Inasmuch as the House has already acted, I have asked the appropriate witnesses to include in their presentations a statement of the effect of the House action. I should also note in this regard that this subcommittee has advised the chairman of the full Committee on Appropriations of our goal of reducing the appropriations requests by $13,500,000 and reducing the outlays by $14,500,000. During the course of these hearings we will be inquiring into the outlay estimates of the agencies. A copy of my memorandum of February 26, 1974, pertaining to this goal will be inserted in the record at the close of these remarks. For the record, I should note that there were no contrary comments received in response to my memorandum. [The memorandum follows:] United States Senate COMMITTEE ON APPROPRIATIONS WASHINGTON, D.C. 20510 February 26, 1974 JAMES R. CALLOWAY CHIEF COUNSEL, AND STAFF DIRECTOR MEMORANDUM FOR MEMBERS OF THE SUBCOMMITTEE ON Subject: 1975 Budget Ceilings Chairman McClellan has requested that each Appropriations Subcommittee of the Appropriations Committee establish, as it did last year, a tentative ceiling that it will undertake to achieve in processing each appropriation bill. The Budget for fiscal 1975 was transmitted on February 4th but as of this date the Subcommittee has received little other data than that which was in the Budget document. I have examined the available materials and am prepared to suggest the following overall goals in response to the Chairman's request: In developing these goals I am mindful that the Budget provides only for the straight continuance of the current levels of expenditures for the Senate and House items. I am hopeful that any increases that may arise for these items during the course of our hearings, will be of minimal effect on these goals. My recommendations would cover all of the mandatory increases of the other accounts in the bill, i.e., Architect of the Capitol, Library of Congress, Government Printing Office, and the General Accounting Office; and allow a substantial portion of the program expansions requested. Of course, the final amounts would be determined by what develops in our hearings, but I believe these are goals we can operate under. In order to comply with the Chairman's request that these goals be submitted to him by February 28th, I would need any thoughts you might have to the contrary by the close of business, February 27th. Otherwise I will submit the above on behalf of our subcommittee. Emest. Hollings Subcommittee on Lexislative Branch Appropriations CAPITOL WEST FRONT EXTENSION Senator HOLLINGS. I am also pleased to note that the House is not recommending extension of the west front of the Capitol. However, I am extremely concerned that nothing at all is planned in the budget estimates toward preserving the west wall. The Architect of the Capitol is now in China and I hope that while he is there he has a good opportunity to study the preservation techniques of the Chinese. I am sure he will be viewing the Great Wall of China and I am hopeful that he will return with a greater enthusiasm for preservation of the great landmarks of our national heritage. The Comptroller General is here this morning to be our opening witness. He wears two hats-under one he heads the General Accounting Office, and under the other he is Chairman of the Cost Accounting Standards Board. Mr. Staats, I believe we should follow the usual custom and let you proceed first with the presentation on behalf of the Board and then we will take up the GAO. For the record, I will indicate that the budget estimate for the Board is for $1,650,000 and that the Committee on Appropriations of the House has recommended the full amount. We also welcome the Executive Secretary of the Board, Mr. Arthur Schoenhaut, and the General Counsel, Mr. Harry R. Van Cleve, who are once again assisting you with your presentation. PREPARED STATEMENT AND JUSTIFICATIONS Mr. Staats, we will put your statement in full in the record along with the appended materials. You may proceed as you desire with your presentation. [The statement, estimate, and justifications follow:] MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE: I am appearing before you today in my capacity as Chairman of the Cost Accounting Standards Board to discuss the budget estimates for Board operations during Fiscal Year 1975. The four persons who serve with me on the Board are Mr. Herman W. Bevis, Mr. Charles A. Dana, Mr. Robert K. Mautz, and the Honorable Robert C. Moot. Mr. Arthur Schoenhaut is the Executive Secretary of the Board. He serves as director of a professional staff, presently numbering 21, and a total staff of 35. Our budget estimate for Fiscal Year 1975 is $1,650,000. This amount is $150,000 more than the amount appropriated for Fiscal Year 1974. The principal reasons for this increase are the continuing effect of Federal pay increases and, beginning with Fiscal Year 1975, we are required by Public Law 92-313 to reimburse the General Services Administration for the costs of space and related services it provides to the Board. Our budget estimate does not contemplate any increase in the number of permanent positions. Before describing the details of our budget estimate, I would like first to review briefly for you the Board's activities to uate. The Board promulgated its first regulations and its first two Cost Accounting Standards on February 29, 1972. These materials have been required to be included in negotiated defense contracts since July 1, 1972. Five additional Standards have been promulgated by the Board with varying effective dates in Fiscal Years 1973, 1974 and 1975. One of the most important of the Board's regulations is the requirement of disclosure of cost accounting practices by major defense contractors. Initially, each contractor who received negotiated prime defense awards in excess of $30 million in Fiscal Year 1971 was required, as a condition of contracting, to submit a Disclosure Statement. The Board has amended that regulation to provide that, beginning April 1, 1974, Disclosure Statements will be required from companies who received in excess of $10 million of negotiated prime defense contracts of the kind subject to the Board's jurisdiction in either Fiscal Year 1972 or Fiscal Year 1973. The Board has received copies of 925 Disclosure Statements from 80 contractors required to make disclosure when the threshold was $30 million. We contemplate receiving copies of between 400 to 500 additional statements with the $10 million threshold. The Committee may be interested to know that the Board has established a computerized data bank into which are placed the responses contained in every Disclosure Statement received. We nave the capacity now to provide aggregate data with respect to any question or combination of questions covered by the Disclosure Statement. This data bank is therefore of considerable assistance to the Board in its research into possible Standards. The 7 Cost Accounting Standards promulgated by the Board to date are: |