merce Department is faced with the sort of problem as to where they begin and end, and where we begin and end.

Generally speaking, our activity is intended to concentrate in the oversea area, where we either find or search out or survey the possibilities that are inherent in the situation overseas.

The job of the Department of Commerce is to pick it up, say, from our office here in Washington and get it into use in the United States. Now, obviously it is not always easy to decide where we stop and where they begin, but our relationship with the Department of Commerce at this particular time, I think, is very good, though the Department of Commerce is anxious to get its people overseas and we would like to see American businessmen because of, you might say, the plain inertia of having something to do-we want to go ahead and carry it out in this country.

These are not always easy problems to resolve, but I assure you we are in direct cooperation with Mr. Kearns.

Mr. EVINS. I know that your main function and purpose is noble, high, and laudable, and is not directly concerned with small business. This committee is specifically trying to find out where small business can participate and where you can assist.

We gain the impression here and you state that small business is expected to participate in the future, and you also say in your concluding statement that looking ahead you expect an increase in activity. Actually, we really can't point our finger to very much in the way of small business benefiting by the ICA program.

Mr. SACCIO. Well, we realize that one difficulty of getting statistics on this sort of thing as to just what the participation of small business is-we have cited some instances where we think it runs about onethird or 25 percent of actual participation by small business.

Secondly, of course, it is our feeling that the best we can do the thing that we can do best is to get this information out.

Now, we are not going to say once we have the information that we are going to limit it to small business. It is free to everybody to use. I don't think the committee is suggesting that we do that.

The third thing we think we can do in this field is the sort of thing which will make the climate in the particular country where we are working conducive so that the risks are not as high so that small business can take chances in these areas.

Now, we are not saying that we are doing a tremendous job here for small business, and we are not trying to be noble or "greater than thou" on this thing.

We have our specific job, and it is no more important in my view than what small business job has to be done in this country. It is the same sort of a job.

Now, as far as the activity in the countries themselves, we feel very strongly that if we can create an atmosphere of smaller communities of business, smaller plants, trades, crafts, things of that kind, we are going to succeed faster than concentrating on big operations.

These big operations are necessary. You have to build roads and dams if you are going to have the power of the means of communication, but the Office of Private Enterprise which we set up in ICA was intentionally set up so we could concentrate on the problems of private investment in the country itself.

It may be you get a large operation there, and it is true we welcome it, because it helps considerably in the job we are trying to do, but we are not forgetting the role of small business in that country.

Mr. EVINS. Thank you.

Mr. BROWN. Mr. Director, let's take a case history that I know a little something about a country in southeast Asia, where they had a water problem and needed some wells.

When that was reported back to you people in Washington, what was the first step? Did you hire an engineering firm to go over and investigate the thing?

Mr. SACCIO. Well, you are presumably referring to a particular case, but I will refer myself to the general procedure followed.

Mr. BROWN. That will be fine.

Mr. SACCIO. Ordinarily, a project comes to us from the mission itself. They are in the field; they are supposed to come back to us and tell us what they think in conjunction and cooperation with the other country as to what sort of project would be important.

Now, you take one southeast Asian country. They thought tube wells were pretty important, and we approved the project here and went about financing it. I haven't got all the details of the one I have in mind, but essentially, what happened there was that contractors were sent to this country, and they did a fairly substantial job in the digging of deep wells for irrigation purposes.

Mr. BROWN. Just a second, now. Let's take it a step at a time. Did your agency send engineers over there first before contractors moved into the field?

Mr. SACCIO. I think we probably in that instance made a survey to see what was the possible cost.

Mr. BROWN. You do hire engineering firms to go check into these things?

Mr. SACCIO. That is right.

Mr. BROWN. Have you ever compiled a list of how many different engineering firms you have used?

Mr. SACCIO. We supply a list every year to Congress of all engineering surveys made where the cost is over $25,000. That would be a fair estimate of the number of people we use.

Mr. BROWN. And you show the different firms?

Mr. SACCIO. The names of the firms and the amounts. That is by law, a requirement.

Mr. BROWN. I wonder if that could be a part of the committee's files, and then the committee can decide whether it should be in the record.

Mr. YATES. The list he referred to?

Mr. BROWN. Yes.

Mr. SACCIO. If you will refer to the Foreign Affairs Committee— or we will get you the list, if you like.

Mr. YATES. Let us have a copy of what you furnished the Foreign Affairs Committee.

Mr. SACCIO. All right.

(The list referred to will be found in appendix II, p. 177.)

Mr. BROWN. In this hypothetical instance, the engineers come back and say it is practical, and then the constructiou people move in. Now, who determines which construction firm gets the job?

Mr. SACCIO. Well, we can do that in any number of ways. The more common way is for invitations to go out to construction companies to bid on the specifications that have been prepared by the engineers, and the company is selected in cooperation with the other country. Sometimes they do it themselves-a lot more than our participation—and we help. Sometimes we practically do it all-depending on their ability in the field-and the company is selected on the basis of many considerations. It may be their experience overseas, the cost, the price, and so forth, and other factors that are involved. Mr. BROWN. Now, before you could have a multiplicity of bids, there would have to be a multiplicity of companies familiar with the job, wouldn't there?

Mr. SACCIO. That is right.

Mr. BROWN. In general, then, it goes to whatever construction firm is in the area and doing work.

Mr. SACCIO. Not necessarily. We make an effort to get companies into the field, even though they haven't been overseas before. In fact, many times we don't want to hire a company that has already had contracts in that area on the theory that we want to diversify our suppliers.

Mr. BROWN. In this hypothetical instance, the engineering firm came back and said they need those wells and are ready for people to dig or drill those wells.

Now how could the XYZ Drilling Co. in southwest Missouri participate in a bid of that kind when he doesn't even know what is involved, or anything about the country, or anything else?

What I am getting at is this: What good is the general invitation to bid?

Mr. SACCIO. Well, the point of it is if you just take one case, obviously a company that has not been in the field before, outside of the United States, which is interested in doing the business would be certainly at a disadvantage on its first try.

Mr. BROWN. Now my point is, first, do you have some regular method by which you get these various construction firms and these various contractors in this country to go over there?

Mr. SACCIO. We do. We have what we call the Uniterm, a trade name, I guess, or setup by which all sorts of firms are invited to send in their brochures giving their experience, their capacity, the kind of work they want to do. This is all listed in our files.

Now when we have a particular type of job, say in the engineering field, we go through the Uniterm and select the firms that have shown an interest in this particular kind of activity.

Mr. BROWN. You select the firm here in Washington?

Mr. SACCIO. I am talking about engineers. You get to the point where your technical man comes up with five or six he thinks will do this type of job, and do it well. He lists them in a study which he proposes to a panel, giving what he thinks are the priorities, or the ones that are best suited to do this particular job in the particular country.

Mr. BROWN. And he submits those to

Mr. SACCIO. To a panel.

Mr. BROWN. And who is on that panel?

Mr. SACCIO. We have on the panel the head of the Contract Office, the head of the Technical Services Office involved, and a representative of the Regional Operations Office

Mr. BROWN. They are all your people?

Mr. SACCIO. That is correct.

Mr. BROWN. So the ICA picks the engineering firm.

Mr. SACCIO. That is right.

Mr. BROWN. And picks the contractor?

Mr. SACCIO. When the engineering firm is through with its job, then the specifications developed by the engineers are broadcast to a list selected by the appropriate technical division and consists of firms who, in the judgment of that technical division are competent and able to do the particular piece of work.

Mr. BROWN. Now let us be practical in that sense. If the XYZ construction firm hasn't done any work in Pakistan, they wouldn't be in a position to bid on it, would they?

Mr. SACCIO. If they want to do business there, they have to take the risk that anybody else does.

Mr. BROWN. My point is this. Is there a broad enough base in these operations, are there several contractors encouraged to go over there and get familiar with these things, and are they given an opportunity to go over and survey the job before there is consideration of bidding? Mr. SACCIO. They are given an opportunity, but we don't finance them to do it.

Mr. BROWN. Do you give them notice so they can?

Mr. SACCIO. We give adequate notice.

Mr. BROWN. Are you sure?

Mr. SACCIO. I am willing to undertake to check this, but when we sent out invitations to bid, and if obviously according to the bidder there isn't sufficient time, we hear about it pretty quickly.

Mr. BROWN. Well, now, sufficient time is what-would you say 30 days?

Mr. SACCIO. No, it depends on the kind of job you have. Some of these require going over and looking at the site to determine what the job really entails. It is not just fixed.

Mr. BROWN. Now you report to Congress how many different contractors and construction firms

Mr. SACCIO. No, we report engineers, that is a requirement of the statute.

(A tabulation of construction contracts covering approximately 5 years appears in appendix I, p. 178.)

Mr. BROWN. But you have in your records how many different firms have had these jobs?

Mr. SACCIO. These are open any time anyone wants to look at them. We have listed them on occasion, on request, as to American firms that we have used.

Mr. BROWN. If that list could be brought up to date, that would be of interest.

Mr. YATES. What list are you talking about, the original list you talked about that included engineers and construction companies? Does the list that is required by statute mean only a list of engineers ?

Mr. SACCIO. Engineers over $25,000.

www

Mr. YATES. You are now inquiring about construction companies who have received contracts, different types of contracts, or what? Mr. BROWN. I don't think the list would be very long if they drew

it up.

Mr. SACCIO. If you want to limit it to capital construction of one kind or another, I will take a look and see how long it is going to be. I don't know whether it would be tremendously long.

Mr. BROWN. If it wouldn't entail too much work.

Mr. YATES. What period do you have in mind, the last 5 years?
Mr. BROWN. The last 5 years.

Mr. YATES. Would the last 5 years be adequate, Mr. Saccio?

Mr. SACCIO. I would like to look at it and report to you what the work entailed is. It may be a very simple matter.

Mr. BROWN. Now, when this business

Mr. SACCIO. It may be useful for your staff to look over a publication that we put out called the ICA commodity and freight payments of the United States listed by State, and the suppliers that supply commodities through our financing.

Mr. BROWN. I would be interested in seeing a list of the commodities.

Mr. SACCIO. No, these are the suppliers, which would show you the broad spread.

Mr. BROWN. You are talking about capital investment in a given project, and who does it. There is a prime contractor in every instance, isn't there?

Mr. SACCIO. Yes.

Mr. YATES. Well, the committee would be interested in that booklet as well, and we would appreciate your leaving a copy for our files. Mr. SACCIO. Very well.

(The booklet referred to will be found in the files of the committee.) Mr. BROWN. When the prime contractor is authorized, is that mostly on a negotiated basis?

Mr. SACCIO. The engineering part would be on a negotiated basis. The construction part would have more elements of competition, but would end up in most instances on a negotiated basis.

Mr. BROWN. What percent would you say are negotiated and what percent are competitive bids, and I am talking about the prime?

Mr. SACCIO. I think probably the vast majority are on a negotiated basis, because of the type of work and the conditions involved.

Ordinarily we are really only bargaining about the fee involved, not the cost, because the cost has to be determined as the job is done. Mr. BROWN. Does the Renegotiation Act cover that?

Mr. SACCIO. No, we are not under the Renegotiation Act, and I don't believe legally we could insist on renegotiation.

Mr. BROWN. So in other words on a negotiated basis, it is really a cost-plus operation.

Mr. SACCIO. Cost plus fixed fee, that is right.

Mr. BROWN. Now, the opportunity for small business to participate as a prime contractor in these projects would be very, very small, wouldn't it?

Mr. SACCIO. Well, if you get a roadbuilding contract, maybe not. If you get a dam construction, the opportunity will be of course considerably less.