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COMMITTEE ON APPROPRIATIONS

JAMIE L. WHITTEN, Mississippi, Chairman

EDWARD P. BOLAND, Massachusetts
WILLIAM H. NATCHER, Kentucky

NEAL SMITH, Iowa

JOSEPH P. ADDABBO, New York
CLARENCE D. LONG, Maryland
SIDNEY R. YATES, Illinois
DAVID R. OBEY, Wisconsin
EDWARD R. ROYBAL, California
LOUIS STOKES, Ohio

TOM BEVILL, Alabama
BILL CHAPPELL, Florida
BILL ALEXANDER, Arkansas

JOHN P. MURTHA, Pennsylvania
BOB TRAXLER, Michigan

JOSEPH D. EARLY, Massachusetts
CHARLES WILSON, Texas

LINDY (MRS. HALE) BOGGS, Louisiana
ADAM BENJAMIN, JR., Indiana
NORMAN D. DICKS, Washington
MATTHEW F. MCHUGH, New York
BO GINN, Georgia

WILLIAM LEHMAN, Florida
JACK HIGHTOWER, Texas

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
JOSEPH M. McDADE, Pennsylvania
JACK EDWARDS, Alabama

JOHN T. MYERS, Indiana

J. KENNETH ROBINSON, Virginia
CLARENCE E. MILLER, Ohio
LAWRENCE COUGHLIN, Pennsylvania
C. W. BILL YOUNG, Florida
JACK F. KEMP, New York
RALPH S. REGULA, Ohio

CLAIR W. BURGENER, California
GEORGE M. O'BRIEN, Illinois
VIRGINIA SMITH, Nebraska
ELDON RUDD, Arizona
CARL D. PURSELL, Michigan
MICKEY EDWARDS, Oklahoma
BOB LIVINGSTON, Louisiana
BILL GREEN, New York
TOM LOEFFLER, Texas
JERRY LEWIS, California
CARROLL A. CAMPBELL, JR.,
South Carolina

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

gative Staff on the procurement practices of the Department of Defense. Since a good deal of the material was of a classified nature, sometimes the full extent of the shortcomings of the procurement practices of the Department of Defense could not be revealed in the unclassified document.]

A COMPILATION OF REPORTS FOR

THE COMMITTEE ON APPROPRIATIONS

U.S. HOUSE OF REPRESENTATIVES

on the

PROCUREMENT PRACTICES OF THE DEPARTMENT OF DEFENSE

Surveys and Investigations Staff

June 1982

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