I am sure we can set up. It may be a transportation problem in your State.

Senator NELSON. As I am sure you are aware, there are some very fine examples of this already through the 701 grants that have been made to States and local governments for planning. I have not checked the legislative history, but whoever conceived the idea of making congressional planning grants was quite ingenious, and it worked very well.

Several regional groups in my State, and in other States, have utilized Federal funds which require the establishment of a regional planning commission, and they give them funds to make a comprehensive regional plan for the development of that region in terms of its resources, its institutions, its transportation, its population, its economics, its industry, and this does, in those areas where planning grants have been made, and where they have been successful, it has involved a broad participation by the city councils and members of the county board, newspapers, and all members of the community, and wherever that has happened it has worked very well.

So Congress has made grants successfully and is making them daily all over the United States to various regions and States for development of comprehensive plans.

Now, what we are trying to do here is to figure out a technique for doing several things, but one of them is to develop an understanding in the country of the whole concept of systems engineering and how it can be utilized to do whatever you are trying to do.

And, also, to get some demonstration projects going to demonstrate the efficacy of the concept. It is one thing just to give some grants and say, "You go ahead." That is what we have done, and it has had some very good results. We are trying to take the next step now, and give it some direction, some leadership on the national level, and that is what we are sort of fumbling around about here trying to figure out what the best technique is.

I am not satisfied with the bill I introduced, nor with the bill that the minority introduced. You mention that you endorse the concept of the national commission.

That proposal is in the minority's bill, and I endorsed the concept, too, but I do not know how it would work. I do not know who you would put on it or what they would do.

On the other hand, in my proposal we would simply grant funds to the Secretary of Labor and he would accumulate the expertise, or advisers, and make grants for experiments, and I am not satisfied with that, either. But if we were to draft a bill and had some seed money to accomplish what we are seeking to accomplish, or what you are talking about in terms of the American Council for Progress, how would you do it? If you had to draw up a bill for Congress, what would you do?

Mr. MICHAELIS. Well, I believe I would combine, even so, the features of the two bills, and I would try to determine a number of specific case examples for demonstration experiments. I would try and determine what representative examples could be set up in a number of States where the political environment for such collaborative efforts is promising, as it was in the school construction case in California.

I would look for similar situations in other functional areas, transportation and health care for instance, and I would set up relevant collaborative experiments in different States, involving the local decisionmakers with the help of professionals in the systems field. I would monitor this series of experiments from a national level through a national commission, or council, or whatever you wish to call it, composed not only of government people, but also people from industry, labor, and the professions.

I say, "monitor," because these national leaders may not commit themselves right at the start to becoming, say, the Council for American Progress, but they might one day grow into it as they themselves see the value of these methods at the local level.

In short, I say, first, that the systems concept, the methodology and its usefulness, can best be demonstrated by experiments in actual life, rather than by, let us say, hypothetical studies or scholarly articles only, which is what we have now.

Secondly, I say that a national commission, a group of men and women at the national level, can and should observe these experiments very closely to see what can be derived from them for larger national

issues.

Experiment locally, observe nationally, and then maybe you will get to the point where you can act nationally, using the systems method to the fullest extent.

Let me say one last thing, Mr. Chairman. Let us try and not be driven too far into thinking that the systems method is simply a science and engineering process. It is that in part, to be sure, but that is not the critical aspect you are facing here. The critical aspect is not the generation of new methodological knowledge. The critical issue is whether the existing knowledge, or new knowledge you can create, will be used. And that use involves the decisionmakers directly.

Systems methodology should thus not be equated with "Let the scientist and engineer do it; he will find the solutions."

Senator NELSON. I agree with that. In drafting the bill, we had in mind the idea that you would do experimental projects both in terms of educating the decisionmakers as to what the concept is all about, and doing some actual, real-life projects involving everyone, including the decisionmaker, of course, and that an appropriation would be made to the Secretary of Labor, who then would accept petitions for projects, or originate them himself, whether they are in the field of transportation in some city or school administration or whatever it may be.

I am still not very happy with that approach, and I am not sure it would work too well.

On the other hand, the other bill, S. 467, proposes creating some kind of a national commission to study, and I do not know who would be on it, and who would do any work.

In other words, I am more concerned about the mechanics of the bill right now than anything else, because I do not think there is any doubt but that you set it up right mechanically you can creatively use the funds to tackle the problems you are talking about, because we have done it very well in a number of places in the country, and that is the part that I-you can set up a commission and have some mayors and Governors and Congressmen and everything else on it, so they

do nothing, and then they hire somebody, and it might be that they do not know what they are doing either.

I have thought of putting it in the National Science Foundation and authorizing them to hire their own consultants. They would have to do their own systems engineering on the problem we gave them, so to speak, and decide what are the limits of the experimentation we can do, what areas we can start it, and then proceed from there.

Mr. MICHAELIS. I have not thought this through. This is the first time I have heard this suggestion. I think the Science Foundation. would undoubtedly be very capable of marshaling the scientific resources, the scientific understanding for the systems methodology, both in the physical sciences as well as in the social sciences, to be sure.

I would only wonder, off the cuff, whether it has the political power and ability of projecting this knowledge into experiments with the realities of everyday life. A home in the Science Foundation for an experiment of this kind might just possibly lead to excessive scientific attention and therefore, by the same token, to possibly an excessive disinterest on the part of the political and managerial establishment. If I were to put myself in the position of the chief executive of a large company, on hearing that the National Science Foundation has charge, and I were asked to participate, I might just conceivably say, "I will send my research director. This will be scientists talking to scientists." We do not have to convince scientists that the method is useful, but we do have to convince managers, and that means that we must involve the managers. This explanation of new methodology must be a part of their daily responsibilities.

Senator NELSON. I am just looking for an established Federal institution that already exists to administer the funds. There would be no limit on whom they might consult. They would call in the American Management Institute, and they would call in the aerospace people who have worked in the field, they could call in the nonprofit organizations, they could call in expertise from all walks of like, and consult with them about how to approach setting up their own system analysis on the problem of meeting the situation, so to speak.

They might find some method or technique of administering the program. That is the problem. I am not really worried that we can make it work if we can find some technique to administer the program. You, or anybody else who has given it some thought, could name in 5 minutes more problems that ought to be evaluated and demonstration projects that ought to be done than we could do in the next 5 years.

For example, one of the biggest costs and one of the biggest problems in America is education. My own casual judgment about it is that among the biggest institutions in the United States are the institutions of higher learning, and among the worst-managed institutions in the United States are the institutions of higher learning.

If these large universities were a business institution they would have to fire every manager on the campus the next day. They just are not competently run from a management standpoint. The management of these institutions should be evaluated. We ought to have an appropriation and some kind of systems evaluation team working with the business managers, with the professors, and with the presidents

of several institutions just for the purpose of improvement, from the management standpoint.

I think you could do some revolutionary things in improving the management of the institutions of higher learning as well as the primary and secondary schools, most of which are run quite incompetently from a management standpoint, too.

But you need somebody, some team at the national level, who decides, who selects the problems that ought to be evaluated, and hires people to do it, to work it out. That is what I am trying to get at.

Mr. MICHAELIS. Yes.

Senator NELSON. Everybody who has testified, and the testimony is very good, agrees we ought to do something, but I have not gotten much good advice on how to implement it. That is the problem.

Mr. MICHAELIS. Is it reasonable to say that, since you mentioned education, obviously the Office of Education must be a moving force. If you think of transportation, the Department of Transportation or the Department of Housing and Urban Development must be such a force.

They themselves must be involved in the first place, because they have responsibility for allocating national resources and they themselves are managers of that process, and must involve themselves with the managers at the State and local levels, both in industry and govern

ment.

I am thinking out loud. Possibly a body that could act as a central coordinator, if you will, of separate experiments carried out with the help of these various agencies might be the General Accounting Office. I have not thought this through at all-the Comptroller General has a responsibility to assist Congress in providing control over the application of public funds. He has exercised this function traditionally on a retrospective basis, that is on how well we have spent public fundsafter they were spent.

I suggest that he might also carry out a prospective function. It may be that the Comptroller General, assisting Congress, could coordinate the approach by executive agencies getting involved in various experiments in systems methodology. And such experiments might certainly involve the National Science Foundation, as a resource of physical and social science expertise. But I question whether the Science Foundation alone could accept the coordinating and initiative involved in what is in reality a political issue in the broadest sense. Senator NELSON. That is a problem.

Thank you very much. It was valuable testimony. I appreciate your taking the time.

We will give the reporter a 3-minute break.

Our next witness will be Vincent Moore, assistant director of the Office of Planning Coordination, State of New York. The Honorable Timothy Costello could not be here.

We will have a 5-minute recess.

(Whereupon, a recess was taken.)

Senator NELSON. We will resume our hearings with Mr. Vincent Moore, assistant director, Office of Planning Coordination, State of New York.

Mr. Moore, we appreciate very much your taking time to come down here today to testify and give us your statement on these two bills.

Your prepared statement will be printed in full in the record. You may present it in any way you see fit, either extemporize from it or read it, whatever you wish.

Mr. MOORE. Thank you, Senator. I believe I will do a little of both.

Senator NELSON. Fine.

STATEMENT OF VINCENT J. MOORE, ASSISTANT DIRECTOR, OFFICE OF PLANNING COORDINATION, STATE OF NEW YORK, ALBANY, N.Y.

Mr. MOORE. Mr. Chairman, members of the subcommittee, I welcome this opportunity to participate in your hearings to investigate ways in which "systems approaches" can be most effectively brought to bear on our most pressing domestic problems. I also wish to express the regrets of the director of the office of planning coordination, Charles T. Lanigan, that previous commitments prevented his appearing before you personally, as he wished he could.

Your committee's concerns are, however, of considerable interest to the State of New York, and we appreciate your willingness to hear my substitute testimony.

It has been my privilege to serve New York State's dynamic administration for the past 5 years. My specific responsibilities have been the development of a systematic approach to the integrated planning, programing, and budgeting of the State government's operations. I should add that my service with the State has been with both the central planning and central budgeting staff agencies of the Governor, and that previous to this, I had spent several years as a planning consultant working with local governments of all forms.

The State of New York is now entering its third year of operational experience with formalized system for planning, programing and budgeting (PPBS). This system was initiated with Governor Rockefeller's approval in April 1965-5 months before the President instituted the Federal PPBS as a Government-wide system.

The work of the Rand Corp. and Defense Department systems analysts had little influence on the development of the New York State system. It evolved quite apart from these efforts and I believe that our system with its uniquely different origins, demonstrates several important facts:

That there is sufficient universal recognition of the need for more systematic planning, programing and budgeting of Government operations to justify your committee's concerns;

That State governments, given progressive, sensitive leadership, can measure up to the tasks; and

That there are several different approaches to developing a more rational decisionmaking process in government.

I would like to briefly describe for you, the New York State approach to PPBS, and in the process provide you with our opinions. and answers to your specific concerns of:

What is now being done in this field;

What the role and relationships should be in (a) the Federal Government, (b) State, local and regional governmental units,