curately, there is no disagreement that the waste and inefficiency are most serious. We believe that the impact on procurement alone involves some hundreds of millions of dollars annually.

ALTERNATIVES FOR CONSIDERATION

During hearings in June 1971, the Joint Committee on Congressional Operations considered three primary alternatives for expediting the budget process.12

Lengthening the Period of Appropriations

One alternative was to appropriate for construction programs on a full-funding basis and to appropriate for regular ongoing functions of Government for two years. This procedure would reduce the congressional committees' annual workload on a balanced basis, thereby permitting review and approval of fewer authorizations and budgets each year without a substantial loss in congressional control. Hopefully, this, in turn, would permit acting on all bills prior to the start of the fiscal year. We found that such procedures would alleviate some of the procurement problems, since planning periods could be based on a two-year rather than on a one-year cycle.

Changing the Authorization Process

A former Director of the Bureau of the Budget suggested the following changes in the authorization process:

• Authorizations should be made effective for longer periods of time, at least two years and preferably five years, or for an indefinite period. For example, in the case of construction projects requiring three or four years to complete, Congress could authorize the entire project at the outset.13

• A greater portion of the authorizing leg

Note 3, supra.

"See Part E for a further discussion of construction funding problems.

islation should be stated in program terms instead of in dollar amounts, leaving the annual amount of funds to be determined by Congress when it acts on the appropriations. • Authorizing legislation which expires in one calendar year should be reviewed during the preceding year. In other words, renewals and extensions would be enacted in 1973 for authorizing legislation which expires in calendar year 1974.

• The rules of Congress should be amended to make it possible for appropriations to be considered when authorizations are not acted upon in a timely manner.

Many observers believe the root of the delay problem is in the authorization process, particularly the tendency to restrict authorizations to a single fiscal year or to a maximum dollar amount for the budget year, rather than consider them in terms of whole programs or integral segments of programs.

Many authorization provisions are in socalled "permanent" legislation, but during recent years there has been a growing tendency to require an annual enactment of an authorizing bill. The number of appropriations requiring annual authorization increased from 8.2 percent of the total in fiscal 1960 to 19.3 percent in fiscal 1972. The dollar amounts of appropriations requiring annual authorization for fiscal 1960 and 1972 were $6 billion and $32.9 billion, respectively. Specific annual authorization acts are now prescribed for DOD procurement of military aircraft, missiles, naval vessels, tracked combat vehicles, naval torpedoes, other weapons, research and development, and construction. Annual authorization requirements also have been extended to appropriations for NASA, AEC, Foreign Aid, the Coast Guard, and the National Science Foundation.

14

The objective of having both an authorization and an appropriations process in Congress seems to be to provide one forum in which the program aims and the means of accomplishing them can be reviewed and another forum in which the annual dollar expenditures can be evaluated and compared with competing needs. Contrary to this objective, the more the au

14 U.S. Congress, Joint Committee on Congressional Operations, Changing the Federal Fiscal Year: Testimony and Analysis, First Report, 92d Cong., 1st sess., H. Rept. 92-614, p. 52.

thorization process deals with annual increments of work-rather than with the entire program or integral segments of it-the more the two sets of hearings tend to concentrate on the same short-range questions and the less attention is given to overall objectives and longer-range implications. Agencies for which annual authorization is required must present their programs to four different congressional committees. They find that the presentations to both the authorizing and appropriation committees tend to concentrate on the same questions and issues and revolve around the dollar estimates for the budget year rather than providing a basis for evaluating basic objectives.15

The congressional committee having jurisdiction has a basic responsibility for what is to be undertaken and for such oversight as is needed to reassure Congress on such matters as program integrity, control, and methods of accomplishing the agreed-upon objectives. However, accomplishing these tasks need not depend on having annual expiration dates for the authorizations. Such alternatives as staggering the expiration dates for different programs but holding periodic program reviews could provide the authorizing committees with full control over these matters, without imposing the arbitrary limitations that result from having authorizations expire annually.16

15 Interestingly, the check-and-balance system represented by the congressional rules requiring authorizing legislation before funds can be appropriated seems to have originated as an answer to late appropriations earlier in our history:

The roots of this procedural distinction in the House of Representatives were planted by John Quincy Adams, who served in the House after he left the White House. He complained that appropriation bills had tacked on to them all sorts of legislative matters (called 'riders') which gave rise to dissensions and protracted debate in the House, "with the consequence that appropriation bills dragged their slow length along through half a year before they finally passed." His proposal was to require that appropriation bills be reported within 30 days after the commencement of each session.

From early debates on the subject there resulted a House rule which requires that before an appropriation is made, the expenditure first must be authorized by law. Thus, there is set up a dual legislative process. Authorization or policy is one enactment; funds to carry it out is another and separate enactment. (Herbert Roback, Congressional Interest in Weapons Acquisition, a paper read at the Program Managers Course, Army Logistics Management Center, Fort Lee, Va., July 1962, pp. 14-15.)

18 For example, the Legislative Reorganization Act of 1970, as implemented under the present House Rule XI, 29, requires the committees to conduct a review and study on a continuing basis of appropriation, administration, and execution of their jurisdictional laws. Each committee, whether House or Senate, is required to submit a biennial report on its review and study activities. There is no need, therefore, to regard the annual authorization as the only means to enable and ensure periodic program evaluations by the committees.

Also, it is imperative to distinguish between a continuing long-term activity and a one-time major project. In the latter case, there is seldom good reason for enacting authorizing legislation which does not permit completion of a usable product or achievement of a given end result. Thus, authorizations should treat either the project in full, or, at least, usable individual segments in a sequence which would produce usable results even though the remaining segments are not authorized. If such a project or integral segment extends over several years, the authorizing committee has other means, such as annual reports, and program reviews, for maintaining control over the project.

In the case of continuing activities, authorizations enacted a full year in advance (that is, in the legislative session prior to the session at which the appropriation would be considered) have two very distinct advantages. First, continuity of the program is maintained since such a system allows ample time for agencies to plan program adjustments desired by Congress, on a basis that causes far less disruption than the present system. Second, such a system eliminates the delay in considering appropriation bills because of a lack of authorization and makes it possible for the budget submissions to be much clearer, since the major elements of the program have been decided when the budget is being prepared.

In our opinion, adoption of suggestions along these lines would significantly benefit the procurement process; planning for procurement is best accomplished in terms of the natural phases of the work at hand. For many activities, these phases bear little or no relationship to a fixed period on the calendar.

Change Dates of the Fiscal Year

Under the fiscal year system, Congress receives, in January, the budget for the year beginning the following July. This leaves about six months for the congressional review and approval process.

Under one proposal to change to a calendar year, Congress would receive the budget in January for the year beginning the following January. This would, on the surface, appear to

permit a period of 12 months for congressional review and approval. However, as presented by the testimony on this proposal, if the new budget is to be based on actual data for the past year (to end in December) it could not be submitted until around April and half the added time would thus be dissipated.

This led to discussion of another alternative which would change the fiscal year from July 1-June 30 to October 1-September 30. On this basis a budget presented in January could contain actual data for the year ending on the preceding September 30, and Congress would have nine months instead of six months prior to the beginning of the budget year to consider and act on the proposals.

The improvement this could make in the cycle is obvious from data on dates of appropriations approvals over the last ten years." As mentioned earlier, only seven out of 129 bills were approved prior to July 1 for fiscal years 1964-1973, but 55 bills were approved prior to October 1; in five of the ten years, more than half of the appropriation bills were enacted prior to October 1.

DISSENTING POSITION

One Commissioner* does not concur with the

1 Note 1, supra.

Commissioner Sanders.

recommendation to change the fiscal year (Recommendation 27(b) (4)). He subscribes to the conclusion reached by the Joint Committee on Congressional Operations 18 that insufficient evidence exists to warrant changing the fiscal year.

SUMMARY

Unplanned funding delays-regardless of cause lead to disruptions, substitute decisions, and temporary expedients that are both costly in themselves and inefficient in terms of the program objectives that procurement is supposed to serve. While procurement is not the only Governmental function affected, the problem affecting procurement is so serious that we consider its early solution imperative. Other considerations obviously are involved, but from examples we have seen of problems arising in other areas of Governmental activity, including the effects of late appropriations on State and local governments, school boards, and so on, the problem of late appropriations must be squarely faced and promptly resolved.

18 Note 14, supra.