INFORMATION POLICY ISSUES RELATING TO ADMINISTRATIVE CONTRACTOR DATA AND MARKINGS MONDAY, SEPTEMBER 18, 1978 HOUSE OF REPRESENTATIVES, GOVERNMENT INFORMATION AND INDIVIDUAL RIGHTS SUBCOMMITTEE OF THE COMMITTEE ON GOVERNMENT OPERATIONS, Washington, D.C. The subcommittee met, pursuant to notice, at 10:10 a.m., in room 2247, Rayburn House Office Building, Hon. Ted Weiss (acting chairman of the subcommittee) presiding. Present: Representatives Ted Weiss and Paul N. McCloskey, Jr. Also present: Timothy Ingram, staff director; Robert Gellman, counsel; Anne Sullivan, professional staff member; and Catherine Sands, minority professional staff, Committee on Government Operations. Mr. WEISS. The Subcommittee on Government Information and Individual Rights of the Committee on Government Operations is now in session. We deal today with two issues which have a profound impact on Government information which is generated by a contractor when working on a Government project, but which is not turned over as part of the final product. What happens to that data, and who can have access to it and use it commercially, are concerns which agencies have dealt with in inconsistent ways. As far as the committee can determine, there is no Government policy or policies. Consequently, data which is either worth considerable money, or may contain sensitive personal information, end up in contractors' hands, with no Federal controls over its use. We will first hear from Lester A. Fettig, Administrator for Procurement Policy, of the Office of Management and Budget. We will also receive testimony from representatives of the General Accounting Office, who will present the initial findings of an audit requested by the Subcommittee on Agency and Contractor Compliance with certain requirements of the Privacy Act. The Privacy Act contains a limited provision that requires contractors who maintain personal files on individuals, which would otherwise be maintained by the contracting agency, are to comply with the Privacy Act's standards. GAO has indicated there is limited compliance with this provision. The second issue we will deal with concerns the use of administrative markings by Fede hose labels-"eyes only," "for official use only," "a Fi dential," and so on 1 are applied to limit access, both by the public and by employees within Government. Commodity Futures Trading Commission Chairman William Bagley recently dramatically announced that he was throwing into the Potomac River the rubber stamps his agency used. This was the only effective way, in his words, that confidential stamps could be eliminated. There may be quieter ways to achieve the balance between legitimate privacy and confidentiality needs of government and the requirements of public availability of government documents. Robert Saloschin, chairman of the Justice Department's Freedom of Information Committee, will present his thoughts on the issue. First, we will hear from Mr. Fettig, of the Office of Federal Procurement Policy. Mr. Fettig, please identify yourself for the record. We have your prepared statement, and you can, if you wish, just summarize it for the benefit of the subcommittee. STATEMENT OF LESTER A. FETTIG, ADMINISTRATOR FOR FEDERAL PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET; ACCOMPANIED BY THOMAS WILLIAMSON, ASSOCIATE ADMINISTRATOR FOR ACQUISITION LAW, OFFICE OF FEDERAL PROCUREMENT POLICY Mr. FETTIG. I would be pleased to do that, Mr. Chairman. I am Lester Fettig, Administrator of the Office of Federal Procurement Policy. Accompanying me on my right is Tom Williamson, Associate Administrator for Acquisition Law. I think it would be appropriate, just as a matter of introduction, to describe the Office of Federal Procurement Policy, so the hearings can have proper context. It is a part of OMB, the only part established by a separate public law which gives us direct authority over all procurement policy, procedures and regulation. The congressional intent in passing the law was to create for the first time a higher level focal point to deal with matters of uniformity and interagency issues in contracting, just such as this one. I should point out, in addition, the authority extends to all procurement under grants. It does not extend statutory authority to grants per se, but if a party is receiving Federal grant money and, in turn, using it for procurement, then the authority of the office does follow along. The committee's draft report I have read and studied over the weekend, the "Ownership, Use and Disposition of Information in the Possession of Federal Contractors and Grantees." The central finding that there is no comprehensive Federal policy is correct in the sense that there is no one place for any contractor to turn for guidance in all circumstances. We do not have a central comprehensive policy. I will raise a question at the outset as to what form such a comprehensive policy might or should take, particularly if what is intended is a detailed set of regulations or clauses that might cover all circumstances in the future. I agree with the committee's observation that there is certainly potential for abuses, some of which is postulated and hinted to in the report, but, as it pointed out, it is very difficult to find any concrete evidence of abuse taking place today. I would also agree that there is potential for abuse in a related direction, and that is in many cases the Government, the contracting agencies, may acquire, pay for, collect, and retain too much data, and pay the price for unnecessary encumbrances. If I might briefly review the current situation, let me touch on four separate circumstances that arise. First, let me address the cases where data is treated explicitly today in many contracts. This can be both product data, where the contractors will be told quite clearly what is to be done with engineering drawings and other specifications and materials and processes. In addition, contracts are very often quite elaborate in describing nonproduct data and what is to be done with it, how often submitted and retained. This will relate to administrative reports, audit findings, financial reports and a variety of contractor operational data. In many cases these are boilerplate requirements, imposed on everyone, particularly in the high dollar weapons system-type contracts. At the current time, the Office of Federal Procurement Policy is, in fact, seeking to standardize many of these contract requirements with an eye toward making them uniform, just as the committee's intent seems to be, and to make sure that questions of national security, patent rights, copyrights, proprietary rights, and application of the Privacy Act are well understood and uniform. In that regard, the draft circular, which is out for comments, I will place in the record, with the committee's permission, and this can be a takeoff point for further discussions and deliberations. Mr. WEISS. Without objection. [The information follows:] 60261021 Copeland 4/18778 EXECUTIVE OFFICE OF THE PRESIDENT APR 1 3 1973 MEMORANDUM TO THE HEADS OF EXECUTIVE DEPARTMENTS AND SUBJECT: Control of Management System Criteria and Data Attached is a copy of a proposed policy on the above subject We would appreciate a response by close of business Monday, June 19, 1978, so that we may incorporate appropriate revisions. Jones J. Me Juta J. James T. McIntyre, Jr. Attachment EXECUTIVE OFFICE OF THE PRESIDENT WASHINGTON, D.C. 20503 OFFICE OF FEDERAL PROCUREMENT POLICY DRAFT TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS SUBJECT: Control of Management System Criteria and Data 1. Purpose. This document establishes policies to be followed by executive branch agencies in the control of development and application of contractually specified management system criteria and required product and nonproduct data in the acquisition of goods and services. 2. Background. Government contracts for goods and services frequently prescribe management systems to be used by contractors in performance of their contracts. Additionally, records are required to be kept, reports and data to be submitted, and product data retained or submitted. While the cost impact of such requirements varies significantly among individual procurements, the cumulative costs on all procurements have been estimated to be billions of dollars annually. Although some of these requirements are essential, a system of checks and balances is needed to ensure that such requirements are necessary, that management system criteria rather than management systems are used, and that such requirements are coordinated |