All parties agree that the revised contract is equitable and workable.

Active utility participation in the Clinch River is a principal project objective.

The utilities are committing substantial resources.

The use of utility personnel is both desirable and appropriate, and The Clinch River project is vital to the overall national energy plan.

We are making good technical progress on the project. The organizations are working well together, and morale is high. We are anxious to get on with the work.

Thank you, Mr. Chairman. This concludes my statement.
Senator MONTOYA. Thank you very much.

I would like to ask now a question of Mr. Behnke. Now, Mr. Behnke, assuming that NRC requires the inclusion of a core catcher, or requires some other material change in the design of the Clinch River Breeder Reactor which results in some delay in the project beyond ERDA's approved schedule, what will be the position of the private participants regarding termination of the project? Specifically? Would the private participants use the delay resulting from the design change as a justification for terminating their participation in the project?

STATEMENT OF WALLACE B. BEHNKE, EXECUTIVE VICE PRESIDENT, COMMONWEALTH EDISON CO., AND CHAIRMAN OF THE BOARD OF THE PROJECT MANAGEMENT CORP.

Mr. BEHNKE. I would like to respond to that, Mr. Chairman, with five points.

First of all, it is our understanding of the proposed modifications that ERDA ultimately has the unilateral right to set the project schedule anywhere they choose.

The other four points I would like to make are these. First of all the utilities have not taken any position for or against the core catcher. In fact, the matter has not been discussed in any detailed way with them. The core catcher has not been described. It has not been reviewed. Its purpose in the plant is not clear. Its effect on the project objectives is not clear. Second, the utilities have expressed themselves very clearly on licensing and safety in the project objectives which are part of the project agreements.

Third, what the utilities want is a breeder that is safe by all objective standards. At the same time they also want Clinch River to be a powerplant suitable for operation on the utility system and they hope that Clinch River will offer some demonstration of the ultimate prospect of economic competitiveness of breeder powerplants.

Finally, it is my own belief that if a major change in the reference design were required by licensing, and this was consistent with the project objectives, that the utilities would support it.

Senator MONTOYA. Do we have any other questions?
Representative Moss. Not of this witness.

Senator MONTOYA. Of the other witnesses? We don't have any more witnesses.

Representative Moss. I have no further questions, Mr. Chairman, at this point.

Representative MCCORMACK. I have a question for Dr. Seamans. Dr. Seamans, you mentioned the administrative procedures you would undertake with respect to the canon of ethics, I believe we will refer to it, for the nongovernmental employees. Are there any other administrative orders or regulations that could come from your office that would address in any way any of the substantive issues that have been raised by Congressman Moss of California?

Dr. SEAMANS. We will obviously need a variety of administrative procedures.

Representative MCCORMACK, I wonder if I could have the attention of the gentleman from California? I have asked a question here that may be of specific interest to you. What I have asked is if Dr. Seamans has any administrative procedures that might be undertaken to respond

Representative Moss. Would the gentleman yield?
Representative MCCORMACK. Yes.

Representative Moss. I have only dealt with questions of conflict for 24 years, starting with my service on the old House Post Office and Civil Service Committee. Whatever Dr. Seamans might be I can tell you without any fear of effective contradiction that he has no really effective means other than possibly dismissal. There can be no sanctions imposed, nothing comparable to what we can exercise against our own employees, the Federal employees. And whatever else the doctor might say would be inconsistent with the facts.

Representative MCCORMACK. I don't think this is what we are addressing ourselves to. I wonder if you would listen to what the gentleman has to say in response to my question.

Do you have any other suggestion you would like to make?

Dr. SEAMANS. First of all, we are preparing a code of ethics which essentially will be identical with the code that is followed by Government employees. We will have a set of administrative procedures that will apply to all detailed aspects of administrative personnel procedure in this office including hiring. It will, of course, include all aspects having to do with potential conflicts of interest.

It is certainly true that we cannot impose criminal penalties on non-Government employees. I do not believe the statutes will allow it. That being the case, the final recourse, if an individual does not follow and conform to the accepted standard, is prompt dismissal. I think that is a very severe penalty, myself. It will not redound to that person's future. It is true that he will not go to jail. There is no way we can impose the same kind of penalties on the non-Government people that we can on the Government people, as I understand the law. So, I think if this is the issue, it would mean that we could not have a joint project as we have described it.

Representative MCCORMACK. May I pursue this for clarification. Do I understand that all purchasing and contractual relationships will be the ultimate authority of the Government employees of ERDA? Dr. SEAMANS. Basically that is correct. None of the non-Government employees will have any capability or authority to sign any documents that in any way commit government funds or related schedules, changes in technical direction, and so forth. That will be entirely in hands of the Government employees.

Representative MCCORMACK. So at the very most the participation by the non-Governmental employees will be by way of making evaluations of options and making recommendations and this sort of thing for various projects, various pieces of equipment and this sort of thing?

Dr. SEAMANS. They could try to influence the project director, or the head of the contracting department to turn a program in a certain direction for whatever reason they might have. They could do that, but they don't have the authority to do it.

Representative Moss. Doctor, would they assess performance of Government personnel?

Dr. SEAMANS. I missed that question.

Representative Moss. Would the nongovernment personnel be in a position to assess the performance of Government personnel?

Dr. SEAMANS. The final judgment would be always in the hands of those who are in the Government.

Representative Moss. Doctor, this is one of the most incredible statements I have ever listened to. You are telling me that in a kind of blending of management and of key positions that you can draw the precise lines you have just delineated here and make it work? If you can, you deserve a medal for the most distinguished record in the unachievable of any person who entered upon public service anywhere at any time.

I know you can't. You know you can't. Anyone who has examined the management in government knows that it is an absolute impossibility for you to make the kind of blend you have here and achieve the clear delineations that you have just stated.

Dr. SEAMANS. I would not be sitting here before this committee if I did not believe it possible. So, I guess we have a very strong difference of opinion.

Representative Moss. Then you believe in fables and fairy tales. Representative MCCORMACK. Do you wish to comment further? Dr. SEAMANS. Yes, sir. I have to say that to repeat what I may have said in the previous executive hearing-when I came into my present position and saw the arrangement that we had for managing this project I felt it was completely unsatisfactory. I talked to those who were responsible from TVA and from the utilities, explained why this was an impossible situation, explained that the only way we could proceed was to have final responsibility in the hands of the government, and specifically the Administrator of ERDA. I believe we have achieved an extremely effective way of blending that essential requirement with participation by the utilities and I, myself, think we have done a remarkable job in getting the cooperation in this change of 741 utilities as well as the TVA. We are all set to go. We still, however, have the very unsatisfactory arrangements that we had a year ago, and as far as I am concerned, I am not going to continue taking responsibility for this program unless we can get this changed over into a satisfactory arrangement very soon.

Representative MCCORMACK. Mr. Chairman, I have one more ques

tion.

Senator MONTOYA. Let me make a comment on that.

Doctor Seamans, I personally know how dedicated you have been to all these programs and what you have done to try to assume greater responsibility on the part of ERDA. I know you have traveled all over the country visiting many projects. I know you have worked hard. In fact some of your aides have told me that you are always traveling on weekends somewhere.

I want to commend you. I think that the decision we have to make here today is whether we keep the status quo which has not worked or whether we improve upon it. I think that is the issue before this committee.

If we want further modifications of the contract, then of course we can make some recommendations in our report urging ERDA to pursue further negotiations or conduct further negotiations toward the kind of modifications that would improve upon the status quo after the contract modification is approved.

Dr. SEAMANS. Mr. Chairman, could I say at this point that we recognize this is not a perfect document. It has been said earlier today that it is the result of a negotiation between a large number of different entities. We did feel that in keeping with the spirit of what has happened in the past we should amend the contract rather than write a new contract. Perhaps we were wrong on that. In any event if improvement can be made in this contract we will be the first to work on it and to follow to the best of our ability any suggestion you may make.

We will be more than happy to work on this and review these kinds of changes with the GAO or with any responsible member of the committee, or the committee staff. We don't consider this modification to be the ultimate in a contractual document, but we do consider it a very, very great improvement over what we have today.

Senator MONTOYA. Now I am going to have to leave for a hearing. I have to chair a hearing at 1 o'clock. I will make this statement. At the conclusion of this hearing, if there is no objection, we will poll the committee on whether the Joint Committee should approve the statutory criteria, as amended, thus authorizing ERDA to execute the proposed amendment to the contract. If there is no objection we will proceed to do that.

Representative Moss. Mr. Chairman, on that I will enter an objection.

Senator MONTOYA. Then I will entertain a motion to do that. Representative Moss. Then I will raise a point of order of no quorum. Senator MONTOYA. The point of order is well taken.

Representative Moss. I would ask that at an appropriate time on behalf of Senator Tunney whose letter was delivered to me here in the committee room this morning, that four questions which he asked be addressed to Dr. Seamans be addressed to him and answered for the purpose of the record.

Representative MCCORMACK. Will those be submitted to Dr. Seamans at this time?

Representative Moss. It is perfectly all right with me to submit them to Dr. Seamans.

Senator MONTOYA. We will put them in the record and have Dr. Seamans provide the answers.

Dr. SEAMANS. I will be happy to do so. [Letter referred to follows:]

I am very sorry the prior commitments preclude my attending today's hearing on the amended contract for the Clinch River Fast Breeder Reactor demonstration project. As you know, I am very concerned by the conclusions of the General Accounting Office in the recent CRBR contract analysis which was undertaken at your request. Therefore, I look forward to the opportunity to review the new testimony which will be presented to the Joint Committee.

I have taken the liberty of drafting several questions concerning the specific provisions of ERDA's amended contract. Your assistance in getting responses to these questions would be appreciated. 1. The statutory criteria which this Committee adopted state that these contracts should include definitive arrangements for the construction and operation of the CRBR. As I understand it, it is ERDA's intention that TVA will carry on the operation of the CRBR. Administrator Seamans' recent letter to Chairman Anders states that the contract with TVA is yet to be negotiated. Does this mean that definitive arrangements for the operation of the CRBR have not been arranged?

2. If these definitive arrangements have not been made, have the statutory requirements been met?

3. Won't ERDA be in a very difficult negotiating position, since it is responsible for the operation of the reactor, yet TVA, for all practical purposes, appears to be the agency which will actually operate the facility.

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