available. Coverage relating to the
availability of advisory services in FSS is incomplete.
Only transportation and public utilities are covered in
any depth. Moreover, information on how to obtain advisory
services from any of the Services is incomplete.
There is a great demand for consultative assistance on
space management which PBS is unable to meet for lack of
resources. The need for this assistance can probably be
reduced to some extent by providing more space manage-
ment training.
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There is no single organizational entity within GSA with
the responsibility for providing leadership and coordination
of the advisory services function. Within FSS, the Market
Research and Marketing Division has as part of its mission:
"upon request, perform supply management studies in Federal
agencies and coordinate with the National Liaison Division
in providing recommendations to improve internal supply
management and operating programs . . ." There is no perma-
nent staff assigned to this function. With the exception
of a major study conducted for the Republic of Liberia,
this division has done little in providing advisory services
of the type described in this paper.
Agency responses to an ASRP questionnaire and interviews
with agency managers of administrative services yielded
mixed responses regarding GSA advisory services. Most
managers of GSA administrative services think:
o GSA should provide consultant-type advisory services
in all its major functions;
o Agencies would be willing to pay for advisory services
if accomplished professionally by competent people. However,
these officials have reservations about GSA's ability to
provide the requisite number of skilled personnel to produce
a professional product. An exception to this view is work
performed by NARS.
o GSA must become more service-oriented if it is to do
the advisory services job well. Agencies state that some
of the consultant help they get now is more oriented to
GSA needs than it is to customer agency needs.
III. CRITERIA FOR IMPROVEMENT
A cadre of highly qualified, service-oriented, professional
personnel.
A single point of contact for potential customers capable
of evaluating customer needs and GSA's ability to provide
them.
Uniform policies and procedures applicable to the availability
of advisory services and how to obtain them.
A continuing monitoring and evaluation of advisory services
being performed for customers.
An effective feed-back mechanism from customer agencies.
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Adherence to government policies regarding government
competition with private enterprise as set forth in
OMB Circular A-76.
IV. OPTIONS
1. Establish a small organization on the staff
of the Administrator responsible for the planning, control,
coordination, and monitoring of GSA's advisory services
program. This organization would: conduct market surveys
of potential customer needs; assess GSA abilities to satisfy
these needs; serve as the focal point in relations with
customer agencies; establish uniform policies and proce-
dures; develop regulatory coverage and monitor work perfor-
mance. The actual consultant-type work would be performed
by personnel from the applicable GSA Service on a fully
reimbursable basis.
a) Advantages:
Permits a realistic determination of user needs for advisory
services and GSA's ability to provide them.
Enhances the planning for and utilization of GSA resources.
Improves communication with customer agencies.
Permits the adoption of uniform policies and procedures
together with appropriate regulatory coverage.
Insures that actual work performed satisfies the customer
agency.
Identifies subjects requiring additonal policy guidance
and/or training assistance.
Facilitates measuring the cost effectiveness of the
advisory services program.
Facilitates the view of the Administrator vis-a-vis service
to other agencies.
Enhances the service orientation image of GSA.
b) Disadvantages:
Will require additional personnel resources.
May adversely affect existing relationships between indivi-
dual GSA Services and customers.
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2. For each GSA Service, establish an organization
that would be responsible or the p annin , control, coordi-
nation, and monitorin of that Service s advisory service
function. This organizational element would perform the
same functions previously identified under the first option.
a) Advantages:
Same advantages as set forth under the first option with the
exception of proximity to the Administrator.
Lower staffing requirements.
b) Disadvantages:
Reduces the opportunity for uniform policies, procedures,
and regulations on an agency-wide basis.
Location in a Service which has a line responsibility may
diminish the objectivity and effectiveness of the advisory
function.
B. PROCESS IMPROVEMENTS
Regardless of the organizational structure, the following
process reforms should be adopted:
1. Conduct an annual survey of government depart-
ment and agencies aimed at determining the extent and type
of advisory services which GSA may be asked to provide.
2. Assess GSA's ability to meet potential customer
needs and their impact on GSA's resources, budget, and
mission performance.
3. All advisory work should be fully reimbursable.
4. Provide for a continuing monitoring of all work
being performed and a reporting system that ascertains user
evaluation of the work.
5. Document all costs associated with performance
and establish a customer feed-back system to obtain results
of the advisory recommendations.
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GSA Consultant-Type Advisory Services, FY-1977
Staff Yrs. Avg. Non-Reimb. Reimbursable
Expended Grade Service Provid
d
e
Income
ADTS
54.0
GS-13
$ 134,000
(10%)
$1,200,000
(90%)
NARS
48.0
GS-13
None
1,200,000
(100%)
PBS
47.8
GS-12
1,200,000
(60%)
825,000
(40%)
GS-13
80,000
(57%)
60,000
(43%)
GS-14
225,000
(100%)
None
GS-13
$1,600,000
(30%)
$3,800,000
(70%)
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-DATE
Nov 1977
SUBJECT
Administrative Services Reorganization Project OL 7
5025
24 May 78
Trans of Draft Rpts - Admin Services Reorg Proj OL 8
2385
13 Jun 78
Letter to Joseph F. Malaga Real Prop Task Force
Findings and Alternatives
Trans of Draft Rpts - Admin Services Reorg Proj OL 8
2790
Copy of Publication PRESIDENT'S REORGANIZATION
PROJECT One final copy - One reproduced copy
-3 Jul 78
MEMO FOR PFjPS FR RECD Comments on Issue S-9, Public
U
Utility Management, Administrative Services OL 8
3072
5 Jul 78
Draft Task Force Reports
5 Jul 78
MEMO FOR P&PS FR P&PD Admin Services Reorg Proj
-5 Jul 78
MEMO FOR P&PS FR SD Presidents Reorganization Project
Findings and Alternatives OL 8
3088
7 Jul 78
Letter to Joseph F. Malaga SUB Administrative
7 Feb 79
Services Reorganization Project
Copies of letters and memoranda concerning the
President's Reorganization Project FR DL for DDA OL 9
0535
11 Jun 7 9
NOTE FOR Comptroller FR Don I. Wortman DDA
Presidential Management Improvement Council OL 9
2409
10 Sep 79
MEMO P&PS FR OSB SUB National Supply System OL 9
3643a
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Next 1 Page(s) In Document Exempt
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r sident's
F -I o rg a ni z ati o n
Project
Administrative 7er^Vi f`%S
i~~ rc ,.~- aUon i ojeci
Supply and Support Se; vices
-I'Cs1< I cart
Findings and Ai ernativ :s
ti'U.Un 15", 1978
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SUPPLY AND SUPPORT SERVICES
JUNE 15, 1978
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TABLE OF CONTENTS
SECTION
PACE
A.
SUPPLY AND SUPPORT SERVICES
1. EXECUTIVE SUMMARY . . ? ? ? ? ? ? ? . ? ?
2. ISSUES
S-1: DESIGN CONCEPT FOR A
NATIONAL SUPPLY SYSTEM
S-2: CRITERIA FOR CONSOLIDATION
21
OF DEPOTS . . . . . . . . . . . . .
S-3: FSS SUPPLY OPERATIONS . . . . . . .
24
S-4: CUSTOMER SERVICES . . . . . . . . .
36
S-5: VENDORS AND THE FSS
53
PROCUREMENT PROCESS . . . . . . .
S-s: PERSONAL PROPERTY UTILIZATION ? ?
59
S-7: PRINTING SERVICES . . . . . . . . .
64
S-8: STRATEGIC AND CRITICAL
70
MATERIALS STOCKPILE . . . . . . .
S-9: PUBLIC UTILITIES MANAGEMENT . . .
73
S-10: COOPERATIVE SUPPORT SERVICES ? . .
79
S-11: MOTOR VEHICLE MANAGEMENT . . . . . .
84
S-12: TRANSPORTATION AND TRAFFIC
MANAGEMENT . . . . . . . . . . . . .
92
B.
REGULATORY AND ADVISORY SERVICES
1. EXECUTIVE SUMMARY . . . . . . . . . . . . 97
2. ISSUES
RA-1: GSA'S REGULATORY ACTIVITIES . . 100
RA-2: INTERAGENCY TRAINING . . . . . . . 109
RA-3: ADVISORY SERVICES TO AGENCIES . . . 122
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 ADMINIATpA'l~efVEorSF 1~~00~ /~8 ,,1#, ~-Qg f9~R@pp100150001-9
SUPPLY AND SUPPORT SERVICES TASK FORCE
EXECUTIVE SUM74ARY
BACKGROUND
The First Hoover Commission led to enactment of the Federal
Property and Administrative Services Act of 1949, which
established the General Services Administration (GSA), and
vested in its Administrator responsibility for developing
a comprehensive Federal system for the delivery of supplies
and related support services. This system was to be man-
datory for all agencies of the Executive Branch, except
that the Secretary of Defense could exempt the Department
of Defense from the provisions of the Act. Under the Act,
the Administrator was:
o Empowered to prescribe policies and directives
necessary to ensure compliance with the purposes
and goals of the Act.
o Granted broad latitude to determine whether to
perform functions or responsibilities within GSA,
or delegate them to other agencies.
o Granted similar flexibility in establishing or
revising GSA's internal organization.
o Directed to consult with other interested agencies
to secure their advice and assistance in implemen-
ting the Act.
To carry out the responsibilities related to supply and
support services, the Federal Supply Service (FSS) was
created as a key element in the new Administration. FSS
is responsible for the following major functions:
o Regulatory, covering responsibility for developing,
maintaining and revising Federal Procurement Regu-
lations, Federal Property Management Regulations,
Federal Travel Regulations and other Government-
wide regulations.
o Supply, encompassing the economical and efficient
procurement and supply of a wide range of common-
use, commercially available items and services for
all Federal agencies including the Department of
Defense.
o Support Services, including assistance in negotiatinq
long-term public utilities contracts and transportation
rates; representing the civilian agencies before
Federal, State and local transportation and utility
regulatory bodies; ensuring timely utilization,
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rehabilitation or disposition of excess or surplus
property; operating interagency motor pools and
providing centralized interagency traffic management
and transportation services; and auditing of all
agencies' transportation payments. It is also
responsible for acquisition, inspection, storage,
maintenance and shipment of materials for the
Strategic and Critical Materials Stockpile.
Although this system was established to be the central,
Government-wide-supply mechanism, there is less than total
use of it by Federal agencies. Agency officials with respon-
sibility for administrative functions are critical of many
aspects of the current system. Clearly, the potential for
development of a Government-wide system for the delivery of
supplies and support services has not been fully realized.
A task force of the Administrative Services Reorganization
Project (ASRP) was established to examine the adequacy of
supply and support services on a Government-wide basis and
consider organizational options and management improvements.
The task force conducted extensive interviews and gathered
data from executives and operating personnel of Federal
departments and agencies; officials of GSA, GAO and OMB,
r(lanufacLuring, reLailinig and services industry executives;
state government officials; and representatives of trade,
special interest and professional organizations. The task
force listened to and evaluated the concerns of Government
contractors and vendors. It reviewed the constraints im-
posed on the delivery of services by legislation, Congres-
sional overview and the budget.
The issues described below were selected for study as having
the greatest potential for improvement in the delivery of
supply and support services. Issues 9-:3, Supply Operations,
S-4, Customer Services, and S-5, Vendors and the FSS Pro-
curement Process, are GSA oriented. Alternatives and recom-
mendations included for these three issues are compatible
with the ultimate development of a National Supply System
as presently covered by issues S-1 and S-2. ASRP recommends
that the criteria for any future changes in the supply oper-
ation of FSS be based on the National Supply System plans and
policies. Review of issues S-1, a National Supply System, and
S-2, Consolidation of Depots, were jointly sponsored by the
ASRP and OMB's Office of Federal Procurement Policy (OFP{?).
ASRP also recommends that work on these two issues be continued
on a systematic basis. The S-1 and S-2 issue summaries, there-
fore, do not represent final findings and alternatives, but
rather are current status reports.
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FINDINGS AND ALTERNATIVES
A. SUPPLY FUNCTIONS
S-1: A National SupplySystem - Major supply systems are
operated by numerous Federal agencies, including GSA, Veterans
Administration, Defense Logistics Agency and each of the mili-
tary services. Each system is essentially independent of the
others, resulting in significant duplication of policies,
procedures, data systems and corresponding overhead staffs.
A joint ASRP-OFPP task group was established to develop
a design concept for a National Supply System which would elim-
inate avoidable duplication among the existing systems and
reduce operating costs. The Task Group has prepared a
preliminary definition of a National Supply System, including
a description of its principal features and characteristics,
and has also developed a plan and schedule for further defining
and describing the system in all of its detailed policies,
programs and procedures. By reducing the redundancy in present
Federal supply activities, it is estimated that personnel
and related savings can eventually amount to $100 million a
year or more. After approval, the task group's reports will
serve as the basis for the work of an implementation task group
to be established. The latter group will develop a detailed
description of the National Supply System and a phased integrated
plan for implementing that system.
S-2: Consolidation of Depots - A total of 67 major wholesale
general depots are operated by 10 Federal agencies, primarily
the DOD, GSA, and VA. DOD and GSA have completed studies of
intra-agency depot consolidations. To promote further
Government-wide consolidations, a joint ASRP-OFPP task group
was established as an adjunct to the National Supply System
concept. The task group has prepared a comprehensive inventory
of the Government's wholesale depots and is completing its
work on criteria for further consolidating those facilities.
The DOD and GSA studies could result in as many as 20 fewer
depots. It is estimated that a substantially greater number of
depots could be consolidated through full implementation of
the National Supply System. A 20 percent reduction in the
current operating costs of the existing 67 common supply
depots for personnel, space and transportation activities could
eventually result in savings amounting to more than $200 million
a year. After approval, the task group's report on recommended
criteria will serve as the basis for the work of an implementa-
tion task group to be established. The latter group will de-
velop a detailed consolidation plan and a uniform, Government-
wide depot operation procedure.
S-3: FSS Supply Operations - FSS supply policies are devel-
oped at the headquarters level by four different functionally
oriented offices. Supply operations are fragmented among
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several F535 off ices in Washington, D.C. , the ten 3S,-% regional
offices and three commodity centers. Overall. effectiveness
and responsiveness could he improved with a corresponding
reduction in costs by removing supply operations out of
Washington and by consolidating field operations. At the
central office level, another Deputy Commissioner position
responsihile for coordinating all supply rianagement policy
should be established. At the field level, all procurement,
inventory management and specifications development operational
activities should be transferred into one or more commodity
centers or assigned to selected 'GSA regional offices. ''lajor
process improvements recommended for FSS include: full cost
disclosure pricing; acceleration of civil agency participation
in the Federal Catalog System; stocking items closer to cus-
to!,mers; reduction of depots; improved ADP programs for dis-
tribution programs; and further refinement of the supply
economic decision making nodel.
S-4: Customer Services - Among the significant findings con-
cerning cusr_nmer services are that: (1) insufficient resources
prevent the opening of additional GSA self-service stores,
although studies confirm the need and demand by a:rencies for
these popular retail supply outlets; (2) marketing activities
are not effective or responsive to customer requirements;
(3) the customer liaison function performed by customer service
representatives is decentralized to the GSA regions with little
central direction; and (4) ordering and order processing is
complex, 'fragmented and highly system-centered. Improvements
recommended are: (1) give customers the option of buying locally;
(2) expand the number of retail outlets for GSA supplies;
(3) strengthen marketing organizationally and functionally,
increase customer information sources and develop customer pro-
files; (4) establish a national customer liaison program with
strong central direction and increase the number of field customer
service representatives; and (5) adopt standard requisition forms,
implement a telephone ordering system for small users, and
centralize order processing at a single facility.
1.3-5: Vendors and the FSS Procurement Process - Federal procure-
ment procedures, forms and specifications are frequently
criticized by vendors as unnecessarily complex. Certain r)rocess
improvements have been initiated by FSS in concert with OFPP to
simplify regulations, contract forms, and contract language, and
to minimize the use of design specifications in favor of functional
specifications and emphasis on procurement of commercial products.
Further, the dollar levels for activating those requirements in
Government contracts which promote various Federal social and
economic policies lack uniformity and do not reflect changes in
economic conditions. A uniform $25,000 for application of all
such social and economic policies, with provision for future
adjustments, is recommended.
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B._ SUPPORT SERVICES
S-6: Personal Property Utilization - GSA is responsible for
Government-wide utih zation of excess personal property and
sale of surplus personal property. DOD is responsible for
internal screening of excess property generated by the military
services prior to referral to GSA and for worldwide sale of
surplus DOD personal property. Other Executive Branch agencies
sell certain types of property by separate legislative exemptions
or delegations of authority. The disposal of excess personal
property can be improved by assigning GSA Government-wide
responsibility for the domestic sales functions, thereby elim-
inating the duplication that now exists among GSA, DOD and other
Executive Branch agencies. DOD would continue to be responsible
for the disposition of DOD foreign excess property and demilitari-
zation of DOD material and equipment. In addition, the dis-
posal process can be facilitated by providing holding centers
for agency excess personal property awaiting disposition.
S-7: Printing Services - Present arrangements for printing and
reprogranhic ser lv ces-do not effectively meet the needs of the
Executive Branch. The Legislative Branch, through the Joint
Committee on Printing and GPO, controls the total Government
printing program. There appears to be some redundancy of staff
between GPO and the larger Executive 'Branch agencies, and no-
where in the Executive Branch is there any central policy over-
view on printing matters. If the duplicative procurement
processes are eliminated, organization and operational respon-
sibilities clarified, the total printing and reprographic ex-
penditures could be substantially reduced. ASRP suggests two
alternatives: (1) a policy management and review office to
provide leadership and direction in the delivery of printing,
reprographic, and publication services; (2) reactivate the inter-
departmental Committee on Printing and Processing. Both would
provide a single point within the Executive Branch for policy
development and standards work, needed legislative proposals for
Presidential consideration, program review and coordination of
requirements, technological assessments and :market analyses.
S-8: Strategic and Critical materials Stockpiling - National
Stockpile policy and goal setting functions are the responsibility
of GSA's Federal Preparedness Agency (FPA), which is being recom-
mended for consolidation with other Federal emergency preparedness
and response activities into a new agency. Remaining stockpile
operations are fragmented among GSA's Federal Supply Service
(acquisition, inspection, storage and maintenance), Office of
Finance (inventory records keeping), and FPA (stockpile disposal).
Under the present arrangement, no single official below the level
of the Administrator is responsible for all stockpile operations.
To improve control, coordination and accountability, all GSA
stockpile operations should he consolidated into a single office
within the Federal Supply Service.
5
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S-9: Public Utilities Management - Public utilities services
to^Federal-agencies are reliable and effective, but because
there is no aggressive central management of Federal/public
utilities policies, the Government probably has excess costs
of over $30 million annually. Emphasis should be placed on
procedures to eliminate late payment liability of utility
bills, reduce peak-demand costs through improved load-management
and conservation, and reduce total cost of utilities through rate
or tariff reductions in cost-of-service cases. It is recommended
that GSA's role be expanded and enhanced with a new charter to
develop Government-wide public utilities policies, procedures
and management systems.
S-10: Cooperative Support Services - Establishing centralized
support services for agencies located in the same building
or in close proximity is a viable alternative for delivery of
certain administrative services to Federal agencies. This con-
cept has not been fully implemented or supported by Executive
agencies. ASRP recommends that GSA, with the support of OMB
and Heads of Departments and Agencies, vigorously pursue the
application of cooperative support services on a local basis
in buildings or complexes where large multi-agency populations
exist. ASRP also recommends that GSA conduct feasibility
studies for establishing cooperative support service agreements
on a nation-wide basis for selected services such as payroll and
voucher processing to smaller non-departmental organizations.
S-11: Motor Vehicle Management - The Federal domestic motor
vehicle-fleet-approaches 400,000 with GSA motor pools consti-
tuting about 20 percent of ch total., Management and operation
of the fleet is fragmented among many agencies, with wide
variations in costs and effectiveness. Alternatives for im-
provement are to strengthen GSA's Government-wide fleet
management role through legislation and to consolidate
duplicative motor pools. Process recommendations to improve
management and reduce costs are: establish a separate working
capital fund for the Interagency Motor Pool System (IAMPS) with
authority for retention of earnings to meet new agency vehicle
requirements; depreciate IAMPS vehicles and establish user rates
based upon replacement costs rather than acquisition costs to
provide adequate reserves for scheduled replacements; capitalize
vehicles consolidated into the IAMPS at replacement cost less
current market value for the same reason; replace IAMPS sedans
and station wagons every 3 years or 50,000 miles; and establish
a uniform system of inventory and cost reporting. Savings up to
$60 million annually could be expected from these and other
improvements.
S-12: Transportation and Traffic Management - GSA has not been
aggressive in ~ex rcising its statutory responsibilities for
Government-wide transportation and.traffic management-
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The present orqanizational arrangement, which combines this
function with unrelated activities, tends to de-emphasize trans-
portation management. A separate organization to perform GSA's
present statutory responsibilities could improve management.
The following process recommendations could also result in cost
savings of up to 814 million annually: establishing a compre-
hensive routing control system for large civil agency shipments,
do more FOB origin procurement rather than FOB destination,
and additional transportation audits.
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f -~
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ISSUE: NO. S-l: A NATIONAL SUPPLY SYSTI 4
1. INTRODUCTION
This is a status report on an interagency effort to define
and describe a National Supply System for use by agencies
of the Federal Government.
National Supply System Task Group 'o. 1 was formally
established on February 3, 1978, under the aegis of the
National Supply System Advisory Board in cooperation with
Administrative Services Reorganization Project. It was
charged with (a) preparing a preliminary definition of a
National Supply System, including a description of its
principal features and characteristics, and (b) developing
a plan and schedule for further defining and describing the
system in all of its detailed policies, programs, and proce-
dures. The task group is composed of representatives of
Treasury, DOD, GSA, VA, DOT, DU-UEW,W, OFPP, and the ASAP.
II. BACKGROUND AND CURRENT STATUS
A "National Supply System", single, integrate d
Government-wide system for the procurement and supply of
materials used by Federal agencies, does not now exist.
Instead there is a proliferation of diverse, non-integrated
logistics procedures among. Federal agencies. :Many of these
procedures, developed on the basis of limited perspectives
and in response to immediate needs, are restricted in appli-
cation and redundant in terns of Government-wide supply needs.
such as the Federal Catalog System,
chanisms
i
,
n me
Certa
offer the potential for Government-wide use, but this
potential has not been developed. In summary, the present
Federal logistics system is marked by duplication in
functions, inefficiency in operation and fragmentation of
responsibilities.
To eliminate these conditions and promote economy in Federal
procurement and supply practices, the Administrator for
Federal Procurement Policy established the National Supply
System Advisory Board in October 1976. The Advisory Board
is a high level, interagency forum consisting of representa-
tives from DOD, Interior, DOT, GSA, VA, and DREW. In January
1973, arrangments were made to combine the Advisory Board
effort to define the National Supply System with closely-
related efforts of the ASRP.
8
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On March 14, 1978, Task 'Group. vo. 1 completed and forwarded
the preliminary definition of the National Supp.ly System to
the National Supply System Steerin:j Committee. On April 10,
1978, the Steering Committee, consisting of representatives
of DOD, GSA, VA, OFPP, and the ASRP, unanimously approved the
definition, as modified in minor respects, and forwarded it to
the Advisory Board for approval. (A copy of the preliminary
definition is attached as Appendix A). Pending final approval
of the definition by the Advisory Board and formal sufm!(iission
to the ASRP, Task Group No. 1 was authorized to develop tie
proposed plan and schedule for further defining and describing
the National Supply System. On May 17, 1.978, Task Group, No. 1
completed the proposed plan and schedule and forwarded it to
the-Steering Committee for review (cooy attached as Appendix B).
It is expected that the Steering Committee arid the Advisory
Board will have completed their deliberations on the products
of the Task Group by July 1, 1978.
The concept of the National Supply System, as developed to
date, involves the establishment of Federal-wide uniform
policies and procedures that cover all the logistics
processes associated with the wholesale supply of items of
personal property: acquisition, supply distribution,
requisitioning, depot and warehousing Processes, transpor-
tation, cataloging, financial procedures and automated data
processing. It envisions a single, top-level executive
authority, reporting to the President, with responsibilities
for issuing uniforu policies procedures an:, manage;cent staTIdlards
governing the operation of the system. Operational roles and
responsibilities of National Supply System participants will
be developed following approval of the functional aspects
(policies and procedures) of the National Supply Systems.
By reducing the redundancy in the present system, it is
estimated that personnel and related savings will eventually
amount to an estimated 5100,000,000 a year. The savings will
be realized over a period of several years as the proposed
policy, functional and ADP reforms are implemented.
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APPENDIX A
NATIONAL SUPPLY SYSTEM
PHASE I - PRELIMINARY DEFINITION AND DESCRIPTION
1. PREAMBLE
The purpose of this document is to provide a definition of a National Supply
System (NSS), along with a brief description of the principal features and
characteristics of that System.
II. DEFINITION
The National Supply System (NSS) is a single, uniform, integrated Federal-
wide system for the acquisition, supply, and distribution of personal property and
related services, with authority to establish, enforce, and monitor policies and pro-
cedures, world-wide in scope and application.
Ill. OBJECTIVES
The System will be one which is designed to accommodate both normal
peacetime, as well as emergency and defense-wartime requirements. The System
will seek to:
A. Eliminate overlap and duplication, improve cost-effectiveness and provide
for more effective utilization of existing Executive Branch personnel in the
management of acquisition and supply programs.
B. Establish a single, coherent, predictable, and responsive process for use
by Executive Branch agencies in acquiring supplies and related services
necessary for mission performance with flexibility essential to
accommodate the diverse needs and capabilities of the participants.
C. Provide for a greater degree of reliance on the private sector in meeting
supply and logistics needs so that:
1. Government duplication of private sector capabilities can be eliminated;
and
2. The Government's potential for benefiting from competition within the
private sector can be enhanced.
D. Establish a Government-wide comprehensive approach to the resolution of
acquisition and supply problems in the Executive Branch.
E. Create a single body of complementary procedures for use by manufac-
turers and suppliers in responding to the supply and service needs of Ex-
ecutive Branch agencies.
F. Facilitate the implementation, in a more rapid fashion, of technical and
systems improvements on a Government-wide basis.
G. Assure that policies associated with acquisition and supply reflect and
respond to the national security and other national interests, as directed by
the President.
NATIONAL SUPPLY SYSTEM STEERING COMMITTEE
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IV. FUNCTIONS
The System would encompass the following:
A. A single, unified body of supply policies, program directives, and related
central management activity.
B. A cataloging system for the identification, specification, and standardiza-
tion of items.
C. A standard system for the acquisition of material.
D. An item management system for designating managers for individual
items and/or classes of items which will optimize the one item/one
manager concept.
E. A standardized requisitioning and issue procedure with automated and
manual capabilities, and an order status tracking capability.
F. A standardized logistics communications system.
G. A system of contract administration to include quality assurance.
H. A single, integrated distribution system to accommodate the receipt, in-
spection, storage, issue, and movement of material in which the depot
facilities will be used on a common-use basis.
1. A single integrated system for the reutilization and disposal of excess and
surplus property.
J. A system for collecting, developing, communicating, and disseminating
acquisition and property management data which takes into account the
needs of the Congress, the Executive Branch, and the private sector.
K. Representation before appropriate Federal and State regulatory bodies.
L. Continuous close cooperation with the Central Personnel Management
Authority to promote programs for improved qualification and position
classification standards and similar activities towards improving the
recruitment, training, career development, motivation and performance
evaluation of acquisition and supply personnel.
V. STRUCTURE
A. The System will be applicable to each department, agency, committee,
commission, and board of the Federal Government. Each entity will par-
ticipate in the system as a manager, operator, or user, or in a combination
of these roles. Executive Branch entities will participate under a mandatory
charter; the Legislative and Judicial Branches may participate on a volun-
tary basis; however, if they choose to participate, they will do so within the
same parameters and restrictions as the Executive Branch. NATO and
other friendly foreign countries will also be participants in selected
aspects of the System. Contractors and quasi-governmental agencies may
become users of the System when sponsored by participants.
B. The System will include:
1. A single, top level, central, governing executive authority, designated by
and reporting to the President;
2. Full and continuing representation in major policy and program formula-
tion and key decision making by system participants, at the level of
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department/agency head, and in relation to the size and significance of
such participants' contributions to, and reliance on the System;
3. Consultative mechanisms to assure continuing advisory and supportive
inputs from recognized, knowledgeable private sector expertise to
assure that full consideration is given to commercial, industrial, and
socio-economic aspects and impacts of Federal supply activities; and
4. A policy and management structure to assure fulfillment of statutory
and Executive Branch requirements by developing standardized
policies, procedures and management standards goverriing the opera-
tion of the System, and to provide for evaluation and compliance. Opera-
tional mechanisms will assure that implementation of National Supply
System policies and programs associated with the acquisition and con-
trol of principal end - and related depot-level repairable - items of per-
sonal property which are mission-unique to a single department or
agency will be the responsibility of that department or agency unless
specifically excepted by law or Presidential direction.
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NATIONAL SUPPLY SYSTEM
PHASE II - PLAN AND SCHEDULE FOR COMPLETING
PRELIMINARY DEFINITION AND DESCRIPTION
1. INTRODUCTION
The purpose of this document is to provide a recommended plan and schedule
for completing the Preliminary Definition and Description of the National Supply
System which was submitted by Task Group No. 1 to the National Supply System
Steering Committee on March 14, 1978, and tentatively approved by the National
Supply System Advisory Board (NSSAB) on April 20, 1978.
If. SCOPE OF PLAN AND SCHEDULE
Completion of the definition and description of the National Supply System
(NSS) will include:
A. The further definition and delineation of the NSS, description of its
functions and their components, and, upon approval by the NSSAB,
development of the respective roles and responsibilities of the par-
ticipants, proposed policy setting authority, and organizational
structures;
B. The development of the implementing charter, policy statements, orders
and similar directives for bringing the National Supply System into
existence;
C. The clearance and coordination of such implementing documents with
all participants and other interested parties, including publication in the
Federal Register;
D. Revisions to such implementing documents, as required, on the basis of
comments received; and
E. The development and coordination of all transition plans, schedules and
other arrangements for phasing into the new National Supply System.
For each of the functions described in Part IV of this report, there has been
included a listing of examples of a number of significant components. Also noted,
are known projects or studies toward the enhancement of the National Supply
System objectives. In addition, specific reference is made to some activities
uniquely required to further define, describe and implement that function with
respect to the National Supply System. These should all become part of, and
integrated into, the plan and schedule of work for the development of the National
Supply System, and should be coordinated by the National Supply System Im-
plementation Task Force.
Unified policies, programs, directives, procedures and standard forms are re-
quired for all of the functions, as referenced in IV, A below, so these will not be
repeated as a required item under each function.
NATIONAL SUPPLY SYSTEM STEERING COMMITTEE
TASK GROUP NO. 1
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III. NATIONAL SUPPLY SYSTEM IMPLEMENTATION TASK FORCE (NSSITF)
The organization through and by which the work of completing the definition
and description of the National Supply System will be accomplished, will be known
as the National Supply System Implementation Task Force (NSSITF). This Task
Force should be staffed by personnel from Executive departments and agencies,
on full time detail assignments. Details would be based on the cooperation and
concurrence of the agencies affected, and with regard to the relative degree of par-
ticipation of each department or agency in the National Supply System, as well as
on the need for top level, functional expertise and analytical ability. The Task Force
will consist of a senior level Director, a Functional Coordinator for each major func-
tion, identified in the National Supply System Definition, and Work Groups for each
function and/or major sub-function.
The Task Force Director and the Functional Coordinators, to the extent prac-
ticable, should be collocated to assure close coordination in development of
unified National Supply System plans and policies.
In addition to the staffing requirements referenced above, a budget allocation
should be provided for the operation of the National Supply System Implementa-
tion Task Force, for adequate support staff, and for all logistical and travel re-
quirements.
IV. FUNCTIONS
The specific functions, components, related ongoing and scheduled projects,
and activities uniquely required for each function, are indicated below:
A. A Unified Body of Supply Policies, Program Directives, and Other
Central Management Activity.
Components:
? Policies ? Management Concepts
? Program Directives ? Organizational Structures
? Plans and Schedules ? Budget and Accounting System Design
? System-Subsystem Designs ? Evaluation Plan
? Standard Forms ? Public Information Program
? Participant Role Definitions ? Transition/Phasing Arrangements
1. Currently Underway:
See listings of specific projects associated with Functions B through
L, below.
2. Scheduled:
See listings associated with Functions B through L below.
3. Required:
In addition to those National Supply System projects currently under-
way, or scheduled, as identified for Functions B through L below, it is
necessary to develop:
(a) Unified, Federal-wide policies, programs, systems, directives,
procedures, and standard forms for each of the functions, in
consonance with Section III, Objectives, of the Preliminary
Definition and Description of the National Supply System;
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(c)
(b) Specific plans and policy and program directives to assure a fully
(d) Programs to improve understanding of Federal acquisition and
supply policies, both within the Service, and by organizations and
individuals doing business with the Government;
(e) Programs for identifying, evaluating and correcting, on a con-
integrated and consistent, phased implementation of each
system, program and procedure, as described in Functions B
through L.
Unified Government-wide budget, finance and accounting
policies and procedures to assure orderly funds transfers,
property accountability, and other requirements associated with
common service acquisition and supply;
tinuing basis, overlappings, duplications, inadequacies, incon-
sistencies, inefficiencies, and other errors or omissions in
Government supply policies, procedures, regulations and
directives, and in other policies, regulations, and laws affecting
supply;
A detailed transition plan for the orderly phasing of sub-systems
into the National Supply System, and for reviewing such sub-
systems to identify excess system resources (facilities, equip-
ment, personnel, software).
A Cataloging System
Standardization of Items.
Components:
? Identification of items
Identification,
Assignment of National Stock Numbers
Specification and
? Registration of all National Supply System participants in the
Federal Catalog System
? An integrated data base of cataloging data for common use by National
Supply.System participants
? Item Management data
? Control of the entry and exit of items
? Standardization of items
? Cataloging publications to satisfy user needs
? NATO and other friendly foreign government participation
1. Currently Underway:
Office of Federal Procurement Policy/DoD/GSA joint project for
development of specification management improvement program.
2. Scheduled:
National Supply System Task Group #3 is to develop programs and pro-
cedures to assure systematic entry and control of items into the NSS,
and NSS Task Group #4 is to develop means to maximize Civil Agency
participation in the Federal Catalog System.
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3. Required:
Development of a program to require registration of items in the
Federal Catalog System.
C. A Standard System for the Acquisition of Material.
Components:
? Includes all functions associated with acquisition of material, other than
those listed elsewhere, ie:
? Requirements Forecasting ? Advertising
? Source Determination ? Solicitation
? Centralized/Decentralized Procurement ? Negotiation
? Schedules ? Evaluation
? Local Purchase ? Award
1. Currently Underway:
(a) A single, unified acquisition regulation (Federal Acquisition
Regulation). Also, see Function J.
(b) Unified policy guidelines for implementation of the Commercial
Products Acquisition/Distribution Program,
(c) Improved Multiple Award Schedule Contract Program.
(d) Market Research and Analysis Programs.
2. Required:
Specific procurement assignment criteria as required for Functions C
and D.
D. An Item Management System for Designating Managers for Individual
items or Classes Which Will Optimize the One itemlOne Manager
Concept.
Components:
? Standard Inventory management systems
? Inventory Management Assignments
? Supply Support Assignments
1. Currently Underway:
An effort by OFPP/DoD/VA/GSA/DREW to establish a single
government-wide system to procure and assure quality of medical and
nonperishable subsistence items.
2. Required:
Specific item and procurement assignment criteria as required for
Functions C and D.
E. Standardized, Requisitioning and Issue Procedures with Automated and
Manual Capabilities and An Order Status Tracking Capability.
Components:
? Requisitioning and Issue System
? Uniform Priority System
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? Reporting System
? Transportation System
? Intransit Item Visibility System
F. A Standardized Logistics Communications System.
Components:
? System-wide automated digital network
? System-wide automated addressing capability
? Standard Input/Output Codes and formats
? Communications systems dedicated to logistics traffic transmission
? Manual and mechanical Interface with the Digital Network
G. A System of Contract Administration to Include Quality Assurance.
Components:
? Standard quality assurance procedures
? Adherence to specifications, contract delivery dates, and production
schedules
? Pre-award and post-award audit of contractors
? Contractor compliance with affirmative action and socio-economic
program requirements
1. Currently Underway:
(a) Consolidation of contractor affirmative action compliance within the
Department of Labor
(b) Development of the Federal Acquisition Data System (See Function
J).
H. An Integrated Distribution System to Accommodate the Receipt,
Inspection, Storage, Issue and Movement of Material in which the Depot
Facilities will be Used on a Common-use Basis.
Components:
? Depot Operating Systems ? Depot Transportation Systems
? Receiving ? Expediting and monitoring
? Issuing ? Material marking
? Packing/Crating/Handling ? Consolidation/Staging
? Stock Control ? Material Movement
? Storage (Physical Inventory, ? Traffic Management
Warehousing, and Preservation) ? Positioning/Repositioning
? Retail Stores Operations
1. Currently Underway:
(a) National Supply System Task Group #2 is to develop criteria for con-
solidating wholesale government supply distribution facilities.
(b) The preliminary efforts of DoD in reviewing their thirty-four general
purpose depots for potential consolidation.
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(c) The preliminary effort and plans of GSA/FSS to reduce their
depots.
1. An Integrated System for the Reutilization and Disposal of Excess and
Surplus Property.
Components:
? Utilization Screening
? Reporting
? Repair, Rehabilitation and Reclamation
? Reutilization and Reassignment
? Donation
? Sales
J. A System for Collecting, Developing, Communicating, and Disseminating
Acquisition and Property Management Data Which Takes Into Account
the Needs of the Congress, the Executive Branch, and the Private
Sector.
Components:
? National Supply Data System
? Ability to provide required and recurring reports
? Additional related systems to program plans, budgets, costs, personnel
data and other information as required
1. Currently Underway:
A Federal Procurement Data System, including a Federal Data
Procurement Center, for assembling, organizing and presenting con-
tract placement data for the Federal Government, is to commence
operation October 1, 1978.
2. Required:
(a) An advisory group to recommend additions, deletions and changes
to the National Supply Data System.
(b) An interagency committee to determine required programs and data
elements, and to test, implement and oversee the development
of programs for the National Supply Data System.
K. Representation Before Appropriate Federal and State Regulatory Bodies.
Components:
? Represents the National Supply System participants in all matters
pertaining to transportation, public utilities and telecommunications.
L. Continuous Close Cooperation with Central Personnel Management
Authority to Promote Programs for Improved Qualification and Position
Classification Standards and Similar Activities Towards Improving the
Recruitment, Training, Career Development, Motivation, and Performance
Evaluation Of Acquisition and Supply Personnel.
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Components:
? Classification standards
? Qualification and performance standards and appraisal methods
? Analysis and development of recruitment sources for qualified
personnel
? Training and career development programs
? Recognition and awards programs
? Certification and Licensing programs
1. Currently Underway:
Federal Acquisition Institute is developing career programs for
acquisition and contracting personnel. These should be expanded, in
cooperation with GSA and CSC, to include all supply personnel.
2. Required:
A task group to develop a code of ethics, examination, licensing and
certification programs, and to develop an awards and recognition pro-
gram, for special achievements of supply, and acquisition personnel.
IV. SCHEDULE
Note: Actions to be completed by the dates shown, but with full input and consultation
with agencies affected, and approval by National Supply System Advisory Board. It also
envisions continuing coordination with other related projects, studies and cost benefit
analyses, underway elsewhere in the Federal Service, in the development of the products
needed to complete the definition and description of the NSS.
A. September 1, 1978
? Approval of the National Supply System Project Summary by the
President
? Charter for Task Force and appointment of Task Force Director
? Appointment of Functional Coordinators
? Organization of Work Groups including necessary administrative
support
B. January 1, 1979
? Development of completed, formal National Supply System definition,
and of initial drafts of major policy and program directives
? Coordination of the above with NSS participants and other interested
parties
? Negotiation and resolution of comments by the National Supply System
Advisory Board
C. April 1, 1979
? Development of initial drafts of comprehensive descriptions and of
policy and program directives for each of the functional areas
? Coordination of the above with NSS participants and other interested
parties
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? Approval by the National Supply System Advisory Board of completed,
formal National Supply System definition, and final drafts of major policy
and program directives
D. July 1, 1979
Approval by the National Supply System Advisory Board, of final drafts
of comprehensive descriptions, and of policy and program directives for
each of the functional areas.
E. September 1, 1979
Subsequent to completion and approval by NSSAB, of comprehensive
functional descriptions, policy and programs directives, as per D above,
delineation of roles and responsibilities of NSS participants, and of
management authorities and organizational structures. Coordination with
all interested parties, negotiation and resolution of comments and
approval by the National Supply System Advisory Board.
F. January 1, 1980
Issuance of all policy, program and management directives, establishing
the National Supply System, with phased implementation to begin
April 1, 1980-this gives a six month lead in, transition period for actions to
be effected at the beginning of FY 81, le October 1, 1980.
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ISSUE NO. S-2: CRITERIA FOR CONSOLIDATING GOVERNMENT SUPPLY
-----_.--._._.___.. DEPOTS
I. INTRODUCTION
This is a status report on an interagency effort to develop
a series of viable, realistic criteria for consolidating
Government wholesale distribution facilities.
National Supply System Task Group No. 2 was established on
March 2, 1978, under the aegis of the National Supply System
Advisory Board and the Administrative Services Reorganization
Project. It was asked to prepare an inventory of the Govern-
ment's wholesale distribution facilities in the 50 states
and to develop criteria for reducing the number of these
facilities. The task group is composed of representatives
of DOD, GSA, VA, NASA, DOT, OFPP and the ASRP.
BACKGROUND AND CURRENT STATUS
On January 10, 1978, the National Supply System Advisory
Board authorized the establishment of Task Group No. 2 as
the first step in a project to establish a single consolidated
networx of Federal depot facilities for Government-wide use.
The National Supply System Advisory Board also directed that
the efforts of Task Group No. 2 be thoroughly integrated with
the work of the Administrative Services Reorganization Project
(ASRP) and that the work products of this task group, as
approved by the National Supply System Advisory Board, be
contributed to ASRP.
Scores of agency depots exist, many of which are located in
close geographical proximity, store and issue similar kinds
of items, and often issue these items to the same customers.
Some depot facilities are poorly located to effectively
serve their customers, are housed in overaged, obsolete
facilities, and utilize agency-unique procedures. Because
of the impact of the commercial product acquisition program
and other factors, future capacity requirements for depots
may be reduced. The GSA, for example, has reported that
nearly 60% of items stocked in depots have been removed from
stock since 1970. Moreover, both DOD and GSA have completed
consolidation studies of their respective facilities and, in
the case of GSA, have begun to implement their findings.
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On April 26, 1978, Task Group No. 2 completed and forwarded
its inventory of Government wholesale depots to the National
Supply System Steering Committee where it is presently under
review. That inventory, a summary of which is attached as
Appendix A, reveals that 67 general purpose depots are owned
and operated by 10 Federal agencies in the 50 states.
The task group is also completing its deliberations on
criteria for further consolidating those facilities. Cri-
teria under development relate to user responsiveness, cost
effectiveness, management considerations and numerous other
aspects of depot effectiveness. It is expected that the task
group report on criteria will be submitted to the Steering
Committee in early June, and subsequently to the Advisory
Board for approval. As soon as the consolidation criteria
are approved by the National Supply System Advisory Board,
a task group for transitional planning is scheduled to be
established. ASRP estimates that 6 months will be required
for this stage of the program.
The 67 common supply depots operated by the 10 Federal
agencies have annual operating costs of $1.2 billion. These
depots take up 190 million square feet of space and employ
22,946 people. The studies currently underway in DOD and GSA
could result in as many as 20 fewer depots. It is believed
that a substantially greater number of depots could be con-
solidated through full implementation of the National Supply
System and that a 20 percent reduction in current operating
costs for personnel, space and transportation would result.
Based on the 20 percent estimate, annual savings would be
$240,000,000. Projected savings have been rounded off to
$200,000,000.
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APPENDIX A
Wholesale Depot Consolidation Studv
Task Groura 42
Inventory Suimnaxv
Reporting
Agency
No. of Space Inventory
Depots Gr.. Sq.. Ft. Dollars
Depot
Personnel
Agriculture
45,050
$404,000
Commerce
NOAA
118,363
6,580,490
45
126,219,000**25,000,000,000**
21,000 est.*'
GSA
12,883,985
203,160,195
1,214
EEW
66,419
2,422,600
51
Interior
39,680
3,982,306
23
Justice
150,000
250,000
2
NASA
81,475
35,643,507
Contr.
863,144
187,900,000
286
1,084,366
40,784,958
317
141,551,482
$25,481,128,056
22,946
*Excludes 81 Fuel Terminals and 15 Ammunition Depots.
**Does not include Bulk Petroleum, Oils Lubricants; Axmnunition;
Chemical, Biological, Radiological Materials; Perishable Subsis-
tence; Industrial Plant Equipment; or most Major End items.
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ISSUE FS SUPPLY OPER? (IONS
I. INTRODUCTION
This study memorandum provides an assessment of the GSA /F' ~S
organization and the policies, programs, and procedures er:iployed
in providing supply support to civil and military customers.
The study involved a review of the entire FSS supply manargement
function. Nationwide interviews were conducted with F3S Central
OOffice and regional staffs, as well as with officials of commer-
cial enterprise and state governm6nts. Extensive reviews were
made of the GSA/FSS organization statements, FSS operating pro-
cedures, GAO reports, GSA Internal Audit Reports, consultant
studies, operating prograrn surveys, reports of Congressional
Committee Hearings, and OF'PP policy statements.
FSS supply management activities, in support of a central
sur_ply mission, were authorized by Public Law 152, the Act
establishing GSA in 1949. In the intervening .29 years, the
scope, volume and'complexity of activity has expanded markedly.
Support provided worldwide to civilian and military activities
amounts to approximately $3 billion annually. any rianaocrient
and operational improvements have been instituted over the years
to handle the increased workloads. Included were development
of more sophisticated procurement and inventory management con-
cepts and procedures, increased utilization of ADP systems,
installation of more mechanized equipment and internal movement
systems in depot operations, better management information sys-
tems, as well as some organization changes and advanced financial
controls. Review of the current FSS organizational structure,
including the Central office and the regional offices indicated
that alternatives are available to improve system effectiveness,
improve responsiveness to the customer, and reduce costs in the
delivery of supplies and services. A cost/benefit analysis
should be made prior to implementing any of the alternatives.
II. BACKGRO'.JND AND CURRENT SITUATION
A. ORGANIZATION PROBLEMS
The organization of the FSS has been subjected to numerous
studies and adjustments over the years. Frequent chances in
top management have brought new management Philosophy and
policy direction. However, pressures from Political interests,
employee unions, and trade associations have sometimes thwarted
efforts to make other organizational adjustments considered
necessary.
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The supply management functions in FSS are performed by a
Central Office with 7 major headquarters offices, 4 staff
offices, and 3 commodity centers reporting to the FSS Com-
missioner. The field organization consists of 10 regional
offices and 20 supply distribution facilities. Procurement
is accomplished by 17 separate elements located in 11 geo-
graphic areas, and inventory management operations are
performed by 12 separate activities throughout the FSS.
The FSS depot stocK program, which currently involves approx-
imately 22,000 items, is subject to reduction as' a result of
the OFPP "Commercial Products Policy", which would increase
reliance on the commercial distribution system. The degree
of impact is dependent on the results of current OFPP/FSS
negotiations to clarify the policy. Literal interpretation
of this policy would drastically affect the .FSS depot stock
program as well as-FSS supply policies and organizational
structure.
Washington level attention to the development of policy in FSS
is reduced because of operational responsibilities assigned
to the central office. The present structure forces opera-
tional decisions to the level of the Commissioner or -Deputy
Commissioner that should not be made at that level. Iovinn
supply operations from the Central Office to the field would
provide a clear division between policy development and opera-
tions and would promote More consistent and integrated supply
management policies. Assigning operational control to the
field organization would increase management control, improve
effectiveness of operations and improve responsiveness to
customers.
B. POLICY AND PROCFRURAL PROBLEMS
FSS as a major central supply support organization conducts a
number of management programs and operating functions includ-
ing planning, budgeting, funding, program review, procurement,
method of supply determinations, logistics data management,
supply distribution, and inventory management. The effective-
ness of supply management efforts is influenced by other
factors such as the Commercial Products Policy as sponsored
by the Office of Federal Procurement Policy.
Review of the current FSS policies, programs, and procedures
indicates that although improvements have been made in recent
years, and others are planned, there are still a number of
areas which offer potential for improving supply systei-i re-
sponsiveness and effectiveness, or reducinq costs. Each area
is identified and discussed below.
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III. CRITERIA FOR IMPROVEMENT
Improve managerial control
Reduce costs
Improve responsiveness
Improve effectiveness
Improve FSS/customer relationships
IV. ORGANIZA' IONIAL ALTERNATIVES
A. CENTRAL OFFICE ORGANIZATION
Reassign all supply management operations presently being per-
formed in the Central Office to the FSS field activities, ret.ain-
ina only policy and procedures within the Central Office; create
a Deputy Commissioner for Supply Management responsible for the
total supply management function and a Deputy Commissioner for
Support Services heading up other FSS activities. This proposal
must he considered in conjunction with field organization struc-
tures discussed in paragraph B below.
Several operational Functions are assigned to
the Central Office:
all FSS cataloging operations; procurement of general products,
office and photographic equipment, and office supplies and paper
products; some specification, standards, and quality control opera-
tions; and all supply operations performed by the three commodity
centers.
FSS supply management policy responsibilities are currentl.v diluted
by supply operations activities in the Central Office and are split
among 4 Assistant Commissioners. Resolution of policy/pro,xrarn dif-
ferences in the best interest of the supply support system and the
customer must be resolved at the Commissioner/Deputy Commissioner
level.
Moving supply operations from the Central Office to the field]
and centralizing supply management policy responsibilities under
a Deputy Commissioner for Supply Manacgement would establish the
organizational structure needed to assure consistent and inte-
grated system wide policy guidance on a continuinct basis. This
would increase management control of operations and improve ef-
fectiveness and responsiveness to customers. By having the policy
managers for the various supply management functions operating at
the same organizational level and reporting to the Deputy Commis-
sioner for Supply Management, who would integrate the various
policies involved, a more cohesive and balanced effort to carry
out the supply support responsibilities will result. A
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Significant realignment of detailed functions at the office level
under the Deputy Commissioner for Supply Management is considered
necessary. The responsibilities of the Office of Procurement
would be limited to the procuring and acquisition of material.
The proposed Office of Supply Operations would be established with
the responsibility for inventory management to include: require-
ments computations, related budget/financial responsibilities,
stock control, order processing., inventory adjustments, and method
of supply determinations. An Office of Cataloging would be estab-
lished for staff support of this function.
Customer service functions would support both Supply Management
and Support Services and would be established as a separate
organizational entity reporting directly to the FSS Commissioner.
Another alternative for the organizational placement of these
customer service and assistance functions is discussed in Issue
No. S-4, "Customer Services". This alternative would have the
Customer Service Office report to the GSA Administrator and pro-
vide service for all of GSA.
Pros:
Increased stability of workforce
Reduced total GSA personnel costs through lower average grade
Increased managerial control
Improved responsiveness to customers
Improved flexibility of workload planning and control
Cons:
Loss of some experienced personnel
Temporary degradation of performance during transition
period
Possible temporary personnel overstrength
Initial costs for relocating personnel, establishing new
systems, and revising communications network
B. FIELD ORGANIZATION
1. Establish a single National Commodity Management
Center (CMC) responsible for all operational functions; pro
curement. inventory management, distribution, cataloging,
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specifications, standards, and quality control. Eliminate
these operations at FSS headquarters and at the regional
offices and integrate the functions into the CMC. Disestab-
lish existing commodity centers and integrate the functions
into the CMC. Revise ADP system requirements to support FSS
supply operations. Establish direct communications links
between the National Center and each distribution facility.
Pros:
Improve management control
Reduce personnel and investment costs
Improve supply responsiveness and effectiveness
Cons:
Initial costs for relocating personnel, establishing new
systems, and revising communications network
period
Loss of some experienced personnel
Temporary degradation of performance during transition
2. Extend the current commodit
y center concpt C
e -on-
tinue the present tools, furniture and automotive commodity
centers and establish additional centers for paper products and
general supplies and incorporate current Central Office opera-
tions and regional supply management operations into the centers,
all of which would be field activities.
Transfer operational functions for procurement, inventory man-
agement, distribution, cataloging, specifications, standards
and quality control, to be consistent with commodity management
by individual centers. Eliminate these operations at FSS head-
quarters and regional offices. Centers would assume supply man-
agement functions for assigned classes and would report to FSS
headquarters.
Pros:
Improve management control
Reduce personnel and investment costs
Provide commodity visibility and improve customer relations
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Cons:
Supply management remains decentralized and fragmented
Does not maximize responsiveness or effectiveness
Savings less than the centralized commodity management
center alternative
3. Strengthen and refine the regional structure - retain
the present 10 region structure; eliminate the present commodity
centers and assign their functions to the regions; and improve the
process and system in and among the regions.
Establish all supply management functions within a region for the
classes/items assigned to that region. Eliminate these functions
from FSS headquarters.
Pros:
Eliminates fragmentation between regions and commodity
centers
Eliminates system duplications
Improves management control by separating policy and
operations
Concentrates inventory management and procurement respon-
sibility in each region for the class/items assigned.
Cons:
Continued fragmentation of supply management functions
Minimum savings from consolidation of commodity centers
No obvious increase in responsiveness to customers
4. Continue the present structure for the regions and
commodity centers with the supply management operation functions
presently performed in the Central office assigned to the regions.
Existing procurement, standards, specifications, and quality
control operations would move from Central Office to the regions
or to a new commodity center or a combination of both.
Commodity centers would become field organizations.
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Minimum disruption of personnel and systems
Provides separation of policy and operations
Cons:
Supply management functions remain fragmented
Minimum reduction in operating costs
No improvement in effectiveness or responsiveness to
customer
5. Reduce the number of regions - Consolidate the present
10 regional FSS supply support operations into a lesser number.
Should it be decided to perpetuate FSS supply operations in the
regional offices, savings could be realized by consolidation of
these functions in fewer regions. For example, the number of
regions involved in FSS supply support operations could conceiv-
ably be reduced from the current 10 to 3; one East Coast, one
West Coast, and one Mid U.S.
Pros:
Some reduced costs from consolidation
Some increased management control
Decreases system development and implementation problems
Cons:
Supply management functions remain fragmented
No improvement of responsiveness and effectiveness to
customer
Minimum reduction of operating costs
A limited procurement capability would be retained in the
regions to support retail operations and provide internal
regional local purchasing support regardless of the organi-
zational alternative selected.
V. PROCESS IMPROVEMENTS
A. FUNDING METHODS
FSS supply management operations are funded from 3 sources:
appropriations which cover all operating costs, a revolving
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account - the General Supply Fund which finances the cost of
purchases in both the stock and nonstock programs, and reim-
bursements from other agencies for special work performed.
By law, the General Supply Fund may be used only to recover
the purchase price of property and the transportation and
maintenance costs involved. FSS prices stock items to recover
those costs which for the period October - December 1977
amounted to a markup of 12.1%. For nonstock support, the
customer is charged only the amount billed FSS by the vendor.
One of the major recommendations of the Commission on Govern-
ment Procurement was that interagency supply support activities
should institute a program of industrial funding which would
recover all costs of supplying products and services which in
turn would foster efficiency in use of resources by both the
supplying activity and the user.
FSS, with the assistance of the Office of Finance staff, GSA,
prepared a study entitled "Full Cost Recovery for the FSS"
(November 15, 1973). The conclusion was that industrial
funding had advantages for FSS and that its stock, nonstores
and schedules programs would remain cost effective despite the
cost add-ons necessary. At that time, FSS would have had to
mark-up stock by 33%, and add a 5% surcharge for nonstores
and schedules products. Despite this, FSS prices would still
have been 16.3% below the commercial market prices on stocked
items and 13.9% below for nonstores and schedules. A compar-
able situation exists today.
Based on the indicated feasibility of implementing industrial
funding in FSS, a decision was made to prepare draft legisla-
tion to amend PL 152. During this period however, DOD voiced
opposition to using industrial funding in supply operations as
being a costly and unsatisfactory accounting method for DLA
items and agreed to FSS using it only if storage and distribu-
tion costs were funded by GSA appropriations and DOD had full
freedom to use alternate supply sources when more economical.
Since OFPP could not resolve the matter, FSS cancelled their
plans for introducing industrial funding.
FSS then.proceeded to consider. the possibility of applying
a system of full cost disclosure. It identifies costs of
the supply management operation for improved management
control but does not provide for collection of overhead and
imputed interest expenses from the customer. FSS expects
to have a complete cost disclosure system in use by FY 1980.
Recommended Process Improvements
FSS should continue the revision of its accounting systems to
identify and collect all costs attributable to the supply man-
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aqement program (including ADP and telecommunications costs) as
a prerequisite to instituting full cost disclosure under present
funding arrangements.
Upon resolution of the roles of the various agencies under the
National Supply System, consideration should he given to initia-
ting legislation to provide for industrial. funding of the supply
management operations of the NSS.
The Administrator of GSA is authorized by law to establish and
maintain a uniform Federal Catalog System to identify and clas-
sify personal property under the control of Federal agencies.
Under this law, each Federal agency is required to utilize the
Federal Catalog System except as the GSA Administrator shall
otherwise provide. The Defense Cataloging and Standardization
Act authorized the Secretary of Defense to develop a single
supply catalog system for DOD. Both laws require coordination
to avoid unnecessary duplication.
Chapter 101-30 of the Federal Property Management Regulations
delineates Federal agency and GSA responsibilities in identi-
fying and recording items in the Federal Catalog System. These
regulations also prescribe the procedures to be followed by
Federal civil agencies in requesting exemptions from the program.
While substantial progress has been made in the identificatior
and recording of items required by Federal civil agencies in
the Federal Catalog System since 1949, it is estimated that
374,000 items used by civil agencies have not yet been reviewed
for assignment of National Stock Numbers. Locally assigned
stock numbers and individual civil agency management of these
items negate the economies of a centrally managed system.
Review of these items for assignment of National Stock Numbers
is also essential to realize a fully effective National Supply
System. The current staffing level of the FSS Logistics Data
Management Division has not permitted any significant progress
in reviewing these 374,000 items nor has it been possible to
initiate item reduction studies in the 69 Federal Supply Classes
assigned to GSA.
Another problem is the current FSS policy which results in
rejecting civil agency requests for supply support when pro-
jected annual demand is less than $25,000 for an item.
Recommended Process Improvements
FSS should continue its plan for prioritizing agency participa-
tion and seek the additional resources necessary to accelerate
review of the civil agency items not assigned NSN's and to con-
duct a more effective Item Reduction Program.
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FSS should pursue full agency participation in the Federal
Catalog System.
FSS should re-examine the current policy for rejecting civil
agency supply support requests when projected annual demand
is less than $25,000 and utilize the economic decision-making
model in determining the appropriate method of supply.
FSS supports agencies worldwide on some 22,000 common use items
from 20 facilities comprising 14.4 million square feet located
throughout the U.S. Sales for FY 1977 amounted to $597.9 pil-
lion. A number of problems were noted in reviewing the opera-
tions. Several facilities visited had substantial amounts of
underutilized space thought to result froi:a recent item support
transfers to DLA, need for realignment of stocking patterns?and
reduction in number of stocked items. Actions to resolve this
situation include the application of a simulation technique to
determine the optimum number of facilities needed and an annual
Supply Distribution/Inventory Management effort to assure that
items are stocked in the facilities nearest the customers.
Another area for improvement is the need for separate ADP output
for controlling hazardous material shipments. Currently this
process is performed manually creating an unneccessary expense.
Adjustments were being made without verification to stock item
record balances by activities outside of the depot on the basis
of customer complaints indicating over or under shipments from
the depot. This increases the potential for erroneous
inventory balances.
There is also the possibility of increased costs of depot
operations if the FSS policy of accepting "commercial pack"
from vendors is widely implemented without further definition.
With the wide variances in unit packages by different vendors
for the same items under the same National Stock Number, errors
in receiving, inventorying and issuing can be expected.
Finally, improved ADP programs are needed for more effective
stock location control, compression of receipt processing time,
improved shipment consolidation and elimination of time delays
in delivering depot work packages from the distant computer
processing sites. These improvements are not scheduled for
inclusion in the ADP design effort scheduled for implementation
in 1980.
Recommended Process Improvements
FSS should pursue its plan to consolidate the number of distribu-
tion facilities from 20 to a range of 8 to 12. Central Office
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Inventory Management should pursue early implementation of the
April 1978 item stocking plan.
Obtain a computer program change as soon as possible which will
provide separate documents for hazardous items so that required
packing and shipping controls can be applied automatically.
Establish a requirement that the Supply Distribution Inventory
Sampling Staff conduct an interim physical inventory before
making any adjustments to book balances now being made auto-
matically on the basis of customer reports of over or under
depot shipments.
FSS re-examine implementation of the commercial pack policy to
assure judicial and selective application.
FSS re-evaluate the urgency of need for major system improvements
in the distribution facilities. In the event required improve-
ments cannot be included? in the ADP support system for 1980, the
Office of Supply Distribution should seek to achieve operational
improvements manually, if necessary, at the earliest practicable
date.
D. COMMERCIAL PRODUCTS POLICY
OFPP policy provides that Federal government activities are to
make maximum use of the commercial. distribution channels to meet
requirements for common use type ite,ls. The need for complex
federal specifications will he reduced and the cost of government
storage and distribution will be minimized. The rationale is that
greater reliance on the commercial sector will result in lower
costs of doing business with no adverse impact on supply system
responsiveness. Pursuant to this policy, FSS subjected 2,296
items to the GSA developed computerized economic model for making
cost effective method of procurement and supply decisions. This
analysis recommended 1,529 or 65.6 percent be retained in the FSS
stock program, 745 or 32.5 percent be placed on supply schedules,
and 21 or 0.9 percent be designated for local purchase. FSS plans
to complete analysis of all of the stocked items in the next twelve
months.
The FSS analysis established that economic factors must be taken
into consideration in arriving at the optimum method of supply.
This position was included in a letter to OFPP dated April 3,
1978. If the OFPP policy is to be literally implemented without
reference to economic considerations on an item-by-item basis,
the FSS depot program would be virtually eliminated.
Recommended Process Improvements
FSS and OFPP should resolve policy concerning acquisition and
distribution of commercial products.
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E. MgpTIIOD OF SUPPLY DETERMINATION
FSS uses a computerized program to assist management in reaching
item-by-item decisions regarding which method of supply would
produce the lowest total landed cost to the Government. A number
of constant data elements are stored on the system, such as costs
of item management, procuring, requisitioning, receiving, inspec-
tion, inventory holding, issue, transportation, billing and col-
lection. Different levels of cost are assigned for each of three
major methods of supply: supply from stock, supply by Federal
Supply Schedule, and agency local purchase. (A fourth method
of supply used by FSS, called non-stores procurement, is not yet
included in the Economic Model.) Other constant data included
are information compiled annually showing percentage price savings
obtained by FSS compared to prices which agencies would have to
pay locally. Variable data are run against the model including
anticipated demand, different cost levels by item depending on
the expenses applicable to receiving, inventory holding, method
of procurement selection, etc. The computer program matches these
data and indicates the cost for each method of supply.
Several problems were noted. Currently, the accuracy of the model
cannot he verified since detailed program documentation was not
compiled during construction of the model although detailed write-
ups will commence shortly. The model is currently used only to
determine the appropriate method of supply for items now in stock
or being considered for such type of support. Apparently, data
on Federal Supply Schedules, Non-stock Procurements, and local
buys by agencies are not sufficient to use the model in calcula-
ting whether a change in.the method of supply for these millions
of items would be economically desirable.
The model has not been formally reviewed by other Government or
private sector activities although GAO has initiated an effort
in this regard and OFPP has also been provided a general descrip-
as tion of the model for review and comment. FSS is refining the
model to replace a number of cost averages now used with more
meaningful data based on expense variances which exist among
r supply items and among the methods of procurement used.
Recommended Process Improvements
Immediate action should be taken to fully document the current
economic decision making model as well as the refined approach
as it is developed.
FSS should establish an approach to review all assigned items.
Other non-GSA activities in Government and the private sector
should be requested to review and critique the economic decision
making model.
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ISSUE No. S-4: CUS'POMER SERVICES
I. INTRODUCTION
This study memorandum provides an assessment of GSA/FSS services
to its Federal customers.
Central supply systems of the federal government should serve
one basic purpose - effective support of the federal customer.
A gxowing communication gap, caused by increased*GSA centraliza-
tion, inhibits customer feedback on system operations and design.
The system too often is perceived as not responsive to customer
needs.
Customer satisfaction has been assessed across all supply support
programs (Stores, Schedules, National Buy) at user and agency
level through questionnaires, interviews, and analysis
of objective and perceptive data. The analysis encompassed
all aspects of delivery of services from product selection
and availability through order and delivery processes, and
final acceptability or adjustment.
The principal bases for this analysis are:
o Review of the Federal Supply Service - This involved
examination of the concepts, attitudes, knowledge and processes
of the central system as managed and operated by GSA.
o Customer Support Questionnaire (CSQ) - This questionnaire
was sent to more than 9,000 customer activities to obtain
their needs and perceptions. (See the Appendix for specifics.)
o Meetings with representatives of customer activities -
This provided additional insight on how the customer viewed
the central system.
o Outside visits - The basic management concepts of major
industries and several states were likewise examined and docu-
mented.
II. THE ISSUE
Overall, the analysis of GSA coupled with the meetings and CSQ
findings indicate a broad degree of customer acceptance and
satisfaction with the centralized system. However, a number
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of areas need significant modification and improvement
in order to be responsive to customer requirements. For
example, GSA operates on a regional mode, when, in fact,
several customer service activities should be a single
national effort. Currently, the system itself lacks
responsiveness and timeliness in terms of order processing
and customer delivery. Part of this is due to inadequate
resources and an outdated ADP system, which is not responsive
to either the customer or GSA management. Furthermore,
management relies on a regional management organizational
concept which perpetrates "production of economy measures"
causing a deterioration of the quality of responsiveness
to customers. In effect, this philosophy and management
process promote system-centered thinking resulting in customer
dissatisfaction with day-to-day operations.
The Customer Services issue is organized into 5 sections
each of which is a principal area of customer interaction
with the system. These are examined separately in the context
of recommended improvements to the management, process/system,
procedure and policy aspects of each. Conclusions and
recommendations are enumerated in detail under the following
headings in Sections A through E below.
A. General Customer Perspective
B. Retail Services and Systems
C. Marketing and Cataloging
D. Customer and Agency Liaison
E. Ordering and Order Processing
The criteria for improvement utilized in examining these
areas are:
o Increase responsiveness.
o Reduce operating costs.
o Simplify Federal customer tasks.
o Separate regulation from guidance.
o Separate policy from operations.
o Align responsibility and authority.
o Offer greater use of commercial products.
A. GENERAL CUSTOMER PERSPECTIVE
Too often the needs of the customer are overlooked in favor
of institutional. requirements of the centralized supply system.
The different procedures and forms used by the individual
systems; the stringent, mandatory system requirements; manda-
tory use of specifications; and the need for compliance
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with system parameters (degree or lack of flexibility), all
affect upon the users.
The general customer perspective findings were developed
througn meetings with respresentatives of customer agencies
and througn a "Customer Support Questionnaire" (CSQ)
which was mailed to 9,286 addressees world-wide. Analysis
of tree comments and recommendations made during the
meetings and the responses to the questionnaire indicate
tile following:
Regulations and Procedures - 90% of those responding
felt treat dequisition~orderi.ng procedures are complete
and understandable", but that they need to be consolidated
and simplified. Too much effort is required of agencies
to conform and comply with the regulatory and procedural
dictates. A "cross reference guide" employing generic
names of items arid products must be developed.
All forms in the system should be standardized.
Range of Products - Generally satisfactory, however,
additional coverage is needed in certain Federal Supply
Schedule areas.
Quality of Products - Complaint procedures regarding
quality of items do not produce satisfactory results.
Tire tt;D/ivriLSPLC's are not Kept current. Many are obsolete.
Few reflect current state-of-the-art.
Adequacy-of Delivery - Delivery time received one of
the lowest overall ratings of the CSQ - 70% favorable.
Many of the standard commercial items have inordinately
long delivery times. Items which are readily available
on tyre open market nave 60-90 day delivery times when
purchased through the system.
Follow-up on Requisitions - 76% gave an affirmative
rating to follow-up response - again not strongly favorable.
Requests should only be required to be sent to a single
organization representative.
CustomerAssistance - Strongly negative evaluation,
particularly in response to the statement concerning
visits - 7d gave an unfavorable rating.
Catalogs and Price Lists - An 86% favorable rating was
given to adequacy of catalogs/ price lists. GSA needs
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to ensure timely delivery of contractor's catalogs
and price lists to customers.
Adjustments - The adjustment process is difficult and
very time consuming; there are too many forms and too
many contact points. The system should only require a
single report to be prepared and submitted to a single
servicing organization, regardless of the reason the
adjustment is being requested.
Special Order/Buying Procedures (SO/BP) - The SO/BP
has enormous potential; however, the lack of
attentiveness to the customers' needs has "turned
them off".
CONCLUSIONS/RECOMMENDATIONS
1. CONSOLIDATION OF REGULATIONS AND PROCEDURES:
Emphasize standardization, uniformity, clarity and sim-
plicity. Avoid jargon, codes and complex procedures.
Tone down mandatory aspects, emphasize guidance and
assistance.
This recognizes that many users are in low graded
non-professional positions and are not supply "oriented";
it also would reduce the time required for training
of user personnel and enhance users' view and use of
the system. Costs of development of a fully integrated
regulatory system must be carefully considered.
2. SIMPLIFY THE ADJUSTMENT/CREDIT PROCEDURE: Adopt a
"No fault - customer is always right" concept. Institute
a one-stop procedure. This would substantially reduce the
time, paperwork and confusion for the customer and the
consolidated support activity, however, it does require
some internal system adjustment.
3. ENSURE THAT THE CENTRALIZED SUPPORT AGENCIES ADOPT
A SERVICE ATTITUDE: Requires some internal system adjustment.
4. ESTABLISH CUSTOMER SERVICE REPRESENTATIVE (CSR) AS
THE SINGLE FOCAL POINT FOR CUSTOMERS OF THE CONSOLIDATED SYS-
TEM: Customers desiring follow-up information, general assis-
tance, resolution of problems (such as adjustment/credits,
quality complaints, delivery problems, etc.) should only be
required to make a single contact. The CSR should have the
authority to cross organizational and territorial boundaries.
The benefits include increased emphasis on the needs of the
customer, savings in time and resources and establishing a
means and focal point for the customer to easily communicate
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with the centralized system. Substantially increased CSR
costs and workload would result.
5. IMPLEMENT IMMEDIATELY THE RECOMMENDATIONS OF THE
GAO AND OF THE COMMISSION ON GOVERNMENT PROCUREMENT
WITH REGARD TO FED/MILSPEC SYSTEMS: Purge those that
are obsolete or unnecessary and update the remainder
to reflect the current state-of-the-art. More reliance
must be placed on competitive, commercial products.
This would allow customers to take advantage of those
products which best suit their needs.
6. EXPEDITE THE DELIVERY OF CATALOGS AND PRICE LISTS
T0? CUSTOMER AGENCIES: This would emphasize the service
aspects of the system and increase purchases through
the system which, due to a lack of such information,
are now made on the open market.
7. IMPROVE THE SPECIAL ORDER/BUYING PROCEDURE (SO/BP):
That portion of the system should be revitalized to make it
more responsive and visible to the customer. The requirements
of various customers referred to the centralized SO/BP activity
would be combined to produce the cost benefits available through
consolidated purchasing. -
8. ABOLISH THE CURRENT "WAIVER" REQUIREMENTS AND
SUBSTITUTE WITH INTERNAL DOCUMENTATION: Current "waiver"
requirements are too cumbersome, time-consuming and unnecessar-
ily complicate the acquisition process. Internal agency
review, with appropriate notification to GSA, will suffice.
9. REMOVE "MANDATORY" REQUIREMENTS FROM FEDERAL SUPPLY
SCHEDULE CONTRACTS: FSS contracts should be "available for
use" as opposed to being "mandatory for use" by customer
activities.
10. RAISE THE DOLLAR CRITERIA FOR MANDATORY USE OF THE
STOCK/NON-STOCK SYSTEM: Amount should be increased from the.
current $10 (GSA) and $25 (DLA) limits to a more reasonable
level of $100 (possibly as high as $500 after thorough
analysis). Present limitations are considerably behind today's
cost of doing business. The cost to comply with the dollar
criteria may be more than value of item ordered.
B. RETAIL SERVICES AND SYSTEMS
Retail services and systems cover a range of activities to
assist users, particularly smaller units, in obtaining support
from the central system.
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RETAIL STORES PROGRAM
The program is well supported by customer agencies
from both an economic and convenience viewpoint. Increasing
demand exists for FSS to open additional stores.
GSA. has not acquired nor identified resources sufficient
to open all the stores which studies have shown would be most
effective to the Government.
The CSQ indicated support for the retail stores'and for
the expansion of facilities and services:
YES NO
Almost Almost
Always Often Sometimes Never
Locations convenient/
accessible 46% 20% 12% 22%
Required items
available 25% 38% 28% 10%
Personnel knowledge-
able/responsive . 47% 38% 10% 5%
Credit on returns/
adjustments made
promptly 52% 31% 10% 8%
Item range should be
expanded 49% 26% 16% 8%
Open market arrange-
ments would be
preferable 26% 21% 31% 22%
The stores are in an excellent position to offer ordering
assistance to the customer, both for schedule items
and items in GSA stock. Resource limitations, policy decisions
and management direction have tended to restrict these services.
RETAIL INTERSERVICING
No effort has been undertaken to identify the local
support potential and to promote interagency arrangements.
Effective interagency "interservicing" need not have a "resource
problem" since it relies on existing capabilities put fully to
use.
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FEDERAL RETAIL ORGANIZATIONS
Federal agencies have each developed a retail structure
without criteria or basic management and organizational concepts.
The structure reflects that agency's best effort to cope with
a basic requirement - the need to bring items carried in Govern-
ment wholesale inventories into the hands of the end user who
is in fact an operator or administrator and not a supply clerk
or officer. The retail system gives him tailored support in a
simple, direct arrangement.
OPEN MARKET/LOCAL PURCHASE PROGRAMS
The CSQ indicates a general customer preference for Government
sources as opposed to local purchase. This preference recognizes
that the government source offers an advantageous price. The
following table summarizes the customer attitudes on local
purchase (open market) as a source:
YES NO
Almost Almost
Open market sources
are available
Open market sources
are preferred
Open market prices
advantageous
Always Often Sometimes Never
53%
28%
10%
8%
20%
20%
35%
25%
8%
15%
38%
38%
The customer preference for Government sources increases
the opportunity for customer satisfaction by leaving options
open. In effect, the customer will tend to use the system even
if he is given local options to purchase on the open market;
the system stands to lose little business and will gain increased
customer appreciation. For example, it is clear that the
local purchase option on stocked items could be raised from the
present $10 (GSA)/$25 (DLA) to a level on the order of $100 to
$500 with little impact on the system and with benefit in elimi-
nating small, uneconomic orders. The CSQ strongly supports an
increase in the exception criteria.
In the area of Federal Supply Schedules there is an
opportunity to give the customer a wider range of choice and
to promote greater use of commercial products. Improved
management of the schedule program has to be a prerequisite to
its optimum use by the customer. The major weaknesses indicated
in the CSQ are ease of understanding, vendor responsiveness,
and GSA responsiveness to waiver requests.
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CONCLUSIONS/RECOMMENDATIONS
1. EXPAND RETAIL STORE ACTIVITIES: Expand the number of self-
service stores and range of items and services offered, including
ordering assistance. This will greatly increase customer respon-
siveness, simplicity of customer operations and increase use
of commercial sources and products. This will increase the cost
of operations to GSA, but it will be more than offset by reduced
customer agency costs.
2. DEVELOP RETAIL SERVICES AND SYSTEMS: Promote 'the develop-
ment of retail services and systems and develop supporting
policies, practices, and systems. This recommendation would
reduce costs through better management and organization of
the multitude of fragmented user systems. On the other
hand, it involves a major effort on GSA's part to develop
and promote the program with attendant resources and management
support.
3. INCREASE INTERAGENCY SUPPORT: Promote the use of inter-
agency support arrangements among and between Government
agencies. This will reduce costs and increase responsiveness,
but it will require some initial effort by all parties to seek
out and make the initial arrangements.
4. IMPLEMENT GOVERNMENT-WIDE STORE CONSOLIDATION: Consolidate
all Government self-service stores under GSA. This concept
potentially reduces costs through consolidation and uniform
management systems/procedures. This will, however, cause
a loss of flexibility to the major agencies, particularly
in adapting to internal finance and accounting systems.
5. INCREASE LOCAL PURCHASE OPTIONS FOR STOCK AND SCHEDULE
ITEMS TO A MINIMUM OF $100 AND POSSIBLY TO $500 PER LINE
ITEM: This will greatly increase customer satisfaction
and responsiveness while reducing system costs. On the other
hand, it will increase costs to users for more expensive
commercial products.
An effective marketing management program which emphasizes
customer service and satisfaction offers large savings by as-
suring:
Better information on products and services to customers
and government/agency suppliers.
That the customer's perspective has the attention of
the highest organizational levels.
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That responding to customer and his needs is the
overriding organization-wide objective.
Increased system knowledge of customer needs and
requirements.
In the private sector, the "customer is always right".
Profit motivated companies invest a considerable
percentage of their resources in providing the customer
with information, ordering assistance, product
information and a variety of other types of support.
Currently, information about the Federal customer is
not available in a timely manner in a consolidated
location. The expenditures necessary to improve the
marketing capability of the central supply system are
not significant compared to the amounts of public monies
being lost as a result of more expensive open market
purchases by agencies. Improvements in the customer
support system will enhance the customer agencies'
ability to accomplish their missions.
Publications - GSA catalogs have been published only
atirregul'az intervals and do not include all items
available from the various procurement and supply
programs. Information is not always well cross-referenced,
clear, concise, or easy to use. Continued improvement
and expansion of the catalogs is necessary.
Data Base - Data on customers, their buying practices,
preferences, and scope of operation, as well as data on
the potential existing in the Federal marketplace for
common commercial supply items is inadequate, often
outdated and unsatisfactory for marketing requirements.
Identification of customer requirements and capabilities
to deal with the central administrative services system
are paramount to the system's success.
Product/Support System Strategies - Identification of
the customer's product needs and the turning of those
needs into product availability must be improved. Product
knowledge encompassing marketing, merchandising, technical
and procurement aspects would allow a positive, aggressive
posture in merchandising, as opposed to the existing
"reactionary" approach.
The performance measurement of all elements of the central
supply system should reflect the customer emphasis rather
than divided internal considerations.
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CONCLUSIONS/RECOMMENDATIONS
1. STRENGTHEN THE MARKETING COMPONENT: Marketing should be a
component of customer service and support reporting to the
Commissioner, FSS, with increased resources. It should be
highlighted both organizationally and functionally, emphasizing
external, customer-oriented service and responsiveness rather
than internal system-oriented efficiency. The stress should
be on customers' satisfaction, not sales targets as the premier
measure of market system effectiveness.
2. ESTABLISH A COMPREHENSIVE CUSTOMER DATA BASE AND PROFILE:
A complete up-to-date profile and directory of Federal customers
should be maintained. This would provide capabilities similar
to those in private industry. There would, however, be increased
costs for "start-up" and continuing operations.
3. ENSURE THAT A SINGLE ORGANIZATION DISSEMINATES "EXTERNAL"
INFORMATION: This would bring together information on products,
services and methods of procurement/supply in catalogs, price
lists, and brochures to facilitate easier customer use of ordering
material.
4. IMPROVE THE SUPPLY CATALOG PROGRAM BY:
o Upgrading information provided in the catalog; better
descriptions of items, illustrations, etc.
o inclusion of Federal Supply Schedule publications and
information into a single package prepared by the central
marketing organization.
5. PUBLISH CATALOG AND ORDERING INFORMATION ON A FIRM, YEARLY
SCHEDULE.
6. DEVELOP SPECIFIC PROGRAMS TO MEASURE CUSTOMER SATISFACTION.
7. DEVELOP A SIMPLE SYSTEM WITH VISIBILITY AND INFLUENCE TO MAKE
MANAGEMENT AND OPERATIONS AWARE OF AND RESPONSIVE TO CUSTOMER
DISSATISFACTION SURFACED BY FEEDBACK.
D. AGENCY/CUSTOMER LIAISON PROGRAM
This highlights changes to the present system which will
improve customer responsiveness and deals specifically with
the agency/customer liaison activity. The objective is to
develop an effective customer liaison program that represents
GSA, not only FSS.
45
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The agency/customer liaison organization provides the primary
interface with FSS Federal customers on a day-to-day basis,
assists customers in using the central supply system for
commercial support requirements and in resolution of problems
encountered by the customer.
Seven National Liaison Representatives deal with the major
agencies and departments at the headquarters level, and 25
Customer Service Representatives throughout the 10 regions
support all Federal activities in the field for Federal Supply
Service programs and functions.
The basic agency/customer liaison functions are not properly
positioned within GSA's organizational structure. As a result,
GSA lacks a single "GSA service" concept. Currently, GSA's
customers must deal with several different organizational
entities within GSA as the CSR does not represent GSA across
the board. Additionally, customers receive varying degrees and
levels of service from region to region. The chart below clearly
illustrates the wide disparity regarding levels of customer
service visits (data from the CSQ).
POSITIVE RESPONSES AVERAGE
lowest highest
CIVILIAN (except USPS) 8.4% to 31.4% 17.8%
MILITARY 20.0% to 47.8% 31.0%
TOTAL 15.5% to 33.9% 23.4%
Although the customer service representative is known, ac-
cessible, and resourceful, the customer rarely sees the CSR.
Measuring levels of CSR effectiveness is extremely important,
but because the present liaison program is so highly decen-
tralized and fragmented, measurement is impossible. A single
centralized program with accountable objectives, action plans,
etc., will permit comparative measurement of CSR activity and
levels of GSA customer service.
CONCLUSIONS/RECOMMENDATIONS
Based on the analysis from the CSQ, field interviews, reports,
etc., the following recommendations are proposed for considera-
tion:
1. ESTABLISH A GSA-WIDE CENTRALIZED NATIONAL LIAISON PROGRAM:
This would enable the customer service representative to cross
functional organization lines and operate as a representative of
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?pa~~zed ac ivity. is wall also provide a single point
of contact and improve the service-wide information and feedback
to the Office of the Administrator.
2. REALLOCATION OF MANPOWER TO INCREASE THE NUMBER OF CSR'S
(FROM 25 TO BETWEEN 60 AND 100): This will enable GSA to provide
greater attention/responsiveness to the customer; however,
that investment could cost nearly $2.5 million. Sufficient
resources must be allocated to actively pursue those Federal
agencies now purchasing from the open market (some $4.5 billion)
where direct cost savings can be attained.
3. REVISE AND STRENGTHEN CSR OBJECTIVES AND RESPONSIBILITIES:
This will improve their reporting, measurement, accountability
and effectiveness to the customer.
E. ORDERING AND ORDER PROCESSING
GSA customers are participants in a highly automated supply
system. Most military and some large civilian customers submit
requisitions through an automated communications network. Low
volume, non-automated customers, both military and civilian,
are required to place hard copy orders into the system in
FEDSTRIP/MILSTRIP format. The requisitioning process has been
described as complicated, cumbersome and non-responsive by
a number of customers.
The order processing operation is decentralized at ten (10) GSA
regional offices. The system appears to foster discontinuity,
evidenced by its inability to respond to immediate require-
ments and inquiries, proliferation of status, invoices, GBL's,
etc. The requisitioning procedure and order processing system
should be simplified to foster customer satisfaction through
responsive service.
No major programs have been mounted or efforts made to increase
the use of electrical/electronic transmission from civil agency
ordering activities, thus a major slowdown in placing
requisitions into the system exists. The implementation
of a national telephone ordering system for low volume non-
automated domestic customers could simplify ordering procedures
resulting in greater responsiveness and customer satisfaction.
Simplification of procedures and reduction in lead time could
be achieved if GSA would interlock their present system of
handling civilian off-line customers with their on-line com-
munications military network.
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The use of standard requisitioning forms for all civilian
agencies and the military would simplify coordination, eliminate
overlap and duplication and realize substantial cost savings.
The results of the CSQ indicate that customers understand and
can cope with the system. GSA could, however, simplify and
expand the customers' avenues of entering the system to obtain
current status of orders in process. The regional mode of
operation may be responsible for (1) the system being inacces-
sible to handle customer needs and (2) the lack of control and
visibility as to where orders are in the system.. Customer
reaction to the ordering system/process is tabulated below:
CSQ EVALUATION OF REQUISITIONING PROCEDURES
Requisitioning/
ordering procedures are
complete and understandable
Status reports, when
requested, are received
on a timely basis
Shipping documentation
is adequate for receiving
purposes
Response to requisition
follow-up is adequate
Internal department/
agency ordering procedures
are published and adequate
YES
Almost
Always
Often
NO
Sometimes
Almost
Never
52%
37%
8%
3%
46%
37%
13%
4%
39%
36%
18%
7%
52%
35%
10%
3%
During the first six months of J'Y 1978, a total of 4.1 million
orders were processed. Nearly 500,000 of the 4.1 million
orders were submitted in hard copy form (mail, message or
telephone order). In each case, hard copy orders must be
manually converted to machine processable format (MILSTRIP/
FEDSTRIP) for processing.
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The present order processing system involves approximately
300 people in the GSA headquarters and regions. Centrali-
zation of this operation at a single processing point would
simplify the operation and realize cost benefits in terms
of efficiency, staff reduction and elimination of operations
at headquarters. This single processing point would also
buffer customers from GSA's internal system and enhance
relations.
CONCLUSIONS/RECOMMENDATIONS
1. TELEPHONE ORDERING: Implement pilot program with an
"800" telephone number similar to phone. service offered to
customers by commercial type call-in ordering systems and
review Touchtone Telephone Requisitioning System. This
will eliminate preparation of manual requisitions for low
dollar volume customers and more timely responsiveness.
However, it will result in a cost to relocate and/or retrain
affected personnel.
2. QUICK ORDER SYSTEM: A simplified processing system for
small orders and repetitive customer orders with the goal
of 36-hour processing turnaround. The advantages will be
reduced labor costs for small orders and increased product-
ivity. The major disadvantage will be the cost of inventory
to assure responsiveness.
3. ELECTRONIC FACILITIES: Tie civilian customers to existing
electronic communication facilities. The autodin (DOD) network
has provided customer satisfaction. This will provide rapid
communication capabilities for system processing. Again, cost
of establishing and implementing programs linking each agency
with the military network could be significant.
4. ADOPT STANDARD REQUISITIONING FORMS: Standardization would
simplify coordination and eliminate duplication.
5. CENTRALIZE ORDER PROCESSING: The processing is now
performed by ten (10) regions and headquarters should be
performed at a single processing point. The order processing
policy and procedures function should be in the same organiza-
tion as inventory management. This will centralize and consol-
idate this function achieving substantial savings. In addition,
it relieves headquarters from the order processing operation
and provides greater customer satisfaction/efficiency and
responsiveness. However, it will have an impact on personnel
relocation.
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CUSTOMER SERVICES
CUSTOMER SUPPORT QUESTIONNAIRE (CSQ)
This Appendix furnishes background on the development of
the CSQ and records the, basic findings as reflected in over
2,400 responses. This is the first such comprehensive
survey of customer satisfaction and it is documented for
continued analysis.
The objective of the Customer Interest Group (CIG) was to
obtain information on who the "customers" are and how they
perceive: (1) the consolidated supply system and (2) the
products they receive through the system. The questionnaire
(a copy of which is enclosed) was developed in
three parts.
Part A was formatted to?provide data about the respondent,
i.e. the organization; location, size (in dollar volume of
business); major commodity usage; who they purchase/order
from; whether the respondent provides or receives supply
and/or procurement support; etc. This information would
permit the stratification of responses to Parts B and C to
determine if trends exist by state, activity, dollar volume
etc.
Part B asked the respondent to evaluate support programs
or functions of the General Services Administration (GSA),
Defense Logistics Agency (DLA), and the Veterans Adminis-
tration (VA) systems. Part B was prepared in four (4)
sections; each section dealing with a different program or
functional aspect. Section 1 covered the stock/nonstock
programs of GSA, DLA and VA; Section 2 those agencies'
customer assistance programs; Section 3 the GSA Federal
Supply Schedules; Section 4 the GSA Self-Service Stores.
Part C asked the respondent to evaluate the commodities
received from each of the support agencies (GSA Stock/
nonstock, GSA Federal Supply Schedule, DLA and VA).
Nineteen major commodity groupings were identified. The
statements about each commodity grouping related to (1)
the range of products offered, (2) the quality/performance
aspects, (3) delivery times, (4) adequacy of catalogs and
price lists, (5) whether the requisitioning/ordering
procedures were complete and understandable, and (6) whether
open market sources are (i) available, (ii) preferred,
or (iii) more advantageous.
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Respondents were asked to use numbered ratings 1 through 5
to evaluate the statements in Parts B and C.
1 - Almost always or definitely yes
2 = Often or yes
3 = Sometimes or no
4 = Almost never or definitely no
5 = Not applicable, no exposure or no experience
The CSQ also solicited written comments.
FINDINGS
The overall response to the support programs of GSA,
DLA and VA was favorable, on the order of 80% satisfactory.
However, the favorable rating is not an indication that the
system does not need to be improved. To illustrate the full
magnitude of unfavorable ratings, it is only necessary to
apply the percentages to :
- the number of customers: If the system has 50,000
customers and 20% of those customers indicated dissatis-
faction, it would mean 10,000 customers are dissatisfied; or
- the number of orders processed: If 8,000,000 orders
are processed by the system, the 20% would mean 1,600,000
orders could have produced some unsatisfactory results.
The vastness of the system requires that the analysis give
consideration to the individual parts of the system as well
as to the whole.
The following table summarizes the overall response to the
major subject areas by the actual number of responses and
by the percentage of each response:
Subject Area
Responses
YES
NO
Almost
Always
Often
Sometimes
Ali-no st
Never
a. Stock/Nonstock #
7,429
5,533
2,363
948
Programs (GSA, DLA %
& VA)
46
34
15
6
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Subject ART Responses
YES
NO
Almost
Always
Often
Almost
Sometimes
-Never-
-
b. Customer Assis- # 2,865
1,854
1,304
1,995
tance Services
DLA and VA)
(GSA, % 36
23
16
25
c. GSA Federal
# 4,561
4,437
2,,071
813
Supply Schedule
% 39
37
17
7
d. GSA Self-Service # 2,540
1,813
1,156
807
Stores 40
29
18
13
e. Range of Products # 9,481
10,427
4,014
1,763
is sufficient (GSA, % 37
41
16
4
DLA & VA)
f. Quality/Per- #10,282
10,976
2,729
805
formance is satis- % 41
factory (GSA, DLA
& VA)
44
11
3
g. Delivery Time # 7 , 04 3
10 , 274
5,344
1,929
is adequate (GSA, % 29
42
22
8
DLA & VA)
h. Catalogs/Price 411,319
10,179
2,463
1,100
are adequate (GSA, % 45
DLA & VA)
41
10
4
i. Requisitioning/ #12,960
9,944
1,965
793
Ordering Procedures % 51
are complete and
39
8
3
understandable (GSA,
DLA & VA)
j. Overall commodity
#51,066
51,784
16,510
6,383
evaluation (GSA, DLA
& VA)
% 41
41
13
5
k.
Open Market
6,932
3,701
1,351
1,044
Sources are available
% 53
28
10
5
1. Open Market
'# 2,358
2,468
4,217
3,043
Sources are Preferred
% 20
20
35
M. Open Market
1 959
1,754
4, 372
4,307
Prices are Advanta-
geo us
% 8
15
38
38
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ISSUE NO. S-5: VENDORS AND THE FSS PROCUREMENT PROCESS
I. INTRODUCTION
This paper summarizes the.findings of an examination of the
relationship of the Federal Supply Service (FSS) with sup-
pliers. The discussion below explores two major problem
areas: contract complexity and complexity of specifications.
This study was focused primarily on policy, procedural, and
management matters rather than organizational adjustments,
which are dealt with elsewhere in the report. The study also
avoided duplicating the comprehensive three-year explorations
of the Commission on Government Procurement. The Office of
Federal Procurement Policy (OFPP) is rapidly implementing
the Commission's recommendations. In these circumstances
the task became one of verifying the needs for improvement
and evaluating ongoing actions in meeting these needs.
The literature on government-vendor relations was examined,
e.g., reports of the Commission on Government Procurement,
GAO reports, Congressional Committee hearings, and reports
of the Paperwork Commission. A questionnaire was sent to
248 vendors and to 60 trade and commodity associations, and
116 responses were received from vendors. Task Force members
also visited vendors, government agencies, and trade and
commodity associations in the field.
II. CONTRACT COMPLEXITY
This section explores how Federal contracting methods affect
various types and sizes of suppliers and what might be done
to correct problems.
Most vendors sell only a small portion of their product to
FSS. Half of the respondents stated that they sold less than
5 percent of their production to the Government. Such firms
cannot become expert on Government contracting, so it makes
sense to simplify contracts whenever possible to encourage
them to do business with the Government.
However, contract complexity problems appear to be more an
irritant than a major impediment to most vendors. The major-
ity of respondents indicated that organization and content
of bid packages had little or no influence on their willing-
ness to bid or their price. Still nearly nine percent of
respondents claimed that these issues precluded bidding.
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FSS is now experimenting with standard formats on a limited
basis. Government standard forms for solicitation, offer
and award have been revised to present a more attractive
and logical arrangement of provisions. This concentration
on format rather than forms may lead to some proliferation
of solicitation and award instruments. If combined with
improved readability, the overall result should be beneficial.
If FSS moves away from the use of standard forms, procurement
staff may need to consult the body of regulations more fre-
quently. A computer based regulation information retrieval
system could provide easier access.
For small purchases ($10,000 and under), the Paperwork
Commission concluded that standardization of forms can be
helpful. A single government small purchase form along the
lines of the FSS experiment" should be tried.
Recommendations:
The testing of the experimental format by FSS (GSA Form 1424 A,
B, and C) should be carefully reviewed by OFPP to determine
whether this approach is more useful than standard forms for
universal application.
The Federal Acquisition Institute (FAI) should conduct a
feasibility study of the applicability of ADP to management
of acquisition regulations.
There is a growing demand for using plain language in laws,
regulations, contracts, and other legal instruments. The
President recently directed that Federal regulations be
written in language a small business person can understand.
The National Institute of Education (DHEW) has solicited
proposals for research on clear writing and effective design
of documents. Several teams in GSA and DOD working on new
Federal Acquisition Regulation are giving careful consideration
to drafting simple, clear, and understandable requlations.
SOCIO-ECONOMIC PROVISIONS
Government procurement contracts are used to promote Federal
social and economic policies concerning such goals as fair
employment practices and improving our balance of payments.
In 1972 the Commission on Government Procurement recommended
that the thresholds for applying such policies to procurement
be raised to $10,000. The Paperwork Commission also recommended
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$10,000 threshold. Currently a threshold of $25,000
seems more appropriate, with future periodic adjustments.
The ASRP vendor questionnaire included the question, "How does
time required for invoice processing and payments influence
your approach on government contracts?". Respondents claimed:
No effect 49.1%
Inconvenient/No substantial
impact on bid price 20.7%
Bid price increased and/or
discourages bidding 18.4%
Precludes bidding 1.7%
A thorough GAO study (FGMSD 78-16) concluded that "Contrac-
tors were generally satisfied with the Government's (payment)
performance". Comparing the Government's payments with commer-
cial firms respondents stated that commercial firms pay:
Faster
43%
Slower
21%
Same
36%
The GAO did find room for improvement and recommended admini-
strative changes such as developing due date standards and
increased use of imprest funds.
Though there is a common notion that the Government does not
pay its bills promptly, the conclusion of this study is to
the contrary. Potential vendors should be more widely
informed of the results of studies like these to count-er
misapprehension about late payment by the Government.
III. COMPLEXITY OF SPECIFICATIONS
This section deals with criticism of Government specifica-
tions used in the procurement of commercial products. Vendors,
members of Congress, the Commission on Government Procurement,
the GAO and more recently the office of Federal Procurement
Policy have all found fault with various aspects. of procurement
specifications. Many critics favor local purchasing or multiple
award contracting, which are said to make more efficient use
of existing commercial marketing and distribution facilities.
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Specifications are also criticized for:
o Length and complexity
o Excessive referencing of subordinate specifications and
standards
o Unnecessary divergence from current commercial product
characteristics (unique government item)
o obsolete design or formulation manufacturing
technology specified
Fifty-seven percent of the vendor respondents to the ASRP
questionnaire reported substantial problems with specifica-
tions. This contrasts with twenty-five percent reporting-
major problems with bid package complexity. Interviews with
several industry associations confirmed this conclusion.
A PROPOSED APPROACH TO SPECIFICATION SELECTION
The organizations involved in developing specifications operate
somewhat in a vacuum and often fail to give proper considera-
tion to the needs of all elements interested in the procurement
process. In many instances complex rather than simplified
specifications are developed. Positive integration of all
supply management decisions is required to reconcile the diverse
needs of all interested customers, suppliers and supply manage-
ment officers. Through this improved coordination, the most
favorable selection can be made from the specification options
which range from brand name to the more complex design specifi-
cation forms.
As can be seen from Figure 1, different item and industry
characteristics should determine the appropriate specification
option. Merchandising'(or supply management) decisions, however,
should intervene and control this logical process. For example,
low aggregate volume, necessity for item choices or a logical
decision to decentralize an item for local purchase may dic-
tate some "lesser" form of item specification. When this
occurs the potential or actual capability to prepare and
maintain a detailed technical purchase specification should
be overridden.
For specification management to become a subordinate element
in a rational supply system, some changes are needed in present
productivity measurement and resource allocation practices.
This will encourage better specifications, cancellation of
unnecessary documents, and more externally developed speci-
fications.
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~" PURCHASE SPECIFICATION TYPES
PURCHASE SPECIFICATION
OPTIONS MATRIX
SELECTION
CRITERIA
vc
a
,o.a
a'~
w
tie
z
~
BRAND NAME
Patented or Proprietary
x
0
X
0
0
0
0
0
X
0
0
0
BRAND NAME OR EQUAL
Brands are comparable
Low aggregate demand
0
X
0
X
Low risk of inferior item BID
0
X
0
X
X
0
0
X
Ln
BRAND NAME OR EQUAL WITH
SALIENT FEATURES
. Not all brands comparable
0
X
0
X
Low-to-moderate demand
X
X
X
X
X
0
0
X
Moderate Risk of Inferior Item BID
DESIGN/FORMULATION
. Moderate to high demand
High risk of inferior item BID
O
X
0
0
Stable production technology
ii
Design-formulation Spec. Effective
X
X
X
X
0
X
X
PERFORMANCE
. Moderate to high demand
High Risk of Inferior Item BID
0
X
0
0
Dynamic or multiple production technology
Design-Formulation approach inefective
X
X
X
X
0
X
X
X
COMBINATION DESIGN/
PERFORMANCE
? Moderate to high demand
0 X
0
0
High risk of inferior item BID
X
X
X
X
0
X
X
X
Dynamic/multiple production technology
Performance Spec/test difficult
ti
ci 4b, 4`b fi 3ro
ti 3m
o 3ro ti ' ?
J C. O
y y
//vq
PREPARING
OPTIONAL ACTIVITY
PROCEDURES OPTIONS
v4 i b a o xv
'w 'o o>G'o
~c
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GREATER RELIANCE ON VOLUNTARY CONSENSUS STANDARDS ORGANIZATIONS
Many experienced procurement professionals believe that where
purchase specifications are appropriate, a better and more
acceptable commercial item specification could be produced by
voluntary consensus standards writing bodies such as the
American Society for Testing and Materials. Wider use of
such specifications would assure greater industry technical
support and would avoid some of the technical deficiencies of
today's Federal specifications.
More cooperative efforts among government specification
writers at Federal, state and local levels should enable
FSS to obtain satisfactory specifications at lower direct
cost. Even the limited information gathered in this survey
indicates that a great deal of fragmented technical effort
is underway. Though past efforts suggest that the task
of organizing such an effort is difficult, the potential
exists for more effective use of resources. The appropriate
forum for this coordinated effort may be the voluntary
standards process.
The Government, under current procurement statutes cannot
abolish Federal purchase. specifications--nor does the evi-
dence. suggest that this would be an optimum solution. There
is, however, substantial evidence that specifications can be
significantly improved both in format, content, and through
selective application of the appropriate level of specifica-
tion for each procurement. FSS should increase management
emphasis on the OFPP tasks, refine and update Government
specifications, improve application of technical resources by
developing better channels of communication with industry and
voluntary consensus standards groups, other Federal specifi-
cation components and state and local government specification
writers. In summary the recommendations are:
o Develop merchandising planning system to guide supply,
procurement, specification efforts, product mix, item entry,
item elimination
o Use brand name and other less complex descriptions
where possible
o Support ASTM purchase specification developments to
replace Federal purchase specifications
o Seek state/Federal cooperative specification development
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ISSUE NO_. S-6: PERSONAL PROPERTY UTILIZATION
I. INTRODUCTION
This is an assessment of personal property utilization and
disposal activities in the Federal Government.
This study concentrated on GSA and DoD, the two largest man-
agers of personal property utilization and disposal activi-
ties. The study included research on applicable laws, regu-
lations, previous studies and correspondence; questionnaires
to 17 Federal cabinet and major independent agencies; inter-
views with State government organizations; and, evaluation
of the solicited views of trade associations, professional
groups, other state and local government organizations and
private citizens.
II. BACKGROUND/CURRENT SITUATION
The Federal Property and Administrative.Services Act of 1949,
assigned the responsibility for the supervision and direction
of the disposition of excess and surplus property to the
Administrator of General Services. The Act further assigned
the responsibility for supervision and direction of the dis-
position of DoD foreign excess property to the Secretary of
Defense. The responsibility for the sale of domestic surplus
property generated by DoD is accomplished through a delegation
of authority from GSA. Other agencies are authorized to sell
surplus property either by legislative exemption, delegation
of authority from GSA or by agreement with GSA. Examples of
agencies engaged in these activities are the U.S. Postal
Service, Department of. Energy, Tennessee Valley Authority,
and Department of the Treasury. Agencies engaged in sales
activities generally do so for selected types of property
only.
Within GSA, responsibility for utilization of excess and dis-
posal of surplus personal property is assigned to the Office
.of Personal Property Disposal, FSS. The present organization
has an authorized ceiling of 580 positions including Wage
Grade and temporary positions. The actual end-of-year em-
ployment in Fiscal Year 1977 was 452 with an annual budget
of $9,503,000. The Office of Personal Property Disposal
has division structures in the ten GSA regions. GSA operates
12 Personal Property Centers (PPC's) and two Sales Centers
(SC's).
The Office of Personal Property Disposal is organized by
program responsibility. The Utilization Program efforts re-
sult in the annual retention for Federal use of excess pro-
perty valued at over $1 billion (original acquisition cost)
out of approximately $3.5 billion of excess' property each
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year which includes DoD reportable property. The Rehabili-
tation Program, is designed to preclude new procurement, by
extending the useful life of many common use items of pro-
perty. At present, there are approximately 2,600 small firms
contracted to perform repair and rehabilitation work under
this program. The Donation Program makes available to eli-
gible State and local donees property which has been deter-
mined surplus to the Federal Government's needs. Donations
currently average about $400 million out of a total annual
availability of approximately $2.4 billion (original acqui-
sition cost) declared surplus to the Federal Government's
needs. GSA, responsible for the general supervision of the
sale of all Government personal property, operates its Sales
Program with appropriated funds. Annual sales proceeds for
FY 1977 reached $30 million as a result of selling usable,
salvagable and scrap property.
In summary, out of $3.5 billion of excess property reported
in FY 1977, about $1.1 billion was reutilized, about $0.4
billion was donated and about $0.1 billion sold. The approx i-
mately $1.9 billion remaining (in terms of original acquisi-
tion cost), is either otherwise disposed of or remains in
inventories for future screening.
Within DoD, responsibility for the worldwide integrated man-
agement of the Defense Personal Property Disposal Program
is assigned to the Defense Logistics Agency (DLA). The De-
fense Property Disposal Service (DPDS), an element of DLA,
is assigned the operational and organizational responsibil-
ity. The DPDS has five Defense Property Disposal Regions
(DPDR's), three in the continental U.S. and one each in the
Pacific and Europe. There are 156 Defense Property Disposal
Offices (DPDO's) and 73 Defense Property Holding Activities
(DPHA's) which although separately located are part of the
DPDO's. The three DPDR's in the United States employ approx-
imately 3,431 civilians. DoD accounted for over $4.8 billion
in excess personal property generations in FY 1977. This
figure includes both reportable (to GSA) and non-reportable
property. It does not include $620 million of overseas excess
personal property. During FY 1977, $278 million in DoD excess
personal property was made available for the GSA operated
Donation Program. During this same period sales totaled
$121.8 million (including approximately $21.2 million from
overseas sales).
GSA and DoD both operate personal property sales activities.
Duplication exists in personnel, mailing and printing costs,
warehousing and storage, advertising, market research and
evaluation, automated systems, conduct of sales and associ-
ated activities.
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The Departments and agencies that responded to ASRP inquir-
ies concerning personal property utilization and disposal,
brought forth three principal conclusions: (a) screening
and disposal actions take too long; (b) agencies frequently
incur excessive storage costs for property being stored
while awaiting disposition; and (c) central "holding facil-
ities" or "one-stop property centers" should be established
in areas with large Federal populations or where large volumes
of excess/ surplus are generated.
III. CRITERIA FOR IMPROVEMENT
o Minimize fragmentation and overlap of domestic sales
of personal property.
o Reduce overhead and operations cost.
o Reduce total time requirements for disposal cycle.
IT o Establish improved systems and processes to increase
efficiency and savings.
? o Improve services to the buying public and to other
agencies of the Executive Branch.
IV. ALTERNATIVES
A. TOTAL CENTRALIZATION OF DOMESTIC SALES FUNCTIONS
Consolidate and transfer all domestic sales functions per-
formed by GSA, DLA and other Executive Branch agencies to
the office of Personal Property Disposal, GSA. The required
transfer of personnel and other resources from the Defense
Property Disposal Service (DPDS), DLA would not interfere
with DPDS's continuing accomplishment of its missions re-
lated to demilitarization of Defense property and foreign
excess property. GSA would, under this alternative, propose
necessary legislative changes, rescind its delegation of
authority to DoD for domestic sales, and revoke existing
agreements with other Executive Branch agencies based on
a time-phased implementation plan worked out with all part-
ies concerned. The essence of this recommendation is that
GSA should assume appropriate responsibilities for the
domestic sale of all Government-owned personal property.
1. Advantages
Increased efficiency and effectiveness of sales
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Reduced costs through the elimination of dupli-
cation of efforts, facilities, systems and overhead.
Offers a central source of information to the
buying public.
Can conduct sales under a standardized
set of procedures and practices.
Provide a single organization responsible for
market research, analysis and sales evaluation.'
Provide a single organization (DoD) responsible
for foreign excess personal property.
2. Disadvantages
Personnel turbulence resulting from reorgani-
zation transfers from DoD to GSA.
point.
Increase cost to deliver goods to a central
Resistance by Executive Branch agencies perform-
ing own sales activities.
Loss of,efficiency during transition phase.
Transfer to and consolidate in GSA carefully selected domes-
tic sales activities performed by GSA, DLA and other Execu-
tive Branch agencies. Transfers would be contingent upon a
comprehensive feasibility study, under GSA's leadership, to
determine whether consolidation of sales activities and the
delegation of certain sales authorities to agencies are eco-
nomically justified on an installation-by-installation basis.
1. Advantages
Increased efficiency and effectiveness of sales
Reduced costs through the elimination of dupli-
cation of efforts, facilities, systems and overhead.
Offers reduced number of sources of informa-
tion to the public.
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2. Disadvantages
Personnel turbulence resulting from reorgani-
zation transfers.
Resistance by Executive Branch agencies per-
forming own sales activities.
Loss of efficiency during transition phase.
C. PROCESS IMPROVEMENTS
1. Establish GSA operated property utilization
and disposal centers to provide a facility for all Federal
agencies for: temporary storage; screening for utilization;
display for inspection by Federal, State and local agencies
and other eligible donees and the general public; rehabili-
tation; and sales activities,. Locations would be based on
proximity of large Federal agency populations and/or large
volumes of excess generations. Upon physical transfer of
property to a center GSA would accept accountability
for same.
2. Accelerate the implementation of a standard-
ized automated management information system in GSA; insure
its compatibility with existing systems of DoD and other
agencies. FSS-23 (GSA's Excess/Surplus Personal Property
Disposal System) is not fully operational.
3. Provide for greater availability by inter-
regional utilization screening where feasible rather than
restricting to present regional screening.
4. Make rehabilitated excess personal property
available to agencies on a reimbursable basis to avoid new
procurements.
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ISSUE NO. S-7: PRINTING SERVICES
This is an assessment of the printing and reprographic func-
tion in the Executive Branch and an exploration of suggested
organizational and management improvements.
The study included interviews with State Government officials
and solicitation of opinions from Executive Branch agencies
by both interviews and questionnaires. Major reprographic
equipment manufacturers and other industry representatives
were interviewed. Historical research was undertaken to
identify the evolution of Federal printing policy and regu-
latory documents.
The estimated cost in FY 1978 of total Federal printing and
reprographic services is $1.49 billion. It is believed that
substantial annual savings could be achieved through proced-
ural and operational changes.
II. BACKGROUND/CURRENT SITUATION/PROBLEM AREAS
The legal basis for Federal printing is Title 44 of
the
U.S.
Code. This basic legislation was enacted in
1895,
and
has
been updated and revised through the years;
codified in 1968.
it was
last
Title 44 provides for a Congressional Joint Committee on
Printing. It is chartered to use "any measure it considers
necessary to remedy neglect, delay, duplication, or waste
in the public printing and binding and the distribution
of Government publications."
The Joint Committee on Printing issues the Government Print-
ing and Binding Regulations for the guidance of Federal agen-
cies, controlling items of equipment and production processes
as well as the sources of printing production and procurement.
There are four principal sources of procuring printed matter
for the Executive Branch: agency internal plants; Government
Printing office; direct commercial procurement; and GSA
plants. The total annual cost for printing and reprographic
services is not precisely known due to a variety of funding
mechanisms and inconsistent accounting procedures. However,
a summary of agency costs by source is as follows:
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Cost
Agency internal $752 million
GPO
A)
Commercial
(75%)
B)
Plants
(25%)
258
86
Agency direct procurement 55
Estimate of indirect
overhead cost for agency
plant operations
$1,158 million
TOTAL $1,498 million
The total number of JCP-authorized printing plants is ap-
proximately 300, with agency internal plants accounting
for 281, GPO 7, and GSA 12.
The above summary indicates an emphasis on the utilization
of in-house production sources. Agency responses to a survey
questionnaire confirmed this situation. In addition, the
following comments were noted:
(a) Thirteen agencies ($347M) said all four
sources of printing were required; five agencies (including
most of DOD) ($333M) did not use GSA, as a source.
(b) The first consideration in selecting a
printing source is time.
(c) Each of the printing sources provides dif-
ferent levels of service in terms of time and complexity
with GPO handling the majority of contract printing; agen-
cies producing urgent and classified printing and duplica-
ting as provided by law; and GSA providing Standard Forms
and reprographic services.
(d) Six large agencies of those sampled,
identified a necessity for`change in the current structure
and a clarification of the roles of the Joint Committee on
Printing/Government Printing Office and the Executive
Branch. Chapter 5, Title 44, USC requires that:
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 Hpprovea ror, ejepse zuuz/qi/uts : c:iH-KUI-ts5-uuISy wuuiuu]buuui-,
printing, binding, and blank-
book work for Congress, the Execu-
tive Office, the Judiciary, except
for the Supreme Court of the United
States, and every independent office
and establishment of the Government,
shall be done at the Government
Printing Office, except...
(1) classes of work the Joint Committee
on Printing considers to be urgent
or necessary to have done elsewhere;
and
(2) printing in field printing, plants...,
and the procurement of printing, if
approved by the Joint Committee on
Printing."
"Printing or binding may be done at
the Government Printing Office only
when authorized by law."
Although waivers are issued in certain situations, the GPO
is essentially a mandatory source of printing supply, es-
pecially in the area of commercial procurement. Although
many agencies support both the utility and economy of GPO,
the mandatory aspect of its role has caused operational
difficulties and excessive costs in some instances.
The Legislative Branch, through the JCP and GPO, controls
the Executive Branch printing program (vested by Title 44).
President Wilson's veto of an appropriations bill on May 13,
1920 recognized that legislative control of Executive print-
ing could be a violation of the separation of powers clause
of the Constitution. The controversial provision stipulated
that no journal, magazine, periodical or similar government
publication could be printed, issued or discontinued by any
branch or office of the government service unless authorized
under regulations prescribed by the Joint Committee on Print-
ing. His veto message stated, in part that, "the Congress
and the Executive should function within their respective
spheres. Otherwise efficient and responsible management will
be impossible and progress impeded by wasteful forces of
disorganization and obstruction..."
Control by the Legislative Branch has caused operational
difficulties in the Executive Branch:
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(a) JCP controls the procurement of printed
products and printing equipment, resulting in inefficien-
cies in both the purchase and production of printed matter.
(b) The JCP regulates only specific items of
equipment and production processes and does not provide
an optimum means of evaluating and implementing state-of-
the-art developments in word processing, reprographics,
micropublishing and computer driven printing devices.
There is no central point in the Executive Branch for pro-
viding agencies with coherent policy or program guidance
in the printing and reprographic areas:
(a) Technological assessments and market analy-
ses are conducted autonomously. Many agencies are expending
management resources to evaluate identical systems or proce-
dures.
(b) In the reprographic area some individual
agencies have attempted to manage an effective copying/dupli-
cating program. The costs of reprographics (conservatively
estimated to be $478 million) are controlled only to the
extent managed by individual agencies. Each agency performs
individual.cost studies, analyses and hardware evaluations.
Savings in this area could be as high as 20% with a coordin-
ated effort and sufficient funds to purchase rather than
lease when economies so dictate.
(c) A comprehensive Federal Government clear-
ing house (or information system) does not exist to collect
government-generated material nor to index, abstract, or
advertise its availability.
(d) The impact of emerging technologies on
the way information is handled, generated, duplicated, dis-
tributed and stored is not coordinated within the Federal
Government.
(e) A wide range of printing and lithographic pay
rates and classifications presently exists which should be
rationalized. Additionally, the GS-1654 Printing Management
Series has not been revised in 20 years. It fails to re-
cognize technological developments and program management
requirements.
(f) There have been difficulties in applying
the provisions of Circular A-76 to the procurement of print-
ing in Executive Branch agencies.
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(g) Previous studies which reflected potential
savings through management improvements have not been im-
plemented due to procedural difficulties. The savings from
central guidance could accrue in: (1) Improved procurement
and use of reprographic equipment, (2) modernization of in-
ternal agency printing plants, (3) establishment of standards
for storage, warehousing and other related distribution pro-
cesses, (4) reduction of overhead costs, and (5) technical
assistance in printing management processes.
III. CRITERIA FOR IMPROVEMENTS
o Reduce costs of printing.
o Improve the kind and quality of printing.
o Improve delivery and service for printing.
IV. ALTERNATIVES
A. Establish a policy management and review office in
the Executive Branch for the purpose of providing leader-
ship, coordination and guidance in the delivery of printing,
reprographic and publication services.
1. Advantages
This office would provide a single central and
responsive point within the Executive Branch for:
Development of legislative proposals for
Presidential consideration designed to clarify Legislative/
Executive roles.
Development of policy and standards.
Coordinating and reviewing program require-
Making state-of-the-art or technological assess-
ments and market analyses.
Developing a comprehensive clearing house
(information system) to index, abstract, identify and control
distribution of government-generated material.
2. Disadvantages
There would be initial costs of creating a small
office staff. (Cooperative arrangements with Departments and
major Agencies could be used to start the program.)
There may be Legislative Branch opposition.
68
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B. Reactivate the Interdepartmental Committee on Print-
ing and Processing (Executive Order 7993 of October 29, 1938)
and give it a suitable Secretariat and resources for policy
management and review of printing, reprographic and publica-
tion services in the Executive Branch.
1. Advantages
No new Executive or legislative action required
to establish this committee.
This Committee and its Secretariat would pro-
vide a single central control point within the Executive
Branch for:
Developing policy and establishing standards
Coordinating and reviewing program requirements
Making state-of-the-art or technological assess-
ments, market analyses, and new product reviews.
Developing a comprehensive clearing house (in-
formation system) to index, abstract, indentify, and dis-
tribute Government-generated materials.
2. Disadvantages
Initial start-up costs and ongoing program
Functional management problems which are endemic
to committees (this maybe overcome to some extent if a strong
Secretariat director can be installed).
Legislative Branch opposition.
Committee would not have authority to modernize
internal agency printing plants, improve other printing costs,
or reduce printing overhead.
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ISSUE NO. S-8: STRATEGIC AND CRITICAL MATERIALS STOCKPILE
I. INTRODUCTION
This is an assessment of GSA's organizational arrangement
for carrying out certain residual operating responsibil-
ities of the Strategic and Critical Materials Stockpile.
This study assumes the implementation of a recommendation
by the Federal Emergency Preparedness and Response Project
that the stockpile policy and planning functions now per-
formed by GSA's Federal Preparedness Agency he transferred
to a proposed Civil Emergency Management Administration.
Under this concept, all stockpile operations, including
FPA's Office of Stockpile Disposal, FSS's Office of Pro-
perty Management and the Office of Finance's Stockpile
Inventory Branch, would continue to be performed by GSA
under authorities contained in the Strategic and Critical
Materials Stock Piling Act of 1946.
The assessment required an examination of all organizational
responsibilities for the full spectrum of stockpile opera-
tions from stockpile acquisition through disposal. This
effort included meetings with concerned Congressional com-
mittee staffs, assessment of prior studies and reports on
this subject, meetings with key Federal agency representa--
tives, review of Federal statutes concerning stockpile man-
agement and polices, consideration of involvement with the
Federal Emergency Preparedness and Response Project, and
review of pending legislation.
The project, however, did not review the economics or ef-
fectiveness of the present warehousing and locations or the
alternatives to physically stockpiling needed materials as
a means of supporting the stockpile goals. In addition, the
project did not look at other stockpiling related activities
performed by other agencies such as the Commodity Credit
Corporation and the stockpiling of oil reserves under the
Energy Reserve Act of 1974 by the Department of Energy.
II. BACKGROUND AND CURRENT SITUATION
Although the United States has a wealth of natural resources,
experience has established that it is far from self-suffici-
ent in a variety of raw materials necessary to conduct a
major war. Therefore, the U.S. stockpiles strategic and
critical materials in sufficient quantities to protect it-
self against a dangerous and costly dependence upon foreign
sources of supply in time of national emergency as an essen-
tial element of national security.
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The responsibility for the management and operation of the
Strategic and Critical Materials Stock Piling Act is assigned
to the Administrator of GSA. The Administrator has redele-
gated these functions to the Director, Federal Preparedness
Agency, the Commissioner, Federal Supply Service, and the
Director, Office of Finance, Office of Administration.
As of March 31, 1978, the estimated market value of strategic
materials held in Government inventories amounted to $8.6
billion. The materials are being stored at 115 locations:
34 military depots, 28 GSA depots, 14 other Government-owned
sites, 10 leased commercial sites, and 29 industrial plant
sites.
During the period from World War II to July 1973, the opera-
ting responsibility was carried out in a single mission-
oriented organization. On July 1, 1973, the organization was
abolished and the Office of Property Management was function-
ally transferred to the FSS, while the Office of Stockpile
Disposal was concurrently reassigned as a staff function to
the office of the Administrator and later transferred to the
Federal Preparedness Agency.
As a result, the operating responsibility for the National
Stockpile is currently fragmented within GSA among the
Federal Supply Service, the Federal Preparedness Agency, and
the Office of Finance. FSS's Office of Property Management
has physical custody of the stockpile and is responsible for
acquisition, inspection, storage, maintenance, and shipment
of all stockpile materials. Within the FPA, the Stockpile
Policy and Objectives Division determines the commodities to
be included in the stockpile, and the quantities of each. In
addition, the Office of Stockpile Disposal, which. is located
in FPA, is responsible for selling or otherwise disposing
of stockpile materials which are no longer required. The
Office of Finance operates and maintains both the stockpile
financial general ledger accounts, as requried by law, and
the inventory records of materials in the stockpile.
Under GSA's present organizational alignment, the operating
responsibilities of the National Stockpile have several
drawbacks: (1) no single individual below the level of Admin-
istrator of GSA has overall responsibility or accountability
for all aspects of the stockpile program; (2) coordination
between FSS, FPA, and Office of Finance is frequently cumber-
some and incomplete; (3) some redundance in overhead staffs
exist; (4) competing organizational objectives are difficult
to resolve due to communications and coordination problems;
and, (5) maintenance of out-of-date inventory records due to
difficulties in coordination between organizations.
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III. CRITERIA FOR IMPROVEMENTS
o Minimize fragmentation and overlap of operating
responsibilities.
o Minimize potential for stockpile management con-
flicts.
o Increase accountability for management of stock-
pile operations.
Improve national emergency response capability.
o Minimize program disruptions.
o Reduce overhead costs.
IV. PROCESS IMPROVEMENT
Consolidate functions of the Stockpile Inventory Branch of
the office of Finance, the Office of Property Management
of FSS, and the Office of Stockpile Disposal of FPA into a
single office of stockpile management which would he respon-
sible for all stockpile activities.
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ISSUE NO. S-9: PUBLIC UTILITY MANAGEMENT
I. INTRODUCTION
This is an assessment of the Public Utility Services aspects
of Contracting, Management, and Rate intervention, provided
by GSA to other Federal user agencies.
The study included interviews of selected Federal user agen-
cies, utility company suppliers, State Regulatory Commissions,
the Federal Energy Regulatory Commission, State Governments,
private sector users, and GSA personnel.
The Federal Government spends an estimated $2.4 billion for
purchased public utility services and for operations costs
for Federally-owned heating and generating plants (exclusive
of utility services supplied under total building leases).
II. BACKGROUND AND CURRENT SITUATION
Section 201 of the Federal Property and Administrative Ser-
vices Act (FPASA) of 1949, as amended (40 USC 481), provides
that the Administrator of GSA shall procure and supply non-
personal services for the use of the executive agencies and
perform functions related to procurement and supply and that
he shall represent other agencies in negotiations with public
utilities and in proceedings before Federal and State regula-
tory-bodies. The Secretary of Defense may exempt DoD when-
ever he determines it in the best interest of national secur-
The procedures by which public utility services are acquired
for Federal agency users is quite varied. Approximately
25% of purchased utility services are paid by GSA for build-
ings operated by GSA. These utility charges are included
in the GSA Standard Level User Charge (SLUC) system wherein
tenant agencies pay a total unit rate for space. The remain-
ing 75% represents usage by military and civilian agencies
with large self-contained installations.
The military services arrange for public utility services,
usually by negotiating a contract with a utility supplier
under provision of Supplement 5 to the Armed Services Pro-
curement Regulations (ASRP), or by a contract based upon
an Area-wide Agreement (negotiated by GSA) which may be in
existence for the service area of interest. A delegation
of authority signed between the Administrator of GSA and
the Secretary of Defense on October 11, 1954 allows DoD to
handle its own utility requirements.
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Several agencies have authorities for procuring utility
services (and other services as well) under their original
agency authorizations, or under Section 602 of the FPASA
(40 USC 473). Examples include the Federal Aviation Admini-
stration (now a part of the Department of Transportation),
Veteran's Administration, Federal Reserve Board, U.S. Depart-
ment of Agriculture, DEIUD, TVA, CIA, the Bonneville Power
Administration, the U.S. Postal Service, and NASA. In some
instances a contract may be negotiated with a public util-
ity company using much of an existing GSA Area-Wide Agree-
ment; in others the commercial utility company commercial
service forms may be used. In some instances, the GSA con-
tracting process causes extended delays to agency programs.
The GSA Area-Wide Agreement is a comprehensive contract
negotiated with utility companies for their entire service
area, usually for a ten-year term (or for one-year renewable
terms), and provides for the inclusion of various Federal
users by the completion of a contract-appendix form, which
resembles a utility company commercial agreement.
The outstanding feature of the GSA Area-Wide Agreements
(and of the military service contracts) is the inclusion
of some 17 mandatory clauses and seven optional clauses
(FPR 1-4,410-4,5; GSA Form 1685). These clauses cover a
variety of socio-economic subjects which have been man-
dated by Federal law and by Executive Order for inclusion
in Federal purchase or supply contracts. These clauses
are now being interpreted to also apply to various levels
of sub-contractors and suppliers and that a utility company
or contractor must enforce compliance upon its suppliers.
This requirement for contractor enforcement of mandatory
clauses upon sub-contractors is causing problems and incurs
added costs, which State commissions are concerned about.
These added costs are discriminatory to other customers of
the utility company. There are also serious questions of
contract law and performance thereunder which must be re-
solved.
As a result of recent enforcement actions against utility
companies, many utilities are refusing to sign or to renew
the GSA Area-wide Agreements or to accept GSA contracts for
services. This makes it necessary for GSA to sign the com-
mercial form to receive service. In these instances, the
Public Buildings Service/GSA makes up monthly purchase
orders (as obligating documentation) which the utility com-
panies would prefer not to receive.
Officials of the Federal Procurement Regulation staff cite
existing legislation (31 USC 200 (a)(1)) as requiring a
written agreement between Federal agencies and suppliers.
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The text of this statute reads:
"(a) After August 26, 1954, no amount
shall be recorded as an obligation of
the United States unless it is supported
by documentary evidence of --
(1) a binding agreement in writing
between the parties thereto,...or"
(Followed by 7 alternatives or exceptions).
The Federal Procurement Regulation staff has not accepted
subsection 7 of this same statute which cites as an excep-
tion
"(7)... services performed by public
utilities...".
This appears to provide that the approved tariffs of State
public service commissions and the service agreements of
public utility companies are acceptable as "documentary
evidence" of an obligation by the United States Government.
There are additional cases now pending in the Supreme Court
(U.S. vs. New Orleans Public Service, Inc., and U.S. versus
Mississippi Power & Light Co.) that may further complicate
the contractural situation between the Federal Government
and public utility companies (both energy and transportation
companies). Since it has been well established that utility
companies are covered by the Federal law, simplifying the
contracting process by legislation that affirms the intent
of 31 USC 200 (a)(7) would make it possible to use commer-
cial utility contract forms in many cases.
Inquiries disclosed that the only documentation relating to
utility service arrangements used in private industry and by
State government institutions were copies of approved rate
and service tariffs and the utility company service agree-
ment form. Auditors will accept this documentation as suf-
ficient support for checks drawn in payment of utility
bills.
The Commission on Government Procurement in its Recommenda-
tion 18 stated that Federal procurement should --
"Encourage procuring activities, when it is
deemed in the best interest of the Government,
to purchase supplies or services from public
utilities by accepting the commercial forms
and provisions that are used in the utilities'
sales to industry and the general public,
provided that the service contract provisions
are not in violation of public law."
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to assure that the most advantageous rate or rate combin-
ation is being used. A consulting service for agency users
would be helpful in this review.
The payment of utility bills involves a phenomenon endemic
to public utilities - the need for bill-payment cash flow
to finance continuing operations. Utility companies are
financed by their customer payments to furnish working
capital.
This need for cash flow has resulted in short payment times
for utility bills -- 10, 15, 20, or 25 days are common. More
recently, Sta-tj commissions have approved late-payment charges
for customers who are tardy in making payments. These are in
the order of 3% or 3-1/2% for a first month and additional
amounts up to 5% per month, or 1-1/2% per month with no limi-
tation on the interest amounts on unpaid balances. Also, State
commissions permit the cessation of service for chronic late-
payment or nonpayment of bills (This has happened to Federal
user agencies).
Some Federal user agencies incur late charges on their util-
ity bills. Late-payment charges are paid largely as a result
of not really understanding the nature of utility bills and
not having a system to accomodate them. The Department of
Agriculture handles utility bills from over 4,000 points
across the United States at their National Finance Center
in New Orleans. They have averaged less than four days from
receipt to final action. U.S. Postal Service bills are paid
on time.
Precise data on Federal late-payment charges are not avail-
able, but from various sources including sample studies under
way in several agencies it appears likely that obligations
of $7 to $10 million per year are now being accrued by Fed-
eral agencies. Much of this can be avoided, as demonstrated
by those agencies who have developed systems to cope with it.
Load-management systems are being used in many areas of the
United States for both residential and commercial-building
energy load control. Home air-conditioners and hot-water
heaters are equipped with remote activated switches in
Georgia, Michigan and Ohio. The Georgia Building Authority
is installing a computer controlled load-management system
for the Georgia State Capital Building complex. GSA has
several test installations in various parts of the United
States.
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This concept of peak-demand reduction through load-manage-
ment - "peak shaving" - is a very significant technique
that merits strong emphasis. The savings are attractive
and can be widely achieved.
Public utility service rates are established after hearings
and presentations before State and Federal Regulatory Com-
missions. Utility companies and utility users present cost-
of-service or rate-of-return information with economic, en-
gineering, accounting, or financial data relating to the
utility services provided.
Many States have a People's Utility Counsel to represent re-
sidential and non-commercial users. Representatives of the
Federal Government sometimes appear at such rate hearings
and proceedings, either as observers, or as intervenors re-
presenting the Federal Government as a large user. As a
general rule, any one with an interest may be an intervenor
is such hearings.
The effectiveness of GSA and other Federal Government parti-
cipants in regulatory intervention cases appears to be mixed.
Performance ranges from the GSA appearance in the Arkansas
hearings on automatic indexing for utility costs (the pro-
posal was denied, but whether it was achieved by reason of
the GSA intervention is not certain) to recent hearings be-
fore the Florida commission in which two sets of Federal
Government witnesses presented diametrically opposite views.
For the most part, it appears that participation is limited
to observing or questioning, expert witnesses. GSA has made
full-scale rate-of-return presentations at past hearings.
III. CRITERIA FOR IMPROVEMENT
o Improved Federal management practices to reduce
costs of utility services.
IV. PROCESS. IMPROVEMENTS
To enhance the public utility management function GSA should
expand the existing public utilities management activity
with a new charter to develop policies, procedures, and man-
agement systems. There is a need for the Administrator to
work closely with industry/Government experts to identify
various aspects of public utility management, organize a
program of work, and provide an ongoing reference for for-
ward progress.
Agencies should assure that public utility bills are paid
within stated payment periods on a schedule which is most
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advantageous to the Government. There may be need to revise
existing systems or establish new ones to provide for pay-
ing utility bills prior to making adjustments.
Agencies should make post-payment audits of utility bills.
This is a new function that would parallel the present post-
audit function for transportation bills. Review would cover
the tariff schedule used, special rates, and the like.
GSA should seek better rates to reduce total cost of utili-
ties. The Federal Government as a large user requires a con-
tinuing block of energy from many utilities that could war-
rant a base block rate lower than other rates by virtue of
economies of size.
Agencies should use systems that reduce peak-loads. The
peak-demand for any given instant that is greater than at
any other period in the year will establish the demand rate
for the next annual period. There are several techniques for
managing (controlling) and reducing this peak demand. These
controls also may reduce the total annual load and cost.
GSA should develop recommendations to Congress to improve
the method for Government utility contracting. The Commis-
sion on Federal Procurement recommended Federal contracting
for public utility services should be reserved for rare, ex-
ceptional cases, and commercial forms and procedures should
be used to the greatest extent possible.
Expected Benefits:
Reduced peak-demand costs
through load-management and other conser-
vation programs
$15
- 16 million
Reduced total costs through
management -- improvements such as rates
or tariffs (cost-of-service cases)
10
- 14 million
Paying utility bills on a
scheduled basis
7
- 10 million
Total Annual Savings
$32
- 40 million
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ISSUE NO. S-10: COOPERATIVE SUPPORT SERVICES
This is an assessment of the potential for delivering cer-
tain administrative services more efficiently and at reduced
cost. These services will be called "cooperative support
services". It replaces the former title "common services" as
it more accurately describes the intent and nature of the
concept.
Two cooperative support service concepts are discussed in
this study: (1) central administrative support services and
facilities provided to agencies in a common building/complex
in lieu of each agency providing the same services or facil-
ities for its own use; and, (2) centralized services provided
on a nation-wide basis to smaller agencies with inadequate
resources to provide the same services individually.
The study included examination of applicable laws, regula-
tions, previous studies and correspondence; questionnaires
to 17 Federal cabinet and major independent agencies; visits/
interviews with small Federal agencies and State government
organizations; and evaluation of the solicited views of
trade associations, professional groups, other state and
local government organizations and private citizens.
II. BACKGROUND/CURRENT SITUATION
The Bureau of the Budget, now OMB, on August 28, 1964 pub-
lished Circular No. A-68, "Establishment of central sup-
porting service facilities in headquarters and field office
locations". The Federal Property Management Regulations
(FPMR), Part 101-5, "Centralized Services in Federal Build-
ings", implemented Circular A-68.
Although Circular. No. A-68 was the initial movement by the
Federal government towards centralized service centers, the
real push did not come until 1971 when GSA's Office of Man-
agement Services established a pilot project at the Arcade
Plaza Building in Seattle, Washington.
The Seattle Federal Regional Council was utilized to provide
the needed framework. Seattle seemed an ideal site to estab-
lish the pilot "cooperative support services" project because
the Arcade Plaza Building housed the five FRC charter agen-
cies; the Department of Health, Education, and Welfare (DHEW);
the Department of Housing and Urban Development (DHUD), the
Department of Labor (DOL), the Department of Transportation
(DOT), and the Office of Economic Opportunity (OEO). Follow-
ing two years of planning the project became operational in
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1971 with six initial services (mail and messenger; procure-
ment; receiving and shipping; laboring services; self-service
supply room; and library) being provided to a population of
975. It was estimated that the centralization of these serv-,
ices would result in a 25% reduction in costs.
An evaluation of the pilot project was conducted in 1972 by
GSA in cooperation with OMB. This evaluation concluded that
the pilot project was efficient, economical, and provided
a high level of customer satisfaction. The evaluation team
recommended that the Arcade Plaza arrangement be made per-
manent and the concept be extended to all locations where
feasible.
In early 1973, 0MB Circular No. A-68 was cancelled when cen-
tralized support services and other government-wide functions
were transferred to GSA. Subsequently, GSA issued Federal
Management Circular (FMC) 73-4, Central Support Services.
Within FSS the responsibility was levied on the Office of
Customer Service and Support, which intended to establish a
Common Services Branch, but never pursued it when applica-
tion of the program was not supported outside of the Seattle
project.
In 1975, only three of the original five participants re-
mained in the Seattle pilot project, i.e., DHEW, DHUD, and
CSA (formerly OEO). A new review of the project was requested
by the Working Group on Administration, composed of repre-
sentatives of the three remaining agencies, in May 1975.
The National Archives and Records Service (NARS) of GSA con-
ducted the study and recommended common services should con-
tinue in its present form, at least in the short run. Ulti-
mately, the transfer of DOL and DOT out of the Arcade Plaza
did lead to the discontinuance of common services except
for library services which may also be terminated due to
funding cutbacks in FY 79.
The current thinking of those who participated in the Seattle
experiment is that cooperative support services would work
effectively and economically on a localized basis provided
that understanding and support of cooperative support serv-
ices in philosophy and resources exist at all levels in
headquarters and the field.
GSA tried to initiate agreements at new Federal installa-
tions in Honolulu, San Diego, and Fort Worth. However, the
resistance encountered in trying to work out a means of
obtaining manpower ceilings for the consolidated services
was never overcome and all new initiatives were dropped.
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Also reviewed was the Kluczynski Building in Chicago, a
large Federal building occupied by several Federal agencies.
The intent of this review of the delivery of administrative
services was to determine if duplication existed in 23 se-
lected types of services. It was concluded that duplication
did exist and a feasibility study would be warranted.
The potential for a national approach to the delivery of
certain kinds of administrative services to smaller agencies
was examined. The model chosen for study was the USDA's con-
solidated payment center in New Orleans. In 1970,'the USDA
estimated that by consolidating the processing of payment
vouchers a reduction of 473 man-years of effort and $3,845,000
in total costs could be realized. The National Finance Center
was fully implemented in 1977 with the addition of nine more
systems. Projected savings for 1977 with the total system
operational is $4,345,630.
Using the USDA voucher processing feasibility study format
from 1970, statistics were collected for the same activity
in ACTION, FCC, ICC, NSF, and TVA. The results show that
approximately 236 man-years are being devoted to voucher
processing. Although no firm conclusions about efficiency
of operations can be derived from this limited statistical
sampling, the figures do indicate that duplicative voucher
processing systems exist and that there is considerable
volume in smaller Federal organizations. This could be ana-
logous to-what existed in the USDA prior to establishment
of the National Payment Center.
Agency responses to the ASRP inquiries indicate that they
generally agree with the theory of economy that cooperative
support services projects, but there is great disparity in
their views about what services should be included/excluded
and the advantages/disadvantages involved.
A recent example of centralization of administrative services
is the establishment of a Office of Administration in the Ex-
ecutive Office of the President (EOP). The Office of Admini-
stration consolidated services previously being supplied
from many different sources with a wide variation in the qual-
ity and completeness of services. Services included were:
personnel, accounting, mail, library facilities, computer
operations, messengers, payroll, etc. Previous fragmentation
of these services produced: numerous service duplications;
inconsistent distribution of services; excess capacity in
some units and deficiencies in others; missed opportunities
for economies of scale; and lack of cost control.
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Three of the advantages expected from the establishment of
the Office of Administration were: estimated savings of
approximately $1.1 million and 40 positions; an administra-
tive base on which to develop service; a management focus
for accountability, responsibility and monitoring of admini-
strative services in EOP.
Accounting, the first service fully centralized in the office
of Administration, is meeting with great success in terms of
increased customer satisfaction, improved management inform-
ation and more expeditious service.
III. CRITERIA FOR IMPROVEMENT
o Eliminate duplicative costs for the delivery of
support services.
o Improve the delivery of support services.
o Identify actual costs of support services.
o Upgrade the efficiency and quality of support
services required by non-departmental agencies.
o Reduce excess capacity and fill deficiencies where
they exist,
IV. PROCESS IMPROVEMENTS
A. Have GSA, with the firm support of OMB and Heads
of Departments and Agencies vigorously pursue the applica-
tion of cooperative support services on a local basis in
buildings or complexes where large multi-agency populations
exist. This effort should be accomplished through full and
complete coordination and cooperation with the Federal Ex-
ecutive Boards and Federal Regional Councils.
B. Have GSA, with the firm support of OMB, and the
necessary resources from appropriate agencies, investigate
the feasibility of establishinq cooperative support service
agreements on a National basis for non-departmental agencies.
This alternative would entail an in-depth feasibility study
for selected services such as payroll, voucher processing,
property accounting, etc.
C. Revise the FP,MR, Part 101-5 to reflect the local
and national basis concept of cooperative support services,
and specify in detail the accomplishment of feasibility
studies, the roles of the Federal Executive Boards (FEB's),
the Federal Regional Councils (FRC's), OMB and the Depart-
ments and Agencies.
B2
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D. Establish flexible cooperative support service
agreements, which permit addition of new services, and
elimination of services which cease to be cost-efficient.
E. Provide for annual reviews of all cooperative
support service agreements.
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ISSUE NO. S-11: MOTOR VEHICLE MANAGEMENT
I. INTRODUCTION
This is an assessment of the management and operation of
motor vehicles used in the Federal Government.
The Federal fleet for the purposes of this report is clas-
sified as commercial type, general purpose vehicles such
as sedans, station wagons, ambulances, buses, and trucks
operated by the Executive Branch agencies,. Excluded are
military tactical vehicles, special purpose vehicles such
as fire trucks and trucks with permanently mounted special
equipment, motorcycles, trailers, trailer vans, and some
law enforcement vehicles. The domestic Federally-owned fleet
as of FY 1976 consisted of 392,000 vehicles witha current
capitalized replacement value of approximately $3.3 billion.
The annual operating and maintenance cost of this fleet was
approximately $600 million.
GSA operates 78,000 vehicles; other civil agencies 75,000;
USPS 123,000; and DOD 116,000. This report concentrates on
those vehicles operated by GSA and other civilian agencies,
and DOD vehicles operated off-base. It excludes vehicles
operated by USPS.
The study involved interviews with OMB, GSA, GAO, USPS, and
other Federal agency personnel; members of Interagency Motor
Equipment Advisory Councils in three GSA regions; officials
of three state governments; officials of corporations invol-
ved in the leasing and management of vehicles; manufacturers
of vehicles; and responses to questionnaires sent to Federal
agencies.
Customer agency dissatisfaction with the level of motor equip-
ment support services provided by GSA has been on the increase
and is substantiated by agency interviews, questionnaires and
letters. Contributing to this situation are: age, condition,
and availability of vehicles in the GSA fleet; GSA's need to
better understand customer agency mission requirements; and
inadequate funding for motor equipment services.
The study examines the economies of centralized motor vehicle
fleet management for the civilian and off-base military domes-
tic fleet. Once the deficiencies in the Interagency Motor Pool
System (IAMPS) have been corrected, motor pools and vehicles
should be consolidated as determined feasible.
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II. BACKGROUND/CURRENT SITUATION
OMB and the GSA General Counsel believe that PL 81-152 does
not grant GSA authority to establish standards for agency-
owned fleets.
Legislation proposed by GSA in 1976 to designate GSA as the
Government-wide motor vehicle fleet management authority was
not pursued because funding restraints precluded the assump-
tion of further responsibilities by GSA. A 1977 proposal was
not acted upon because it was GSA's opinion that the merits
of the proposal were a matter for consideration by the Presi-
dent's Reorganization Project.
In 1954, PL 83-756 and E.O. 10579 established the Interagency
Motor Pool System and gave GSA (Subject to economy, effici-
ency or service considerations and with due regard to the
program activities of agencies concerned) the authority to
consolidate, take over, acquire, or arrange for the operation
by any executive agency of motor vehicles for the purpose of
establishing, maintaining, and operating Interagency Motor
Vehicle Pools or Systems.
PL 83-766 exempted military vehicles used principally with-
in the confines of a post, camp, or depot. However, these
vehicles can be consolidated into the IAMPS if the agency
operating the vehicles so requests. However, requests for
consolidation into the TAMPS have been denied by GSA, re-
cently due to lack of funds. PL 83-766 also exempted Postal
Service vehicles.
1. Fleet Management
GSA does not have legislative authority to prescribe Govern-
ment-wide fleet management practices such as utilization and
assignment criteria; operations; maintenance; cost and inven-
tory controls; procurement standards and options; or author-
ity to conduct Government-wide fleet management surveys or
reviews and, as a result, prescribe corrective actions.
There is no standard or uniform motor vehicle management
system within the Government. The lack of a standardized
or common measurement system has resulted in fragmentation
and duplication of the various motor vehicle services re-
sulting in overall increased expense for the Government.
GSA does not now provide fleet management assistance to other
agencies. The FPMR presently contains management directives
relating to replacement criteria; vehicle identification and
licensing; reporting certain fleet inventory data, limited
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operational data and statistics; preventive maintenance ad-
visory guidelines; storage advisory guidelines; and use of
the U.S. Government National Credit Card.
2. Interagency Motor Pools
GSA operates an Interagency Motor Pool System (IAMPS) con-
sisting of 100 motor pools in major metropolitan areas or
areas where there is a concentration of Federal activity.
These pools provide assigned vehicles as well as dispatch
vehicles to individuals and organized elements of the Gov-
ernment for essentially exclusive use. These pools range
in size from 2,549 vehicles in the Washington, D.C. Motor
Pool (assigned and dispatch) to 155 in the Parker Arizona
Motor Pool. All of these pools have some maintenance and
repair capability. Often vehicles in a IAMPS pool are not
operated near the pool headquarters, but are assigned to
customer agencies over a wide area.
There is no uniform application of.a vehicle recondition-
ing prior to sale program among the IAMPS. The judicious
reconditioning of vehicles can substantially increase net
proceeds from vehicle sales.
Replacement of IAMPS vehicles has been deferred due to lack
of funds. At the end of fiscal year 1977, 30,000 vehicles
out of 78,000 in the IAMPS fleet were eligible for replace-
ment. GSA allocated $66.8 million from the General Supply
Fund to purchase about 15,000 vehicles during FY 77. This
situation has also been aggravated by higher vehicle acqui-
sition costs. For example, the base cost of a sedan has in-
creased from about $1,700 in 1969 to $2,700 in 1977. The
average delivered cost (options & transp.) is now $3,750.
Due to a lack of resources only limited action has been
taken by FSS/GSA to meet increased customer agency needs
created by Congressionally or Presidentially mandated pro-
grams assigned to the customer agencies. Of the 16 agencies
which responded to the questionnaire concerning the effect-
iveness of GSA motor vehicle services, more than two-thirds
replied that GSA's service is "poor". Agencies also indicated
that service was erratic, and varied from region to region.
Operational dependability declined as over-age/mileage vehi-
cles required frequent additional maintenance.
GSA reported that it turned down agency requests for about
9,000 vehicles during 1976. As a result, customer agencies
were forced to acquire vehicle support through more costly
alternatives such as commercial leases, agency funded pur-
chases and privately-owned vehicles (POV).
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In FY 7p rhere were approximately 4,800 vehicles being
leased by Government agencies. This number increased to
approximately 10,500 in FY 77. This includes 5,800 sedans
and station wagons leased by GSA in support of agency needs.
All sixteen of the agencies responding to the agency quest-
ionnaire said they leased vehicles "because the vehicles
needed were not available from GSA".
A GAO study "Opportunities to Reduce the Cost of Government
Operations", LCD-77-215 February 28,1978, and a May 1977 GSA
study -- Government Ownership vs. Centralized and Decentral-
ized Leasing -- showed that Government ownership was far
less expensive than commercial leasing. Basic capital cost
per vehicle per month for GSA-owned vehicles was $52.15;
centralized GSA lease cost was $71.36; and decentralized
agency leasing cost was $123.49.
Agency funded purchases result from IAMPS inability to pro-
vide vehicles. This forces agencies to either seek a sup-
plemental appropriation or reallocate existing funds. This
circumstance frequently results in the agency not being able
to submit a requisition to the GSA Automotive Center in time
for inclusion in a consolidated purchase, resulting in higher
vehicle price.
The increased use of privately-owned vehicles (POV) in lieu
of Government-owned vehicles is an expensive alternative.
The permissible reimbursement rate for POV has risen from
11 cents a mile in FY 73 to 17 cents per mile in FY 77 (pro-
jected to go to 18.5 ce-nts in FY 79) versus 12.2 cents per
mile for a GSA sedan in FY 77. Except for immediate manager
control, there are no systems currently available which can
be used to collect data and monitor POV use. POV also can
become an unreliable source of transportation due to factors
such as: employee refusal, union action, energy crises, and
insurance.
3. Repair and Service Contracting
GSA mandatory repair and service contracts have created ser-
ious problems for both the IAMPS and customer agencies be-
cause of the poor quality of service and contractor accessi-
bility. Twelve of the seventeen Federal agencies which replied
to the agency questionnaire concerning GSA mandatory contracts
stated that the quality of repairs and the responsiveness of
the contractors were poor. Commercial organizations minimize
these problems by contracting with national repair and main-
tenance firms which offer simplified billing procedures and
standardized rates -- as well as good service.
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III. CRITERIA FOR IMPROVEMENT
o More responsive and better service to agencies.
o Reduced cost of operating motor vehicles
o Creation of management data bank for better control
of costs and vehicle inventory.
IV. ALTERNATIVES
A. Establish a new organization in GSA with a specific
charter to develop a Government-wide fleet management system
and expand the IAMPS.
1. Advantages
Increased management control and effective-
ness leading to quantitative savings.
Correct existing fragmentation/duplication
of vehicle management throughout the Federal fleet.
Savings through: uniformity of policies,
procedures, guidelines; vehicle inventory reductions;
facility reductions; vehicle inventory and operating
data.
Improved service to user agencies.
Lower Government fleet costs (approximately
$400 per pooled vehicle per year based on IAMPS costs
compared with prior to pooling costs developed in GSA
feasibility studies).
Elimination of duplicative fleet inventories,
facilities, equipment and personnel.
2. Disadvantages
Legislation required
Will require reallocation of resources when
facilities and manpower are transferred from other agencies
to the IAMPS.
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3. Expected Benefits
Expanding IAMPS $44 million
Reduce Commercial Leasing $ 9 million
Change Sedan/St. Wagon
Replacement Criteria 6 yrs./60,000 to
3 yrs./50,000 miles
$ 5 million
Vehicle prior to sale
reconditioning program $ 2 million
B. Secure all or some requirements commercially
1. Advantages
Reduction of Government capital outlays
Provide tax income to Federal Government
Reduce operational personnel
2. Disadvantages
Increased costs
Loss of controls
Mass reorganization and agency impact
C. Decentralize operations to using agencies (No IAMPS)
but with GSA policy direction.
1. Advantages
Greater flexibility for agencies in securing
motor vehicle support.
2. Disadvantages
Loss of control
Increased costs
Expensive duplication and fragmentation
Special problems for small agencies
Legislation required
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D. PROCESS IMPROVEMENTS
Legislation needed to:
1. Assign to one agency authority for Government-
wide fleet management if alternative A is selected. This
authority would include but not be limited to:
Prescribing of Government-wide policy on vehicle acquisi-
tion, utilization, operation, maintenance, replacement and
disposition; management reviews to evaluate and correct
vehicle management and operational inefficiencies; and
energy conservation measures and programs.
Establishing a common management information inventory and
reporting system. (In a report "How Passenger Sedans In The
Federal Government Are Used and Managed" B-158712, dated
September 6, 1974, GAO reported that.most Federal Agencies
did not have central records showing, by location, the number
and types of light vehicles in use throughout the agency.
Similarly, GAO reported that "GSA does not have any manage-
ment control over these vehicles". The data furnished GSA
by the agencies is "incomplete and inaccurate".)
2. Establish a separate motor vehicle working
capital fund (WCF) for the !AMPS to segregate TAMPS finan-
cial operations from the procurement/supply financial
operations to allow:
Retention of surplus earnings in the IAMPS WCF to provide
for the acquisition of vehicles to meet agency needs.
Depreciation of vehicles and establishment of user rates
based upon replacement cost rather than original acquisition
cost. This would correct the financial difficulties created
by inflationary factors over the vehicle replacement cycle
and insure that adequate reserves are created for the pur-
chase of replacement vehicles. (The U.S. Forest Service
presently has the authority to depreciate vehicles on a re-
placement cost basis.)
Capitalization of vehicles consolidated into the IAMPS at
replacement cost less current value.
3. Eliminate the statutory price limitations im-
posed on the purchase of sedans and station wagons. The
current base price limitation of $2,700 for sedans and
$3,100 for station wagons has not kept pace with inflation
and other cost factors.
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4. Increase the appropriated capital of the General
Supply Fund in the amount of $100 million to provide for ac-
quisition of additional vehicles in the IAMPS to meet require-
ments of customer agencies and to replace vehicles eligible
for replacement. This would be a temporary measure pending
approval of legislation to establish the separate TAMPS
working capital fund in the manner described herein.
Administrative action is needed to:
1. Reduce operating costs of IAMPS vehicles by
changing current sedan/station wagon replacement cycle
from 6 yrs./ 60,000 miles to 3 yrs./50,000 miles. Various
GAO and GSA studies have substantiated that the current
6 year/ 60,000 mile replacement standard is clearly not the
most economical. A 3 year/50,000 mile replacement cycle vs.
a 6 year/60,000 mile cycle would produce annual savings of
approximately $2.2 million in depreciation, maintenance, re-
pair, and tire costs; a 6,-year saving of $21 million in fuel
cost; and the conservation of 28 million gallons of gasoline.
2. Reduce costs by establishing a Government-wide
prior-to-sale vehicle reconditioning program. Judicious re-
conditioning of vehicles by the IAMPS could increase net
sales proceeds by an estimated $1.1 million annually; govern-
ment-wide implementation would result in an additional $1.3
million in net sales proceeds annually.
3. Establish interagency motor pools after feasibi-
lity studies have proven pooling to be cost beneficial. A
recent GAO study of 20 motor pools operated by agencies shows
that 8 of the 20 pools should be consolidated into the IAMP
system, at an actual dollar savings of $743,000 annually.
Establishment of motor pools in other areas would save an
additional $780,000 annually through a reduction in facili-
ties and manpower, as well as better vehicle inventory con-
trol and utilization.
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ISSUE NO. 5-12: TRANSPORTATION AND TRAFFIC MANAGEMENT
I. INTRODUCTION
This is an assessment of domestic transportation and traffic
management practices, including transportation audit and rate
intervention, of the civilian executive agencies.
The annual expenditure for domestic transportation procured
from carriers is about $3 billion, of which $700 million is
civil agencies. This paper concentrates on the latter.
The study involved questionnaires and interviews with offic-
ials of Federal agencies; visits to commercial concerns such
as J.C. Penney, Sears Roebuck, Mobil Oil, and Montgomery
Ward; and contacts with transportation carrier associations,
e.g., the Transportation Association of America, Household
Goods Carriers Bureau, Middle Atlantic Conference, Rocky
Mountain Motor Tariff Bureau, Movers and Warehousemans
Association of America, and Air Transport Association of
America.
The results of the study substantiate that the application
of traffic management expertise to civilian agency passenger
and freight movements could result in substantial annual
savings and should provide improved services to the executive
agencies.
II. BACKGROUND/CURRENT SITUATION
GSA has authority for Government-wide traffic management
policy, under the Federal Property and Administrative Serv-
ices Act of 1949 (PL 81-152) with exceptions such as DoD,
USDA price support programs, DOE, and USPS. GSA has not
fully executed the authority or responsibilities of PL 81-
152. Traffic management lacks central direction; does not
have sufficient program emphasis; and is not adequately
funded to perform the full range of functions specified in
PL 81-152. GSA issues advisory rather than mandatory FPMR's
and provides assistance on a request basis. There is little
policy direction on an affirmative basis.
Traffic management liaison with executive agencies is an
integral part of GSA's Government-wide responsibility as
traffic manager. This liaison program has been placed in
GSA's Region 3 for agency headquarters liaison.
The traffic management function in GSA has achieved measur-
able savings of over $15 million per year on traffic moving
under GSA's supply system; on traffic managed by GSA for a
few agencies such as the Bureau of the Mint and Department
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of Agriculture Food Stamp Program; and by transportation
contracts for office relocations and other special types
of movements. However, since GSA does not have detailed
data on the majority of the civil agencies' traffic, pot-
tential savings are not realized through shipment routing
control opportunities for rate negotiations and other traf-
fic management actions.
The civilian executive agencies of the Federal Government
procure a large volume of supplies on a delivered basis,
i?.e., FOB destination. Hence, the Government is not able
to control the transportation costs related to such pro-
curement. Civilian agency FOB destination procurement
potentially subject to GSA transportation management is
$6 billion annually. A minimum of 5% of the procurement
dollar on FOB destination prices is estimated to be trans-
portation cost or $300 million annually. The application
of traffic management expertise in the procurement cycle
could yield minimum savings of $3 million per year.
Civil agency expenditures for passenger transportation on
Government transportation requests are approximately $100
million annually. A management system to identify instances
where interagency group or charter ticketing are feasible
could result in significant annual savings.
GSA represents the civil agencies as users of transportation
services in proceedings of transportation regulatory bodies
such as the Interstate Commerce Commission and in docket
actions of carrier rate bureaus. In this capacity, in FY
1977, GSA reviewed 122 thousand carrier docket proposals for
rate or rule changes, filed 871 docket actions with carrier
rate bureaus, and participated in 51 regulatory agency pro-
ceedings.
Before 1940, payments to transportation carriers were pre-
audited by fiscal officers and post-audited by GAO, with
certifying officers liable for incorrect payments. This sys-
tem presented few problems until shipments volume exceeded
the pre-audit capabilities of certifying officers. The Trans-
portation Act of 1940 provided that carrier bills were to be
paid on presentation without pre-audit by certifying officers.
The transportation audit function was transferred from GAO to
GSA in 1975. The function was placed in GSA's Federal Supply
Service, Office of Transportation and Public Utilities.
Audits are made of payments to carriers of all modes of trans-
portation by all executive agencies (civilian and military)
for shipments of material on Government Bills of Lading (GBL)
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and movement of persons on Government Transportation Requests
(GTR). Federal Property Management Regulations (FPMR) are pre-
pared which provide direction to Executive agencies and car-
riers in the format and preparation of GBL's and GTR's; vouch-
ering and payment of bills for services rendered by carriers
and filing of claims by or against carriers. These regulations
place the audit function in a highly visible and sensitive
position vis-a-vis the multi-billion dollar transportation in-
dustry. The value of payments audited in FY 1977 were $1.8 bil-
lion; overcharges recovered from carriers were $~1.3 million.
At the time of the transfer of the transportation audit func-
tion to GSA, GAO transferred 417 employees to GSA. The pre-
sent staffing level is 323. The reduction of staffing ceilings,
inability to hire technicians from the carrier industry, and
loss of technicians through retirement has reduced the tech-
nical staff of the transportation audit activity.
Where audit systems cannot be computerized, the audit of
payments below certain minimum amounts is not cost benefi-
cial. The practice of a secondary audit by an independent
auditor, paid a percentage of money recovered, is employed
by many private companies, but has never been used by the
Government.
III. CRITERIA FOR IMPROVEMENT
o Reduced cost of transportation services.
o Increased cost effectiveness through enhanced
audit effort.
o Improved services to customer agencies.
IV. ALTERNATIVES
A. Establish a new organ-izati_on in GSA with a specific
charter and expanded resources to develop a Government-wide
transportation program to include policies and procedures,
management systems and audit. Operational control would re-
main with the agencies except where a small agency requests
GSA to perform these functions for it. Program management
would include policy; regulations; rate intervention; rate
negotiations; maintenance of a tariff library; furnishing
rates, routes and technical assistance; management reviews
and training; and rate audit. Operations would include ship-
ment planning; obtaining rate and routing information from
the central traffic manager; shipment documentation; ordering
equipment from designated carrier; filing of claims; hid/
contract evaluation (FOB origin vs. destination) using rate
data furnished by the central traffic manager.
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1. Advantages
Increased management control and effectiveness
,,,,ding to significant savings.
Better service to civilian agencies.
A pre-shipment control system.
Capability of establishing a data management
,se from audit function data which. will generate. savings.
Capability of establishing a passenger traffic
;ragement system which should result in considerable sav-
-1s, the magnitude of which has not been identified.
2. Disadvantages
Perception by agencies that increased controls
)uld delay shipments.
3. Expected Benefits
Pre-shipment Routing Control System
Use of FOB Origin Contracts
Secondary Audit
$10 million
3 million
1.6 million
B. Centralize both management and operations in GSA.
1. Advantages
Advantages of centralized operations would
s;'crue only to small agencies.
2. Disadvantages
Centralized operations would require that
":7ny functions best performed at the site of shipment
removed to a more distant location with resulting
deduction in support response.
C. Combine civil and military in GSA. It is inadvis-
ie to combine civilian and military traffic management
-cause the DOD mission responsibilities override any poss-
benefits that would be derived. The Second Hoover
mission of March 1955 stated that "The transportation
~.Jrlctions of DoD are so vast and so different from those
f the civilian agencies that they should be handled separ-
'1ely." While the Second Hoover Commission also recommended
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that DoD perform its own transportation rate audit, DoD at
the time of the transfer of the audit function from GAO to
GSA in 1975, took the position that the audit function was
sufficiently removed from its mission that DoD need not per-
form its own audit.
1. Establish a pre-shipment routing control system
to determine the best cost mode and carrier.
2. Establish a post-shipment evaluation system to
ensure compliance with routing specified'on particular
shipments and to develop data on traffic not included
in the routing control system.
3. Institute a secondary audit procedure using
contractors on a shared reimbursement basis through
legislative action or OMB direction.
4. Make FPMR's mandatory for appropriate trans-
portation functions.
5. Establish a passenger travel management system
to determine the best cost mode and carrier including
group and charter arrangements where feasible.
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ADMINISTRATIVE SERVICES REORGANIZATION PROJECT
SUPPLY AND SUPPORT SERVICES TASK FORCE
REGULATORY AND ADVISORY TASK TEAM
EXECUTIVE SUMMARY
BACKGROUND
The Federal Property and Administrative Services Act of 1949
assumed that the General Services Administration (GSA) would
exercise a Government-wide leadership role in the delivery of
administrative services. To carry out its mission, GSA has
issued guidance to agencies in the form of Federal Property
Management Regulations (FPMR), Federal Travel Regulations
(FTR), and Federal Procurement Regulations (FPR). In a more
service-oriented view, GSA provides assistance to agencies
by offering training programs and conducting consultant-type
advisory studies.
The study involved extensive interviews with GSA and customer
agency personnel, interviews with officials of large corp-
orations and state governments, analysis of questionnaires,
and review of existing statutes, GSA and agency regulations.
ISSUES
The adequacy of three principal activities were addressed
by the Task Team:
o GSA regulatory activities
o Interagency training
o Advisory services to agencies
FINDINGS AND ALTERNATIVES
GSA REGULATORY ACTIVITIES
With respect to the FPMR and the FTR, there is no consistent
institutionalized system for obtaining customer participa-
tion in the development of regulatory material. There is
evidence of overemphasis on intra-GSA coverage versus inter-
agency guidance. In varying degrees, required changes to
regulations are not timely, language is overly complex,
implementation of changes by the Federal establishment is
costly, and there is no adequate system for either agency
feedback or determining the level of agency compliance.
Organizational Alternatives. The structure of GSA has inhib-
ited its ability to present a strong, coherent and service-
oriented regulatory image to the Federal agencies it was
created to serve. Three alternatives were considered:
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eve opment and control of regulations
on the staff of the GSA Administrator.
o Centralize coordination and monitoring of regula-
tions on the staff of the GSA Administrator.
o Strengthen staff of each GSA service to develop and
control regulations.
Process Improvements. GSA should make the following
improvements:
o Increase agency participation in regulatory develop-
ment and feedback.
o Establish an improved compliance system.
o Simplify regulatory language.
o Write regulations which minimize the need for dupli-
cative agency implementation.
INTERAGENCY TRAINING
Training and motivation of personnel are an integral element
of administrative services. The quality and quantity of
training provided to administrative services personnel varies
by GSA Service. Moreover, some duplication of training
effort between the Civil Service Commission and GSA requires
resolution. Department of Defense training courses and the
Federal Acquisition Institute are excellent models to emulate
in establishing training and career development programs for
administrative services personnel at all grade levels.
Alternatives. The fragmented approach to training within
GSA lends itself to the following options to improve service
delivery:
o Consolidate administrative services training effort
in GSA on the staff of the Administrator.
o Consolidate administrative services training effort
in the Civil Service Commission.
o Continue current fragmented approach and work on
product improvement.
o Contract-out training.
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Process Improvements. Initiate action within GSA and work-
ing with other agencies to:
o Initiate a Government-wide career development program
for administrative services personnel.
o Establish a system to receive customer agency input.
o Insure strong ties between training and program
operations.
Improve training evaluation.
ADVISORY SERVICES TO AGENCIES
Based on customer agency response, there is a place in the
GSA for an institutional group of high-quality consultants.
The current approach to providing this type of service
varies considerably among the GSA Services.
Organizational Alternatives.
o Establish an organization on the Administrator's
staff to plan, control and monitor advisory services.
o Establish an organization within each GSA Service
to plan, control, and monitor advisory services.
Process Improvements. Initiate action within GSA and working
with other agencies to:
o Conduct market surveys to pinpoint customer demand.
o Establish a customer feed-back system.
o Make program fully reimbursable and emphasize
quality performance.
o Avoid the audit image in providing advisory services.
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ISSUE RA-1: GSA'S REGULATORY ACTIVITIES
I. INTRODUCTION
This paper presents an assessment of GSA's role in the
development and issuance of, and monitoring agency compli-
ance to the Federal Property Management Regulations (FPMR),
Federal Travel Regulations (FTR), and Federal. Procurement
Regulations (FPR). FPMR's are the primary mans by which
GSA manages the Government's property management practices
and are applicable to almost all executive agencies. The
FTR governs all travel by civil service employees. FPR's
prescribe procurement policies and procedures and, are
applicable to almost all civilian agencies. The study
included interviews with GSA and other agency personnel,
interviews with officials of several large corporations
and state governments, analysis of responses to several
questionnaires sent to major departments and agencies,
and review of existing statutes, applicable GSA regulations,
and agency implementing regulations. The results of this
assessment indicate that GSA has not adequately fulfilled
its regulatory role as envisioned in enabling legislation.
II. BACKGROUND/CURRENT SITUATION
A. FEDERAL PROPERTY MANAGEMENT REGULATIONS (FPMR)
GSA authority for the FPMR can be found in the Federal
Property and Administrative Services Act of 1949, Section
205.(c).
The FPMR system is the vehicle by which GSA prescribes
regulations, policies, procedures and delegations of
authority pertaining to property management and records.
FPMR's are applicable to all executive branch departments
or agencies, with a few legistative exemptions. The FPMR
system is the primary method used by GSA to regulate the
Government's property management practices and covers
Federal Travel, Archives and Records, Defense Materials,
Public Buildings and Space, Supply and Procurement, Tele-
communications and Public Utilities, Transportation and
Motor Vehicles, and Utilization and Disposal.
All four GSA Services contribute to the FPMR. Federal
Supply Service (FSS), for example, has cognizance over
regulatory coverage dealing with federal travel, defense
materials, supply, public utilities, transportation and
motor vehicles, and utilization and disposal.
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Since many subjects have a direct or indirect impact on
all Services, a significant amount of coordination effort
is required. In addition to multi-Service preparation and
coordination of regulations, numerous offices within a
Service contribute to the development of the FPMR. In the
National Archives and Records Service (NARS), eight offices
draft FPMR material. Table 1 identifies the number of offices
and people involved in FPMR development for each GSA Service.
GSA INVOLVEMENT
---~IN FPMR_ __
GSA
Service
No. of GSA
Divisions
No.
of Persons
PBS
10
43
ADTS
1
4
NARS
8
30
FSS
19
81
TOTAL
38
158
Each of the GSA Services developing Government-wide
regulations also has responsibility for GSA operational
programs. Even within a Service, an office developing FPMR
material may also have cognizance over an operating program.
For example, the Office of Personal Property Disposal in
FSS operates a Government-wide utilization program and, at
the same time, develops regulations governing utilization
of property within an executive department or agency. Much
of the FPMR prescribes procedures applicable to the use of
GSA services rather than policy and procedures pertaining
to the management of other agencies' internal property
management practices. For example, of 145 pages in the
FPMR dealing with supply and procurement, 100 pages
involve procedures relative to obtaining FSS material
and services.
Agency involvement in the development of regulations is
typically minimal, and there is no standard procedure for
user participation. For example, a recent regulation on
first-class air travel was not coordinated with agencies,
while a regulation concerning shipment of household goods
was fully coordinated with agencies through an interagency
committee. The implementation of the FPMR by other agen-
cies ranges from zero to the extensive use of implementing
documents. These documents are issued in a variety of
publications including handbooks, department orders, admini-
strative manuals and the Code of Federal Regulations (CFR).
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Depending on how thoroughly the FPMR prescribes policies
or procedures on a specific subject, agency implementing
procedures may.be brief or extremely detailed. For example,
the Federal Travel Section of the FPMR is 100 pages in
length; Department of Transportation's implementing manual
is 300 pages long. Table 2 is based, on data from several
agencies and indicates typical agency involvement in
implementing the FPMR.
AGENCY IMPLEMENTATION
OF THE FPMII
FPMR Subtitle
FPMR
Pages
Average
No. of Pages
of Agency
Instructions
Average
No. of Persons
Involved in
Implementation
Average
Cost of
Agency Changes
FY 1977
General
55
105
10
$ 4
768
Federal Travel
104
671
11
,
57
901
Archives &
Records
1,481
,
139
190
Public Bldgs.
& Space
262
,
30
207
Supply &
Procurement
661
,
29
997
Telecommunica-
tions & Public
Utilities
l05
13
,
8
410
Transportation
& Motor Veh.
Utilization &
Disposal
157
n l n
153
18
,
C J, J Y V
18,985
695
3,656
120
$318,988
There is no Government-wide system for monitoring agencies'
property management practices or implementing regulations. GSA
neither receives nor reviews the implementing procedures of
other agencies. For the most part, GSA does not review agencies
property management practices. Agencies, responding to a
questionnaire, identified their internal audit and/or GAO as
activities that are, and should be, responsible for monitoring
property management practices. These audits typically focus on
specific operating problems as opposed to systems reviews.
GSA neither receives nor reviews agency internal audit or GAO
reports relative to agencies' property management practices.
Some agencies conduct "management reviews" which involve
review of all aspects of property management for a specific
activity.
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Fppp3. FEDERAL TRAVEL REGULATIONS (FTR)
Before 1971, OMB was responsible for development and
issuance of travel regulations. This authority was exer-
cised on behalf of the President pursuant to Public Law
89-554, dated September 6, 1966. By Executive Order No.
11609, dated July 22, 1971, this authority was transferred
to GSA. The Administrator of General Services was empowered
to exercise the authority of the President to prescribe
regulations relating to travel, subsistence and certain
transportation expenses, and mileage allowances.
Federal Travel Regulations are published in handbook format
in Part 7 of the Federal Property Management. Regulations.
The FTR is applicable to all civil service employees. Travel
entitlements for uniformed service personnel are covered in
Vol. 1 of the Joint Travel Regulations, which are published
by DOD's Per Diem Committee. The State Department issues
regulations prescribing travel entitlements for Foreign
Service personnel. In addition, GSA delegated responsibility
to the State Department for determination of per diem rates
for overseas locations.
Federal Travel Regulations are prepared in one of the four
branches of the Transportation Services Division in the FSS
Office of Transportation and Public Utilities. The other
three branches are responsible for negotiating transportation
contracts, providing traffic management services, and repre-
senting the Government before transportation rate-setting
agencies. Numerous levels of review are required before
issuance of an FTR: five offices in FSS, one in the Office
of Administration, and one in the Office.of General Counsel.
Changes to the regulations are not made in a timely manner.
In 1977, at least five changes, proposed in 1972, were
finally published, e.g., the Comptroller General's March 27,
1972, decision concerning reimbursement for cost of travelers
checks was not implemented in the FTR until June 1, 1977.
There is no standard system to provide for agency partici-
pation in development of the regulation. GSA's decision
to solicit agency comments or approval is purely judgmental.
Forty-five percent of the agencies responding to study group
inquiries indicated that current participatory mechanisms are
inadequate. Agency implementation of the FTR is extensive.
The FTR is approximately 100 pages in length while Department
of Treasury's implementation-totals over 1,200 pages. As a
specific example, per diem is covered in 5 pages in the FTR
and 30 pages in Department of Transportation regulations.
Much of this implementation is required because the FTR:
(1) does not provide examples applicable to specific travel
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situations; and, (2) uses extremely complex language and
sentence structure.
With respect to monitoring compliance to the FTR, the dis-
cussion of monitoring compliance to the FPMR is applicable'.
C. FEDERAL PROCUREMENT REGULATIONS (FPR)
GSA authority to issue regulations pertaining to procurement
is contained in Section 205(c) of the "Federal Property Act".
This authority is subject to regulations prescribed by the
Administrator of Federal Procurement Policy pursuant to the
Office of Federal Procurement Policy Act, Public Law 93-400,
dated August 30, 1974. The FPR is applicable to all execu-
tive agencies except the Department of Defense, NASA and
the Coast Guard. The Armed Services Procurement Regulations
(ASPR), developed by DOD, generally governs procurement by
these three agencies.
The FPR is developed by the Federal Procurement Regulation
Staff which is on the staff of the Commissioner, FSS. Changes
to the FPR are coordinated with agencies through the Inter-
agency Procurement Policy Committee. Agencies responding
to study group inquiries indicated that this type of partici-
pation is satisfactory. Agencies are generally satisfied
with FPR content. However, a number of agencies indicated
that guidance concerning procurement of non-personal services
was inadequate. With respect to monitoring compliance to the
FPR, the discussion of monitoring compliance to the FPMR,
above, is applicable.
Public Law 93-400 authorized the Administrator of Federal
Procurement Policy to establish "a system of coordinated,
and to the extent feasible, uniform procurement regulations
for the executive agencies". On January 31, 1978, OFPP
requested that DOD and GSA "play a lead role to assist in
developing a single Government-wide procurement regulation",
entitled the Federal Acquisition Regulation (FAR). The
primary objectives of the FAR project are to consolidate
and replace ASPR, FPR, NASA PR and other acquisition regu-
lations containing material applicable to more than one
agency; create a new single regulation that is understandable
and comprehensive; and, provide new material not currently
in the basic procurement regulations. OFPP, through DOD
and GSA, plans to have all revised sections available for
public comment no later than January 31, 1979, and to have
a completely reviewed FAR ready for publication August 30,
1979. To date, no plans have been made to develop mechanisms
for maintenance of the FAR subsequent to its planned publication
date in 1979.
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 III . CTvE
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Recognize GSA's statutory responsibility for developing
and issuing regulations, through adequate professional
staff resources, and enhanced acceptance of GSA leadership
in property management, travel and procurement matters.
Distinguish between a staff role in the development of
regulatory coverage for user agencies and an internal GSA
line operating role.
Reduce organizational fragmentation of responsibilities
for development and issuance of regulations, to facilitate
communication and increase uniformity of policy.
Promote early user participation in the development of
regulatory coverage to facilitate coordination, increase
user understanding, and enhance cooperation.
Promote prompt resolution of policy or procedural conflicts
and timely issuance of changes to regulations.
IV. OPTIONS
A. ORGANIZATIONAL OPTIONS
1. Establish an organization, on the staff of the
Administratorr,,-responsible for development, c-eord~.aation,
control and promulgation of all regulatory material. Apro-
priate Service personnel responsible for this function would
form the core-of this organization.-`} -- a) Advantages:
Enhances organizational recognition of GSA's regulatory
role.
Provides separation of staff and line operating responsi-
bilities and reduces organizational fragmentation of
responsibility for development and issuance of regulatory
material.
Promotes uniformity in the regulations issued by GSA and
implementing procedures issued by the agencies and facili-
tates timely issuance of regulatory change.
Enhances the opportunity to provide uniform and effective
mechanisms for agency participation in regulatory develop-
ment and improves the opportunity to establish uniform
and effective mechanisms to monitor agency compliance.
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Improves lines of communication for customer agencies and
the Administrator.
b) Disadvantages:
User agencies may prefer existing system, which is relatively
lax and permits wide latitude in developing, issuing, and
monitoring implementing regulations and procedures.
GSA Services may be reluctant to relinquish their tradi-
tional role in the regulatory area.
Separates the regulatory function from the technically
knowledgeable personnel in the GSA Services.
2. Establish an organization, on the staff of the
Administrator, responsible el el -far coordination, control and
promulgation of all regulatory material. Development of
regulations would continue to be the responsibility of
each GSA Service.
a) Advantages:
Improves lines of communication for customer agencies
and the Administrator.
Provides the opportunity to oversee development of effective
mechanisms for agency participation in regulatory develop-
ment and improves opportunity to oversee development of
effective mechanisms to monitor agency compliance.
b) Disadvantages:
Organizations responsible for regulatory development would
continue to be responsible for both staff functions and
operational programs.
Organizational fragmentation of responsibility for regulatory
development would continue.
Timeliness of issuing changes to the regulations is adversely
affected by the addition of review levels.
Impairs resolution of policy conflict because personnel
knowledgeable in content of the regulation are located in
several operational organizations separate from the organi-
zation that is the focal point for communications with
agencies and the Administrator.
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3. For each Service, consolidate the regulatory
functions into one organization. Each organization would be
responsible for the development, coordination, control and
promulgation of all regulatory material applicable to the
functions performed-bby-that Service. -?~
a)
Advantages:
Improves separation of staff and line responsibility at
the Service level.
Reduces organizational fragmentation of responsibility
within each Service. Lines of communication for agencies
would be improved in that a single organization in each
Service, instead of several organizations, would be the
focal point of communication.
Concentration of authority to issue regulations within a
Service will provide for more uniform policies, eliminate
duplication of functions, and lead to development of a strong
coordinated top-management team.
Enhances opportunity within each Service to provide effec-
tive mechanisms for agency participation in regulatory
development and to install effective mechanisms to monitor
agency compliance.
Facilitates staff coordination with the technical experts
in the Service.
b) Disadvantages:
Organization would be located in an agency that is primarily
a "line" operation.
Multiple lines of communication for the Administrator.
Dispersion of authority in the separate Services fosters
opportunity for non-uniform policies and duplication of
effort.
Mechanisms within GSA for agency participation in regulatory
development and for monitoring agency compliance may vary
between Services.
PROCESS IMPROVEMENTS
1. Institute a formal committee structure for
development of regulatory material. Committee members would
include representatives from GSA operational programs and
customer agencies.
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2. Establish a project which has as its objectives:
(a) a review of existing regulatory coverage to determine its
completeness and implement appropriate changes designed to
reduce redundant implementation by all users, (b) improvement
in the readability of the material, and (c) adoption of a
uniform format.
3. Staff the regulatory function with exceptionally
well-qualified personnel who will provide the leadership
required. Staff personnel should be rotated periodically
to retain currency of subject matter expertise.
4. Adopt state-of-the-art processing techniques for
the publication and issuance of regulations.
5. To insure uniformity in agency implementing
regulations, agencies should publish their implementation
in Title 41 of the Code of Federal Regulations. Until such
time as agencies begin to publish their implementation in
the CFR, they should send copies of their implementation
to GSA.
6. Agencies should provide GSA with copies of
appropriate audit material covering those aspects of pro-
perty management, travel management, or procurement under
the purview of GSA regulations. GSA would use this infor-
mation to identify problem areas requiring regulatory
change.
7. GSA, in cooperation with the other agencies,
should institute a system of agency-conducted management
reviews to evaluate the functions of property management,
travel management, and procurement. Agencies should pro-
vide appropriate findings to GSA so that GSA can resolve
any problems requiring regulatory change.
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ISSUE NO. RA-2: INTERAGENCY TRAINING
I. INTRODUCTION
This paper presents an assessment of GSA's role in providing
training for Federal employees whose work involves supply
and procurement, transportation and traffic management,
travel, motor pool management, space management, and records
management.
The study involved interviews with GSA and other agency offi-
cials in Washington and in the field, analysis of responses
to questionnaires submitted by major departments and agencies,
and review of existing statutes, Executive Orders, and Civil
Service Commission (CSC) Regulations.
The results of this assessment indicate that the interagency
training now being provided by GSA is meeting many critical
training needs of Federal agencies. However, customer agen-
cies who sponsor employees for the program say it is deficient
in several respects.
II. BACKGROUND/CURRENT SITUATION
A. GSA TRAINING
At the present time, interagency training is fragmented
within GSA. No single organizational unit has responsibi-
lity for promoting, coordinating, or administering "the
program". However, the Director, Training and Development
Division, Office of Administration, serves as liaison
with CSC. He collects information about courses to be offered
and statistical data on training provided by GSA Services to
customer agencies.
Federal Supply Service (FSS). The Training Division of the
FSS offers nine five-day courses in the supply and procurement
field on a reimbursable basis. The courses are taught by a
staff of eight instructors who work out of Washington. The
program is growing to meet the demand for it--over 5,000
trainees will probably participate in FY-1978. FSS' Office
of Transportation and Public Utilities offers 15 short inter-
agency seminars relating to transportation, traffic management,
and travel on a non-reimbursable basis. Most of the seminars
are 2 - 3 hours in duration; a few are 8 - 10 hour's long. The
seminars usually are led by local FSS Transportation personnel.
National Archives and Records Service (NARS). NARS offered 20
"paperwork management" courses, from 20-80 hours, on a reim-
bursable basis in FY 1977. Some of these courses were scheduled
for interagency participation and others were conducted by
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special arrangement for individual agencies in both
Washington and the field. These courses are taught
by local NARS personnel.
Automated Data and Telecommunications Service (ADTS).
AD' Soffered only 2 one-hour "courses" in FY 1977. Both
courses were offered on a non-reimbursable basis and were
tied to the installation of FTS systems in a few locations.
Although these programs meet the definition for interagency
training, they are really "orientation" programs designed
to acquaint agency personnel with newly installed telephone
systems.
Public Buildings Service (PBS) and Federal Preparedness
Agency (FPA).PBS and the FPA reported no administrative
services interagency training in FY 1977.
officials of NARS and FSS' Office of Transportation and
Public Utiities point to the value of using "program
practitioners" as instructors in their courses. They value
the close linkages between people who run their programs,
provide advice and assistance to agencies, and who serve
as instructors in their training courses. Often the same
people do all of these things, or, at a minimum, work
closely together. These kinds of linkages are valuable.
CSC offered 20 reimbursable interagency courses in the
procurement field in FY 1977 including two courses relating
to grants administration. Course offerings vary from 2 - 10
days in length and are offered in Washington and in the field.
Most of the courses are taught for the CSC by contract instruc-
tors.
Three of the CSC procurement courses cover the same
subject matter that is covered by FSS Training Division
courses. The CSC also has a space management course which
it offers infrequently and a new "Travel Regulations and
Procedures" course which it has offered twice in FY 1978
in Washington and plans to conduct in the regions. FSS'
Office of Transportation and Public Utilities helped the
CSC develop this course. This latter course seems to dup-
licate a similar course offered by GSA Regional Offices.
(NOTE: Statistical data on FSS, NARS, and CSC interagency
training is summarized in Appendix A. Cost data is sum-
marized in Appendix B).
C. DEPARTMENT OF DEFENSE (DOD) TRAINING
DOD has extensive training programs in administrative
services fields, especially supply and procurement. All
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of these courses are designed for DOD civilian and mili-
tary personnel. DOD is doing a good job of meeting its
needs. DOD makes extensive use of the supply and procure-
ment courses offered by GSA and the CSC. DOD admits some
trainees from the non-Defense agencies (1 - 2 percent of
the total number trained by DOD). These spaces are eagerly
sought as DOD courses are considered to be better than GSA
and CSC courses. The civilian agencies which use DOD courses.
get far fewer "slots" than they want. DOD does not charge
agencies tuition, but travel and per diem expenses usually
exceed what it would cost to send a trainee ?o a local GSA
or CSC course.
D. FEDERAL ACQUISITION INSTITUTE (FAI)
FAI is an interagency organization administered by DOD
under the guidance of an interagency board of directors.
It has responsibility for upgrading the quality of the
Federal procurement work force. This responsibility
includes the coordination of Government-wide career
programs for procurement personnel. It is not respon-
sible for conducting all Federal procurement training
as is widely believed.
Although FAI is a new organization, it has a number of
programs underway which should result in the improvement
of procurement training. For example, it is working on a
task analysis of the major procurement occupations. This
project will provide detailed information on what procure-
ment personnel do, how they do it, how long it takes, how
often they do it, and what "tools" they use. This informa-
tion will be used to redesign existing procurement training
so that it relates precisely to the needs of the procure-
ment work force. This information will be shared with GSA.
The FAI is also working on programs which will help DOD
and civilian agency procurement schools improve their
training through more effective course evaluation. This
will be especially beneficial to civilian agencies. FAI's
work on career programs for procurement personnel will be
a major step forward. It should do for civilian agency
procurement personnel what has already been done for DOD
personnel--i.e., provide for systematic training and
development. A similar program is needed for other
personnel in administrative services occupations. Agency
managers of administrative services are almost unanimous
in their call for such a program. They think GSA should
take the lead, with help from CSC. One of the issues
addressed by the newly created General Services Council
relates to this need.
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Interviews with agency managers of administrative serv-
ices organizations (17 agency Central Office managers in
Washington and approximately the same number in the Regions
were interviewed), disclosed numerous criticisms of GSA
and CSC conducted interagency training. A number of the
managers thought GSA courses left something to be desired.
A lesser number criticized CSC courses.'It should be noted
that the criticisms generally did not include NARS courses.
The supply and procurement courses received the most cri-
ticism, although transportation and traffic management
seminars were also criticized. The most frequent criticisms
are listed below.
o Course content is too general and too basic
(directed toward procurement and transportation courses).
o In some courses, too much emphasis is placed
on GSA procedures and not enough on the customer agency
needs (directed toward procurement courses).
o Courses are not offered often enough in the
field (directed toward all subject matter areas).
o The quality of instuction is inconsistent.
o There are additional training courses which
should be offered by GSA. These training courses are
listed in Appendix C.
The Supply and Support Services Task Force questionnaire
responses yielded similar results, although agency comments
were generally less specific than the oral comments obtained
in interviews. More than half of the questionnaire respon-
dents rated GSA training as deficient. Some rated it
"satisfactory", but only two agencies called the training
"good" or "excellent".
It should be noted that the FSS Training Division, which
offers supply and procurement courses, regularly collects
participant evaluation data from its attendees when they
complete training. This data indicates that the majority
of participants are satisfied with the training they receive.
It should be noted, however, that experts in the training
field put little stock in 'these so called "happiness" sheets.
They are useful, but tend to be misleading.
Most interagency Government training is accomplished on a
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reimbursable basis. The CSC, which operates the largest
interagency program in Government operates on this basis
for the following reasons:
o Training is designed primarily to meet operating
program needs; it should therefore he treated as a program
cost chargeable to program operations.
o If customers have to pay for training out of
their own funds, they will tend to sponsor only essential
requirements.
o The use of a reimbursable system provides
flexibility to meet changing requirements.
III. CRITERIA FOR IMPIIOVEMENT
Provide enhanced recognition to the importance of training
and career development of administrative services personnel.
Reduction of organizational fragmentation.
Courses should be offered in all subjects which meet the
essential training needs of the target population.
The needed courses should be offered on a timely basis.
The courses should be available in geographic locations which
minimize travel costs for the largest number of trainees.
Course content and coverage should be relevant to the trainee
work situation.
The training provided should have a positive benefit/cost ratio.
IV. OPTIONS
A. Consolidate all administrative services interagency
training now being provided by GSA and CSC into one central-
ized organization on the staff of the GSA Administrator. The
centralized organization would have a delivery capab if y
in each GSA Region. All training delivered by the new organi-
zation would normally be reimbursable.
1. Advantages:
Would assign responsibility for promoting, developing and
conducting administrative services interagency training
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to one organizational unit in GST. This step should
improve program administration, and could lead to
improvements in course quality. It would also provide
a focal point for customer agency input to the program--
an essential step to facilitate improvement.
Would increase the perceived status of interagency
training in GSA.
Would aggregate resources now devoted to interagency
training thereby enhancing the opportunity to increase
organizational efficiency and effectiveness.
Would tend to eliminate duplication in course develop-
ment and delivery, as well as in program administration.
Savings achieved could be used to upgrade the quality of
the program and increase course offerings.
2. Disadvantages:
Would remove training from GSA sub-units which have
functional responsibility related to the training.
Would require establishing a field delivery capabi-
lity; therefore, reassignment of some personnel would
be necessary.
B. Transfer all GSA interagency training to some
other agency, p robably the CSC. The training would be
centralized in that agency-and would be reimbursable.-
1. Advantages:
Except for an increase in the perceived status of GSA
training, would have of the advantages cited for Option
A above.
In the case of CSC, would assign the training respon-
sibility to an agency which has more experience conducting
interagency training and which has an existing delivery
system.
2. Disadvantages:
Would have the disadvantages cited in Option A.
Would remove the training from the organization in
Government which has functional responsibility for
administrative services and place it in an agency with
no functional expertise in the subject matter fields
covered.
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In the case of CSC, would place the training in an agency
whose "track record" for administrative services training
has been criticized. In addition, the CSC would oppose
the option as it conflicts with stated CSC policy, i.e.,
interagency training should be done by the agency with
functional responsibility.
Would deny GSA an opportunity to improve its image by
improving its training programs.
C. Leave administrative services interagency training
where it is now, i.e., in the'various_ GSA Services and the
CSC, and continue to offer it -OF the same terms. Concen-
trate on improving the program in terms of better quality
and quantity of course offerings.
1. Advantages:
Would leave the training' development and administration
in close proximity to the Service with the functional
responsibility it relates to.
Minimal personnel disruption.
2. Disadvantages:
Existing, dispersed staffs would be too few, and in some
organizational units, not qualified, to bring about the
improvements needed..
Does not provide a top management focal point.
D. Discontinue some, or all GSA and CSC administrative
services interagency training, and contract it out to the
private sector.
1. Advantages:
Would permit diversion of GSA and CSC personnel now working
on administrative services training to other program areas.
Would permit coverage of training subject-matter areas
that are not now covered without adding additional staff
resources.
2. Disadvantages:
Would assign the training to organizations which do not
have functional responsibility for the program areas
covered and which would need considerable help from either
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GSA or the user agencies in developing the training. The
CSC now uses contract instructors for most of its pro-
curement courses and there is considerable criticism of
their work.
Greater costs--CSC analyses have consistently demonstrated
that interagency training is far less costly than training
provided by the private sector.
In order to be effective, would require that one or more
GSA units monitor the program, thereby further increasing
the cast.
Would deny GSA the opportunity to improve its image by
improving its in-house training programs.
V. CONCLUSIONS, PROCESS IMPROVEMENTS, COST IMPLICATIONS
In this paper, it cannot be proven conclusively that a given
increase in the quantity and quality of training for the
Federal administrative services work force will result in
a given increase in the efficiency and effectiveness of
that work force. But, it is reasonable to assume that more
and better training will result in better work force per-
formance. American public and private investments in educa-
tion have made major contributions to increases in product-
ivity in our society--these investments have reaped returns
which far exceed the amounts invested.
As the administrative services training needs of most agen-
cies are similar, it is economical and efficient to meet
these needs on an interagency basis.
There is a considerable amount of interagency administra-
'tive services training being accomplished by GSA and CSC.
Howev.er',i'the..criticism directed at this training indicates
that ,it.ot nearly as effective as it should be. This
training must be improved.
Although some additional financial and staff resources
would be needed to achieve full program effectiveness,
some improvement could be achieved by reorganizing
resources. Consolidation of GSA and CSC interagency
training could result in savings of $150,000 - $200,000
per year, while at the same time improving program admini-
stration and delivery. These savings should be "plowed
back" into the program to achieve further quality improve-
ment and provide new course offerings.
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1. A resource enhanced centralized organization
should be funded to conduct a series of task analyses for
the major administrative services occupations (other than
procurement). These task analyses should be similar to
those now being planned by the FAI for the procurement
occupations. Data obtained from these analyses could then
be used to improve existing courses and to develop needed
courses.
2. A Government-wide career development program
for administrative services personnel should be developed.
The FAI is developing such a program for procurement personnel,
but similar action is needed for the other administrative
services occupations. The new centralized administrative
services training organization should be assigned responsibi-
lity to administer this program. However, the program should
be developed in cooperation with the recently established
General Services Council. That Council has already decided
to consider GSA's role in such a program.
3. Course content must be reviewed and revised
where necessary, and different methods of instruction should
be considered. The centralized organization should employ
or contract for specialists who are well-qualified for
instructional development. CSC and. DOD can provide this
assistance.
4. The new consolidated training organization should
establish an effective system for improving course evaluation
to ensure that its course offerings are responding to the
needs they are designed to meet. The CSC has a staff of
well-qualified consultants who should be able to help in
establishing the evaluation system.
5. Steps must be taken to ensure that linkages
between program operations and training are maintained.
For example, GSA and customer agency personnel should
be routinely used in the development of the training
program. They should help to decide what courses to
offer and should serve as advisors in developing course
content. They should also be used as instructors. Some
functional specialists could be rotated through the train-
ing office on two - three year assignments. This latter
practice is now being used by several excellent Government
training organizations. Agency and GSA operating programs
input to the centralized training program would also be
enhanced by establishing two "advisory boards", one made
up of customer agency managers of administrative services,
perhaps a committee of the new General Services Council;
and the other made up of managers from the GSA Services.
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C. COST IMPLICATIONS.
Appendix B indicates that GSA Services and the CSC spent
about $1.9 million for interagency training for the admini-
strative services in FY 1977 (all but $70,500 of this was
reimbursable). That amount will probably increase to
about $2.1 million in FY 1978 and $2.3 million in FY 1979
if the program continues to operate without change.
Although significant program improvement can be achieved
without additional funding, the interagency training pro-
gram could be made more effective if additional funding
were provided at the outset. These additional funds would
be used to further improve course maintenance, to develop
new courses, to develop new course delivery systems (e.g.,
programmed courses, correspondence courses, etc.), to con-
duct task analyses,.and to develop a career system.
The following is a five-year projection of costs:
Additional Appropriated Funding
in thousands of dollars
FY 1979-1983
FY-79
FY-80
FY-81
FY-82
FY-83
Course Maintenance
New Course Development
100
100
100
100
100
100
50
50
---
New Delivery Systems
100
100
100
50
---
Task Analyses
50
50
50
50
---
Career System Develop-
ment and Maintenance
35
25
25
25
25
Totals
$385
$375
$375
$225
$25
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An Overview of1Training Offered by GSA and
CSC in the Administrative Services, FY-1977
No. of
Courses
No. of Sessions
Wash/Field
No. of Partic.
Wash/Field
FSS - Training Div.
9
53/63
1,875/2,200
FSS - Off. of Trans.
and P.U.
15
61/19
530/1,678
20
9/91
268/1,482
CSC
20
63/117.
2,100/1,314
Totals
64
186/290
4,773/6,674
Reimb./
Non-Reimb.
Reimb.
Non-Reimb.
Reimb.
Reimb.
N/A
Staff
Size
Operating
Cost
14.0
$426,000
3.7
70,500
10.0
572,000
13.8
822,000
41.5
$1,890,500
o CSC uses contractor instructors extensively, therefore, staff figures are deflated.
o DOD figures not included, as DOD training is designed to meet DOD needs, and not interagency
needs (however, some non-DOD employees (about 2%) do participate in DOD courses).
o ADTS not included because its interagency training is really orientation training.
0 PBS and FPA not included because they offered no interagency training in FY-1977.
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Analysis of Program Costs
(in thousands) in FY-1977
Course
Course
Devel. &
Administration Delivery
Maintenance
T
otals
FSS - Training Division
$61.0
(14%)
$221.0
(52%)
$144.0 (34%)
$426.0 (100%)
FSS - Office of Trans. & PU
10.3
(15%)
38.0
(54%)
22.2 (31%)
70.5 (100%)
MARS
60.0
(11%)
482.0
(84%)
*30.0 (5%)
572.0 (100%)
CSC
57.5
(7%)
608.3
(74%)
*156.2 (19%)
822.0 (100%)
Totals
$188.8
(10%)
$1,349.3
(71%)
$352.4 (19%)
$1,890.5 (100%)
* MARS and CSC course development and maintenance costs were abnormal in FY-1977; therefore, the
actual figures were adjusted to depict a "normal" year.
N
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Appendix C
Courses Needed to Meet Needs of
Federal Administrative Services Workforce
1. Interviews and questionnaire responses revealed some adminis-
trative services training needs that are not now being met.
The list includes:
o
Energy Conservation
o
Personal Property Management
o
Real Property Management
and
Administration
o
Transportation Management
(as
opposed to operations)
o
Contracting for Research
and
Development
o
Space Management*
o
Administrative Officer Training
o
Administrative Services Manager Training
*
Now offered periodically, but not nearly enough.
2. Most administrative services managers had not analyzed
their staff training needs and could not identify specific
needs. They had a vague belief that needs existed and
could be identified if systematic analyses were made. In
fact, this is true. Systematic task analyses of the
various administrative services occupations would identify
other training needs.
3. One of the major responsibilities of the proposed consoli-
dated interagency training organization would be to keep
abreast of training needs as they develop and to design
and offer training to meet these needs. An interagency
committee (perhaps a subcommittee of the newly established
General Services Council) should be set up to advise the
training organization on training needs.
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 ISSUE 00150001-9
I. INTRODUCTION
This paper presents an assessment of GSA's role in
providing advisory services to other Government depart-
ments and agencies. Most advisory services consist of
management consultant-type studies of administrative
functions. These studies typically result from an agency
request for GSA experts to solve a particular problem or
improve a management system.
The ASRP study involved interviews with GSA and other agency
personnel, interviews with officials of large corporations
and state governments, analysis of responses to question-
naires submitted by major departments and agencies, and
review of existing statutes and regulations.
This assessment suggests that, with limited exceptions,
GSA has not adequately fulfilled its advisory role.
II. BACKGROUND/CURRENT SITUATION
The GSA Services have provided consultant-type services
to other departments and agencies since the early 1950's.
In replies to a study questionnaire, the majority of
agencies replying indicated a continuing interest in
being able to obtain these services.
The involvement in providing advisory services varies
considerably within GSA. Data on consultant services
provided by each GSA Service in FY-1977 are shown in the
attachment.
FPMR coverage relating to the availability of consultant-
type services and how to obtain the services varies by
GSA Service. Coverage relating to the functions of NARS,
ADTS, and PBS is extensive and provides information on
the advisory services available. Coverage relating to the
availability of advisory services in FSS is incomplete.
Only transportation and public utilities are covered in
any depth. Moreover, information on how to obtain advisory
services from any of the Services is incomplete.
There is a great demand for consultative assistance on
space management which PBS is unable to meet for lack of
resources. The need for this assistance can probably be
reduced to some extent by providing more space manage-
ment training.
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There is no single organizational entity within GSA with
the responsibility for providing leadership and coordination
of the advisory services function. Within FSS, the Market
Research and Marketing Division has as part of its mission:
"upon request, perform supply management studies in Federal
agencies and coordinate with the National Liaison Division
in providing recommendations to improve internal supply
management and operating programs . . ." There is no perma-
nent staff assigned to this function. With the exception
of a major study. conducted for the Republic of Liberia,
this division has done little in providing advisory services
of the type described in this paper.
Agency responses to an ASRP questionnaire and interviews
with agency managers of administrative services yielded
mixed responses regarding GSA advisory services. Most
managers of GSA administrative services think:
o GSA should provide consultant-type advisory services
in all its major functions;
o Agencies would be willing to pay for advisory services
if accomplished professionally by competent people. However,
these officials have reservations. about GSA's ability to
provide the requisite number of skilled personnel to produce
a professional product. An exception to this view is work
performed by NARS.
o GSA must become more service-oriented if it is to do
the advisory services job well. Agencies state that some
of the consultant help they get now is more oriented to
GSA needs than it is to customer agency needs.
III. CRITERIA FOR IMPROVEMENT
A cadre of highly qualified, service-oriented, professional
personnel.
A single point of contact for potential customers capable
of evaluating customer needs and GSA's ability to provide
them.
Uniform policies and procedures applicable to the availability
of advisory services and how to obtain them.
A continuing monitoring and evaluation of advisory services
being performed for customers.
An effective feed-back mechanism from customer agencies.
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Adherence to government policies regarding government
competition with private enterprise as set forth in
OMB Circular A-76.
IV. OPTIONS
1. Establish a small organization on the staff
of the Administrator responsible for the planning, control,
coordination, and monitoring of GSA's advisory services
program. This organization would: conduct market surveys
of potential customer needs; assess GSA abilities to satisfy
these needs; serve as the focal point in relations with
customer agencies; establish uniform policies and proce-
dures; develop regulatory coverage and monitor work perfor-
mance. The actual consultant-type work would be performed
by personnel from the applicable GSA Service on a fully
reimbursable basis.
a) Advantages:
Permits a realistic determination of user needs for advisory
services and GSA's ability to provide them.
Enhances the planning for and utilization of GSA resources.
Improves communication with customer agencies.
Permits the adoption of uniform policies and procedures
together with appropriate regulatory coverage.
Insures that actual work performed satisfies the customer
agency.
Identifies subjects requiring additonal policy guidance
and/or training assistance.
Facilitates measuring the cost effectiveness of the
advisory services program.
Facilitates the view of the Administrator vis-a-vis service
to other agencies.
Enhances the service orientation image of GSA.
b) Disadvantages:
Will require additional personnel resources.
May adversely affect existing relationships between indivi-
dual GSA Services and customers.
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2. For each GSA Service, establish an organization
that would be responsible for the planning, control, c -
nation, and monitoring of that Service's advisory service
function. This organizational element would perform the
same functions previously identified under the first option.
a) Advantages:
Same advantages as set forth under the first option with the
exception of proximity to the Administrator..
Lower staffing requirements.
b) Disadvantages:
Reduces the opportunity for unifor;n policies, procedures,
and regulations on an agency-wide basis.
Location in a Service which has a line responsibility may
diminish the objectivity and effectiveness of the advisory
function.
Regardless of the organizational structure, the following
process reforms should be adopted:
1. Conduct an annual survey of government depart-
ment and agencies aimed at determining the extent and type
of advisory services which GSA may be asked to provide.
2. Assess GSA's ability to meet potential customer
needs and their impact on GSA's resources, budget, and
mission performance.
3. All advisory work should be fully reimbursable.
4. Provide for a continuing monitoring of all work
being performed and a reporting system that ascertains user
evaluation of the work.
5. Document all costs associated with performance
and establish a customer feed-back system to obtain results
of the advisory recommendations.
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GSA Consultant-Type Advisor Services
FY-1977
Staff Yrs. Avg.
Expended Grade
Non-Reimb.
Service Provided
Reimbursable
Income
ADTS
54.0 GS-13
$ 134,000
(10%)
$1,200,000 (90%)
NARS
48.0 GS-13
None
1,200,000 (100%)
PBS
47.8 GS-12
1,200,000
(60%)
825,000 (40%)
GS-13
80,000
(57%)
60,000 (43%)
GS-14
225,000
(100%)
No
ne
159.8 GS-13
$1,600,000
(30%)
$3,800,000 (70%)
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