at least in some measure, an unusual structure by establishing
four specific positions in the agency's staff as Executive Level
IVs. An Executive Level IV is a very high level official. In
my view, it is clear that the Congress had in mind that the
incumbents in those positions would have great responsibility
and commensurate authority. Yet, as a result of understandable
desire on the part of the Commission to involve itself more fully
and fundamentally in the licensing process and in the myriad of
matters associated with the issuance of licenses, there has been
a commensurate reduction in the responsibility and authority of
those officials. I believe that is a grave mistake. Over time,
there can be nothing more devastating for a first-class senior
executive--and those that we have now and their predecessors
must be placed in that class--nothing can be more devastating
than to see and feel authorities and responsibilities weaned away
by those above, ultimately reducing the senior executive to a
very senior clerk. It is morale busting and organization busting.
Yet I believe that is the path on which we may be trodding.

5. It is interesting that the reorganization proposal does nothing directly to deal with the problem which all, including Commissioners, over the years have seen--I speak of the existence of separate staff elements whose truly outstanding efforts lack integration. I have in mind the necessary feedback relationship which must exist between licensing review, inspection and enforcement activity, formulation and conduct of research programs, and drafting of regulations and technical guides. All of these must reflect operating experience on as near a real-time basis as is possible. Though we have taken some steps in this direction, there is much yet to be done to achieve the kind of integration which I believe is essential to effective regulation over time. This is something which the Commission itself can and must address. I do not believe that the reorganization plan makes that more or less likely, either of being undertaken or of being successful.

6. Moreover, for its part, the Commission should attend to developing a procedural framework for its own regulatory actions and decisions which assures that no single Commissioner can hamstring the orderly conduct of the Commission's business. The Commission has already recognized this need and I am pleased to say has taken some positive steps in this direction to enhance the effectiveness of its collegial activities. It is important that this progress not be lost.

In sum, I am not convinced that the proposals before the Congress will necessarily or even predictably make improvements, but they surely will make it different. Different is not always better, and I am not convinced that the proposed reorganization will make it better. In the last analysis, what will make the Commission function or fail to function in an effective way is decided in the appointment process.

The managerial dimension of nuclear regulation is more a function of people than organization structure. It is doubtful that any organizational structure for the Commission can harmonize widely differing views about the substance of nuclear regulation. The President and the Congress hold the tools to formulate the answer, not in the power to reorganize but rather in the power to define the nation's policy and to appoint and confirm Commission members who believe that nuclear power is needed, is technically sound, and can be produced safely, and who thus will have the incentive to make it as safe as possible.

APPENDIX C

TESTIMONY OF

EDWARD C. LEESON

EXECUTIVE DIRECTOR

NATIONAL COUNCIL OF TECHNICAL SERVICE INDUSTRIES

Before the

SUBCOMMITTEE ON LEGISLATION AND NATIONAL SECURITY

of the

HOUSE COMMITTEE ON GOVERNMENT OPERATIONS

MARCH 25, 1980

(92)

Mr. Chairman, I am pleased to be able to appear before you today

to comment on H. R. 4717, which has been titled "Federal Personnel Ceilings and Contracting Activities." I understand that you are limiting the scope

of these hearings to Section 3 of the bill, which, while only six lines in length has aroused at least half of the attention given to H.R. 4717. These six lines reportedly would help end the "wasteful year-end spending". However, an analysis of the reported "problem" and the "solution" indicate that this section would worsen the situation.

If there is a problem with year-end spending, it can only result from one of three situations. 1. Contracting officials improperly or illegally

let contracts at the end of the contract year for goods and/or services that should not be purchased. I believe that we can agree that unless these goods or services should not be purchased, and the contract is improperly or illegally arranged, there is no harm done. We have the same problem with last minute Christmas shopping, and no one has suggested we be forced to complete 80% by Columbus Day. 2. Agency management improperly or illegally contract for goods and/or services at the end of the contract year that should not be purchased. In both cases 1 and 2,

there is intent on the part of contracting officials or management to let improper or illegal contracts. 3. Due to the rush of work, particularly in years in which it is several months into the fiscal year before appropriations are available, procurement is delayed on a high volume of goods and services until the last month or two of the fiscal year. Delays in audits, appraisal of progress in research and development, and good program management can all lead to extensive expenditures late in the

fiscal year.

The problem with Section 3 of H. R. 4717 is that it doesn't address any of the problems that would cause or permit situation 1,2, or 3.

If there is an intentional desire to let dubious or illegal contracts,

as in situation 1 and 2, this bill merely changes the month in which to do so from September to July. Does anyone think this will really hinder wrong-doers?

We have just had the end of the fiscal year changed from June

to September without an apparent change in contracting practices. I can assure you that July will do just as well. The reason this ridiculous change is being recommended is because situations 1 and 2 are not prevalant. The vast majority of government contracting and management personnel are

honest and competent.

The very few that are not would continue to let

dubious contracts in July rather than in October.

The real harm that Section 3 of H.R. 4717 would do is to the honest, overworked managers and contract officials that make up the vast majority of government contract negotiators. Already under time pressure to keep pace with an annual budget cycle which frequently begins up to four months late with delayed appropriations, a further reduction by two months in the time available for the obligation of 80% of the budget would be a disaster. Where an honest problem now exists for many contracting officials in meeting year-end spending limitations, reducing the fiscal year to 10 months for

The action specified

80% of the budget will exacerbate the entire process. in this section is exactly the wrong step to take, if anyone is trying to

resolve the problem.

An automatic extension, of perhaps 90 days, to the period in which FY funds can be spent appears to be the only possible "mechanical" solution. Actually, in any of the three cases described above the only practical solution is better management of the procurement process. The Presidential directive on "Control of Year End Buying" is one of a continuing series Passage of Section 3, H.R. 4717

of attempts to improve this situation.

will make the task more difficult.

This letter pertains to Reorganization Plan No. 1 of 1980 dealing with the Nuclear Regulatory Commission. It is forwarded as communication from a concerned citizen with far more than the usual familiarity with the problems the Plan purports to resolve and one who has qualifications to provide meaningful opinion well beyond most people.

My specific understanding of the issues stem from my having been a member of the NRC Special Inquiry Group (the Rogovin investigation), having authored the report "Safety Management Factors Germane to the Accident at Three Mile Island, March 28, 1979."

I have received the March 27, 1980, version of the Plan; have discussed the subsequent revisions with one of the staff members of the House Committee on Science and Technology and read this morning's Washington Post which related to yesterday's meeting of the House Government Operations Subcommittee. Whereas in the final analysis, I favor the Commission form for the NRC (this view of mine was, in effect, a minority view of the Rogovin group), I offer the following critical comments of the Reorganization Plan as presently proposed.

*This report still has not been formally printed by NRC but draft copies have been available at their documentation center since January.

(95)