Mr. ROBACK. In other words, you become a self-enforcing agency for recommendations and then report those to the Congress which you do not have any success with.

Mr. CAMPBELL. I do not know of any occasion where we have attempted to enforce our recommendations on an agency. I do not think we have that authority.

Mr. ROBACK. Well, you are enforcing recommendations on agency all the time, are you not? At least you are trying to get agencies to comply.

Mr. CAMPBELL. Yes, sir. Oh, yes, we are trying to get them to comply. But I do not think that we can make them comply.

Mr. ROBACK. And when an agency does not comply, then you take steps to report that to the Congress, would you say?

Mr. CAMPBELL. We would report whether they complied or not, yes. Mr. ROBACK. I mean, if they complied, you would report it, and if they did not you would also, but in any case there would be many preliminary attempts on the part of the General Accounting Office to get its recommendations effected on its own initiative and on the basis of the recommendations as made by itself without necessarily going through a process of congressional review of approval as to the validity of the recommendations.

Mr. CAMPBELL. I think that is a fair statement; yes, sir.

Mr. ROBACK. You feel that you have the delegated authority from the Congress to make and try to get compliance with recommendations?

Mr. CAMPBELL. Yes, sir.

Mr. ROBACK. And in those cases where you do not succeed in getting compliance, by reporting to the Congress you hope that that will contribute to the more effective compliance or a greater measure of compliance.

Mr. CAMPBELL. Yes. We hope that a committee, such as yours, would take note of it and help us obtain compliance, yes.

DRAFT REPORTS

Mr. ROBACK. Do you issue draft reports which never become final reports?

Mr. CAMPBELL. Yes, we do.

Mr. ROBACK. Under what circumstances? Is it because there is full compliance or because you find that the issue has been invalidated by later findings?

Mr. CAMPBELL. Let us give you an example of one, Mr. Roback. They are not very frequent, but there are some.

Mr. BAILEY. We do have one case where

Mr. NEWMAN. When the draft report has been prepared it is reviewed by the Director's staff before release. In addition, any questions as to legality are cleared in advance with the General Counsel's office, and accounting policy questions are cleared with the policy staff. At the beginning of the calendar year, 1964, we had on hand 178 reports in process in the Division. During the year the monthly balance of inprocess reports increased steadily and at the end of the year we had 245.

In this 12-month period, from January to December we issued 305reports of which 105 related to contract matters. During the same period we terminated 27 assignments in which draft reports had been prepared. Included in these were 13 examinations which involved. reviews performed principally at contractors' locations. In eight or more than half of these instances where draft reports relating to contract matters or contract activities were not issued in final form, our decision was based on evaluation of the substance of comments received from the contractors or the agency. Generally, these comments contain information not previously made available to us.

When such data was furnished and evaluated, we were able to determine that (1) the residual amounts involved in the deficiency identified were relatively minor, (2) the agency comments adequately resolved the points raised in the draft report treatment of the indicated deficiency, or (3) substantial additional work would be required to completely resolve these deficiencies not yet fully explained, and the indicated deficiency is relatively minor.

Mr. ROBACK. Well, what would be the percentage? Is there any figure on the percentage of draft reports that never become final, let's say, on a yearly basis?

Mr. NEWMAN. Well, it is very, very small. It is 27, say, out of 305— 10 percent.

Mr. CAMPBELL. Mr. Roback, I think that, as you know, the procedure for submitting draft reports to the agencies and to the contractors is rather new in our office. I personally felt very strongly about this and thought the idea

Mr. ROBACK. You mean they did not have any draft report before, that everything which was a draft report in the Office became finaĺ in the Office?

Mr. CAMPBELL. The first the contractors knew of it was when it suddenly came out in the newspapers through

Mr. ROBACK. This was in the interest of, you might say, getting better, more assurance of the validity of your findings?

Mr. CAMPBELL. That is correct, and it was also to make certain whether or not the report should be issued. And as a result of the comments on the draft we might find that our original information was inaccurate; had we known that in the first instance, we probably would have saved the Government a lot of money. Such new information may have caused us not to issue a report.

Mr. ROBACK. What is the average circulation time of a draft report between the time the draft report is issued and a final report is issued? Mr. CAMPBELL. Recently the Defense Department has been trying to meet a deadline of 60 days.

Mr. NEWMAN. In the case of the contractors' reports, the contractor normally has 30 days. However, he can have longer than that if he requests it, and we have had cases where they have requested more time.

Mr. ROBACK. And these reports also go to the agencies. My impression is that sometimes several years elapse.

Mr. NEWMAN. No, not now. When Secretary McNamara came in, that was the story, we had some draft reports which were as much as 18 months to 2 years old. Upon his taking office he reviewed 80 or 90 of our reports and requested an audience as to how we operated,

Mr. ROBACK. Did you grant him an audience?

Mr. NEWMAN. What was that?

Mr. ROBACK. Did you grant him an audience?

Mr. NEWMAN. He granted us an audience.

Mr. CAMPBELL. You are right, there was a time there when, par-ticularly in foreign aid because of the difficulty of communication between distant places, it would take sometimes a year, or a year and a half for our draft reports to work their way back to us.

Mr. NEWMAN. Now, generally, Defense reports are supposed to be back in 60 days. Recently, it has slipped to maybe 90 days or more.. But it is not any 2 years.

Now, on the foreign aid reports the Secretary set up 75 days.

Mr. HORTON. Is this 75 days and 60 days, is that the time limitation on which the agency or the contractor has to reply to the General Accounting Office?

Mr. CAMPBELL. Yes, sir.

Mr. HORTON. Is that time limitation a custom that you have established, or is this something that you have issued by way of a directive when you sent out a draft report?

Mr. NEWMAN. It is a procedure we have established to speed up the issuance of reports.

Now, Secretary McNamara set the 60 and 75 days' limit at a special meeting soon after he took office. His opinion was that anybody that cannot reply in 60 days is not on top of his operation.

Mr. HORTON. Well, suppose you do not hear from anyone in 60' days?

Mr. NEWMAN. They ask for extensions.

Mr. HORTON. Suppose they don't, then what do you do?

Mr. NEWMAN. We send a followup letter.

Mr. HORTON. And suppose they still do not reply, then what do you do?

Mr. NEWMAN. Well, we have not had any cases where they still do

not

Mr. CAMPBELL. There have been one or two cases where we have gone ahead; we have been forced to go ahead with our report without their comments.

Mr. HORTON. Well, this then is a delay in the final report.

Mr. CAMPBELL. It what?

Mr. HORTON. This then is a delay in the final report.

Mr. CAMPBELL. Yes, sir.

Mr. ROBACK. When, for the record, was the draft report policy started?

Mr. CAMPBELL. I would say in 1955 or 1956.

Mr. ROBACK. Can you submit the date?
Mr. CAMPBELL. I will submit that, yes.

(The date referred to follows:)

First draft sent to a contractor was in November 1955.

Mr. NEWMAN. There is another good reason, with regard to submitting a complete report with agency comments and contractors' comments. It gives the congressional committee a complete story of the pros and the cons in the report. And that was another reason why we wanted the comments in.

Mr. ROBACK. Has there been any occasion where you have permitted a contractor to look at a final report?

Mr. HORTON. You mean before it comes to Congress?

Mr. ROBACK. The final report. In other words, there is a draft report and the contractor looks at that. Have there been cases where the contractor looks at a final report so that in a sense it is still open for change?

Mr. CAMPBELL. We have had some cases, very few, but we have had

some.

Mr. ROBACK. What are the grounds on which a final report is the subject of scrutiny by a contractor, or at least he has an opportunity to look at it.

Mr. CAMPBELL. Usually when they ask for it.

Mr. ROBACK. When they ask for it. In other words, you would be disposed in a case to grant an opportunity for review of a final report. Now, if issue is taken, is that final report then put back in a draft status?

Mr. CAMPBELL. Yes, it is.

Mr. ROBACK. In other words, the final report is not final if you get some changes, some recommendations or suggestions you think are worthwhile?

Mr. CAMPBELL. The case I have in mind-the important case I have in mind-there were a couple of draft stages that we went through because the contractor requested it and there were some changes as we went along.

Now, when we get to that point where we move from, say, the third or fourth draft report in an unusual case into the final report, we do have to use our judgment that what we are saying in the final report is in essence what the draft report plus comments from the contractor really intended.

Mr. HORTON. Under your policy, General Campbell, how many times do you submit drafts or final reports to a contractor? Do you have any policy on it, the number of times that you would submit a draft or a final report?

Mr. CAMPBELL. We submit a draft report-in each case to the contractor. We will then redraft our proposal report in accordance with the suggestions that the contractor may have in mind, if we can accept them. Then if the contractor asks us for a look at that second try, we will usually agree.

Mr. HORTON. So that you have no limitation on the number of times that it might be submitted to a contractor?

Mr. CAMPBELL. No. We have not had many cases like this.

Mr. HORTON. What is your principal purpose of this procedure to acquire information from the contractor or the agency involved? Mr. CAMPBELL. In submitting the draft report?

Mr. HORTON. Yes.

Mr. CAMPBELL. Well, not necessarily. My intention was-I do not know whether there are any cases where our individual divisions might have something in mind, but as far as I personally am concernedMr. HORTON. This is a procedure you instituted, is it not?

Mr. CAMPBELL. Yes. But the idea was to give the contractor an opportunity to see what we were saying about him and to allow him to make comment on the use of words or the use of a phrase, to tell us what he would like to have us say and suggest how to say it.

Mr. HORTON. Well, are you attempting to convey that this is more or less submitting to the contractor or the agency for clerical corrections.

or

Mr. CAMPBELL. No.

Mr. HORTON. Is it more substantial than that?

Mr. CAMPBELL, Yes. We want any additional facts and comment of any kind on a draft. Frequently a contractor has come back at us with things we did not previously know.

Mr. HORTON. Assume that in the draft report that you submit there is a finding or a conclusion that has been drawn by some member of your agency, and that is submitted to either the agency or the contractor and they take issue with this finding. Is this permissible under your procedure, for them to take issue and to indicate to you that they do take issue?

Mr. CAMPBELL. Yes, sir.

Mr. HORTON. And then are they given an opportunity to substantiate their position and, if so, how?

Mr. CAMPBELL. Well, there have been occasions where we have had conferences on the problem with the agency or the contractor. They submit by letter arguments having to do with it.

Mr. HORTON. Do you have sort of a little trial on it, is that what you are conveying?

Mr. CAMPBELL. No, we do not have quite that. It is more or less a very informal give and take.

Mr. HORTON. Do they come in and testify, so to speak, and a record is taken of what they say?

Mr. CAMPBELL. Yes, informally.

Mr. HORTON. And then is a decision made after that presentation of facts?

Mr. CAMPBELL. Yes.

Mr. HORTON. What distinguishes that from a court procedure or trial procedure?

Mr. CAMPBELL. Well, we do not take testimony as such, and we do not have the formality of a trial. It is more or less an informal discussion. There may be a number of people involved; the contractor may have 5 or 10 individuals in at the same time; we may have several people. I might attend; Mr. Keller might more frequently and division heads usually. It depends on the problem.

Mr. HORTON. Is it fair to say that the direction of a report can be changed as the result of some facts or evidence presented by the contractor or by the agency involved?

Mr. CAMPBELL. Very much so.

Mr. HORTON. Do you expect that this procedure that you have established of submitting these draft reports is going to be on the increase?

Mr. CAMPBELL. That we will submit more and more of them?

Mr. HORTON. Yes.

Mr. CAMPBELL. We are submitting all of them now. I was going back through that development with Mr. Roback; in the beginning we approached this in a very informal way; the policy statement may have been set up later on, probably a year or so after we had started the practice in some areas. At the present time it is being done generally in all areas.