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TUESDAY, SEPTEMBER 7, 1965.

JOHN W. BUSH, ACTING CHAIRMAN
BERNARD F. SCHMID, MANAGING DIRECTOR
J. NEIL RYAN, BUDGET AND FISCAL OFFICER
JOHN A. NOLIN, CHIEF, SECTION OF ADMINISTRATIVE SERVICES

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Program by activities:
1. Regulation of carrier rates, practices, operating author-

ities, and finance..
2. Compliance
3. Supervision and analysis of carrier accounting and sta-

tistics
4. Supervision and interpretation of tariffs.
5. Railroad safety and car service:

(a) Car service.
(6) Railroad safety.

(c) Locomotive inspection.
6. Executive and advisory functions
7. General management and administration.

Total program costs, funded.

Change in selected resources... 10. Total obligations... Financing: 11 Receipts and reimbursements from: Administrative

budget accounts for “Emergency preparedness

function" 25 Unobligated balance lapsing

New obligational authority..
New obligational authority:

40 Appropriation...
Relation of obligation to expenditures:

10 Total obligations.
70 Receipts and other offsets (items 11 to 17).
71 Obligations affecting expenditures.
72 Obligated balance start of year.
74 Obligated balance, end of year.
90 Expenditures excluding pay increase supple-

mental.
91 Expenditures from civilian pay increase supple-

mental..

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STENOGRAPHIC REPORTING SERVICES Mr. Evins. The committee will come to order. Next is a supplemental estimate in House Document No. 278 for stenographic reporting services for the Interstate Commerce Commission. Mr. John W. Bush is the Acting Chairman.

Mr. Chairman, we shall place in the record your justification statement.

(The statement referred to follows:)

JUSTIFICATION OF THE NEED FOR SUPPLEMENTAL APPROPRIATION FOR THE FISCAL

YEAR 1966

The purpose of this supplemental appropriation is to provide funds to finance a stenographic reporting services contract for fiscal year 1966, at a cost of $185,000.

JUSTIFICATION FOR THE REPORTING SERVICES CONTRACT

Under a stenographic reporting services contract which is awarded annually by the Commission, the contractor is required to make a record of all appearances and a verbatim official record of the proceedings in all hearings before the Commissioners or persons designated by the Commission to take testimony, at Washington, D.C., and elsewhere in the 48 contiguous States. The original and one copy of the transcript of record in each hearing is furnished to the Commission, and copies are available for sale to parties in the proceedings and to others.

During the past 6 years, the Commission has experienced serious difficulty obtaining responsive bids for its reporting services contract. Only one responsive bid was received each year during the period, fiscal year 1960 to 1964. For fiscal year 1965, the Commission received no bids responsive to Commission requirements. A thorough survey of available reporting services was made on a nationwide basis and all alternative courses of action were carefully considered without success in securing even one responsive bid. Since it was essential that a contract be in effect by July 1, 1964, negotiations were held with the only competent firm indicating a willingness to enter into such negotiations. These negotiations resulted in a contract which provided free copies to the Commission. However, because of the relatively high price per page of transcript to others there have been numerous complaints registered from State governmental and other parties to the proceedings, and from public sources interested in obtaining transcripts of hearings.

From 1936 to 1965, the Commission has been receiving its copies of the official transcript free of charge. The contractor has received his compensation by sales of the official transcript to others. These latter sales have been steadily decreasing in volume due to the increasing availability of new types of inexpensive copying machines. Many purchasers have reduced their purchases to one copy, and have made additional copies on these machines, thus resulting in fewer sales by the contractor. The Commission has taken a number of steps to discourage this practice. On June 11, 1964, the Commission issued a statement of policy which declared such practice in violation of the Commission policy. In addition, a statement is required to be made by all hearing examiners at the start and conclusion of hearings to the effect that it is the policy of the Commission to discourage copying of transcripts and that copies must be purchased only from the official reporter. A similar statement is included by the official reporter on the order form used by participants in ordering copies of transcript.

This policy seems to have arrested the downward trend of sales, but there is no indication that any increases in sales will result therefrom.

The invitation for bids for the fiscal year 1966 contract for reporting services was issued on February 1, 1965. In recognition of the failure to obtain responsive bids in fiscal year 1965, and the opinion of the National Reporting Council and interested bidders that the existing level of sales is not high enough to make it profitable for a contractor to bid without the Commission paying for its transcript, this invitation contained a provision for the bidding of a price per page to the Commission. There was also a provision permitting a different bid rate per page for the hearings conducted in Washington and the hearings conducted in the field. The successful company was also to be given addressed postage and fees paid envelopes and labels for mailing of official transcripts, exhibits, etc., to the Commission.

Bids were opened on March 8, 1965. The low bidder was the CSA Reporting Corp. of Washington, D.C., the Commission's current contractor. Its bid provides a price to the Commission of 50 cents per page of transcript for the field hearings and no charge for those held in Washington, D.C. The following table shows for the fiscal years 1963 and 1964 the number of field hearings and cor

responding number of pages of transcript and those estimated for fiscal years 1965 and 1966:

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On January 1, 1965, the Commission changed its hearings procedure in order to reduce the number of oral hearings required. The effect of this action is shown by the reduction in the number of hearings in fiscal year 1964 and 1965. However, the average number of pages of transcript per hearing has steadily increased. This is shown in column (3) of the table above. The full effect of the procedural change was realized in the first half of fiscal year 1965. From that point on the number of hearings have again increased due to the upward trend in the number of cases being filed with the Commission.

Fiscal year 1966 estimated level of transcript pages for field hearings will result in an outlay of $185,000, at the bid price of 50 cents per page.

These amounts were computed as follows:

An estimate was made of the total number of pages of transcript for fiscal year 1966 by applying three factors to the fiscal year 1964 actual figures. These were (1) the decrease in hearings due to the procedural change, (2) the increase in the average number of pages of transcript per hearing, and (3) the increase in caseload. These factors, when applied to the fiscal year 1964 actual, resulted in an estimate for fiscal year 1966 of 370,000 pages of transcript for hearings conducted outside of Washington, D.C. The CSA Reporting Service bid of 50 cents was applied to the estimate. This results in an estimate of $185,000 for fiscal year 1966 for the transcript itself.

Mr. Evins. We note you want $185,000 because you say with all the money we gave you, you are running out of funds.

Mr. Bush. That is substantially it.
Mr. Evins. We will be glad to hear you.

Mr. Bush. The statement pretty generally covers the basis of our problem, Mr. Chairman.

As we said in it, for the 4 years from 1960 to 1964, we were only able to obtain one bid on the reporting contract and then in 1964 we obtained none, and had to negotiate with the only available bidder there.

In 1965 we were informed ahead of time that there would be nobody interested in bidding unless they could charge something for the copies we have been getting free. I think we have been pretty fortunate over the years to have been getting this free. A good many of the Government units and agencies did not.

Mr. Evins. Do you mean there is less interest in the work and the hearings and the decisions of the ICC! They are not selling enough copies to justify them giving you a free copy?

Mr. Bush. Well, the new copying machines, according to the reporting services, are about to put them out of business. They used to sell « number of copies, and they have told us that all they ever want to make is 5 percent gross on their business and have offered to open their books to any audit that we would want to make, if there was any kind of a way we could write a contract that would assure them of that. But the parties lately have been getting together and one party would buy a copy and then they would just take them back and reproduce them for a nominal sum and sell them to other parties.

They bid this time 50 cents per page of transcript for the field hearings and still are willing to make no charge for those which we hold in Washington. That compares to 85 cents for the field hearings and 75 cents they charge everybody but the Government. Ours is 50 cents and zero against 85 and 75.

We have compared the charges with other agencies of Government and even here on the Hill I understand they get $1.40 a page if they are allowed to sell copies and $1.65 if they aren't.

Mr. Evins. How long have the reporters been giving you the free service?

Mr. Bush. I think it was in 1956. It was before the advent of these modern copying machines.

Mr. Evins. Haven't you already let your contract for the next year? Is the bidding time closed for your reporting service?

Mr. Bush. Yes, we have.

In prior years we have asked, knowing that at any time we might have no bid at all, as in 1964, or we might have a bid as in 1965, where we would have to pay and we have put in a figure in the budget request tentative that if we had to use it we would have it in there and each time—we had a figure in the budget in case we would have to come to this position and each time it was stricken from the budgetI think probably rightly so. They said "If you ever come to the point where you have to have it, at that time we will talk to you."

Mr. Evins. Out of $26,915,000 budget, couldn't you absorb this? We just got the regular budget worked out with the Senate, the President just signed the new bill into law and you ought to absorb this amount until your regular budget.

Mr. Schmid. The actual amount of money we have this year will give us less average employment than we have had in previous years. Now we have allocated our money for fiscal year 1966. We have carved down our travel money to a bare minimum. We have taken our supplies down to a bare minimum; we have taken our equipment down to a bare minimum. We have it right down to a bare minimum.

If we have to absorb this $185,000, which is an entirely unexpected item which was not in the budget

Mr. Evins. We are not saying absorb it completely right now, but couldn't you get by until you present your regular budget?

Mr. Schmid. No, because we are talking about between now and next June 30. As a matter of fact, we are already absorbing some, Mr. Chairman, because we think it is going to cost us more than $185,000 just to pay this 50 cents for each page of transcript based upon our experience. We have carved it down to $185,000.

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