COMMITTEE ON APPROPRIATIONS JAMIE L. WHITTEN, Mississippi, Chairman EDWARD P. BOLAND, Massachusetts NEAL SMITH, Iowa JOSEPH P. ADDABBO, New York TOM BEVILL, Alabama JOHN P. MURTHA, Pennsylvania JOSEPH D. EARLY, Massachusetts LINDY (MRS. HALE) BOGGS, Louisiana WILLIAM LEHMAN, Florida MARTIN OLAV SABO, Minnesota JULIAN C. DIXON, California VIC FAZIO, California W. G. (BILL) HEFNER, North Carolina LES AUCOIN, Oregon DANIEL K. AKAKA, Hawaii WES WATKINS, Oklahoma WILLIAM H. GRAY, III, Pennsylvania BERNARD J. DWYER, New Jersey SILVIO O. CONTE, Massachusetts JOHN T. MYERS, Indiana J. KENNETH ROBINSON, Virginia CLAIR W. BURGENER, California JOHN EDWARD PORTER, Illinois KEITH F. MAINLAND, Clerk and Staff Director (II) DEPARTMENT OF DEFENSE APPROPRIATIONS FOR 1983 WEDNESDAY, JUNE 16, 1982. PROCUREMENT POLICIES AND PRACTICES WITNESSES WILLIAM A. LONG, DEPUTY UNDER SECRETARY, ACQUISITION MANAGEMENT, OFFICE OF THE UNDER SECRETARY OF DEFENSE FOR RESEARCH AND ENGINEERING HARVEY J. GORDON, ASSISTANT DEPUTY UNDER SECRETARY OF DEFENSE FOR ACQUISITION, OFFICE OF THE UNDER SECRETARY OF DEFENSE FOR RESEARCH AND ENGINEERING DUARD H. LITTLE, DEPUTY ASSISTANT SECRETARY OF THE ARMY, ACQUISITION, OFFICE OF THE ASSISTANT SECRETARY OF THE ARMY FOR RESEARCH, DEVELOPMENT, AND ACQUISITION THOMAS R. MILLER, ASSISTANT DIRECTOR FOR PROCUREMENT, WEAPONS SYSTEMS DIRECTORATE, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR RESEARCH, DEVELOPMENT, AND ACQUISITION, DEPARTMENT OF THE ARMY MAJ. GEN. ROBERT L. HERRIFORD, USA, DIRECTOR FOR PROCUREMENT PRODUCTION, HEADQUARTERS, U.S. ARMY MATERIEL DEVELOPMENT AND READINESS COMMAND EVERETT PYATT, PRINCIPAL DEPUTY ASSISTANT SECRETARY OF THE NAVY, SHIPBUILDING AND LOGISTICS MAJ. GEN. JOSEPH H. CONNOLLY, USAF, DIRECTOR OF CONTRACTING AND MANUFACTURING POLICY, DEPARTMENT OF THE AIR FORCE INTRODUCTION Mr. ADDABBO. The committee will come to order. Today the committee will review the procurement policies and practices of the Department of Defense. This hearing is both timely and appropriate because the procurement budget has increased dramatically in recent years. From an appropriation of $35.5 billion in fiscal year 1980, the procurement budget now before the committee totals $89.5 billion, a 152 percent increase in just three years. These sums represent significant monetary investments. This massive increase has resulted in additional interest, not only from the Administration, but from Congress in an effort to assure that the taxpayer is receiving the maximum return on his investment. (1) BACKGROUND OF INVESTIGATION Concern about procurement policies and practices is not new to this committee. As long ago as 1956/57, the committee held extensive hearings on this subject, and as recently as 1980, further hearings were held and a detailed review of these hearings was included in the committee report. The purpose of this hearing is to discuss both the Department's procurement policies themselves and also how they are actually implemented. We want to determine if these policies are being followed in actual practice. On April 30, 1981, Deputy Secretary Carlucci issued 32 procurement policy initiatives. These initiatives were widely acclaimed as a major effort to streamline the procurement process and make it more efficient. We have some questions about the wisdom of some of these policies, and seek to know how effective they might be. The General Accounting Office has been of great assistance to the committee in reviewing procurement policies and practices as well as the procurement decisions made by DOD on specific weapons systems. However, it has been our experience that the suggestions and recommendations of the GAO are either ignored for the most part by DOD or, to say the least, seem to have little impact on the procurement process. On February 22, 1982, our staff submitted a number of questions on procurement policies and practices to be answered at the OSD level. These questions were received from GAO and were based on recent reports and pending draft reports relating to procurement, contracting, logistics, and maintenance. By and large the answers received from OSD on March 19th were disappointing in that they displayed an apparent general lack of concern about the problems in question. We shall review some of these OSD answers during the course of this hearing. REPORTS BY THE SURVEYS AND INVESTIGATIONS STAFF In February 1981, the Committee's Surveys and Investigations staff was requested to conduct a major continuing investigation of the procurement practices of the Department of Defense. The Chairman and ranking minority members of this subcommittee and full Appropriations Committee sponsored this effort. The committee has received three major reports under this directive, and numerous special and supplementary reports. Together they represent a substantial effort and a comprehensive review. These reports have just been compiled into a single document which includes summaries and responses from the Department. Without objection, this compilation will be made a part of the record of this hearing. [The reports follow:] [CLERK'S NOTE.-This material is an unclassified compilation of the reports and investigative memoranda prepared by the Investi |