Senator PACKWOOD. Our next witness is Mr. Herbert Roback, Director of Studies, Commission on Federal Paperwork.

Welcome to the committee, Mr. Roback. You may proceed as you wish.

STATEMENT OF HERBERT ROBACK, DIRECTOR OF STUDIES, COMMISSION ON FEDERAL PAPERWORK

Mr. ROBACK. Thank you very much, Mr. Chairman.

Mr. Chairman and members of the committee, I appreciate the opportunity to appear here before your committee and discuss briefly what the Commission on Federal Paperwork is doing, particularly in the area of Federal procurement. With me is Brooks Romedy, who directed the procurement study and will be available to answer any questions on details of the report.

Briefly, by way of background, the Commission on Federal Paperwork was created by Public Law 93-556, approved December 27, 1974. The first meeting was held on October 3, 1975, and its final report is due in October of this year-2 years after the first meeting. Then it has 4 months to wind up its affairs.

The Commission, as you may know, is composed of 14 members including, by statutory direction, the Comptroller General and the Director of the Office of Management and Budget. The other 12 members include two Representatives and two Senators, and persons representing the executive branch, State and local governments, small business, labor, and consumer interests. Representative Frank Horton, of New York, is the chairman, and Senator Thomas J. McIntyre, of New Hampshire, is the cochairman. Senator McIntyre is an active member of the Small Business Committee and has made many studies and investigations in the interest of paperwork reduction.

The Commission is not waiting to concentrate all its wisdom in a final report. It has an activist philosophy. Whenever it finds opportunities for paperwork reduction, the departments and agencies are directly advised and are expected to take action.

Ideas for paperwork reduction are translated into specific recommendations. The Commission, at its periodic meetings, considers position papers, votes on recommendations, and officially conveys those that are approved to the departments and agencies concerned. The position papers subsequently are assimilated into more comprehensive reports which, upon Commission approval, are sent to the Congress and the President and made available to the public.

In total, the Commission will issue at least 25 reports and additional products, such as manuals, special techniques for paperwork reduction, and special analyses on a variety of subjects. As of June 10, 12 reports have been approved and are in various stages of publication. To date, more than 570 recommendations have been made and about one-third have been accepted by Congress and the agencies. Others are still under study. We have a few rejections, but generally the reception is good. By the time the Commission completes its work, I anticipate that some 700 recommendations will have been made.

Most of the recommendations made so far cover specific program areas, such as occupational safety and health, pension plans, educa

tion, taxes, housing, income security, and equal employment opportunity. Others will apply across the Government in a general management sense. We expect to develop or amplify new concepts in management, and to lay out techniques and methods for avoiding or reducing unnecessary paperwork.

May I observe, Mr. Chairman, that the recommendations of this Commission will not go into limbo like those of so many commissions in the past. Not only has a substantial number of these recommendations been accepted to date by the agencies, but Public Law 93-556. our enabling legislation, directs that the OMB, for a 2-year period after the Commission goes out of business, assess and followthrough on its recommendations and report every 6 months to the President and the Congress, with a final report at the end of the 2-year period.

Additionally, the General Accounting office will monitor the Commission's recommendations. The fact that the Director of OMB and the Comptroller General both are members of the Commission enhances the prospects for serious attention in the future as well as in the present to what the Commission recommends.

The procurement study was approved by the Commission at its meeting on June 10, 1977. In substantial part, the recommendations previously had been approved by the Commission in the form of position papers. The report is divided into four sections, which I will briefly summarize:

CONTRACT PLACEMENT

Recommendations are made for reducing paperwork through improving small purchase procedures, raising exemption thresholds for contractors subject to a variety of procurement-related laws and regulations, reducing the quantity and improving the quality of preaward surveys, and clarifying procurement standards for observance by Federal grantees.

CONTRACT ADMINISTRATION

Recommendations are made for reducing paperwork through expanding the cross-servicing of contract administration, simplifying the means for making progress payments and cost reimbursements to contractors, reducing the complexity of Government documentation for material receipt and inspection, and limiting the distribution of advisory audit reports to actual users.

PROCUREMENT INFORMATION AND DATA

Recommendations are made for reducing paperwork through improving the means for reporting procurement transactions, modernizing the preparation of the Commerce Business Daily and distributing it less frequently and more selectively, and overhauling the documentation requirements for defense provisioning.

LEGISLATIVE AND REGULATORY FRAMEWORK

Recommendations are made for reducing paperwork through reforming the basic procurement statutes, making simpler and more

uniform the procurement regulations, controlling the supplementary issuances at the agency level, and emphasizing paperwork aspects of procurement in research and training of procurement personnel.

Although our procurement studies did not specifically examine the matter of delayed payments to contractors, it is apparent that excessive paperwork can be a contributing factor. For example, contractor payments can be slowed by rejected invoices, and one aspect of this problem was examined by the Commission. It concerns DOD Form 250, material inspection and receiving report, which is contractually required for Government inspection and/or acceptance of supplies or services by DOD.

Concurrently about 1.5 million forms are prepared annually, averaging 12 copies per form. It serves as a multipurpose report for documenting quality assurance, evidence of Government acceptance, and various other requirements such as packing, receiving, shipping, contractor invoicing and the like. Legally, it evidences transfer of ownership of the identified items to the Government. If the DD-250 is rejected by the Government because of errors in preparation, the contractor is not paid until the errors are corrected.

Problems in data interpretation and inaccuracies cause many forms to be rejected during the Government's mechanized processing. New copies must be prepared either to correct errors or to reflect contract modifications that are received late. Consequently, payments to contractors may be delayed even though contract obligations have been fulfilled.

The Commission recognizes that the form cannot be eliminated, but it makes recommendations for eliminating nonessential data entries and specifying clearly in contracts the Government's requirements for data and distribution, so that the burden on contractors can be substantially reduced.

Although this study addresses the DD-250 problem, similar problems exist in other Federal agencies. For example, the General Services Administration usually requires contractors to prepare and distribute two forms (GSA Form 308, notice of inspection, which is used primarily for quality assurance and contract administration purposes, and GSA Form 1056, notice of shipment) that serve the same purpose as the DD-250. Other civilian agencies are left to devise their own standard forms, since none are specified in the Federal Procurement Regulations.

The Commission also recommended that the Office of Federal Procurement Policy should consider standardizing material inspection and receiving reports government-wide.

OFPP is assessing these recommendations. If given effect, they should result in elimination of one of the problems that slows contractor payment-rejected invoices. The time required to prepare the DD-250 would almost be cut in half with an estimated savings to contractors of more than $10 million.

Another study project dealing with small purchases, Government procurements under $10,000, has the potential for improving the payment process.

Simplified procedures are used in making "small purchases," which account for more than 90 percent of all Federal procurement or a

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total in excess of 8 million transactions per year. Since a variety of purchase methods are available for use, and since some methods are simpler than others, care is needed in choosing the particular purchase technique considered most suitable in a given situation. One method. which should be greatly expanded whenever possible, is the use of imprest funds or petty cash to pay for the purchase and complete the transaction on the spot.

Standard small purchase forms have been developed, but agencies are authorized to use forms of their own design. DOD makes extensive use of a fast payment procedure, which has helped to reduce delivery time and facilitate prompt payment to contractors. No comparable procedure to fast payment is provided for in the Federal procurement regulations which govern procurement by the civilian agencies.

Small purchase provisions within the Federal Procurement Regulations (FPR) and the Armed Services Procurement Regulation (ASPR) are similar but should be made uniform to the fullest extent possible under the governing statutes. Identical or nearly identical regulations would permit the development, by an interagency group, of a single, implementing small purchase directive, published in both the FPR and ASPR, and applicable to all Federal agencies.

Such a procedure, recommended by the Commission, would prevent inconsistencies from finding their way into the guidelines and put a stop to the proliferation of paperwork which is the normal result of the present process. It would also facilitate the standardization of small purchase forms, since agency-designed forms would be reviewed by the interagency group and eliminated if their continued use could not be justified. The revisions to small purchase procedures and forms would have to include streamlining the payment process.

In addition to the DD-250 and small purchases, the Commission's procurement study addressed other specific projects in the procurement paperwork maze that can get prompt remedial action, as I mentioned earlier. For longer range, more fundamental reforms, the Commission found that excessive paperwork in Government procurement can be substantially reduced if the statutory base is reformed, the regulations are made more consistent and uniform, the supplementary issuances by local procuring activities are better controlled, and research and training activities in procurement give due attention to the paperwork aspects.

What we do in other paperwork areas also will have a beneficial effect on procurement. We are trying to raise the level of awareness in Government about paperwork burdens and to start a process of institutional change which will make Government managers more sensitive to the weight of these burdens, more careful in calculating the costs. and more competent in paperwork management.

As far as small business is concerned, the Commission is very much aware that paperwork burdens press heavily in this sector. Wherever possible, in the course of its studies, the Commission has made recommendations particularly helpful to small business. For example, our procurement report recommends that more small businesses can be raised in certain statutes so that more small businesses can be relieved of paperwork-producing requirements. Also, the recommendations looking toward simplified procurement regulations, government-wide

application, and elimination of unnecesary forms and data entries, if given effect, should be beneficial to small business. Other Commission studies include recommendations for sampling instead of universal reporting, reduced frequency of reporting, consolidation or integration of duplicative reports, and administrative improvements in many program areas, which should have a similar beneficial effect.

Members of the Commission frequently use two metaphors regarding paperwork reduction. One refers to cutting weeds and the other to pulling roots. It is necessary to cut weeds, but weeds grow back. Unless we get at the root causes, paperwork in the Federal Government will not be substantially reduced.

The way to get at root causes is to start at the beginning, to study what makes paperwork, and to devise preventive management methods. In this sense, we use the same approach as the Commission on Government Procurement in its weapons acquisition studies-start with the problem at the front end.

And just as the Commission on Government Procurement found that the Congress must carry a share of the blame for problems in weapons acquisition, our Commission finds that the Congress is a large contributor to excess paperwork. Too often it lays down reporting requirements in legislation without giving thought to the time and money costs involved in getting the requested information.

The Commission on Federal Paperwork therefore recommended that committees of the Congress, when reporting out legislation, include in their reports an assessment of the paperwork costs. The Senate, upon Senator McIntyre's initiative, has now adopted this requirement, and we expect that the House of Representatives will follow suit.

Mr. Chairman, this concludes our prepared statement. We will be happy to respond to questions on the part of committee members and staff.

Senator PACKWOOD. In your study, did you run across any Government agencies that were exceptionally good, or exceptionally bad in cutting paperwork?

Mr. ROBACK. Well, there are certain studies on a selective basis to reduce paperwork in different agencies.

The agencies as a whole are not easy to characterize.

Senator PACKWOOD. I was thinking of the GAO list, were they specifically numerically characterized, how long could agencies make payments?

They have not gone through this data sufficiently yet, but they know how long.

Your studies did not go in that direction.

Mr. ROBACK. We did not go specifically into the payment problem. We are studying program areas in which paperwork burdens are heavy and there are possibilities for remedial action.

The GSA for many reasons never had been as aggressive as they should, but they have been subject to records management legislation both in 1950 and in 1976. in an updated statute, which gave them impetus, so in a sense the GSA should be an expert agency on paperwork reduction, but it does not necessarily characterize all of the components of the agency.