Page images
PDF
EPUB

Mr. POWERS. Did you actually get to the point of negotiating any salary or cost with Mr. Ginnane?

Mr. BREWER. I don't believe we did.

Mr. POWERS. How much time was involved in discussions with

Mr. Ginnane personally?

Mr. BREWER. Actual time in talking?

Mr. POWERS. Actual time.

Mr. BREWER. I talked with him I suppose 5 hours, 6, but that was spread over a period of several weeks.

Mr. POWERS. Did that include other matters on

Mr. BREWER. Strictly 270 and the related 271 and 272, sub (2), which are the three related cases.

Mr. POWERS. And Mr. Ginnane and Congressman Springer were the only two that you were involved with in extensive negotiations who were members of the public and whose names can be released without jeopardizing their present employment position; is that right? Mr. BREWER. That is true.

Prior to Senator Allott, of course.

Mr. POWERS. Did you indicate that management, management capability—in answer to one question, your description of the qualifications for Mr. Allott, you indicated that he was a person who had proven his management ability as a person of integrity. Was that one of the criteria, his management capability?

Mr. BREWER. Oh, yes.

Mr. DINGELL. Is he going to engage in management?

Mr. BREWER. He will be managing his staff to make sure he gets the kind of information that is necessary for him to build the kind of record and build the kind of product that we expected of him. He will be heavily involved in the RMC studies to be sure that there isn't a duplication of effort.

The RMC studies will be ongoing along with his, side by side. Mr. DINGELL. Is he going to manage these RMC contracts? Mr. BREWER. No. That is managed under our staff, Mr. Robert Rhodes, here with us today. But he will be here having an input. Mr. Goodman is here also. They will have an input and as the RMC studies evolve and as the results come out, there will be a coordination between the Senator's efforts and RMC's to see there isn't a duplication of effort and waste of money.

Mr. DINGELL. You indicated, in answering one question, that he proved his management talents and in the next question, the Commission responds as follows:

There is no significant question of contract management involved.

Mr. BREWER. That means from our viewpoint. We cannot understand the laws-maybe I should turn it to you-we cannot direct him. That is part of the law, I believe. I am not practicing law now. I am not a lawyer.

Mr. DINGELL. The question directed to the Commission is directed at his management capabilities, not the management of the ICC. Mr. BREWER. It is a personal opinion. He does have management capabilities.

Mr. POWERS. Didn't you also respond that management capability was not a part of the contract?

Mr. BREWER. That is correct. We did so respond.

Mr. CERRA. Senator Allott as special counsel will be performing the classical functions of a lawyer.

Mr. DINGELL. Let me ask this question. I want the Commission to give the answers to these questions unless there is a matter of your personal knowledge or you are a decisionmaking party in this matter. Were you one of the decisionmaking parties in this matter? If not, I would rather Commissioner Brewer and counsel

Mr. BREWER. In all this contract negotiation Mr. Cerra was with me in seeing that these things were complied with. I am not a lawyer. Mr. DINGELL. Obviously you made the decision, or Mr. Cerra did. Mr. CERRA. I had no part in the decisionmaking, Your Honor. Mr. DINGELL. We had better limit ourselves to testimony from Mr. Brewer and the Chairman.

Mr. BREWER. What was the question?

Mr. DINGELL. The question dealt with the management capabilities of the contractor and the response of the agency was that there was no contract responsibility involved.

Mr. BREWER. I don't quite see the distinction.

Mr. DINGELL. I find myself charmed by the anomaly of the two

answers.

Mr. BREWER. I am not quite sure of the distinction. I think we had in mind that he had the capacity to manage his own personal staff. As to managing the contract, he would not have.

Mr. DINGELL. He is managing $650,000. He is managing $350,000 in compensation to him and his staff and $300,000 for additional studies he is supposed to be performing.

Mr. BREWER. If you remember in our testimony the Chairman just gave, we have not bound this down. That is a rough-cut estimate of $350,000 and $300,000.

Mr. DINGELL. Is he going to perform studies, or not?

Mr. BREWER. We don't know. That will be up to him.

Mr. DINGELL. $300,000 expended in anything he wants?

Mr. BREWER. He can spend on salaries, or he can subcontract for small economic contracts.

Mr. DINGELL. You good gentlemen just told us how carefully you had bound him in your letter contract to what he is going to do, apparently.

Mr. BREWER. He is going to produce a product.

Mr. DINGELL. The letter contract doesn't have any limitation. Which is right?

Mr. BREWER. The letter contract is only $55,000.

Mr. DINGELL. The letter contract is $55,000. In the letter contract, then, there are no specific directions as to how he is going to spend his money or how he is going to do it. The only thing it does is say if you don't sign a definitive contract with him, then you are going to give Senator Allott $55,000.

Mr. CERRA. That is a legal question. If I may answer

Mr. DINGELL. I suppose we are going to have to get a legal opinion-you give us your opinion and then we will evaluate it as to whether or not it is a policy decision.

Mr. CERRA. That is fine. The contract provides this is a cost reimbursement type of contract, without fixed fee.

Mr. DINGELL. If that is so, then you have not laid down all of these careful restrictions as to what the moneys are going to be spent for and how they are going to be spent.

Mr. CERRA. All the costs must be allowable under the cost principles set forth in part 15 of the Federal Procurement Regulations. They must be allocable to the contract and overall they must be reasonable, considering the circumstances, either from cost or price analysis principles.

Mr. DINGELL. Well, that is not

Mr. CERRA. This is what the government contract regulations require and this is what we sought to put into the contract.

Mr. DINGELL. The letter contract doesn't impose any limitations on what he is supposed to produce under this contract. The only thing it says is if he doesn't-if ICC doesn't carry forward, he gets $55,000. Mr. BREWER. That is not correct, sir. Not under our interpretation. He has to submit a voucher showing what costs he expended and those costs have to be allowable under the contract in order for them to be paid. We have signed a letter contract. This is what we are talking about.

Mr. DINGELL. You have not signed a definitive contract.

Mr. CERRA. That is right; we have not, but any termination of the letter contract will not encumber us for anything more than $55,000 of allowable costs that come under the contract.

Mr. DINGELL. He gets $55,000 to▬▬

Mr. CERRA. No. He does not.

Mr. BREWER. The contract does not say that. That is a maximum. If he spends less, he gets reimbursed for less.

Mr. POWERS. In this letter contract, I believe it provided the definitive contract was to be entered on or before April 1, is that correct?

Mr. BREWER. Right.

Mr. POWERS. And you say the definitive contract has not been

entered into?

Mr. BREWER. No. We extended it 30 days after we-you will see in the contract, unless extended by the contract officer.

Mr. POWERS. Orally, or in writing?

Mr. BREWER. In writing.

Mr. POWERS. Do you have a copy of the extension with you? Mr. BREWER. I believe I do have."

Mr. DINGELL. While you are looking, without objection, the Chairman will order the insertion at this point of the extension of letter contract, the date of which is March 30; am I correct?

Mr. BREWER. Uh-huh.

Mr. DINGELL. And the date on the letter contract is February 26. Mr. BREWER. It says a definitive contract must be completed by April 1, unless otherwise extended by the contracting officer, which we have done.

[The material referred to follows:]

INTERSTATE COMMERCE COMMISSION,
Washington, D.C., March 30, 1973.

EXTENSION OF LETTER CONTRACT No. ICC-72-5, DATED FEBRUARY 26, 1973
I hereby extend the date for the negotiation and execution of the Definitive
Contract for Special Counsel for 30 days as provided in Section E of Letter
Contract ICC 72-5.

ELIZABETH K. DALGLEISH,
Contracting Officer.

Mr. DINGELL. Let me ask you about this. The Federal Property Act requires advertising for any Federal contract; is that right? Mr. BREWER. May I refer that to Mr. Cerra?

Mr. CERRA. Except in 15 situations.

Mr. DINGELL. You folks at the ICC claim it was impracticable to secure competition on the contract; is that right?

Mr. CERRA. That is correct.

Mr. DINGELL. So you used section 10 of the statute 41, U.S.C., 252 (c) 10, to get around that requirement; is that right?

Mr. CERRA. That is correct.

Mr. DINGELL. Now, was a determination and findings, as required by law, made?

Mr. CERRA. In our opinion, the determination and findings to solesource contract were made on November 5, 1971.

Mr. DINGELL. Would you submit to us a copy of that determination and findings? Do you have that with you?

Mr. CERRA. It is contained in the report of the Commission in Ex parte 270.

Mr. DINGELL. Would you turn to the appropriate page for me, please.

Mr. CERRA. I might say that the title 41 of the code, the section you are talking about, section 252 (c), requires that all Government contracts be advertised for bid except in 15 situations. We chose exception No. 10, which is "for which it is impracticable to secure competition."

Now, the code itself provides that in exceptions 1 and 11 through 14, certain determinations by the agency are required and that those determinations under section 257 (c) must be in writing.

At the initial stages of this determination to hire special counsel, the decision was made by the Commission to seek an outside source and all our funding requests from the Appropriations Committee were based on that assumption.

Mr. DINGELL. Well, I have before me here a document signed by Elizabeth K. Dalgleish, dated March 7, 1973, in which there is a series of findings and it is entitled "Determination of Contract," 262(c)10, which covers this particular contract.

Now, was that a determination and findings or was that not a determination and findings?

Mr. CERRA. That is a written determination and findings. Initially, the findings were made by the Commission in November 1971.1 Mr. DINGELL. Mr. Powers.

Mr. POWERS. Counsel, in addition to the statute, there are some voluminous Federal procurement regulations which specify what you must do in entering a contract; is that not correct?

Mr. CERRA. That is correct.

Mr. POWERS. Is it your contention that the November 1971 decision is the determination and findings required by statute and the FPR's?

Mr. CERRA. That was the determination and findings of the solesource contract. The staff, because of the peculiar requirements of the regulations by the Administrator of GSÅ, determined to place this

1 The material referred to is the November 1971 decision by the Commission which has been previously inserted herein.

in writing to be signed by the contracting officer. The draft of those determinations and findings carrying out the will of the Commission or its initial determination in November were in existence long prior to the contract being signed with Senator Allott on February 26. They were reduced to writing to implement the Commission's determination on March 6.

Mr. BREWER. March 6, they were signed.

Mr. POWERS. They were reduced to writing because the regulations required it; is that not correct?

Mr. CERRA. That is correct.

Mr. BREWER. The draft had been circulating for some time and we have someone here with the original draft.

Mr. POWERS. These regulations don't say anything about the D and F being constructive. They say it shall be in writing and that it shall be signed by the contracting officer.

Mr. CERRA. They were signed by the contracting officer.

Mr. POWERS. That was not signed by the contracting officer. That was signed by your chairman.

Mr. DINGELL. Doesn't the law require that they be signed-the law doesn't refer to constructive. It says signed. It means final. It doesn't mean any constructive piece of paper floating around the ICC, does it? It means a final piece of paper signed by the contracting officer; am I right?

Mr. CERRA. The particular provision of the Federal procurement regulations that I was made aware of through Mr. Wilson, who really is our contracting expert, says that they shall be signed by the appropriate official.

Mr. DINGELL. The appropriate official is apparently Ms. Dalgleish; and that was done on March 6.

Mr. CERRA. That is correct.

Mr. DINGELL. The letter contract was February 26, which was a few days before. Then the other document extending it is March 30. But in any event, the determination and findings were not done according to law and were not finalized as required by law until March 6, several days after the time the letter contract with the Senator had been signed by ICC and by the Senator.

Mr. CERRA. That is correct; but there is no requirement in Federal procurement regulations that says they must be signed prior to the execution of the contract.

Mr. DINGELL. May we have the contracting officer up here to be sworn and testify on this if we are going to be really

Mr. CERRA. I am not talking about the contracting officer. I am talking about the Federal procurement regulations

Mr. DINGELL. Well, bring the contracting officer up. I guess we might just as well have him up here.

Mr. CERRA. You want Mr. Wilson.

Mr. DINGELL. Ms. Dalgleish is the person who signed the contract. Mr. BREWER. Since we do not

Mr. Congressman, we are not in the habit of making these kinds of contracts. We were happy enough and pleased to borrow Mr. Wilson from NASA, who is an expert in the contracting field, who advised counsel with us.

Mr. DINGELL. We had better have Mr. Wilson with us.

« PreviousContinue »