PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL (GRACE COMMISSION)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87-01146R000100010001-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 28
• Document Creation Date: December 19, 2016
• Document Release Date: September 12, 2006
• Sequence Number: 1
• Publication Date: January 1, 1984
• Content Type: MF

Approved For Release 2006/09/13: CIA-RDP87-01146R000100010001-1
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0
MEMORANDUM FOR:'-Chief, Procurement Management Staff, OL
Chief, Headquarters Operation, Maintenance and
Engineering Division, OL
Chief, Printing and Photography Division, OL
Chief, Procurement Division, OL
Chief, Real Estate and Construction Division,
OL
Chief, Supply Division, OL
FROM:
Chief, Information and Management Support
Staff, OL
SUBJECT: President's Private Sector Survey on Cost
Control (Grace Commission)
REFERENCE: Memorandum for D/L from DDA, dtd
19 January 1984, same subject,
(DDA 84-0195)
1. Forwarded herewith is a copy of the Consolidated Office
of Logistics (OL) response to the DDA for recommendations
contained in select Grace Commission Reports. (Attachment A).
Please note that the D/L in his comments to the DDA pledged
that, when and where possible, OL components would take
unilateral action to adopt certain of the Grace Commission
recommendation. The D L also pledged that wewoul,d_x_eport the
results of our efforts to the DDA.
2. Subsequent to forwarding the consolidated report to the
DDA, each OL division and staff was provided a copy of the
report,. asked to review and retain the report and provide this
staff with ad hoc progress reports on recommendations adopted.
To date we ,.ave_no.t xeceived_a-.progress report from any .OL
q.0-m- P_ oren$ ..
3.. It is therefore requested that you now review the
attache.d copy of the.,..-original report to. ,hemDDA_and identify
those specific recommendations that can..be_adopted/.implemented
unilaterally y you re_ sPective_d.v.ision_o.
further requested, for the recommendationsridentifiedtins
review, that you report on any your
adopting/implementing Y Progress or future plans for
those recommendations. Please submit
your written response to this staff by COB 7 July 1984.
Attachment
OL 4118-84
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ROUTING AND RECORD SHEET
SUBJECT: (Optional)
President's Private Sector Survey on Cost Control
FROM: EXTENSION
NO.
Daniel C. King
OL 4045-84
Director of Logistics
DATE
~
r;r
iiltF ~f:J tr%
TO: (Officer designation, room number, and
DATE
building)
OFFICER'S
COMMENTS (Number each comment to show from whom
INITIALS
to whom. Draw a line across column after each comment.)
RECEIVED
FORWARDED
Deputy Director for
Administration
As you will note, we have
2,
expended considerable tint.:: and
effort in reviewing the Grace
Commission reports. Many of the
s.
Grace recommendations are not
applicable to the Agency. A
number of other recommendations
4,
will be handled via LIMS.
Finally, we have merely concurred
in a number of recommendations'-
5.
in those isolated instances where
we can undertake unilateral action
to adopt the Grace recommendations,,
6. ....
we intend to do so as time permits.
We will report the. results of
these efforts to you. . -
7.
S.TA`l? .'
8
t trt
Daniel C
King
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 Approved For Release 2006/09/13: CIA-RDP87-01146R000100010001-1
5 MAR 1984
MEMORANDUM FOR: Deputy Director for Administration
FROM: Daniel C. King
Director of Logistics
i
SUBJECT: President's Private Sector Survey on Cost
Control
REFERENCE: Memo to D/L from DDA,dtd 9 January 1984,
Same Subject (DDA 84-0195)
1. As requested in the reference, the Office of Logistios
-has reviewed the copies of the task force reports completed by
the President's Private Sector Survey on Cost Control (Grace
.--. -
Commission) on:
A. Land/Facilities/persa:iu_< Property
(federal vehicle fleet management only)
B. Procurement/Contracts/Inventory Management
C. Real Property Management'
D. Department of Labor
(OMB Circular A-76 only)
2. Our comments on the applicability of the reports to the
Agency and on the task force recommendations, which can be
adopted by the Agency, are contained in the attachments
corresponding to the listing of reports in paragraph one. In
addition, at the request of the Office of Personnel, we have
provided comments on several recommendations contained in
Grace Commission, Personnel Management Operations report. Our
comments on recommendations in.==this ,,.,.port are at ? .ttachment E.
3. If there are any questions or we can be of.further
assistance in this matter, the focal point for this activity is
the Information and Mana m t Support Staff, Office of
Logistics, extension STAY
STAY
Daniel C. Kin
Distribution:
Orig.. - Addressee
1 - OL Files (wo/att) OL 4045-84
I - D/L Chrono (wo/att)
1 - OL/IMZS Official (w/att)
I - OL/IMSS Chrono (wo/att) OL/IMSS (2 March 1984)
Acoroved For Release 2006/09/13: CIA-RD 87- 001-00010001-1
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PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Land/Facilities/Personal Property
(federal vehicle fleet management)
Recommendation:
LAND 2-1: By Presidential action, the currently constituted
interagency Assistant Secretaries for Management Group,
within the Office of Management and Budget, should analyze
existing reports and data within one year and submit to
the President accounting, opeerational, and management
standards and improvements. These standards should be
implemented for the entire federal fleet under existing
Executive Branch authority.
Comment:
The Office of Logistics concurs in this recommendation.
Recommendtion:
'LAND 2-2: Reform 88 should establish a government-wide
fleet management information system (MIS) and should address
the fundamental question of whether the Federal Government
should be in the business of owning and operating a motor
.vehicle fleet and to what extent it should be doing so.
Comment:
We feel that, because of cover and security, the Agency
should not participate in a government-wide fleet management
information system (MIS).
Recommendation:
LAND 2-3: GSA should maximize volume purchasing leverage
by utilizing a competitive, once-a- ear, fixed/price
indefinite quantity ^entract for each new fiscal year's
planned quantit7e_'.of r.=_w vehicles, based upon agencies'
budgets as submitted to Congress.
Comment:
The Office cf Logistics concurs in this recommendation as
it would be cost effective.
Recommendation:
LAND 2-4: GSA and DOD should increase vehicle resale
revenues by implementing a reconditioning program for all
decommissioned vehicles prior to sale.
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Comment:
The Office of. Logistics concurs in this. recommendation,
but with some reservation. A caveat would be that the Agency
realize the dollars returned on the sale of vehicles to procure
replacements, and that some Agency vehicles would be retained
for training purposes.
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PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Procurement/Contracts/Inventory Management
Recommendations:
PROC 1-1: The Administration should continue its active
programs for substantial reforms of the procurement
process
through the Uniform Federal Procurement System and a strong
central leadership role for the Office of Federal Procurement
Policy/OMB.
PROC 1-2: The Administration should take direct action to
fully integrate procurement reform and the role of OFPP into
the existing-budge, i am grreview processes of OMB.
PROC 1-3: The Administration should take direct action to
retain the Federal Acquisition Institute in OFPP/OMB.
Comment:
Recammen,. - :ions PROC 1-1 through 1-3 ,have _;eneral applica-
tion to the entire federal government process. They would
strengthen the Office of Federal Procurement Policy (GFPP),
have long-term positive impact and should be supported.
Recommendations:
PROC 2-1: The President should propose a well-defined
joint roj_ect to be undertaken by the General-Aecounting
Office (GAO) and the Office of Management and Budget
OMB with assistance from major procuring agencies and
departments, to analyze, by a certain date, the costs of
mayor socioeconomic programs which affect the
process. procurement
PROC 2-2: The President should initiate b Executive
Order a requirement that future socioeconomic programs
proposed to be implement via the procurement process be
subject first to a -cao'tt/`7._s.fit analysis.
Recommendations:
PROC 2-3: The President should pursue legislation, either
separately or as part of the proposed Uniform Federal
Procurement System to tie the thresholds and ceilings for
major socioeconomic programs to the ceiling for simplified
small purchase procedures.
PROC 2-4: The President should ursue legislation either
separately or as part of the proposed Uniform Federal
Procurement S stem to increase the ceiling for simplified
small urchase procedures to 25,000 government wide
 Approved For Release 2006/09/13: CIA-RDP87-01146R000100010001-1
Comment:
Recommendations PROC 2-1 through 2-4 have general applica-
tion to the federal acquisition process and should be supported.
We do feel, however, thatthe Commission should have made an
additional recommendation in this area, i.e., to designate a
group to evaluate a system for implementing socioeconomic
programs through the tax process or other methods rather than
via its contracts for supplies and services.
Recommendations:
PROC 3: Carlucci Initiatives; PROC 4: Multiyear
Contracting: PROC 5: Program Prioritization; and, PROC 6
through--9:.. Project Management Issues Overview.
Vl sue nuw. An audit program should be initiated to
ensure compliance.
These recommendations are specifically for DOD and focus
on major weapon systems. acquisition. While most of the
recommendations seem to have merit for DOD, one must remember
that DOD has a procurement budget of more than $125 billion and
employs more.than.'100 000 personnel in its procurement process.
CIA, with=:'fewer 'pan procurement officerT'ljand_ n ` scule STAT
procurement budget, could not possibly implement the recommen-
dations; however, we do note that PROC 4, Multiyear Contracting,
is of interest and might be of use in selected CIA programs.
Recommendations:
PROC 10-1: DOD should require compliance with the EOQ
system, and should eliminate as much of the variation in
pp C?~1 SPriflno f.Tii- h - --- 4- 4- -
Comment:
Comment:
Because of the relative small size of Agency inventories,
space limitations, changing programs and the inability to
measure inventory procurement and inventory carrying costs, EOQ
Theory has not been utilized by Agency inventory, mar; >gers.
Demand forecasting is based upon either of two factors: (a)
Specific materiel requirements for specific Agency programs,
and (b) recent issue experience (history) obtained from the
automated Inventory: Control System (ICS).
Recommendation:
PROC 10-2: *DOD shouldestablish guidelines for the
Services-to regular)-y asses-- and adjust to current levels
the purchasing and inventory carrying costs.
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Existing Agency automated systems do not
orLEGIB
id
i
prov
e
nf
mation necessary to measure purchasing and inventory carrying
costs. Ti- is h
, owever, a requirement of the LIMS modernization
rro
t t
jec
o provide managers with these costs.
Recommendation:
PROC 10-3: DOD should expedite the modernization of com-
puter facilities to provide accurate status of stock and
to Improve the l
l
eve
or ccuracy of demand forecasts.
The Logistics Integrated Management S
stem (LIMS)
ill
y
w
ovide the necessary tools to improve the accurac
of EOQILLEGIB
y
orecasting in the Agency.
Recommendation:
PROC 10-14: DOD -shon.?ld reinitiate the task of :determi.ning
what Invent_nr~r?,_i:~ + _~ __ _ _
Comment:
We do not consider this recommendation applicable to the
Agency. Given the size and type of programs the Agency supports,
inventories must be responsive to need. It is therefore
essential that Agency fill-rate ratios generally be maintained
attconsi~3tently high levels.
Recommendation:
PROC 10-5: DOD should review the criteria for rating
inventory managers, which should include demand forecast
accuracy and stock turn as well as filled rate.
Comment:
These factors, where applicable--are currently incorporated
into the Performance Appraisal Report for Agency inventory
managers.
Recommendation:
PROC 10-6: DOD should introduce guidelines for adopting
some of the private sector techniques for.keeping inventories
low with appropriate consideration f?:;r readiness requirements
for those inventories affected.
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Comment:
Planning for inventory replenishment (within funding
limitations) of large volume/high dollar items include the
placing of an order on an-.annual basis, but scheduling delivery
on a monthly or quarterly: basis. This strategy helps to mini-
mize carrying costs while:-at the same time increases the
efficiency of warehouse space utilization.
Recommendation:
PROC 11-1: The Services should implement appropriate
interim measures as a short-term strate y to bridge the gap
and for quick payoff in improving inventory visibility and
.. j~a_ nagE gent .
Comment:
Improving inventory visibility and management is an objec-
tive of the Logistics Integrated Management System (LIMS).ILLThL&B
current Inventory Control System (ICS) will be incorporated
into and enhanced by LIMS.
'Recommendation:
PROC 11-2: The Services should pursue ADP modernization by:
(1) Instituting a pilot program in each service to install
"tailored" commercial ADP software packages in conjunc-
tion with the use of minicomputers.
(2) Studying the use of commercial ADP service and equip-
ment with emulati
on capability if needed; to augment
overloaded facilities.
(3) Emphasizing the use of existing modernized or planB
systems in DOD to avoid extended development time.
Also, large private sector industries should be studied
to identify more efficient practices relevant to DOD
logistics.
Co.: ;Its:
These recommendations are being pursued in the development
of LIMS.
Recommendation:
PROC 11-3: There should be a focal point in DOD at a
sufficiently high level to.provide impetus to initiate and
implement measuresfor ADP modernization.
Comments:
The Office of Data Processing is the Agency focal point
for ADP modernization to include the development of LIMS.
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Recommendation:
PROC 12-1: DOD should initiate a program of "wall-to-wall"
inventory taking on a periodic basis.
Comment:
ILLEGIB
Conducting wall-to-wall inventories, by materiel category,
i C A rnitti no r---- A,,-- ..P n..... 4 ..._, r__ __
PROC 12
-2;
e
:implemented. Potential benefits exist relative to inven-
Recommendation:
This recommendation is not applicable to the Agency since
we do not have numerous facilities colocated in small
geographical areas.
Comment:
PROC 1I1-1: Separate the policy and service functions
currently in GSA. Policy responsibilities should be
transferred to OFPP, under the aegis of the Office of
Management and Budget, which would set broad procurement,
contracting and inventory policy for government agencies.
An integral part of this group would be a council of
government - ;encies which would part.ic' >te in the
formulation -f procurement policy.-VIth continuing mandate,
rather than being task-oriented, as appears to be the case
today.
Comment:
This recommendation would further consolidate the policy
function in OFPP. We recommend that the Agency support the
recommendation.
Recommendation:
coding can be accommodated in LIMS is still under review.
The LOGMARS implementation plan should b
nt:
We are currently studying the possibilities of incorporat-
g inventory bar coding into LIMS. The extent to which bar
Recommendation:
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Recommendation:
PROC 14-2: To ensure the greatest possible "economies of
scale," direct all Government agencies to use GSA for
procurement, with the following 'exceptions:
(1) Procurement for defense of the country.
(2) Procurements that could be centralized by other civi-
lian agencies to capitalize on expertise already in
place (for example, Veterans Administration
purchasing medical supplies.)
(3) Clearly-understood previously agreed upon procedures
allowing agencies to go to the open market if GSA was
unable to meet their needs, or if it was determined
to be less costly.
Comments:
The exceptions immediately allow DOD to exclude themselves
from.using GSA, i.e., "Procurement for defense of the country.".
CIA's mission is no less critical than DOD's. Also, our
requirements are more like"DOD~3 than those of a civilian
agency. While CIA has special authority under its "Act" and
other laws and regulations to procure services and supplies
necessary for its mission, a fourth exception should be added
for the CIA.
Recommendations:
PROC 15-1: Convert FSS to a full commodity center approach.
under which each commodity center has "cradle to grave"
management responsibility and is
operated
as a distinct
cost center, as it sign ificantly
reduces
the number of
locations where procurement and
inventory
management
activities are conducted.
PROC 15-2: Develop and monitor performance indicators that
measure the effectiveness of the procurement function,
taking..ip'-o account the marketplace in addition to time-
liness~,- o.y w livery.
PROC 15-3: Develop a program with specific objectives and
deadlines to reevaluate the method of supply for major
items. Responsibility for implementation should be
assigned to the commodity manager. (The Task Force
recommends significant reductions in the use of the
multiple awards program. See PROC 21.)
PROC 15-4: Develop.a program to contract out the direct
deliver retail facilities to the Private sector. The Task
Force recommends that FSS begin with site s) outside of the
National Capital Region as a pilot program under a schedule
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which would result in a prompt evaluation of such an
effort. To further reduce costs, FSS should undertake the
A-76 cost comparison based on estimated costs of these
facilities, rather than incur the implementation costs of
converting the selected site(s) to the new facilities.
Comment:
Recommendations PROC 15-1 through 15-4 impact GSA's internal
organization. We are not in a position to comment.
Recommendations:
PROC 16-1: =?Consnlidate all DOD contract administration
activities in a single organization reporting to-the Under
Secretary of Defense for Research and Engineering.
PROC 16-2: Make modern database management facilities
available to all DOD contract administration activities as
soon as feasible.
Comment:
Rcom~n =__i;:ns PROC 16-1 through --2 address internal
DOD reorganization issues on which-we are not in a position to
comment.
Recommendations:
PROC 17-1: Begin the transfer of an additional 900,000
items to DLA at the rate of 50,000 per month, as soon as
the current transfer of 200,000 items is comp-fete.
PROC 17-2: Aggressively pursue the issue of DOD
Consumable Management with the Senate and House Armed
Services Committees.
Comment:
Recommendations PROC 17-1 through 17-2 address internal
DOD changes w" h will spark considerable discussion be`ween
the serv.i'c-es :-irii DLA. iiavi , said this, we are na`t -in Kposi-
tion to comment.
Recommendations:
PROC 18-1: Mount a campaign through OFPP, the executive
agencies, and private industry to gain support for the
A-76 program from Congress, the public, Government unions,
and local governments.
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PROC 18-2: Raise the present cost study threshold to 10
full-time employee equivalents, approximately $250,000, and
have the threshold applicable in both DOD and civilian
agencies.
_PROC 18-3: Stream.l`ine cost study procedures through the
development of more standardized performance work
statements and study the use of computer processing to
automate the cost calculations.
Comment:
Recommendations PROC 18-1 through 18-3 are for greater use
of the 0MB Circular A-76 process to determine whether functions
can more economically-be uone'by government employees or
contracted out. CIA has essentially exempted itself from man-
datory use of A-76, retaining maximum flexibility as to when to
apply its principles. Notice of this policy has been given to
OMB.
ecommendations:
PROC 19-1: Develop accountability among procurement/contract
management personnel/su ep rvi -'s for making.awards to known
poor performers or for failing to terminate for default,
to debar or to suspend such performers when circumstances
clearly justify doing so. ILLEGIB
Proc 19-2: Establish information systems on vendor per-
formance.
Comment:
Recommendations PROC 19-1 through 19-2 have general impact
on the federal acquisition system. They are intended to guard
against awards to contractors with poor performance. They
establish accountability for managers making awards to poor
performers. We recommend the Agency support these
recommendations.
Recommendation:
PROC 201: :Lcrease the Centralization of Civilian Agency
Procurement.
Comment:
While centralization may effect economics in some areas,
we-have gone the other way in CIA. We. believe that a mix of
centralization and decentralization-must be continued if we are
t;, continue to be respons.ive.. We would not support this recom-
mendation for this Agency.
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PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
Real Property Management
Recommendation:
PROP 1-1: Establish in writing a clear, concise goal for
Federal real property management.
Comment:
We concur in and support this recommendation.
Recommendations:
PROP 1-2:
within 18
Correct
months.
and update the real property database
--PROP 1-3: Select and obtain
and hardware computer system
the most appropriate software
for handling such data.
rn ` '; -.i Develop a working management
property within no more than two years.
Comment:
PROP 1-2 through 1-4: These recommendations deal with
criticism leveled at GSA for its deficiencies in data collection,
outdated information, erroneous information, and inadequate data
collection systems. While this is primarily a GSA-problem, it
cannot be totally corrected without the support of reporting
agencies. For security reasons, this Agency should not report
real property data into a central, essentially open system.
The Agency, however, should do what is necessary to ensure the
effective collection and management of its own data..
Recommendation:
PROP 1-5: The Admln,ist~ . ' ,r of GSA should order an in-depth
internal study of'~dup-li. on within that Agency, culminating
in a report to OMB
ith
w
in one year.
Comment:
While this, too, is a GSA problem, the heavy layering of
personnel and. responsibility in the property acquisition and
maintenance cycle is. overcumbersome and inefficient. The
Agency.has moved towards=more direct leasing and taking, respon-
sibility for maintenance:, and operation of its facilities in
order to circumvent the GSA process.
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Recommendation:
PROP 1-6: Unnecessary duplication between GSA and tenant
agencies in facility management functions should be
eliminaibed promptly.
Comment:
This recommendation should definitely be supported. The
Agency has already taken steps to deal with this issue by
obtaining a delegation of authority from GSA to independently
lease space up to 5,000 square feet. The recent Memorandum of
Understanding between the Agency and GSA, regarding maintenance
and operation of the Headquarters Building is another step
towards reducing duplication in these areas.
Recommendation:
PROP 2-1: Remove the ceiling on SLUC rentals for
GSA-managed buildings.
Comment:
The Task:-Ft~orace this recommendat '.hn a., a means of
controlling or "nianagi ig the acquisition of 'addi ional space.
If Congress permits SLUC rates to be raised to a level com-
parable to commercial market values, agencies might be
restrained from acquiring space at premium prices if they must
justify these new costs in their budgets. This could cost the
Agency more money but it might, in fact, be a disincentive to
rent more space.
Recommendation:
PROP 2-2: Reaffirm GSA's authority in space allocation.
Comment:
This recommendation supports centralized authority for
space management, and primarily by OMB, Congress, and the
President. Prudent business practices should not be put aside
for political co-ns`idey ::',ions. -B As fr_.. impact on the agencies,
overall centralized col.trol in-areas of policy management maker
sense, but agencies need to be given more control in managing
real. estate within established guidelines. Rather than centra-
lize the assignment and review of utilization of space with the
Administrator of GSA, the authority should be delegated to the
agency head. He should be required to report on a regular
basis to the President on space utilization and should be
required to adhere to regulations and order promulgated.
Recommendations:
PROP 2-3: Prepare central and regional plans for GSA
space surveys.
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PROP 2-4: Set space-utilization goals for each agency and
executive department.
Comment:
Recent Presidential initiatives directed towards office
space management reforms deal with this issue. An office space
per person utilization rate goal has been set of 135 square feet
down from 150 square feet. The Agency is complying with this
program. However, we should continue to resist overt reporting
of data.
Recommendation:
PROP 2-5: Require space-utilization submissions and
annual review of progress toward those goals as part of
the budgeting process.
Comment:
Because of the sensitive nature of this Agency and its
locations, personnel etc., these kinds of submissions should
only be done_~on a -lassified basis.
Recommendation:
PROP 3-1: Reevaluate out-year sales goals for surplus
federal real property.
Comment:
No comment.
Recommendation:
PROP 3-2: Give agencies some incentives for cooperating
fully with the surplus property disposal program.
Comment:
n > _. can and should supp.orrt-:_~. a recommendation. I t may
.b:.e. use .`ul to us when we move y1-nto hh:e new Headquarters Building
and begin to dispose of some of our existing buildings.
Recommendation:
PROP 3-3: Facilitate financing where necessary to make
sales.
Comment:
No comment.
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Recommendations:
PROP 4-1: Wage determination procedures should be changed.
PROP 4-2: Th'e'thresho.ld contract size should be increased
to $25,000.
PROP 4-3: Additional DOLfunding should be provided as
required.
PROP 4-4: A transition period should be provided to
accommodate the changes.
Comment:
These recommendations deal with the Service Contract Act of
1965. We believe the Agency should endorse all recommendations
without exception. The Service Contract Act has the greatest
impact. on GSA, since that agency has the responsibility for
housekeeping functions and relies heavily on service
contracting. CIA will become implicated when it contracts for
services on the new building. It is noted that CIA has
excluded itself from the Service Contract Act because of tha
requirement for disclosur -d-f` >:}mation on its contracts
The de facto exclusion is based on the CIA Act of 1949 and cite
responsibility of the DCI to protect sources and methods.
Recommendation:
PROP 5-1: A-76 guidelines for studies on contracting out
of high skill maintenance should be revised.
Comment:
We agree with and would support the recommendation to
exempt high-skills maintenance activities from A-76 studies on
the basis of less formal analysis and the exercise of sound
judgment by those directly involved in making the decisions.
Recommendation:
PROP 5-2: Continued in-rhou:: operations s;~ould require a
simultaneous effort to increase productivity.
Comment:
The Agency is working towards compliance with the
Presidential initiatives on office space management. Actions
are underway to improve data collection, leasing, and main-
tenance and operations procedures. The-direct-leasing program,
use of the Director's-authority when required, and agreement
with GSA on M&O for Headquarters are directed towards those
goals.
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Recommendation:
PROP 6-1: A comprehensive maintenance productivity
program should be introduced.
Comment:
The Agency should certainly support Government-wide
productivity improvements in property maintenance. We have
recently reached an agreement with GSA to take over the
M&0 of our Headquarters Building complex beginning in FY 1985.
We hope that this initiative will cause us to be more effective
managers in this area.
Recommendation:
PROP 6-2: Central responsibility should be established
within each agency.
Comment:
Responsibility is centralized in-the Office of Logistics
arty acquisition and.lea :~ management along with construc4~7on
n,: bility for domestic r. ..: field stations ar
i
th
R
e
n
e
e.:
Estate and Construction Division (RECD), and the Headquarters and
Washington metropolitan area offices are the responsibility of
the Logistics Services Division (LSD). Organizational changes
are currently being contemplated, which will furthc? consolidate
and improve operations at the Headquarters Building.
Recommendations:
PROP 6-S Performance indices for property maintenance
should be established both as a management tool and as
performance incentives.
PROP 6-4: Standards and variance analysis should be used
to improve planning and scheduling.
PROP 6-5: Outside consultants can help et the program
started.
Comment:
Our new initiatives to take over the M&O at Headquarters
should result in improvements in all of these areas. The
Office of Logistics has, when necessary, hired consultants to
help improve maintenance. The latest of these was the Westan
Study which addressed the operations) maintenance, and
upgrading of the Headquarters Power Plant.
Recommendations:
PROP 7-1: GSA should begin a program immediately to
install EMCS on a broad basis.
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PROP 7-2: GSA should benefit from private sector
experience in regard to energy management control systems.
PROP 7-3: GSA should benefit from-DOD experience in
-applying EMMCS to government-controlled buildings.
PROP 7-7: NCR should collect statistics on its own steam
production.
PROP 7-8: These steam-system data should be used to
improve economic performance.
PROP 7-10: GSA should assess each of its Federal
"tenants" for actual consumption of ener in the s ace
under GSA's control.
Comment:
In FY 1983, GSA spent $224 million for utilities. The
Agency should do whatever is necessary and reasonable to
install Energy Management Control Systems (EMCS) in an effort
to f?=~:-'uce the overall energy consumption and real--property
cos:
Recommendations:
PROP 7-11: DOD should put the EMCS already ordered into
dollar saving operation quickly.
PROP 7-5: DOD should base its decisions about new EMCS
investments on dollar-saving potential.
PROP 7-6: Commerciall available EMCS s stems should
receive consideration over custom designs.
Comment:
These recommendations are directed towards DOD, and we do
not feel it appropriate to comment.
Recommendation:
PROP 7-9: Reasons for rescission of the emergency
building temperature restrictions should be clarified.
Comment:
We would support this recommendation. However, we need to
have more control, along with stricter accountability for energy
management within the constraints of operational and practical
needs.
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Recommendation:
PROP 7-11: DOD should renew its investigation of
installing gas and electric meters in military family
housing.
Comment:
This recommendation is directed toward DOD, and we do not
feel it appropriate to comment.
Recommendations:
PROP 8-1: Limit the use of SFO procedures and modernize
th t
t
i` ..~C lnterlm action.
PROP 8-2: GSA should adhere to reasonable private-sector
leasing practices.
PROP 8-3: Introduce more flexibility to GSA leasing
procedures overall.
PROP Speed up GSA lease completions and permit
to
e con en
s of SFOs.
Comment:
The recommendations suggest that GSA simplify and update
leasing methodology by providing more options for negotiating
and utilizing private-sector practices, such as leasing on the
basis of "rental space" as opposed to "net rentable," and by
paying rent at the first of each month rather than. the end of
the month. These kinds of improvements should make prospective
lessors more willing to negotiate. The Agency generally follows
GSA
id
li
gu
e
nes. However, we have gained some flexibility
because of our direct-leasing program.
Recommendation:
PROP 8-5: Adopt local fire safety standards for GSA
leasing whenever possible.
Comment:
We concur and support this recomm =4t ion, particularly
when dealing with the Washington
metropolitan area.
Recommendation:
PROP 8-6: Repeal (or at least reconsider) limiting
legislation.
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Comment:
We agree that the provision of Section 322 of the Economy
Act of June 30, 1932; which; restricts federal lease payments to
no more than. 15 percent'of a building's appraisal value is
obsolete and should be repealed.
Recommendation:
PROP 8-7: Reconsider Executive Order 12072 on GSA space
.leasing in central business area.
Comment:
We would support centralization of Government activities
into federally owned or leased spaces in urban areas, except,
where Agency operational and security requirements are
overriding considerations.
Recommendations:
PROP 9-1: Change threshold on GSA lease prospectuses.
PROP 9..2: -'aise threshold on GSA alterabio:.. _.soectuses.
PROP 9-3: Eliminate requirements for GSA pros ectuses on
property repairs.
PROP 9-14: Full-funding appropriation for GSA leasing.
Comment:
The Agency could support these recommendations. The
dollar threshold is currently at $500,000 and should be raised.
The prospectus procedure is also very cumbersome and costly.
The threshold has not been revised since 1972. This fact
coupled with inflation has made the threshold unrealistic.
Recommendations:
PROP 10-1: Declare a moratorium on DOD constr'.z^tion of FH
in the United States, and suspend housin'-,'acqu?1:-Loons.
PROP 10-2: Consolidate DOD management of FH and UPH
housing, and equalize standards between them.
PROP 10=3: Revise housing administration at local levels
to provide a single service for all military bases in-the
same or adjacent communities.
'PROP 10-14: Consolidate all the DOD Housing Administration.
perhaps under civilian experts.
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PROP 10-5: Reform the Family Housing Survey.
Comment:
These recommendations are directed toward DOD, and we do
not feel it appropriate to comment.
9
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PRESIDENT'S PRIVATE SECTOR SURVEY ON COST CONTROL
The Department of Labor (DOL)
-We have reviewed the subject segment, and while the DDA
memorandum of 19 January 1984, lists OMB Circular A-76 as the
item to comment on, we could find only a brief reference to it
in this segment (LABOR 6-5). It was, however, treated in two of
the other segments, "Procurement/Contracts/Inventory Management"
and "Real Property Management."
We feel it would probably be considered inappropriate for
...the Agency to tell DOL how.to conduct their business. However,
if the Agency does want to comment on this segment, there are
nine areas which concern procurement that we have commented on.
Recommendations:
LABOR 6-1: We are recommending that the Secretary of Labor
direct the Assistant Secretary of Administration and
Management to exercise central control over the acquisition
and mana emeni of all ADP equipment, services and nersonnel.
LABOR 6-2: Develop a definition of the desired VU11-ADP
environment, together with a plan for implementing it.
LABOR 6-3: Replace the planned and current procurements
for ADP equipment throughout DOL, with a single
procurement for 'a series of systems for all of DOL, which
can be used by any and all DOL organizations within the
defined environment.
LABOR 6-4: Establish a central authority to manage both
in-house and contract programmers in ESA, ETA, LMSA, OASAM
and OSHA as a single departmental resource to support
programs and administrative needs in those organizations.
LABOR 6-5: When major changes in the administration of a
program are being considered, such as the planned Phase II
FEC system or recently the Black Lung system.,. provision
of such services by outside contractors should be ;.ven
first consideration.
LABOR 6-6: In-this and all other cases where ADP equipment
and services may be provid:--d internally, the full cost of
conversion to any system incompatible with the defined
DOL-ADP environment should be included. in the cost of
procuring the system.
LABOR 6-7: To forestall. the potential for a "cree in "
divergence from established standards (by organizations
acquiring systems small enough to fall below existing
procurement dollar limit guidelines), require any ADP
procurement above $1,000 to be administered under DOL
standards.
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Comment:
Recommendations LABOR 6-1 through LABOR 6-7 deal with the
-acquisition and management-of ADP hardware, software, and
personnel resources. There are seven recommendations, which
suggest that=centralized control of ADP be established. What
they are proposing is comparable to what we have with the
Office of Data Processing and the Automatic Data Processing and
Equipment Branch, Procurement Division, OL. The recommendations
seem good, and we would expect that DOL would accept them.
Recommendation:
LABOR 11-1: Place all procurement activities under the
direct supervision of a single agency the Office of the
Assistant Secr t f
ary or Administration and Management at
both the National and Regional office levels.
Comment:
The Agency should concur and should also adopt-this recom-
mendation. We currently have a dual d-elegation of procurement
authority which results,; n7oblems in control,-:over- ht, and
reporting.
Recommendation:
LABOR 11-2: Reemphasize training and developmen', (i.e.,
the Executive Development Program for Procurement and
Contractin
g.
Comment:
Concur. The Agency already emphasizes training and devel-
opment for its procurement personnel.
Recommendation:
LABOR 11-3: Achieve staff reduction through consolidation
to effect savings or use the saving
to upgrade the
LS -
procurement functi.on.- -eductions cc ld be done through
attrition.
Comment:
Nonconcur. Undoubtedly; a centralized procurement can
result in a need for fewer procurement personnel and lower
salary costs. Offsetting this benefit (in CIA) would be a sharp
toss in responsiveness, as well as loss of job. satisfaction for
procurement personnel.
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Recommendation:
LABOR 11-4: Give consideration to recommending a threshold
in excess of $ 17,000 to cffset any_ future inflation.
(Department of Defense threshold is -$25,000. )
Comment:
Concur. Threshold should go to $25,000 to be consistent
with DOD.
Recommendations:
LABOR 12-1: We recommend that Congress amend the Davis
Bacon Act to-raisc, the-threshold to at-least$25,000.
--This threshold affects savings as follows:
(1) It would reduce the number of construction contracts
for minor projects subject to the Davis Bacon Act;
and
(2) It would encourage smaller local contractors with
lower wage factors to bid on these projects.
LABOR 12-2: We recommend that the Secretary of Labor
implement the 50 percent regulations change as allowed by
Judge Greene's ruling of December 23, 1982.
LABOR 12-3: We recommend that the Secretary of Labor take
further steps necessary to change the Davis Bacon Act
regulations for all the rejected regulations.
Comment:
Concur with all recommendations.
Recommendation:
LABOR 13-1: We recommend that the Congress amend the Walsh
Healey Public Contracts Act to remove eight hours as the
threshold for overtime pa for a particular work day. The
requirem,., for overtime beyond 40 hours per week should be
maintaineu. The recommendation is designed to accomplish
two objectives:
(1) It will encourage more companies to bid on government
work, and
(2) --It will encourage companies currently covered by Walsh
Healey to examine alternatives to produce their products
more efficiently.
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Comment:
Concur with only recommendation (LABOR 13-1) which is to
remove 8-hour: day while retaining 140-hour week as threshold for
premium pay.
Recommendations:
LABOR 114-1: Raise the minimum dollar value of service
contracts from $2,500 to at least $25,000.
LABOR 14-2: Adopt three revisions to the regulations. We
recommend that the Secretary of Labor adopt three revisions
to the regulations that have been pending since August
1981. They cover the following areas:
(1) Collective bargaining agreements -- limit the
.successors hip requirement for wages on collective
...bargaining agreements to situations only where the
successor contractor performs the service contract in
the same locality as the predecessor.
(2) Composite p?ay ra ,.