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In response to your July 9, 1982, request, we have prepared the enclosed information on the President's Private Sector Survey on Cost Control.

The information covers organizational structure, participants' affiliations and responsibilities, the source of funding, White House and agency monitoring, and agency participation. We also collected information on the conflict-of-interest clearance process, legal authority and issues, the Survey's review and reporting process, and the advisory committee process. In this last area, our letter to you of September 21, 1982, expressed the opinion that the Survey's task forces are subject to the Federal Advisory Committee Act.

This information constitutes an interim report in response to your July 9 request. As described in our testimony at hearings held on September 15 and 21, the Survey has not provided all the data we have requested and has sought legal advice from the Department of Justice.

Because of their bulk, the documents referred to in the enclosed summary will be provided directly to your office.

Sincerely yours,


clifford I. Gould



The objective of this paper is to describe the President's Private Sector Survey on Cost Control. We have collected and summarized information on the following

--general organizational structure,

--background on some participants including private affilia

tion and Survey responsibilities,

--source of funding,

--Federal agencies' involvement,

--White House oversight,

--legal authority for the Survey,

--conflict-of-interest clearance process,

--conformance to Federal advisory committee provisions, and

--task force review processes with specific information on

the Personnel and Social Security Administration task

We reviewed Federal laws and regulations on conflict of interest, advisory committees, and tax-exempt organizations. Survey officials provided some documents that generally described the Survey's authority, organization, and work process.

In addition, we collected information on companies that contributed resources to the Survey. For key Survey members, we compared corporate affiliations with Survey duties and responsibilities.

To identify their roles in the Survey, we interviewed officials from the Survey's Management Office and Foundation of the President's Private Sector Survey on Cost Control, the White House Counsel's Office, the Department of Justice's Office of Legal counsel, the Department of Commerce's Offices of General Counsel and Information Management, the Office of Government Ethics, and the Survey's Personnel and Social Security Administration task forces. In addition, we conducted telephone interviews with Federal officials designated as agency contacts for the Survey.

Background on the President's Private
Sector Survey on Cost Control

On February 18, 1982, the President announced that he was establishing the Private Sector Survey on Cost Control. The President viewed the Survey as a way to control "runaway government spending" and charged the Survey with searching out waste and inefficiency .. in the Federal establishment. The President also said that the Survey would

--report directly to him,

--be results-oriented in deeply reviewing the executive


--provide an outside, objective view on management improve

ments and cost reductions,

--focus on eliminating red tape and duplication, identifying

nonessential administrative activities and increasing
management effectiveness, and

--rely on private sector experts who volunteer their services.

The President mentioned that he used a similar private sector effort while Governor of California, relying on private sector volunteers to identify administrative improvements. He noted that these volunteers made about 2,000 cost-saving recommendations.

On March 3, 1982, the President named Mr. J. Peter Grace as the Survey Chairman. Since then, many actions, involving many organizations, have been taken. Primary organizations that have assisted the Survey include:

--Office of the White House Counsel, Executive Office of the

President: manages the clearance process and provides
legal advice.

--Office of Legal Counsel, Department of Justice: provides

legal advice to the Survey and interprets Federal laws'
application to the Survey.

--Office of Government Ethics: provided an early informal

advisory role on ethical considerations.

--Department of Commerce (DOC): serves as the administering

Federal agency for the Survey's Executive Committee which
is the officially designated advisory committee.

--Federal agencies: cooperate with the Survey's task forces

to help them conduct reviews of Federal operations.

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Executive Order 12369, dated June 30, 1982, authorized the Survey's Executive Committee and identified its functions and operations. Based on this executive order, two legal documents, a contract and charter, were signed on July 7, 1982, which further identified organizations in the survey and described their duties.

Since the executive order--which authorizes the Survey's Executive Committee--provides for private sector funding to the "extent practicable and permitted by law," a nonprofit Foundation was created to support the Executive Committee.

The executive order also named DOC as the Federal agency to oversee and assist the Survey's Executive Committee. Because of their joint responsibilities, the Foundation and DOC signed a contract to engage in a joint project to support the Executive Committee. Under this agreement:

--The Secretary of Commerce agreed to

(1) cooperate with and assist the Foundation,

(2) be a liaison between the Foundation and Federal

agencies, and

(3) coordinate with the General Services Administra

tion to obtain surplus office furniture and equipment for the Foundation.

--The Foundation agreed to

(1) support the Committee by providing facilities and


(2) select a liaison with the Federal official respon

sible for overseeing the Executive Committee and with other Federal personnel, and

(3) require its agents to sign a statement in which

they promise to avoid unauthorized disclosure
of information and establish other controls that
DOC prescribes to prevent such disclosure.

--Both parties agreed that the Foundation is an independent

entity that supports the Executive Committee, and therefore, is not (1) governed by Federal employment laws and (2) accountable to DOC concerning finances.

--Upon termination of this agreement, the Foundation agreed

to transmit to the Secretary of Commerce all data on the Foundation's work.

The Charter for the Survey establishes the Executive Committee as a federally chartered advisory Committee pursuant to Executive Order 12369. Since the Executive Committee exists through DOC, the Secretary of Commerce signed the Charter.

The Charter outlines objectives and duties of the Executive Committee. The Committee is to conduct in-depth reviews of Federal agencies' operations in order to advise the President, Secretary of Commerce, and other Federal agencies on improving management and reducing costs. In doing so, the Committee should also examine managerial accountability, administrative controls, Government expenditures/debt, and personnel management.

The Committee may have, at most, 150 members that the President appoints from the nonpublic sector. The President also designates a Chairman from this membership. While members serve without Federal compensation, they may receive travel expenses. The estimated Federal cost for operating the Committee is $50,000 which includes travel and per diem expenses and l staff-year.

According to the Charter, it was expected that the Committee, or its subcommittees, would meet at least monthly before the final report is sent to the President. DOC advisory Committee regulations describe the procedure for establishing subcommittees.

During the review of agencies, Federal agency heads are to cooperate by providing the necessary data and support to the Committee. DOC is to also provide administrative support to the Committee. After the review, the Committee reports to the President, Secretary of Commerce, and Federal agencies. The Committee is to complete its work and terminate by December 31, 1982--unless properly renewed.


The Survey has four primary groups: an Executive Committee, a Management Office, a Foundation, and the task forces.

Executive Committee

The Executive Committee will eventually consist of 150 business leaders. As of mid-September 1982:

--The White House has cleared 130 members for service on

the Executive Committee.

--Agencies and the White House have cleared 110 of the 130

for task force service.

Chairman Grace and the Executive Committee are charged with the following duties

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