OFFICE OF POLICY ANALYSIS REQUEST

There is a request in the budget of $945,000 for the Office of Policy Analysis, and the request for five new FTE's, and $585,000 for contract support. The reason ascribed is that-I quote:

This will help the Department anticipate and deal with potential adverse effects on several bureaus and will augment capabilities to analyze and address long-term issues affecting global climate change, air and water quality, and solid and hazardous waste management.

What are the existing departmental capabilities to analyze and address long-term issues affecting global climate change, air and water quality, and solid and hazardous waste management?

Mr. VENTURA. On the departmental level they are basically at a new stage. At the bureau level with respect to such areas as U.S. Geological Survey, they are well advanced.

We are proposing that rather than request the entire $945,000 for this particular purpose submitted in advance of my tenure, we propose to direct a portion of that money to the reprogramming. Rather than duplicate existing efforts within the Department, we are now proposing to use a smaller portion of that sum, approximately $526,000, to act more in a coordinating capacity to develop a departmental point of view on these issues.

Mr. YATES. Does it make sense to give you the money for an increase for this purpose when the Geological Survey has been cut from that function in their budget? They have a greater capability for dealing with long-term issues involving global climate change and air and water quality and waste management than your office does. Do they not?

Mr. VENTURA. They certainly do and we agree with that. However, they are only one bureau. What we are proposing to do is coordinate the various activities of the many bureaus to present a departmental point of view.

MAIN INTERIOR BUILDING

Mr. YATES. What is the amount of deferred maintenance on the Interior Building itself? I just wonder how much you have spent to keep up the building over the years.

Mr. VENTURA. Perhaps I could ask Jerry Rogers. Would you have an idea on that? Otherwise, we will respond for the record.

Mr. ROGERS. Mr. Chairman, I wouldn't have an idea on the amount of deferred maintenance, but I do have some information on the types of work that are needed and some estimates of cost for some of this work.

us.

Mr. YATES. That is all contained in the book that you've given

Mr. ROGERS. It isn't all detailed in there, but the book is the basis for that. Yes, sir.

Mr. YATES. What has been happening over the years? Has the building been deteriorating?

Mr. ROGERS. There are signs of deterioration, Mr. Chairman. For example, if you go into the entrance lobby, you can see the ornamental marbles have begun to lose, in places, the fine mortar joints

between them. And if that isn't replaced before very long, one or two of those will begin to move out of place. And once they move out of place, you have an engineering problem rather than just a craftsman problem.

There are places where moisture is penetrating. There are places where murals have suffered damage either through someone striking them with something or accidental spills and that sort of thing. But I'm sorry I don't know about the deferred routine mainte

nance.

[CLERK'S NOTE.-The following information was submitted subsequent to the hearing:]

The requested $1.2 million is not to do routine maintenance. Such maintenance is supposed to be covered by GSA as part of its building delegation to the Department. We are seeking funding for special projects to address preservation of the historic features of the building. We do not anticipate availability of funding for these projects from GSA in the near future.

Mr. VENTURA. Mr. Chairman, I would just add one point to Mr. Rogers' comments. Up until this year, responsibility for the maintenance of the building has been GSA's, not the Department's.

Mr. YATES. I see. Is GSA authorized to use its funds for restoration?

Mr. VENTURA. I don't know that they are now.

Mr. ITTEILAG. They would under ordinary circumstances be authorized to do that, yes.

Mr. YATES. Why do you want to do it and not leave it to GSA? Mr. ITTEILAG. Well, what has happened, Mr. Chairman, is that the responsibility for management of the building has been turned over to our Department as of the beginning of this fiscal year.

Mr. YATES. Is that happening throughout the Administration? Mr. ITTEILAG. It is happening in steps throughout the Government. Some places it happened a few years ago; some places it hasn't happened at all.

Mr. YATES. What is the advantage of that? Is there one? GSA ordinarily has been able to do this pretty well, hasn't it?

Mr. ITTEILAG. Mr. Chairman, I would say the advantage to our doing it are really two. One is I think that when the people work for us, they are more responsible to our Department. And secondly, I think on the basis of reports such as this one and the expertise of people like Mr. Rogers and others in the Park Service, we know what to do best. GSA might not be as capable as we are in that regard.

Mr. YATES. If GSA is no longer engaged in the same job, why are its rates going up? I understood Mr. Ventura to say that the SLUC rates were going up.

Mr. VENTURA. Mr. Chairman, the rates that we pay for building rental are based on the so-called fair market value of rental for the building.

Mr. YATES. But also the amount of work that agency does.

Mr. VENTURA. It's only an indirect relationship, Mr. Chairman. We are advised that the rate for our building and other buildings was changed based on what is believed to be the fair market value. And then to the extent that a surplus is created as a result of the fair market value assessment, that surplus is directed into the Fed

eral Buildings Fund which pays for the leasing and the building of new buildings.

Mr. YATES. What is your feeling about the GSA position that they're charging the fair market value? Is there any way the Department has of knowing whether they are being overcharged? Mr. VENTURA. I suppose there is if we analyze-

Mr. YATES. Who abused those rates? I'm interested because there are so many Federal buildings. And if they are doing it to you, they are doing it to others as well, aren't they?

Mr. ITTEILAG. That is true, Mr. Chairman.

Mr. YATES. Does anybody supervise the GSA actions in this respect?

Mr. ITTEILAG. I think the supervision, to the extent it exists, is carried out by the Office of Management and Budget when it reviews GSA's proposed budget for the use of the Federal-

it?

Mr. YATES. That doesn't relate to the question of its charges, does

Mr. ITTEILAG. It might well, Mr. Chairman. I would think it would, yes.

Mr. YATES. Well, we'll have to find that out.

Thank you, Mr. Itteilag.

CONSULTANT SERVICES

Now, you want to raise the consultant services limit.
Mr. VENTURA. That's correct, Mr. Chairman.

Mr. YATES. To almost three times, two and a half times.

Mr. VENTURA. That's correct.

Mr. YATES. Why?

Mr. VENTURA. The current level of $300,000 was set in 1968 when a GS-15, step 10 was receiving approximately $25,000. That rate has not changed over the past 20 years.

I would also point out that the consultants that we are discussing are not limited to the Office of the Secretary but, with the exception of the Department of Reclamation, are Department-wide.

Mr. YATES. How does that limit handicap your use of consultants? How many consultants did you use in 1987?

Mr. VENTURA. I couldn't give you an exact number, but we used approximately $225,000 worth of consultants.

Mr. YATES. Well, then you don't need more than $300,000, do you?

Mr. VENTURA. We are definitely anticipating a need much greater than $300,000.

Mr. YATES. What is the anticipated need? For what do you use consultants?

Mr. ITTEILAG. Well, Mr. Chairman, the basic reason we took a look at this this year for the first time in a long time has had to do with our experience so far this year where before even half of the fiscal year has gone by, we have had requests for using almost the entire amount of money.

For example, the type of consultant we have used is when a new director was proposed for the Bureau of Mines, in order to get him. up to speed on some of the more specific aspects of this job, we brought that person on board as a consultant. And that has very

definite advantages, it seems to me, in terms of management for the Department.

The other kinds of things we would use a consultant for are when we want a certain kind of expertise that we don't have within the Department.

Mr. YATES. What did you pay your $225,000 for?

Mr. VENTURA. We paid them for technical advice on territorial and agricultural matters for the Territorial and International Affairs. We have used them for advice on mining and minerals management issues, for advice on marketing of loan portfolios and assets, and any number of financial and economic matters that are important to the Fish and Wildlife Service and the National Park Service.

What happens Mr. Chairman, to expand for a moment on what Mr. Itteilag was saying, what the current ceiling does is force the bureaus to contract out a good deal of these services which, in fact, end up costing us a lot more money than if we could simply pay consultancy fees.

Mr. YATES. I had the impression-maybe Mr. Gorrell will remember this along with me that the Administration years ago went into that question, did it not, Mr. Gorrell, as to whether it ought to contract out more services rather than have them inhouse?

Mr. GORRELL. Yes.

Mr. YATES. And it concluded that it ought to. Now, that is being reversed here.

Mr. GORRELL. Yes, it is. But it is based on experience, particularly the point that Mr. Ventura has just made. It is hard to prove, but we believe that there are a number of individuals that are getting contracts for certain rates and the management of those contracts are not as stringent as for consultants.

Mr. YATES. Can you put in for the record a comparison that would justify that?

Mr. VENTURA. Yes. We'd be pleased to provide that.

Mr. GORRELL. We will try to do that. As I say, I think it is going to be difficult to prove.

[The information follows:]

EXPERT AND CONSULTANT COST COMPARISON

When authorized by an appropriation, 5 USC 3109 allows the hiring of experts/ consultants for performance of "personal services" either by personnel appointment or by contract without regard to normal competitive appointment requirements of civil service laws and the Classification Act. "Personnel services" means that an employer-employee relationship exists between the government and the expert/consultant. Personal service contracts are prohibited by FAR 37.104 unless specifically authorized by statute (5 USC 3109).

The Comptroller General has ruled that the rate of pay for reimbursing experts/ consultants for personal services (hired by appointment or contract) is generally limited to the top of a GS-15 except for certain professional engineering positions where a GS-18 rate is authorized.

Nonpersonal services of experts and consultants (i.e., not acquired under 5 U.S.C. 3109 and not involving an employer/employee relationship) are not subject to the above pay constraints. However, both personal and nonpersonal services of experts/ consultants (hired by appointment or contract) are subject to the internal control requrements of revised OMB Circular A-120, "Guidelines for the Use of Advisory and Assistance Services."

When dealing with personal services appointments, reimbursement is usually made at a direct hourly rate for the number of hours worked (although this rate can include indirect cost elements). Generally, a contractor's proposal will include direct labor rates and indirect burden rates, and costs for suppliers, materials, travel, and other direct costs required for performance.

Personal services appointments are often performed at the site of the Government agency or installation using Government-furnished equipment/supplies (computer, copier, telephone) and certain services such as secretarial. Such expenses incurred under a nonpersonal services contract performed off-site by a contractor would be chargeable as additional allowable costs.

Personal service appointments may involve less internal administrative cost to the Government than nonpersonal services contracts since proposal evaluation, contract preparation, administration and close-out activities performed by Government contracting personnel are not required.

A cost comparison follows:

Note-This assumes that the appointee works at the Interior Building and the Government provides secretarial support and necessary supplies and equipment such as phones and personal computers. Since salary rates for nonpersonal service contractors are not limited to that of a GS-15, their rates are often higher.

Mr. GORRELL. One other point that I would like to make is that our Bureau of Reclamation which is funded in the energy and water development appropriation bill for that sole bureau has a consultant limitation of $500,000 now. And we are seeing them use a good bit of that for a lot of their technical work.

Mr. YATES. Then you don't need it in this one.

Mr. VENTURA. That is only for the Bureau of Reclamation, and I think what we are seeing here is an opportunity to perform some good government.

MINERAL LEASING

Mr. YATES. You want to delete section 307 for leasing in the national wilderness preservation system, not for leasing, but which deals with leasing in that system. Why do you want to delete that? Mr. ITTEILAG. Mr. Chairman, we don't think that that is needed any longer because of the new legislation that was passed affecting the process by which we competitively lease on-shore oil and gas on Federal lands. And I'm told that this is taken care of by section 5112 of Public Law 100-203.

Mr. YATES. As we interpret the new law, it takes care of oil and gas. It does not take care of coal, oil shale, phosphate, potassium, sulfur or any of the others. So, why wouldn't it still be needed except for oil and gas?

Mr. ITTEILAG. It might well be needed for that purpose, Mr. Chairman. Why don't we look at it and I'll put something in the record at this point that further explains it.

Mr. YATES. All right.