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f4ettsed.. \di https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ttsi a) -11/4 Collection: Paul A. Volcker Papers Call Number: MC279 Box 9 Preferred Citation: White House Correspondence, No. 24-32, 1982 June-August; Paul A. Volcker Papers, Box 9; Public Policy Papers, Department of Rare Books and Special Collections, Princeton University Library Find it online: http://findingaids.princeton.edu/collections/MC279/c296 and https://fraser.sdouisfed.org/archival/5297 The digitization ofthis collection was made possible by the Federal Reserve Bank of St. Louis. From the collections of the Seeley G. Mudd Manuscript Library, Princeton, NJ These documents can only be used for educational and research purposes ("fair use") as per United States copyright law. By accessing this file, all users agree that their use falls within fair use as defined by the copyright law of the United States. 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Policy on Digitized Collections Digitized collections are made accessible for research purposes. Princeton University has indicated what it knows about the copyrights and rights of privacy, publicity or trademark in its finding aids. However, due to the nature of archival collections, it is not always possible to identify this information. Princeton University is eager to hear from any rights owners, so that it may provide accurate information. When a rights issue needs to be addressed, upon request Princeton University will remove the material from public view while it reviews the claim. Inquiries about this material can be directed to: Seeley G. Mudd Manuscript Library 65 Olden Street Princeton, NJ 08540 609-258-6345 609-258-3385 (fax) email@example.com https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • THE WHITE HOUSE Lizip OF C.7 ECEF,J-1. Ei:SETN,." 4 WASH I NGTON August 27, 1982 1512AU631 RECHVED 'OFFICE or Titi: ctinAmm4 MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES Together we have launched a new era in American life, one that is less dependent on big government and more reliant on private initiatives. We have encouraged corporations, civic groups, and philanthropic, religious and voluntary organizations to increase their involvement in meeting community needs. As leaders of the Federal Government, you have helped to carry that message to the public and I genuinely appreciate your efforts. Now we have the opportunity to put our principles into practice once again. The Combined Federal Campaign delivers help where it is needed without government direction. Secretary of Transportation Drew Lewis has agreed to serve as the 1983 Combined Federal Campaign Chairman for the National Capital area. I request that you personally serve as Chairman of the Campaign in your organization and appoint a top official as your Vice-Chairman. Please advise Secretary Lewis of the person you designate. Your active support and your participation in this vital program is essential to its success. I urge you to take a personal interest in this year's campaign and to make a special effort to achieve new levels of support for the programs of the Combined Federal Campaign. Let us prove by example that our faith in the volunteer spirit of the American people is well-founded. Let our increased giving through the Combined Federal Campaign demonstrate the extent of our commitment to our neighbors in need. I am counting on you to make it happen. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Rcsvc,343, 07 3/ 0 "CECUTIVE OFFICE OF THE PRAPDENI:, titJArtil CP al.trciEt*RI, OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503 OF 'Nu E3ERA REKM: 1987nUG 23 t14 9' 24 M-82-7 oF&Yti 11P, 82 MEMORANDUM FOR THE HEADS OF ,EXECUTIVE DEPARTMENTS AND AGENCIES FROM: DAVID A. STOCKMKNaeDIRECTOR SUBJECT: Administration Policy on Appropriations Bills Passed by the House Background In supporting the First Concurrent Resolution on the Budget, the Administration has implicitly agreed to support appropriations bills that, in the aggregate, comport with the assumptions for discretionary spending programs in that Resolution. In most instances, these levels will accommodate the aggregate level of Presidential requests pending before each Subcommittee of the Appropriations Committee. There is no guarantee, however, that individual accounts will be funded at the level requested by the President. While , agencies are expected to defend the amount of the President's request before the House of Representatives .and in Appropriations, the appeals to the on Senate Committee Administration must also strenuously oppose increases that would cause the overall appropriations provided in each bill to exceed the levels assumed in the Resolution. The purpose of this memorandum is to provide procedures to ensure that these two potentially conflicting objectives can be met. Agency Action For discretionary annually appropriated accounts, agencies may seek corrective action on the part of the Senate Committee on Appropriations, but only in a way that fully supports the Administration's determination that aggregate levels implied by Corrective action may the budget resolution not be breached. incluI- changes in language or in adstrative limitations that are consistent with the President's budget as well as different distributions of the total amount that a bill provides for discretionary programs. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 Agencies that wish to request corrective action will submit to OMB for clearance formal letters to the Chairman of the Senate Appropriations Committee or of its respective subcommittees. The positions in these letters must meet the following criteria: 1111•1•FM10 IMM, ••=• • -- Increases for particular discretionary appropriations may be requested only where the House appropriatiops bill provides funds at a level for that account below the President's 1983 budget request. Any request for increased discretionary budget authority in an appropriation over the amount included in the House bill must be accompanied by a request for offsetting in the accounts other discretionary to decreases These decreases must House-passed appropriations bill. equal or exceed the amount of the requested increase. In addition, this offset must be included in the same appropriations bill and decreases in mandatory spending may not be proposed. The trade-offs that agencies seek must leave 1983 outlays to lead not must and unchanged approximately significantly higher outlays in later years. OMB Clearance If an agency decides to ask the Senate Appropriations Committee to make adjustments to amounts in the House bill, a draft letter will be submitted to OMB at least two days before plannned The letter will be accompanied by transmittal to the Congress. information in the form of the attachment that identifies budget resolution amounts and requested adjustments to appropriations. Amounts carried by OMB for the budget resolution will be provided It should also include any explanatory for this purpose. material that the agencies find appropriate. In those instances where an agency head believes it is not practical to request offsets to budget authority increases that are consistent with the President's program, an exception to the above criteria should be requested. Those requests should be in the form of a letter to the Director of OMB. Attachment https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ATTACHMENT REQUEST FOR CHANGES TO HOUSE-PASSED 1983 APPROPRIATIONS BILLS (in millions of dollars) Agency • Appropriations Bill Resolution discretionary 302(a) allocation BA 0 House Committee discretionary 302(b) allocation BA 0 House-passed discretionary appropriation BA 0 Discretionary appropriations (total for bill) Requested adjustments: Increases: [Appropriation account] 1/ [Appropriation account] Decreases: [Appropriation account] 1/ [Appropriation account] XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX Revised total 1/ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Where applicable, include as separate non-add lines under each appropriation account, the individual programs and activities for which increases and offsetting decreases are requested. • EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503 OFFICE OF FEDERAL PROCUREMENT POLICY 1:22,2 AUG MEMORANDUM T ADS OF EX UTI DEPARTMENTS AND AGENCIES E Sowle, Admini rator FROM: Don SUBJECT: Update on Implementation of Executive Order 12352, "Federal Procurement Reforms" Enclosed for your information are: (1) of the second meeting of the Executive Committee on iiu. A copy of the Federal Procurement Reforms. (Attached to the minutes are the final charters and current membership rosters for five interagency task groups established by the Committee.) (2) The first Report to the President on the Implementation of Executive Order 12352. El https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis These documents will bring you up to date on the status of our continuing efforts to improve the Federal procurement process. We are relying on your agency's Procurement Executive to help plan and foster Government-wide reforms as well as to implement them within the agency. Your active support of these formidable efforts is invaluable and is greatly appreciated. Enclosures EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. AUG 20503 6 1882 MEMORANDUM FOR THE PRESIDENT FROM: David A. Stockman SUBJECT: Progress Report on Implementation of Executive Order 12352 on Federal Procurement Reforms Executive Order 12352 on "Federal Procurement Reforms" was signed on March 17, 1982. It requires the heads of executive agencies and the Office of Management and Budget (OMB) to make fundamental reforms in Federal procurement to ensure effective It specifically and efficient spending of public funds. requires that the heads of agencies initiate a series of procurement reforms and that the Office of Management and Budget's Office of Federal Procurement Policy work with the agencies to provide broad policy guidance and overall leadership and report progress to the President. The Director of the Office of Personnel Management is directed to ensure that personnel policies and standards are conducive to agencies' needs for a professional procurement work force. OMB has initiated a series of actions that will facilitate effective implementation of the Executive order. Set forth in the attachment is our first progress report which outlines the structure and schedule we have established to guide the Executive order's implementation. Attachment https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • PROGRESS REPORT ON THE IMPLEMENTATION OF EXECUTIVE ORDER 12352 March 17 Executive Order 12352 on "Federal Procurement Reforms" was issued. March 26 The Federal Procurement Council (FPC) met to to begin and review the Executive order The FPC is planning for its implementation. composed of the senior procurement representatives from the 24 largest procuring agencies in the executive branch. April 30 The Administration submitted to Congress three proposed bills to reform the Federal procurement process. These bills were in the form of amendments to the Armed Services Procurement Act, the Federal Property and Administrative the Office of Federal Services Act, and Procurement Policy Act. (Although not part of the implementation of the Executive order, these three bills together with the Executive Administration's this comprise order comprehensive program for procurement reform.) May 18 The Executive Committee on Federal Procurement This Committee is Reform was established. comprised of the Procurement Executives from the eight largest procuring agencies, plus the Small Business Administration (SBA) and the The Office of Personnel Management (OPM). purpose of the Committee is to assist in the overall implementation of the Executive order and review guidance (being developed by interagency task groups) to be furnished to the agencies for their use .in implementing the Executive order. June 1 The Executive Committee on Federal Procurement Reform held its first meeting to: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis organization the proposed Review of implementation for planning Executive order; o Establish and six interagency task and the groups; Review the Committee's proposed charter. 2 June 8-11 June 24 The interagency task groups established by the Executive Committee were briefed individually on the Executive order and the areas of for assigned was each responsibility development of broad guidance. A list of these task groups and the chairpersons is attached as Enclosure 1. A meeting with the private sector was held to brief them on our plans for implementing the Executive order and to solicit their ideas and suggestions on the guidance that will be developed by interagency task groups. June 25 The Charter for the Executive Committee on Federal Procurement Reform was approved by the and Budget and Management of Office A transmitted to departments and agencies. copy of the Executive Committee Charter is attached as Enclosure 2. July 8 OMB issued a Model Charter for Procurement Executives. The Executive order requires each agency to designate a Procurement Executive with agencywide responsibility to oversee the development of procurement reforms and the new model This system. procurement agency charter, developed by an interagency group, identifies the appropriate placement of this individual within an agency's organizational structure, sets out primary duties, lists those identifies and functions primary A copy functions appropriate for delegation. as attached is Charter Model the of Enclosure 3. July 14 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis second its held Committee Executive The meeting to review the charters and work plans of the interagency task groups. Five charters and two work plans were reviewed. In addition, the Committee received status reports on two important elements of Executive Order 12352: (1) the Federal Acquisition Regulation and (2) OPM's efforts to develop new classification standards for the procurement career field to meet the needs of the agencies. They also were briefed on the implementation of P.L. 97-177 (timely payment of contractors). • 3 July 26 OMB prepared a schedule of actions and events planned through October 1983 for implementaA copy is tion of the Executive order. attached as Enclosure 4. August 2 DOD, GSA and NASA signed a Memorandum of Agreement (MOA) embodying their plans for completion, implementation and maintenance of A copy the Federal Acquisition Regulation. of this MOA is attached as Enclosure 5. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ENCLOSURE I INTERAGENCY TASK GROUPS Task Group 1 Title Chairman OFPP Contact 1 Establish Agency Procurement Executives Rear Admiral (Ret.) LeRoy Hopkins, National Aeronautics and Space Administration LeRoy Haugh 2 Establish Clear Lines of Contracting Authority Mr. Colonel Armstrong Department of Interior William Coleman 3 Establish Government-Wide System Criteria, Including Competition, and Certify System to Agency Head Brigadier General Charles F. Drenz U.S. Army, Defense Logistics Agency LeRoy Haugh William Maraist Major General Joseph H. Connolly U.S. Air Force Air Force Headquarters Charles Clark 4 Reduce Administrative Costs and Burdens Simplify Small Purchases Mr. Ray Chiesa, Defense Logistics Agency Barbara Glotfelty 5 Rear Admiral Joseph Sansone U.S. Navy, Naval Material Command William Hunter 6 Career Management Programs https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis S Enclosure 2 4110 EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. M503 CHARTER EXECUTIVE COMMITTEE ON FEDERAL PROCUREMENT REFORMS I. Establishment: The Executive Committee on Federal Procurement Reforms is It is under the established effective May 18, 1982. leadership of the Office of Management and Budget and chaired by the Administrator for Federal Procurement Policy. Purpose: in is to assist Committee this of purpose The implementation of the procurement reforms set forth in Executive Order 12352 by providing broad policy review and counsel to OMB through the Committee's Chairperson on Interagency task all proposed implementation guidance. groups will be appointed as set forth in Section V to develop guidance that will enable agency heads to fully accomplish their responsibilities under the Executive Order. One of the functions of the Committee will be to review and evaluate these task group recommendations. Other functions of the Committee are set forth in Section IV. III. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Membership: The Committee is composed of the agency level Procurement Executive from each of the following organizations: Department of Agriculture Department of Defense Department of Energy Department of Interior Department of Transportation . General Services Administration National Aeronautics and Space Administration Veterans Administration Membership will also include a representative from the Small Business Administration and the Office of Personnel Management. A member may appoint an alternate to act in his capacity and represent his organization at a meeting if he is However, principals are expected to unable to attend. attend meetings whenever possible. Notice will meeting. be given at least two weeks prior to a- 1 IV. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Activities: The Executive Committee will: Provide advice with respect to the organization of interagency task groups and the nominations of individuals selected to chair task groups. V. o Review and provide advice with respect to each task group's charter. o Review task group plans to ensure they encompass all the areas needed to fully implement the Executive Order. o Review and evaluate task group progress. o groups task by Resolve questions raised otherwise provide guidance to task groups. o Review the proposed guidance developed by the task group and recommend changes, modifications Or acceptance for transmittal to the agencies. o Advise and counsel OMB/OFPP on content of periodic reports to the President on the accomplishments and progress in implementing the Executive Order. o Review Government-wide proposed policies, recommend areas for the development of new policies and identify statutory provisions that need to be amended or repealed. and Task Groups: Interagency task groups will be established to develop guidance which will facilitate agency accomplishment of the specific objectives of Executive Order 12352. Each task group will be chaired by a General or Flag Officer, Responsibilities of the or civil service equivalent. Chairperson include: o of in terms membership a balanced Ensuring perspective and agency mission responsibilities. o Developing a charter and presenting Committee for review and approval. o Developing a plan of areas and issues to be examined by the task group. it to the • 3 o Briefing the Committee on progress. o Developing presenting and recommended actions. to the Committee _ o VI. Ensuring all actions in the charter and plan are completed or disposed of. Meetings: Meetings of the Executive Committee will be held as necessary at the call of the Administrator for Federal Procurement Policy. Meetings will be held, on the average, once a month. VII. Staff Support: Staff support to the Chairperson will be be provided by OFPP. The Administrator will designate an Executive Secretary to plan, coordinate, prepare the agenda, and maintain minutes of each meeting. w https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Approved: Approved: I R. firight, Jr. D uty Director ffice of Management and Budget Donal E. Sowle Administrator for Federal Procurement Policy DATED: June 25, 1982 r https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ENCLOSURE 3 MODEL CHARTER FOR PROCUREMENT EXECUTIVES Executive Developed By the Procurement curement Council Task Group of the Federal Pro Interagency Task Group Leader: OFPP Contact: LeRoy E. Hopkins LeRoy J. Haugh https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PROCUREMENT EXECUTIVE 2, titled "Federal Executive Order 12352 of March 17, 198 as follows: Procurement Reforms," provides in Section 1 support of "To make procurement more effective in cutive mission accomplishments, the heads of exe ts and agencies engaged in the procurement of produc ate a services from the private sector shall: Design sibilProcurement Executive with agency-wide respon systems, ity to oversee development of procurement with evaluate system performance in accordance of the approved criteria, enhance career management agency procurement work force, and certify to the approved meet systems procurement that head criteria." PROCUREMENT EXECUTIVE procuring agency Under the Executive Order, the head of each Executive who in is responsible for designating a Procurement nt and oversight of turn is responsible for the developme agency-wide procurement systems. cess of acquiring Procurement includes all stages of the pro needs are described property and services beginning with how tractual instrument. and ending with the close out of the con " refers to the develop(The phrase "how needs are described l be used in the ment of the statement of work that wil the It does not include the development of solicitation. "mission element needs statement.") to the (1) appropriate This model charter contains guidance as within an agency's placement of the Procurement Executive ies and responsibilorganizational structure, (2) primary dut for delegation to ities and (3) functions appropriate heads and contracting subordinate procurement organization an,d, may be adopted as is officers. It is intended as a guide so long as it is or modified to the extent necessary of the Executive order. consistent with the purpose and scope rove the efficiency and The fundamental goal is to imp on which plays a vital effectiveness of the procurement functi role in accomplishing agency missions. ORGANIZATIONAL PLACEMENT Background cement was highlighted in The importance of organizational pla mission on Government the findings of the Report of the Com pter 5, page 43. Procurement (COGP), Volume 1, Cha https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 "Technical personnel tend to dominate personnel Procurement engaged in the procurement process. personnel do not receive the management support they must have in order to bring their professional expertise into play in awarding and administering contracts and, as a consequence, they must often bow to the desires of requisitioners who do not have expertise in procurement." need to As a result of its study, the COGP stated the whose reevaluate the place of procurement in each agency ent. program goals require substantial reliance on procurem cy should Under the general oversight of the OFPP, each agen ent and the ensure that the business aspects of procurem procurement multiple national objectives to be incorporated in levels in the actions receive appropriate consideration at all organization. (COGP Recommendation No. 12) Placement Procurement The head of each Federal agency will appoint a tion or a Executive which should normally be a full-time posi cial will primary function of that position.* Since this offi the agency's be responsible for management direction of experienced procurement system, the Executive should be an ctly to, no procurement professional and be at, or report dire administrator lower than the assistant secretary or assistant designate level. Procurement Executives of large agencies may sub-agency subordinate Procurement Executives, as needed, in elements. bilities, the To effectively carry out his/her responsi level in the Executive must be placed at a sufficiently high organization to ensure: function Some agencies which have a significant grants ty. It have combined procurement and grants responsibili separate is not intended in such cases that the agency al whose these functions in order to have an individu So long as primary function is Procurement Executive. utive meets the individual designated as Procurement Exec forth in the criteria and can carry out the function set urement proc of assignment the charter, this grant responsibility does not preclude the assignment of Procurement functions in those agencies where the Executive also has grants responsibility. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 Direct access to the head of the major organizational element served; Sufficient status to deal with contractor executives; and Comparative equality with organizational elements. major mission and program RESPONSIBILITIES 1. Delegation. The Procurement Executive is delegated authority from the agency head to oversee development and provide management direction of the agency's procurement system in accordance with applicable laws and regulations. Specifically, the Procurement Executive is authorized to: a. Prescribe and publish agency procurement policies, regulations and procedures. (When the Federal Acquisition Regulation (FAR) becomes effective, agency policies, regulations and procedures will be limited to those unique to the agency or otherwise necessary to implement the FAR. Repeating or paraphrasing the FAR will not he permitted.); b. Enter into, make determinations and decisions and take other actions, consistent with appropriate policies, regulations and procedures with respect to purchases, contracts, leases, sales agreements and other transactions, except those required by law or regulation to be made by other authority; c. Designate contracting officers and representatives thereof; d. Establish clear lines of contracting authority; e. If appropriate, exercise priorities authority on behalf of the agency, in accordance with the provisions of the Defense Production Act of 1950 (50 U.S.C. App. 2071, et seq.), Department of Defense Delegation of Priorities Authority, dated October 21, 1958, and applicable policies and regulations; f. monitor Evaluate and system performance; the agency's procurement https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 9. h. 2. Manage and enhance career procurement work force; development of the the OFPP, the with coordination Examine, in areas procurement system to determine specific should where Government-wide performance standards in the be established and applied and participate procurement Government-wide of development (The standards. and regulations policies, suring standards will be the criteria used for mea cost, time, i.e., effectiveness; operational etc.); quality, accuracy, quantity, qualifications, i. rds Determine areas for agency unique standa develop unique agency-wide standards; J Be the advocate for competition; and k. Certify to the agency head that system meets approved standards. and the procurement Redelegation . may be The authority delegated in paragraph 1.a internal redelegated only with respect to agency tions. regula procurement policies, procedures and a. 1.f., i. None authorized with respect to paragraph and k. b. c., d., The authority delegated in paragraphs 1.b., ting with e., g., h. and j may be redelegated in wri the power of further redelegation. c. Approved: rc. Wright, Jr. Dep y Director Of ce of Management and Budget DATED: June 30, 1982 Approved:* / Dofa E. Sovire Admin strator for Federal Procurement Policy • Enclosure 4 SCHEDULE FOR IMPLEMENTATION OF EXECUTIVE ORDER 12352 Responsibility Action or Event AUGUST 1982 2 Begin review of public and agency comments on draft Prompt Payment Circular OMR/BRD (Financial Management Branch) 6 Develop plan for resolving outstanding issues (Appendix C of UFPS Proposal) OFPP 18 Executive Committee meeting GSA 19 Prompt Payment Circular issued and effective OMR/BRD 27 Civil Agency Procurement (CAP) Council chartered and operating GSA 30 Review of procurement personnel standards begins at OPM Agencies, OFPP, OPM Prepare composite schedule of Task Group activities and interface charts OFPP SEPTEMBER 1982 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6 • 15 Executive Committee meeting 22 Federal Procurement Council(FPC) meeting OFPP 30 OPM completes personnel standards OPM 30 Bowne contract for Federal Acquisition Regulation (FAR) project renewed GSA 2 Responsibility Action or Event OCTOBER 1982 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1 FAR Transition Group established DOD, GSA, NASA, in accordance with their MOA 1 FAR Secretariat established GSA 1 Interest penalties apply to payments under contracts issued on or after October 1 Prompt Payment Circular 5 Brief industry associations OFPP 13 Executive Committee meeting * 29 Second Report to the President OFPP 29 Procurement personnel classification standards issued OPM 1 Draft FAR to GSA for printing DOD, GSA, NASA, in accordance with their MOA 10 Executive Committee meeting * 18 Public meeting OFPP Executive Committee meeting * FPC meeting OFPP Task Groups begin periodic briefings of key agency officials on proposed improvements to the procurement system Task Group Chairmen NOVEMBER 1982 DECEMBER 1982 8 15 JANUARY 1983 , 411 3 Action or Event Responsibility JANUARY 1983 (continued) 1 Printed draft of FAR to DAR and CAP Councils GSA 19 Executive Committee meeting 25 Brief industry associations OFPP 31 Third Report to the President OFPP FEBRUARY 1983 16 Executive Committee meeting 16 Executive Committee meeting 23 FPC meeting 13 Executive Committee meeting 19 Brief industry associations OFPP 29 Fourth Report to the President OFPP 29 Final FAR to printer and Federal Register DOD, GSA, NASA, in accordance with their MOA 11 Executive Committee meeting MARCH 1983 OFPP APRIL 1983 MAY 1983 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 Responsibility Action or Event _ JUNE 1983 15 Executive Committee meeting * 22 FPC meeting OFPP 1 FAR Familiarization and training begins All agencies 1 FAR published in Federal Register and printed copies of FAR distributed GSA 5 Brief industry associations OFPP 13 Executive Committee meeting * 29 Fifth Report to the President OFPP 17 Executive Committee meeting * 14 Executive Committee meeting -* 21 FPC meeting OFPP FAR effective DOD, GSA, NASA, in accordance with their MOA JULY 1983 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AUGUST 1983 SEPTEMBER 1983 OCTOBER 1983 * Host agency to be determined. • • s• https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Enclosure 5 • 2 AUG 1982 MEMORANDUM OF AGREEMENT (MOA) SUBJECT: FAR Implementation This records the mutual understandings and commitments of the undersigned principals with respect to FAR implementation. The Department of Defense (DOD), the General Services Administration (GSA) and the National Aeronautics and Space Administration (NASA) shall continue their joint efforts to implement the FAR. Every effort will be made to meet the following milestones: o A product, consisting of completed Phase II effort as of 1 November 1982 and Phase I products -that have yet to undergo Phase II review, will be made available to GSA by 1 November 1982 for printing, and will be delivered (minimum quantity of 150 copies each) to the Defense and CAP Councils and NASA NLT 1 January 1983 for completion of their respective executive reviews. o Final Phase II will be delivered to the Councils by 31 March 1983. o FAR will be published in the Federal Register by 1 July 1983. Accomplish necessary familiarization and training to o achieve effective date of 1 October 1983. I. TRANSITION ORGANIZATION AND RESOURCES o The FARPO will be disestablished 30 September 1982. A FAR Group will be established 1 October 1982. will initially be composed of the following resources: Army: two professionals and one clerical Navy: two professionals and two clerical Air Force: three professionals It https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis DLA: one professional and one clerical NASA: one professional and one clerical GSA: seven professionals and one clerical* * GSA has promised one additional professional, if available, and a total staff of 12 once the FAR is published. The FAR Group will be preferably located at the o current FARPO facility. It will remain available until 1 July 1983, but in no event later than 1 October 1983. The FAR Group, as its top priority, will be o responsible for completion of Phase II product, including FAR baselining (i.e., currency with latest regulatory coverage). The FAR Group will also assist the Councils in o accomplishing their respective executive reviews and in conducting necessary orientation and training activities to facilitate FAR transition in accordance with the Annex (Attachment 1). GSA will be responsible for providing the physical o facilities for housing the FAR Group (office space) and for continuation of the Word I computer contract effort. GSA and DOD will provide the necessary support staff. II. ORGANIZATION FOR FAR MAINTENANCE The organization for FAR maintenance shall be as described by the attached chart (Attachment 2). NASA will participate on the DAR Council for a trial o period once the FAR becomes effective. o counsel. GSA will chair the CAP Council and provide legal The FAR will be maintained by the CAP Council and the DAR Council. The operating guidelines of the DAR and CAP Councils are described in the Annex. Responsibility for maintenance of the FAR will be apportioned by the two Councils. Operating guidelines pertaining to disposition of FAR cases, coordination procedures, etc. will be developed by the Councils. Deviation authority will be vested in the respective Councils without regard to apportioned maintenance responsibility. 2 GSA will provide a FAR Secretariat expected to consist of six people (two professionals, two administrative and two clerical) and physical resources for the FAR secretariat. GSA will pay for preparation of the FAR for publication, including publication as necessary in the Federal Register. • The FAR Council will remain intact, to be convened o from time to time to address appropriate matters. While it may serve as a forum for discussion and appeal of appropriate matters, it will not have directive authority. DoD, GSA and NASA will jointly maintain the FAR. o Agencies requiring supplemental procurement regulations are responsible for individually maintaining these supplements. FAR revisions shall be printed in the Federal Register, and to the maximum practicable extent, prior to the effective date. III. PENDING ISSUES FOR RESOLUTION Contribution of resources to the FAR Group by the o civil agencies other than GSA and NASA. The various agencies and DoD components must o identify funds in their respective FY 1983 budgets to purchase the FAR. ;76:a441L-:vcDoD https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I )44Lowg. " V NASA • Attachments: 1. Annex 2. Chart 3 • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ANNEX TO MOA SUBJECT: Councils' Operating Guidelines (DOD/GSA) TRANSITION PERIOD 1. Councils will allocate all FAR subject areas to executive review groups composed of Council members, FAR Group members and subject area specialists, as appropriate. 2. Executive review groups will utilize Phase I product together with other planning documents or data available in preparation for receipt of completed Phase II product or any earlier receipt of stand-alone segments. 3. After receipt of Phase II product, each Council will conduct an executive review of entire FAR and develop any needed changes. 4. During executive review, the Councils will make only changes that are necessary to assure that FAR accommodates the needs of the acquisition community. Existing FAR language will be retained unless there is a compelling reason for change. 5. During executive review, Councils will coordinate results and resolve differences. 6. In the event of a dispute, the issue will be elevated through the acquisition principals of DOD, GSA and NASA to respective agency heads for resolution. 7. Assistance by OFPP may be sought to facilitate resolution of differences. 8. Completed, coordinated FAR will be forwarded to GSA for publication. 9. Upon publication, the Councils will conduct appropriate orientation and training to facilitate FAR implementation. MAINTENANCE DoD and GSA shall promulgate charters for the internal operations of their respective Councils. Each Council shall have the following FAR maintenance responsibilities: a. Reviewing FAR cases and developing proposed coverage utilizing appropriate subcommittee and/or lead agency. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis S b. Coordinating proposed coverage with the other Council. C. In the event of a dispute, the issue will be elevated through the acquisition principals of DoD, GSA and NASA to respective agency heads for resolution. d. Assistance by OFPP may be sought to facilitate resolution of differences. e. Submitting notices of proposed major or substantive changes to the FAR Secretariat for publication in the Federal Register. f. Considering comments in response to Federal Register notices. g. Submitting final FAR revisions to FAR Secretariat for printing. 2 COUNCIL .FAR 01111•m=111. 4111MIMMIll ammasse 41001•16 E GSA (CIVIL AGENCY PROCUREMENT COUNCIL) 11Pummil 411.11•11. COORDINATION < DOD (DAR COUNCIL) * AGREEMENT AMONG DOD, GSA & NASA r 4` SUBCOMMITTEES AND LEAD AGENCY DELEGATIONS PAR SECRETARIAT GSA T * NASA will participate on a test basis. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PRINT AND FUBLISH FAR SUBCOMMITTEES AND LEAD AGENCY DELEGATIONS • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis JUL 2 6 1982 EXECUTIVE COMMITTEE ON PROCUREMENT REFORM MINUTES OF MEETING July 14, 1982 1. The second meeting of the Executive Committee on Procurement Reform was held at 10:00 a.m. on July 14, 1982, in Room 9104 of the New Executive Office Building. The purpose was to: (1) review task group charters and provide advice and guidance to the chairmen, as appropriate; and (2) be briefed on the status of the Federal Acquisition Regulation (FAR)(including formation of the Civil Agency Procurement (CAP) Council), the GS-1102 personnel classification standards, and the effort to ensure timely payments to contractors. 2. The agenda for the meeting is appended as Attachment 1. Notebooks containing the documents pertaining to agenda items were distributed to Committee members on July 9, 1982. ' 3. Attendees included members of the Executive Committee and chairmen of the task groups. A list of all attendees is appended as Attachment 2. 4. In his opening remarks, Mr. Sowle informed the Committee of actions taken since the last meeting, including: a. . Briefing industry associations on the Administration's plans for implementing the Executive order. Mr. Sowle stressed that although he advised the industry representatives to take initiative in participating in the effort, task groups should be sure to solicit information and advice from industry, as appropriate. b. OMB Deputy Director Joseph Wright signed the Charter for the Executive Committee on Federal Procurement Reforms. c. Mr. Wright also _signed the Model Charter for Procurement Executives. It was distributed to agency heads by a July 8, 1982 memorandum from OMB Director David Stockman. The memo requested all agencies that had not already done so to designate a Procurement Executive within 60 days. d. OFPP is working with other elements of OMB to lay the groundwork for a task group to consider balancing individual program needs against mission priorities and available resources. Mr. Sowle also announced that Barbara Glotfelty will assume the role of Executive Secretary upon the departure of Darleen Druyun from OFPP. Mr. Rauch inquired about OFPP's relationship with the "Grace Committee" and asked if Mr. Sowle could share accounts of its progress with the Executive Committee. Mr. Sowle responded that the relationship is good, but that no protocols have yet been established on OFPP-Grace Committee interaction. OFPP will keep the Executive Committee informed of events through its meetings or in periodic reports transmitting a variety of "news". https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 5. Agenda Items a. Charter of Task Group 4 on Reducing Administrative Costs and Burdens b. o MG Joseph Connolly briefed the Committee on the Task Group's activities to date and plans for completing its mission. He stressed the need for continuity of agency representation on the group and for the dedicated work of each agency representative - on Task Group endeavors. o Mr. Sowle suggested that Charter Section IV, second bullet, be modified so as not to exclude consideration of major systems acquisition, since agencies other than DOD (e.g., HHS, VA, DOT) are involved in such acquisitions and could benefit from useful guidance from the group. o In response to a question from Mr. Hopkins, MG Connolly said his Task Group will look into the impact of various dollar thresholds in its areas of interest. o Mr. Piasecki suggested that the group look at the burdens placed on agencies by management initiatives of OMB, such as Circular A-123 and methods of implementing the Paperwork Reduction Act. o MG Connolly noted that Lt. Col. Lawrence Cox is his Special Assistant on Task Group matters. Status of Task Group Activity regarding the Timely Payments Issue M.Sandei-5 reported that group members decided that there is no need for this Task Group under the Executive Committee since: (1) the implementation of P.L. 97-177, under the leadership of John Lordan (Chief, Financial Management Branch of OMB) will effectively implement Section l(f) of E.O. 12352; and (2) ongoing activity of the DAR Council and the FPR Directorate at GSA precludes the need for another forum for interagency coordination Therefore, the Task Group has been on implementation. dissolved. It was noted that OMB had released for comment a draft Circular on timely payments, and that OFPP had distributed it to all agency contact points with a memo dated July 8, 1982. • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 C. d. Charter and Work Plan of Task Group 2 on Establishing Clear Lines of Contracting Authority o Mr. Armstrong reported on the Task Group's activity to date. He noted that the National Science Foundation had been inadvertently omitted from the list in Charter Section III and would be added, and agreed to append a list of group members to the Charter. He explained that the Work Plan was a draft being reviewed by group members, and that the dates in it were not firmly established. However, the plan does fairly represent the group's intentions at this time. Mr. Armstrong also said he shares MG Connolly's concern that the dedication and continuity of group members are critical to the group producing useful results. o With regard to the third task in Charter Section IV, Mr. Haugh suggested that the group not limit its output to "broad, general guidance." Agency heads will be able to make effective use of specific guidance. Mr. Armstrong said some rewording might better express the group's intention, which is to develop guidance that will have broad applicability, i.e., be useful to all or most agency heads. o Mr. Zimmer suggested that the group look at the interrelationship between lines of contracting accountability and the audit function (e.g., OMB Circular A-50) and between contracting officer authority and the contract audit function (e.g., DOD Directive 5000.42). o Mr. Armstrong solicited the Procurement Executives' perceptions of the circumstances surrounding the flow of contracting authority and accountability within their agencies and the identification of areas in which drawing clear lines may be difficult. Charter of Task Grou 5 on Sim 1 f in Small Purchases o Mr. Chiesa briefed the Committee on the activities and plans of Task Group 5. He said the group interprets its role as making recommendations useful to agency heads in establishing programs to simplify small purchases, and not as creating a program for export to the agencies. o When asked about plans to look into automation in small purchase operations, Mr. Chiesa said the group would not only consider the subject but would probably propose that the potential for and employment of automation be one of the criteria for evaluating procurement system performance. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 e. o Mr. Haugh offered to arrange for a representative from the Treasury Department to join the group, if the Chairman wished, to facilitate group efforts to change imprest fund levels or effect other payment procedures. o Mr. Gearde expressed concern that the Task Group might get more into a study mode than an action mode, and urged that emphasis be placed on generating concrete recommendations for specific actions by agency heads. o Mr. McDermott said that SBA's Office of Advocacy would support the group's planned survey of small businesses regarding their problems in supplying the Government under small purchases. o Mr. Piasecki suggested that the group consider the need for and, if appropriate, take action to facilitate (1) tailored training programs for on-site use bj, small purchasing activities in the field; (2) a policy office with a government-wide perspective dedicated to small purchasing (perhaps as part of OFPP); and (3) a determination of the classification series small purchase buyers are and should be in. o In response to a question as to whether the group dollar thresholds, Mr. Chiesa said that in its final group will try to present the associated issues and agency heads, though the group may not be able consensus on solutions. o Mr. Sowle said that any substantive issues on which members of any group reach an impasse should be briefed for the Executive Committee. Before leaving the meeting at this time, Mr. Sowle encouraged task group chairmen to be bold in their thinking and to set their sights high. He discouraged groups spending much time on legislative matters other than to note, while performing other tasks, areas where legislative changes are desirable. will look at product the problems to to reach a Charter and Work Plan of Task Group 6 on Career Management Programs o Mr. Courtney reviewed the charter and task plan, and said the group wants to develop a modular career management program that can be used throughout the Government. o Focusing on Item II.l.h. of the Task Group Work Plan, he emphasized the need for the support of executives at all levels within an agency to make career management programs work. o Mr. Courtney also highlighted Item 11.12. in the Work Plan, saying that the group plans to release products incrementally and consult with agencies to help them establish or improve agency programs. o Because agencies must depend on the full support of OPM (e.g., regarding the PACE exam and classification standards), OPM will be invited to participate on an ad hoc basis in all task group meetings. • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 5 f. g. o Mr. Piasecki asked whether the group would generate guidance on how agencies can overcome problems with funding training. Mr. Courtney said this could be done under the Charter's Section IV task: "Recommend strategies for obtaining the resources and support necessary for effective career programs." - o Mr. Rauch asked if the group would develop criteria against which agency career management programs could be established and evaluated. In the discussion that followed, Mr. Hunter said such criteria will be built into the modules the group plans to develop. o Mr. Katz suggested that the group include a respected agency personnel specialist familiar with procurement. Mr. Courtney said that the group had agreed at its June 25 meeting that it needed representation from the personnel side of the house. Charter of Task Group 3 on Establishing Government-Wide System Criteria, Including Competition, and Certifying System to Agency Head o BC Drenz prefaced his review by pointing out that the charter is a draft that the task group should finalize later in July. The group's work plan should be completed by the end of August, and tasks should actually be initiated in September. o In subsequent discussion, BG Drenz requested clarification of the limits of "evaluating procurement system performance," particularly with regard to a question raised about the function of the Federal Procurement Data System in the process. Mr. Maraist said the group should determine whether and how the FPDS should be used in measuring system performance, but that the group should not get involved with FPDS operations and problems, which are dealt with in other forums. Mr. Armstrong agreed, adding that since FPDS reports go to Congress and the GAO as well as the Executive Branch agencies, their significance in the ultimate Federal Procurement System must be clearly understood. o Mr. Haugh said the group should develop standards, or at least identify areas in which standards should be used, to improve every element of a procurement sj/stem, as well as criteria for evaluating the system's performance. Individual agencies must then develop standards for specific agency functions and employees. Status Report on FAR Implementation o Mr. Brannan distributed and summarized the 12 July 1982 draft of a Memorandum of Agreement among DOD, GSA, and NASA on Mr. Brannan also FAR implementation (see attachment 3). reported that the DAR Council is prioritizing its cases and making other preparations to get ready for FAR implementation and maintenance, including an executive review of the FAR. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis o o o o h. Mr. Hunter asked about plans for training to familiarize the work force with the FAR. Mr. Brannan said a training team would travel around the country once the final publication of FAR is available. Mr. Hunter suggested that appropriate information and training material be provided to the established Government training facilities (e.g., Army Logistics Management Center, Air Force Institute of Technology) to enable them to modify their course content. Mr. Haugh suggested that a training package be fully prepared by January 1, 1983, so that training can begin earlier. The basic aspects of the FAR System, FAR numbering, etc., will all be for established by then. Mr. Brannan reiterated that planning training is under way, and said he doesn't believe training can actually take place until the final FAR is available. s are CDR Summers reported thal the DOD and GSA FAR staff ions now co-located and that he and Mr. Rizzi make joint decis regarding the project products. All of Phase I is completed t) and except for patents coverage (expected by the end of Augus by automatic data processing equipment coverage (expected be November). With present resources, he expects the project to could completed by February 1983. With additional resources, it be completed as soon as December 1982. the Mr. Rizzi said if any agencies could make funds available, have done project can use them to rehire three consultants who Cassidy, considerable work on the FAR: Bernie Eisenstein, Tom and Miles Manchester. Status Report on CAP Council o member Mr. Ferguson reported that the representatives of all as well agencies met July 1 and considered the proposed charter July 9, and as general issues. Comments on the charter were due of July will be considered at the group's next meeting the week on an 26, when it is hoped that agreement will be reached on the operating charter. It was agreed that all people serving further council will be at the GS-15 level. Subjects requiring discussion and resolution include: - DAR How to divide responsibility for the FAR with the Council. - The role of the FAR Council. - CAP and The role of OFPP in resolving disputes between the DAR Councils. 0 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 7 Status Report on Classification Standards for the GS-1102 Series 6. o Mr. Katz advised that OPM staff will meet with selected agency procurement and personnel .staff to (1) supplement the written comments; (2) review the final standard; and -(3) resolve any remaining issues prior to publication. o Mr. Katz reported that an organizational and briefing session would occur within two weeks with Mr. Hunter and selected associates to form the foundation for reviewing the standard. A similar meeting will be conducted with members of the counterpart personnel community. Materials will be supplied. The subsequent meeting at OPM to review the standard will begin during or after the week of August 16, depending on the availability of participants during the heavy August vacation period. a o After some discussion, Mr. Katz agreed to provide copies of the standard to those in attendance at the organizational session so that they can study it at OPM before the review session takes place, on the condition that the content of the standard remain confidential. o Mr. Hunter and Mr. Katz discussed the process by which the agreed-upon review will take place and the standard will be issued. o Several members of the Committee expressed their concern that OPM accommodate the needs of agencies for a professional procurement work force, thereby implementing Section 3 of E.O. 12352. Mr. Katz assured the Committee that OPM takes the Executive order very seriously. Closing Remarks o Mr. Haugh announced that a draft of the first report to the President regarding the implementation of E.O. 12352 will soon be Committee distributed to Committee members by OFPP. members will have one week to comment on the draft and OFPP will submit the report by the end of July. o Mr. Ferguson offered to host the next Committee meeting at GSA. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 8 7. o Any amendments to Task Group charters, as well as up-to-date membership lists, should be sent to Barbara Glotfelty as soon as possible. Copies of the final charters and current membership lists are attached (Attachments 4-8). o The next meeting will be held August 18, 1982, beginning at 9:00 a.m. in Room 5141A, GSA Headquarters, 18th and F Streets, NW. The meeting was adjourned at 12:45 pm. bz Barbara Glotfelty Executive Secretary Attachments - Attachment 1 AGENDA EXECUTIVE COMMITTEE ON FEDERAL PROCUREMENT REFORM JULY 14, 1982 10:00 - 11:15 Review and approve task group charters Task Groups Briefer (10:00 - 10:15) Reduce Administrative Costs and Burdens M/G Connolly (10:15 - 10:30) Establish Clear Lines of Contracting Authority C. Armstrong (10:30 - 10:45) Simplify Small Purchases R. Chiesa (10:45 - 11:00) Career Management Programs R. Courtney (11:00 - 11:15) Establish Government-Wide System B/G Drenz Criteria. Including Competition, and Certify System to Agency Head 11:15 - 11:30 Status Report on FAR implementation, including effective date of FAR and agency implementation, and status of CAP Council J. Brannan E. Bano W. Ferguson 11:30 - 11:35 Status report on Timely Payments R. Sanders 11:35 - 11:45 Status Report on 1102 Standards P. Katz 11:45 - 12:00 Establish date and agenda for next meeting https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis * Attachment 2 Meeting of the Executive Committee on Federal Procurement Reform Attendees July 14, 1982 Cornmittee: Name Donald E. Sowle Frank Gearde, Jr. William E. Long Hilary Rauch William Ferguson Ronald Piasecki Leroy Hopkins Angelo Picillo William Sullivan Paul Katz Robert McDermott Agency OFPP USDA DOD DOE GSA DO! NASA DOT VA OPM SBA Task Group Representatives: Colonel Armstrong BG Charles F. Drenz MG Joseph Connolly Ray Chiesa Roy Courtney R. Sanders DO! Army USAF DLA Navy GSA Others: CDR Edward Bano James Brannan LTC Lawrence Cox CPT Mark Flanigan Rosemary Hoehner CDR Jack Summers Robert Walsh Hamp Wilson Lawrence Rizzi Ed McAndrews G. Doyle Dodge Roger Martino LeRoy Haugh Darleen Druyun William Maraist Joseph Zimmer Owen Birnbaum William Hunter William Mathis DOD DOD USAF DOD DLA ' DOD DOE NASA GSA GSA GSA DOT OFPP OFPP OFPP OFPP OFPP OFPP OFPP , https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Attachment 3 DRAFT 12 Jul 82 MEMORANDUM OF AGREEMENT (MOA) SUBJECT: FAR Implementation gs and commitments of This records the mutual understandin FAR implementation. the undersigned principals with respect to General Services The Department of Defense (DOD), the al Aeronautics and Space Administration (GSA) and the Nation their joint efforts to Administration (NASA) shall continue be made to meet the implement the FAR. Every effort will following milestones: o A II, available Phase I product and incompleted Phase ng, will be delivered to GSA by 1 November 1982 for printi to Defense and CAP (minimum quantity of 150 copies each) completion of their Councils and NASA NLT 1 January 1983 for respective executive reviews. o Councils by Final Phase II will be delivered to the 31 March 1963. o l Register by 1 FAR will be published in the Federa July 1983. o and training to Accomplish necessary familiarization ober 1983. achieve effective date of 1 Oct I. CES TRANSITION ORGANIZATION AND RESOUR o o 1962. ed 30 September 1982. The FARPO will be disestablish established 1 October A FAR Transition Group will be ed of the following It will initially be compos resources: Army: rical two professionals and one cle Navy: rical two professionals and two cle https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Air Force: DLA: NASA: GSA: • three professionals al one professional and one cleric al one professional and one cleric rical* seven professionals and one cle fessional, if available, GSA has promised one additional pro is published. and a total staff of 12 once the FAR o ated at the The FAR Group will be preferably loc current FARPO facilities. It will remain available until 1 n 1 October 1983. July 1983, but in no event later• tha o will be The FAR Group, as its top priority, II product, including FAR responsible for completion of Phase est regulatory coverage). baselining (i.e., currency with lat .0 Councils in The FAR Group will also assist the cutive reviews and in accomplishing their respective exe training activities to conducting necessary orientation and ordance with the Annex facilitate FAR transition in acc (Attachment 1). providing the physical GSA will be responsible for up (office space) and for facilities for housing the FAR Gro er contract effort. GSA and continuation of the Word I comput o support staff. DoD will provide the necessary II. ORGANIZATION FOR FAR MAINTENANCE o nance shall be as The organization for FAR mainte (Attachment 2). described by the attached chart DAR Council for a trial NASA will participate on the o ive. period once the FAR becomes effect 2 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis o provide legal GSA will chair the CAP Council and counsel. CAP Council and The FAR will be maintained by the ines of the DAR and CAP the DAR Council. The operating guidel Responsibility for Councils are described in the Annex. o ioned by the two Councils. maintenance of the FAR will be apport ition of FAR cases, Operating guidelines pertaining to dispos developed by the coordination procedures, etc. will be Councils. .• o respective Deviation authority will be vested in the maintenance Councils without regard to apportioned responsibility. o ected to GSA will provide a FAR Secretariat exp nals, two administrative consist of six people (two professio ces as a FAR secretariat. and two clerical) and physical resour FAR for publication, GSA will pay for preparation of the in the Federal Register. including publication as necessary , to be convened The FAR Council will remain intact o appropriate matters. While it from time to time to address sion and appeal of appropriate may serve as a forum for discus ective authority. matters, it will not have dir y maintain the FAR and DoD, GSA and NASA will jointl respective supplemental individually maintain their procurement regulations. 3 the Federal FAR revisions shall be printed in o le extent, prior to the Register, and to the maximum practicab effective date. III. PENDING ISSUES FOR RESOLUTION o Group by the 'Contribution of resources to the FAR civil agencies other than GSA and NASA. o s must The various agencies and DOD component 3 budgets to purchase identify funds in their respective FY 198 the FAR. Attachments: i. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1. Annex 2. Chart Signed DOD Signed GSA Signed NASA https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ANNEX TO MOA SUBJECT: ines (DOD/GSA) Councils' Operating Guidel TRANSITION PERIOD allocate I product, Councils will e as Ph of t ip ce re er Aft 1. ed of utive review groups compos ec ex to s ea ar t ec bj su R FA l al s and subjecL area Council members, FAR Group member specialists, as appropriate. lize Phase I product Executive review groups will uti cuments or data available in together with other planning do 2. ted Phase II product or any preparation for receipt of comple segments. earlier receipt of stand-alone each Council will After receipt of Phase II product, entire FAR and develop any conduct an executive review of 3. needed changes. uncils will make only During executive review, the Co that FAR accommodates the ure ass to ary ess nec are at changes th Existing FAR language y. it un mm co on iti uis acq the needs of a compelling reason for is re the ess unl ed ain ret will be 4. change. 5. sults Councils will coordinate re , ew vi re e iv ut ec ex ng ri Du and resolve differences. ed e, the issue should be elevat ut sp di a of t en ev the 6. In A to cipals of DoD, GSA and NAS in pr n io it is qu ac e th h ug thro resolution. respective agency heads for 5 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis on facilitate resoluti to ht ug so be ll wi PP Assistance by OF 8. of differences. 9. r forwarded to GSA fo be ll wi R FA d te na di or Completed, co publication. riate ll conduct approp wi ls ci un Co e th n, io at 10. Upon public . FAR implementat:on te ta li ci fa to ng ni ai tr orientation and MAINTENANCE al ters for the intern ar ch te ga ul om l pr al sh A DOD and GS Each Council shall . ls ci un Co ve ti ec sp r re operations of thei nce responsibilities: na te in R ma FA g in ow ll fo e have th ge ng proposed covera pi lo ve de d an s se ca R a. Reviewing FA cy. ee and/or lead agen tt mi om bc e su at ri op pr ap utilizing e other ed coverage with th os op pr ng ti na di or Co b. Council. issue should be e th e, ut sp di a of C. In the event d cipals of DoD, GSA an in pr n io it is qu ac elevated through the ads for resolution. he cy en ag ve ti ec sp NASA to re sought to facilitate be ll wi PP OF d. Assistance by _ ces. resolution of differen e osed major or substantiv op pr of s ce ti no e. Submitting l publication in the Federa r fo t ia ar et cr Se changes to the FAR Register. f. er sponse to Federal Regist re in ts en mm co g in Consider notices. g. r ons to FAR Secretariat fo si vi re R FA l na fi ng Submitti printing. FAR COUNCIL A, NASA, DOE OFPP, DOD, GS , VA, SBA DOT, DOI, NHS • 110111111/M glimmelb 1111111111•11) Woman opoollie III••••1 1111••••••• 111•11111•1•1111 111.111111110 • GSA ENCY (FPR/C/VIL AG UNCIL) PROCUREMENT CO COORDINATION G AGREEMENT AMON SA DOD, GSA & NA DOD (DAR COUNCIL) F.p DLA ARMY, NAleY, A. NASA., NUS, VA, SBA DOT, DO!, DOE, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 01;\ • V SUBCOMMITTEES AND LEAD AGENCY DELEGATIONS 'FAR SECRETARIAT SUBCOMMITTEES AND LEAD AGENCY DELEGATIONS GSA Test Basis Only Kw) PIMILTSH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Attachment 4 CHARTER Interagency Implementation Task Group No. 2 • Executive Order 12352, Federal Procurement Reforms 'Establish Clear Lines of Contracting Authority and Accountability https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I. ESTABLISHMENT: Lines of Contracting The interagency task group for Establishing Clear ctive June 10, 1982. Authority and Accountability is established effe II. PURPOSE: heads of agencies to Section 1(g) of Executive Order 12352 requires the accountability." establish clear lines of contracting authority and utive The task group will develop and propose guidance to the Exec s and procurement Committee that will be available for use by agency head ementation of executives as an aid in implementing or updating impl under Section the agencies' programs to accomplish their responsibilities 1(g) of the Executive Order. III. MEMBERSHIP: and small agencies The membership of this task group represents large activities. The with both centralized and decentralized contracting knowledge of the individuals selected to participate have a thorough in the subject contracting process and the ability to develop guidance matter. of Acquisition and The task group is chaired by the Chief, Division U.S. Department Grants, Office of Acquisition and Property Management, ce of Federal of the Interior. The representative from the Offi cy for the group. Procurement Policy will act as the contact to that agen is identified in The full list of the task group representatives Attachment I. IV. TASKS: aid agency heads and In developing and proposing guidance that will onsibilities under procurement executives in accomplishing their resp : the Executive Order, the task group will o o o 13, Prepare a plan for the task group's work by July addressed 1982, which identifies areas and issues to be contracting in the area of establishing clear lines of authority and accountability. urement Consider all appropriate aspects of the proc te to establishing and management processes as they rela y and accountability. clear lines of contracting authorit will be advisory to Develop comprehensive guidelines that utives in accomplishing agency heads and procurement exec ion 1(g). their responsibilities under Sect https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis V. RESPONSIBILITIES Responsibilities of the chairperson include: o pective and agency Ensuring a balanced membership in terms of pers mission responsibilities. o utive Committee Developing a charter and presenting it to the Exec for review. o ined by the task group. Developing a plan of areas and issues to be exam o Briefing the Executive Committee on progress. o and progress reports Providing copies of the task group charter, plan for scheduling briefings to the OFPP contact who is responsible to the Executive Committee. Responsibilities of the OFPP contact include: o o and deliberations. Participating in all task group's meetings Executive Committee informed Keeping the Executive Secretary of the of charter, plan, and of task group progress, including copies other pertinent documents. o ittee through the Scheduling briefings to the Executive Comm Executive Secretary. VI. MEETINGS: call of the chairperson. Meetings of the task group will be at the VII. SUPPORT: sh its objectives will be Support needed for the task group to accompli ted. the responsibility of the agencies represen Attachment I TASK GROUP # 2 Establish Clear Lines of Contracting Authority CHAIRMAN Mr. Colonel C. Armstrong Chief, Division of Acquisition and Grants Office of Acquisition and Property Management Department of Interior Washington, DC 20240 343-5830 Mr. Lynn Baillets Office of Evaluation Compliance, OPAL, OS Department of Health and Human Services Hubert H. Humphrey Building 200 Independence Avenue, SW, Room 520D1 Washington, DC 20202 245-8901 Mr. Gerald P. Curry Chief of Acquisition Management Office of Personnel Management Room 1466, 1900 E Street, NW Washington, DC 20415 254-8492 Mr. John Dammeyer Office of Procurement Services Department of Commerce Washington, DC 20230 377-4248 Mr. Robert Day Department of State P. 0. Box 9244 Rosslyn Station Arlington, Virginia 22209 235-9528 Mr. John Espenshade U. S. Department of Agriculture ASD ASMB Room 518, Federal Building 6505 Bellcrest Hyattsville, MD 20782 436-7690 Mr. Steve Franco Division of Grants and Contracts National Science Foundation. 1800 G Street, NW, Room 630 Washington, DC 20550 357-9784 Mr. Fred Galinsky U.S. Department of Interior Bureau of Land Management (851) 18th and C Streets, NW Washington, DC 20240 343-5766 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • • TASK GROUP 4# 2 (continued) Mr. Steve Goodman Acting Chief, Acquisition Management Division Federal Emergency Management Agency 500 C Street, SW Washington, DC 20472 287-3826 Captain W. H. Hauenstein Director of Acquisition and Contract Policy Office of the Assistant Secretary of the Navy (Shipbuilding and Contract Policy) CP #5, Room 368 Washington, DC 20360 692-2247 Mr. Richard Hopf General Services Administration 18th and F Streets, NW, Room 4006 Washington, DC 20405 566-1782 Ms. Nancy Nifong-Kerlin National Aeronautics and Space Administration CODE HM-1 700 Independence Avenue, SW Washington, DC 20546 755-9050 Mr. Thomas P. O'Malley U. S. Department of Treasury 1331 G Street, NW, Room 900 Washington, DC 20220 376-0418 Mr. William Price Department of Education Assistance Management and Procurement Services Room 5082, GSA Building #3 7th and D Streets, SW Washington, DC 20202 755-1217 Mr. Karl Pucher Branch of Procurement Management U.S. Department of Interior 19th and E Streets, NW, Room 2619 Washington, DC 20240 343-2105 Mr. Albert Risken Assistance, Management and Procurement Services Department of Education Seventh and D Streets, SW, Room 5680 Washington, DC 20202 245-2525 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TASK GROUP # 2 (continued) Mr. Ron Thompson Nuclear Regulatory Commission Division of Contracts Operations Branch Washington, DC 20555 492-4210 Mr. Robert Walsh Department of Energy MA 9311.1 100 Independence Avenue, SW Washington, DC 20585 252-8188 OFPP CONTACT POINT William S. Coleman, Jr. Office of Federal Procurement Policy 726 Jackson Place, NW, Room 9013 Washington, DC 20503 395-3501 Attachment 5 CHARTER TASK GROUP #3 EXECUTIVE ORDER 12352 I.Ebtablishment: The interagency Task Group responsible for Improving Government Procurement Systems Performance is established effective June 9, 1962. Purpose: Section 1(c), 1(d) and 1(1) of Ekecutive Order 12352 (Attachment 1) requires the heads of agencies to "ensure timely satisfaction of mission needs at reasonable prices by establishing criteria to improve the effectiveness of procurement systems", "establish criteria for enhancing effective competition and limiting noncompetitive actions . . ." and to provide agency procurement executives with criteria to use to "evaluate system performance in accordance with approved criteria . . . and certify to the agency head that procurement systems meet approved criteria." •The task group will develop criteria that will enable agency heads to fUlly accomplish these stated responsibilities under the Ekecutive Order. Membership: The membership of this task group represents a balance of large and small agencies with both centralized and decentralized contracting activities. The membership includes representatives from program and procurement organizations. The chairperson of the task group is a Flag Officer in the Armed Services. Attachment 2 contains the current membership listing which includes the chairperson and contact for the Office of Federal Procurement Policy. IV. Tasks: In developing criteria that will assist agency heads to accomplish their responsibilities under the EXecutive Order, the task group will: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • Develop a tAk plan and schedule for developing and proposing Criteria for Evaluating and Certifying Procurement Systems. • Propose criteria for use in evaluating the performance of procurement systems and certifying them to the agency head to achieve: — Improved system effectiveness — Enhanced competition ** Coordinate areas of collateral interest with other task groups. • In developing criteria for evaluating procurement systems, the Task Group may request agency input and industry views. V. Responsibilities and Authority of the Chairperson Include: • Developing a charter and presenting it to the EXecutive Committee for reyiew. • Developing a plan with milestones, for accomplishment of all Task Group 3 responsibilities. • Organizing, controlling and coordinating tak group members to ensure accomplishment of the provisions of the Ekecutive Order. • Ensuring a balanced membership in, terms of perspective and agency Uission responsibes. • Organizing subtask groups and appointing members as required. • Setting internal schedules for sUbtask groups. • Scheduling and conducting meetings of TsAk Group 3. • Briefing the Exeautive Committee on progress, as necessary. VI. Responsibilities of Agency Task Group Members Include: • Participation in group and subgroup meetingp and tasks as requested. • Ensuring agency representation at all meetings involving issues of concern to your agency. • Providing support as needed. VII. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Responsibties of the OFTP Contact Include: • Participating in all task group meetings and deliberations. • Keeping the Ekecutive Secretary of the Ekecutive Committee informed of task group progress, including copies of charter, plan, and other pertinent documents. • Coordinating the scheduling of briefings to the Ekecutive Committee through the EXecutive Secretary. 2 VIII. Changes to Charter: This Charter is subject to revision by the chairperson in the event the plan developed and coordinated with the Executive Committee is inconsistent with any of its provisions or future events show that effective implementation of the Executive Order requires a change in direction. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • REVISED 7/21/82 3 Ilr""" • TASK GROUP # 3 I. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Establish Government-Wide System Criteria, Including Competition, and Certify System to Agency Head CHAIRMAN Brigadier General Charles F. Drenz, USA Deputy Director (Acquisition Management) Defense Logistics Agency Cameron Station Alexandria, VA 22314 274-7091 VICE-CHAIRMAN Mr. Ed Trusella SAF/ALP The Pentagon, Room 4D866 Washington, DC 20330 695-6351 Mr. Edward P. Cresswell Defense Logistics Agency (LRL) Room 3A350 Cameron Station Alexandria, VA 22314 274-9206 Mr. William Burk Chief, Branch of Evaluation and Management, Room 5527 Office of Acquisition and Property Management Department of the Interior Washington, DC 20240 343-3347 Mr. Phil Butler Acquisition Management Division Federal Emergency Management Agency Room 728 Washington, DC 20472 287-3818 Mr. Ron Crammer Bureau of Indian Affairs Department of the Interior 1951 Constitution Avenue, NW Washington, DC 20045 343-5125 Mr. William Crawford National Aeronautics and Space Administration Code HP-1 Washington, DC 20546 755-2262 TASK GROUP # 3 (continued) Mr. Chris A. Figg (91) Veterans Administration 810 Vermont Avenue Washington, DC 20420 389-2334 Mr. George Haymond Procurement and Assistance Management Division Department of Energy MA-952, Room 1E-002 1000 Independence Avenue, SW Washington, DC 20585 252-1148 Mr. Eugene E. Jackson SBA Liaison Office (OUSDRE) The Pentagon, Room 1E534 Washington, DC 20301 695-2435 Mr. Lawrence Lebow Office of the Solicitor Department of Interior Room 6517 Washington, DC 20240 343-9201 Mr. Don Mitchell Division of Grants and Contracts RC/SP Branch National Science Foundation 1800 G Street, NW, Room 630 Washington, DC 20550 357-7544 Mr. Donald Rusch Office of Acquisition Policy (VM) General Services Administration Washington, DC 20405 566-1869 Mr. Larry Schlosser (OPEN BY ADDRESSEE ONLY) Division of Contracts Nuclear Regulatory Commission Washington, DC 20555 492-4210 Mr. Robert Spargo Procurement Management Division (HM-1) National Aeronautics and Space Administration Washington, DC 20546 755-9050 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ... https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • TASK GROUP # 3 (continued) Mr. Frank Van Lierde FPR Directorate (VR) Office of Acquisition Policy General Services Administration 18th & F Streets, NW Washington, DC 20405 523-4768 Mr. Vito Vollero Office of Procurement and Contracts Department of Housing and Urban Development 451 Seventh Street, SW Washington, DC 20410 755-5585 Mr. Robert Warren Department of Energy (Code MA-942) 1100 Independence Avenue Washington, DC 20858 252-4930 Mr. Fred Weatherill Forest Service, Administrative Service Department of Agriculture P.O. Box 2417 Washington, DC 20013 235-8165 Mr. Herbert Wolff National Science Foundation 1005 Emerald Drive Alexandria, VA 22308 357-9630 OFPP CONTACT POINT LeRoy J. Haugh William J. Maraist Office of Federal Procurement Policy 726 Jackson Place, NW, Room 9025 Washington, DC 20503 395-3300 ATTacnmcni. • CriARIER 110 TASK GROUP #4 EXECUTIVE ORDER 12352 7:educe Administrative Costs and Burdens Establishment: s and Burdens is The interagency.task group for Reducing Administrative Cost established effective June 17, 1982. II. Purpose: s of agencies to: Section 1(a) of Executive Order 12352 requires the head and other burdens "Establish programs to reduce administrative costs Government and which the procurement function imposes on the Federal unt the need to the private sector. Each program shall take into acco paperwork, reeliminate unnecessary agency procurement regulations, clauses, porting requirements, solicitation provisions, contract Private sector certifications, and other administrative procedures. ate." views on needed changes should be solicited as appropri agency heads The task group will make recommendations that will enable of the Executive to fully accomplish their responsibilities under section 1(a) Order. III. Membership: limited balance beThe membership of this task group will represent upon agencies whose combined tween large and small agencies but with emphasis majority of the activities for volume of procurement actions/dollar form the the current membership listing ains cont 1 nt chme Atta nt. rnme Gove ral Fede the Office_of Federal Procurewhich includes the chairperson and contact for the p is Major General J.H. Connolly. ment Policy. The chairperson of the task grou IV. Tasks: agency heads to fully accomle enab will that ons dati mmen reco In making Order, the task group will: e utiv Exec the r unde ties bili onsi resp plish their for identifying, researchdule sche and plan k 'tas iled deta a o Prepare issues to be considered and s area all on ance guid g osin prop ing, analyzing and by the task group. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 411 o Identify elements of the existing procurement process which represent high potential candidate elements for generating administrative costs and burdens. The Task Group will concentrate on supply, service and R&D contracting. Systems contracting, to the extent that it has interagency application, will alsS be considered. The Task Group will exclude separate consideration of weapon system acquison and small purchases (while maintag ongoing.imierface with the task group on small purchases). Included will be a review of the total procurement cycle involving presolicitation, award and contract administration activities. o Conduct assessment of current and contemplated procurement practices, in terms of priority candidate elements. Consider procurement automation opportunities at each step of the procurement process. o Formulate a series of recommendations which, if implemented, will reduce the administrative costs and burdens now imposed by the procurement process upon the Federal Government and the private sector. For each recommendation, indicate the administrative , regulatory, and legislative changes required. Coordinate findings among agencies for comment. o Invite private industry and associatiOn comments for enhancing the procurement process throughout the task group effort. Forward recommendations to industry associations for comment in parallel to seeking agency coordination. o V• Present final report and briefing to the Executive Committee. Responsibes of the chairperson include: o Ensure task group membership is both balanced and representative of procurement actions/dollar value for the entire Federal Government. VI. o Develop charter and present it to the Executive Committee for review. o Develop a plan of areas and issues to be examined by the task group. o Brief the Executive Committee on progress. o Provide copies of the task group charter and plan to the OFPP contact. Responsibilities of the OFPP contact include: • Participate in task group meetings. o Keep the Executive Secretary of the Executive Committee informed of task group progress, including copies of the charter, plans , and other pertinent documents. Advise lhe chairperson in advance of details reported to the Executive Secretary and Executive Committee on task group progress. through o Schedule briefings of the chairperson to the Executive Committee the Executive Secretary. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Izt'L 1C• ! ri-cuirec acc•nciys not ritcd c,r) r Ilk. ir !;!;,u: . VII. Meetings: Meetings of the task group will be at the call of the chairperson. ' VIII. Support: Supported needed for the task group to accomplish its objectives will be the responsibility of the agencies represented on the task group. In the event OFPP additional support is required, the OFPP contact will employ the offices of to facilitate such assistance. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TASK GROUP # 4 Reduce Administrative Costs and Burdens CHAIRMAN Major General Joseph H. Connolly HQ USAF/RDC The Pentagon, Room 4C261 Washington, DC 20330 695-6332 Mr. Gerald Cawley Defense Logistics Agency Attention: (DLA-AO) Cameron Station Alexandria, VA 22314 274-7732 Mr. Jack Horvath National Aeronautics and Space Administration Code HS-1 Washington, DC 20546 755-2080 Mr. John Joyner General Services Administration Room 4026 Washington, DC 20405 523-4764 Mr. Wayne Mills SBA Representative Naval Electronics Systems Command - CoOK Washington, DC 20036 692-1031 Mr. William Opdyke Office of Acquisition and Property Management Division of Acquisition and Grants Department of Interior 18th and C Streets, NW, Room 5522 Washington, DC 20240 343-3433 Mr. Len Redecke Division of Grants and Contracts National Science Foundation Washington, DC 20550 357-9611 Mr. Nicholas F. Scodari Department of Commerce 14th and Constitution, NW, Room 6424 Washington, DC 20230 377-8588 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis , TASK GROUP #4 (continued) Ms. Charlotte Spann Department of Interior 18th and C Streets, NW, Room 2527 Washington, DC 20240 343-8493 OFPP CONTACT POINT Charles Clark Office of Federal Procurement Policy 726 Jackson Place, NW, Room 9025 Washington, DC 20503 395-3455 - • Attachment 7 CHARTER FOR TASK GROUP NUMBER 5 SIMPLIFY SMALL PURCHASES I. Establishment lify The interagency Task Group for Establishing Programs to Simp - Small Purchases is established effective June 1, 1982. II. Purpose Section 1 of Executive Order 12352 requires heads of Executive agencies engaged in the procurement of products and services from e in support the private sector "To make procurement more effectiv of mission accomplishment..." Subsection 1(e) of the Order lify further requires agency heads to "Establish programs to simp the small purchases and minimize paperwork burdens imposed on p private sector, particularly small businesses." Task Grou s Number 5 will develop guidance that will enable agency head to on 1(e) fully accomplish their responsibilities under Subsecti of the Executive Order. III. Membership of large The membership of this Task Group represents a balance lized and small agencies with both centralized and decentra Attachment 1 is .a list of group contracting activities. of members, which indicates the Chairperson and the Office Chairperson of Federal Procurement Policy (OFPP) contact. The this group is a member of the Senior Executive Service. IV. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Tasks for identifying The Task Group will prepare a detailed plan accomplishing the areas and issues to be addressed, and for the work required to: ne the current o Compile available data to accurately defi Federal scope of small purchase activities within the Government. payment methods o Evaluate small purchase and associated e if proauthorized by the DAR, FPR, and FAR to determin be eliminated cedural steps or paperwork requirements can or reduced. Develop recommendations. • o Identify additional small purchase and payment methods being used by the private sector and by individual agencies, and review relevant literature for proposed new or improved methods. Evaluate the feasibility and desirability of Government-wide use of each method. Develop recommendations O Evaluate small purchase DAR, FPR, and FAR segments to determine whether any elements therein will restrict agency heads in fulfilling their responsibilities under - the Executive Order. Develop recommendations. o Identify areas of collateral interest with other task groups and ensure that appropriate coordination takes place. o Summarize the findings and recommendations of the Task Group and develop guidance for agencies to use in establishing programs to simplify small purchase and payment methods, and for use in developing criteria for certification of this aspect of the procurement system. V. Responsibilities of the Chairperson o Ensure a balanced membership in terms of perspective and agency mission responsibilities. o Assure preparation of a detailed task Plan identifying the areas and issues to be addressed by the Task Group. o Brief the Executive Committee on progress. O Give copies of the Task Group Charter and Plan to the Task Group members, including the OFPP contact. O Ensure that all requirements of the Charter and Plan are satisified. VI. Responsibilities of the OFPP Contact https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •• O Participate in all Task Group meetings and deliberations. o Keep the Executive Secretary of the Executive Committee informed of Task Group progress, and provide copies of the Charter, Plan, and other pertinent documents in coordination with the Chairperson. o Schedule briefings to the Executive Committee through the Executive Secretary. 2 VII. Task Responsibilities of the Federal Agencies Represented by Group Members Provide support needed to accomplish the Task Group's objectives. VIII. Meetings the Meetings of the Task Group will be at the call of - Chairperson. Submitted: . /1 2- JUL M2 Raymond F. Chiesa, Chairperson Attachment https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 I TASK GROUP #1 5 Simplify Small Purchases CHAIRMAN Mr. Raymond F. Chiesa Executive Director of Contracting Defense Logistics Agency (DLA-P) Cameron Station, Room 4D231 Alexandria, VA 22314 274-6401 VICE-CHAIRMAN Mr. G. Doyle Dodge General Services Administration (VR) 18th and F Streets, NW, Room 4027 Washington, DC 20405 523-4763 Mr. Jim Arnn Department of Commerce 14th and Constitution, NW, Room 6409 Washington, DC 20230 377-4248 Ms. Deborah Bowen National Science Foundation 1800 G Street, NW, Room 237 Washington, DC 20550 357-7922 Ms. Phyllis Brown Department of Interior Bureau of Land Management (Code 852) 18th and C Streets, NW Washington, DC 20240 343-4843 Ms. Esta Childers Forest Service (RP-E) Department of Agriculture Room 706 P.O. Box 2417 Washington, DC 20013 235-8165 Mr. Joseph M. Cumiskey Office of Procurement & Supply (93) Veterans Administration 810 Vermont Avenue, NW, Room 763 Washington, DC 20420 389-3054 Mr. John Doyle Research and Special Programs Administration (DTA-14) Department of Transportation 400 Seventh Street, SW Washington, DC 20590 426-2620 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1. TASK GROUP # 5 (continued) Mr. Samuel Gentile SBA Representative Naval Air Systems Command Code 00E Washington, DC 20361 692-0933 Mr. Robert Keefe Goddard Space Flight Center Code 240 Greenbelt, MD 20771 344-6941 Mr. Phil Rogers Office of Contracts International Communications Agency 1717 H Street, NW, Room 613 Washington, DC 20547 653-5570 Ms. Wilma Rose Acquisition Management Division Federal Emergency Management Agency 500 C Street, SW Washington, DC 20472 287-3821 OFPP CONTACT POINT Barbara Glotfelty Office of Federal Procurement Policy 726 Jackson Place, NW, Room 9025 Washington, DC 20503 395-3300 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - • Attachment 8 DEPARTMENT OF THE NAVY HEADQUARTERS NAVAL MATERIAL COMMAND WASHINGTON. D.C. 20360 REPLY REFER TO EXECUTIVE ORDER 12352, FEDERAL PROCUREMENT REFORMS TASK GROUP NO. 6: CAREER MANAGEMENT PROGRAMS CHARTER I. ESTABLISHMENT: The interagency task group for Career Management Programs is established effective June 9, 1982. II. PURPOSE: Section 1(h) of Executive Order 12352 requires the heads of agencies to "establish career management programs, covering the entire range of personnel management functions, that will result in a highly qualified, well managed professional procurement work force." Section 1(i) assigns procurement executives agency-wide responsibility for enchancing procurement career management. The task group will develop and submit to the Executive Committee career management programs and plans for possible use by agency heads and procurement executives as an aid in implementing or updating implementation of the Executive Order. Agencies are expected to implement as deemed appropriate career management programs to accommodate Executive Order requirements and conditions. III. MEMBERSHIP: The membership of this task group represents large and small agencies with both centralized and decentralized contracting activities. The individuals it selected to participate have a thorough knowledge of career management as pertains to procurement and will develop the full range of guidance in the subject area. and The task group is chaired by the Deputy Chief of Naval Material, Contracts Business Management, Department of the Navy. The Director, Federal of Acquisition Institute, is the Office of Federal Procurement Policy point ed of contact for the group. The remainder of the task 'group is compos representatives from the following agencies: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Agency for International Development Department of Agriculture Department of Commerce Department of Energy Department of Interior Department of Defense Department of State General Services Administration (Deputy Chairperson) Housing and Urban Development National Aeronautics and Space Administration National Science Foundation Veterans Administration • IV. TASKS: In developing and proposing career management program guidance that will aid agency heads and procurement executives in accomplishing their responsibilities under the Executive Order, the task group will: o Prepare a plan for the task group's work by July 9, 1982, which identifies career management areas and issues to be addressed by the task group including collateral interests with other task groups. o Consider all aspects of the procurement and management processes as they relate to career management. o Develop guidance that will be advisory in nature and not construed to be directive to agency heads or procurement executives. o Consider developing several optional plans for establishing and evaluating career programs which take into account both agency unique and common Government-wide requirements. o Recommend strategies for obtaining the resources and support necessary for effective career programs. o Recommend methods for reviewing the implementation of section 1(h) of Executive Order 12352. V. RESPONSIBILITIES: Responsibilities of the chairperson include: Ensuring a balanced membership in terms of perspective and agency mission responsibilities. o Developing a charter and presenting it to the Executive Committee for review. o Developing a plan of areas and issues.to be undertaken by the task group. Keeping the Executive Committee advised on progress through the OFPP point of contact. VI. MEETINGS: Meetings will be held as necessary at the call of the chairperson. will be held at least once a month until completion of the task. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 Meetings VII. SUPPORT: Support needed for the task group to accomplish its objectives will be the responsibility of the agencies represented, except that an Executive Secretary for the task group will be provided by the Federal Acquisition Institute. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis , 3 % TASK GROUP # 6 Career Management Programs CHAIRMAN Rear Admiral J. S. Sansone Deputy Chief of Naval Materiel for Contracts & Business Management HQ, Naval Materiel Command Washington, DC 20360 692-3555 VICE-CHAIRMAN Mr. Thomas LaMoure Procurement Analyst General Services Administration 18th & F Streets, NW, Room 4014 Washington, DC 20405 566-0648 Ms. Joyce CavaLlini Office of Procurement Services Department of Commerce 14th & Constitution Avenue, NW Room 6409 Washington, DC 20230 377-0620 Mr. Anthony E. Cooch Procurement Division U.S. Dept. of Agriculture 14th and Independence Avenue, SW Room 1575, South Building Washington, DC 20250 447-3037 Mr. Timothy S. Crawford Department of Energy(MA-90) Room 5B080 1000 Independence Avenue, SW Washington, DC 20585 252-8616 Mr. Jay J. Joerger Director, Policy and Interagency Service (91) Veterans Administration, NW 810 Vermont Avenue Washington, DC 20420 389-3108 Mr. Gerald John Procurement Division Department of State Room 528, SA-6 Washington, DC 20528 235-9532 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TASK GROUP # 6 (continued) Mr. Michael L. Kenefick Division of Grants & Contracts National Science Foundation Room 203 Washington, DC 20550 Mr. David Metz Division of Acquisition and Grants Office of Acquisition and Property Management Department of the Interior 18th & C Streets, NW, Room 5526 Washington, DC 20248 Ms. Nancy Nifong-Kerlin National Aeronautics and Space Administration Attention: HM-1 Washington, DC 20546 Ms. Maggie Taylor Office of Procurement & Contracts(ACC-MT) Dept. of Housing and Urban Development 451 7th Street, SW Washington, DC 20410 Mr. Harry White Office of Contract Management Agency for International Development Room 771, SA-14 Washington, DC 20523 OFPP CONTACT POINT William N. Hunter Michael Miller Federal Acquisition Institute 726 Jackson Place, NW, Room 5208 Washington, DC 20503 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 357-9602 343-6431 755-9050 755-5662 235-9132 395-7300 395-3195 Cl EXECUTIVE OFFICE OF THE PRESIDENT • • OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503 OFFICE OF FEDERAL PROCUREMENT POLICY AUG MEMORANDUM FROM: SUBJECT: EADS OF "E 6I9 1TIVE DEPARTMENTS AND AGENCIES d E. Sowle, Ad anistrator Prevention of Wasteful Year-End Spending The Director of the Office of Management and Budget requested that the Office of Federal Procurement Policy provide guidance on ways to prevent wasteful year-end spending in procurement. We are committed to increasing the efficiency and effectiveness of the procurement process. Enclosure 1 is a revised checklist for your use in detecting and preventing end-ofyear procurement abuse. OFPP Policy Letter No. 81-1 (Enclosure 2) requires each agency to have review procedures for fourth quarter spending, and to establish an advance procurement planning system. The procedures developed by your agency to comply with the Policy Letter are useful management controls to assist in avoiding wasteful yearend spending. We request that you emphasize to all procurement and program personnel the importance of using the OFPP checklist and of complying with Policy Letter No. 81-1. I cannot overemphasize that prevention -.)f unneeded or unwise Federal spending is an essential part of our efforts to control waste, fraud and mismanagement and to restore public confidence in the integrity of Government. I ask you to continue to use public funds wisely and to be especially alert to unnecessary, nonessential yearend buying during this last quarter of FY 1982. Enclosures https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis EN CLOSURE 1 CHECKLIST FOR PREVENTING WASTEFUL YEAR-END SPENDING A. Need Determination 1. Is the request part of a current approved plan? 2. Is the request for more property or services than is needed to meet approved and essential program objectives? 3. Is the request duplicative in whole or in part? 4. Has a lease vs. purchase review been completed if appropriate? 5. Is the modified request for purchase of additional items or services not contained in the original procurement request or contractor proposal? Is this because estimated funding needs were in excess of the funds actually required to meet the funding requirements of the original request? Is it fully justified? 6. Purchases or orders for equipment, supplies, or services should not be approved unless they have been planned in advance or are needed to meet an emergency and comply with agency implementation of OMB Bulletins No. 81-9 and No. 81-16. 7. Funds should not be obligated for requirements-type or task contracts in excess of anticipated needs based on projections from prior use and current operating levels. 8. The procurement of consultant services and modifications of current consultant services contracts must be reviewed for compliance with OMB Circular No. A-120 and budget controls. 9. Purchases by or orders from General Se vices Administration, the Defense Logistics Agency, or other central procurement offices, or off Federal Supply Schedules should not be in excess of current use or inventory requirements. Use and inventory requirement must be validated. Orders should not be placed if delivery cannot be made in time to meet current need or inventory requirements. 10. Procurement actions must be reviewed to ensure that they are essential, the minimum necessary, not superfluous or "gold-plated." 11. To avoid duplication or underutilization and to foster greater economy and efficiency, users should ensure maximum utilization of available inventories and the proper use of all available resources including excess property. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis J. 2 12. 13. 14. B. 2. 3, 4. 5. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis s Items should not be replaced while they still are usable unles cost replacement is essential to meet program objectives or substantial savings will result. Materials and equipment should be repaired and reused whenever practicable. Renovation, or redecorating, should only be done when it is essential to program objectives, required because of lease arrangements or in an emergency to protect the health and safety of employees. In any case, it should only be the minimum necessary. Method of Contractor Selection 1. C. loan of Intragovernmental agreements for the common use or equipment, services and facilities should be used when cost effective. Will a noncompetitive contract be necessary? Is it fully justified? Have plans been made to prevent subsequent noncompetitive contracts? Are grants reviewed to ensure they are the proper vehicle in t accordance with P.L. 95-224 and are not used to avoid procuremen procedures? "Unsolicited" proposals should be truly unsolicited and should not be accepted unless they are truly unique or innovative and are for essential program requirement. Award will only be made after strict compliance with regulations on unsolicited proposals. Procurements should not be divided just to come within small purchase sts procedures. In accordance with good procurement practices, reque so. should be consolidated if it would be more cost effective to do for However, this should not be construed to prohibit breakout of items small or minority business. be u ed as Short response times or restrictive requirements must ot contracts. methods to avoid open competition or as means of "steel ig" Use of Existing Contracts 1. 2. the later If the request is for the exercise of options or the funding of necessary? Is years of a multi-year contract, is it fully justified, still the option or later year still reasonably priced? or orders If the requests are purc.hPc^ off Federal Supply Schedules acts, are against basic ordering agreements or requirements-type contr g? they fully justified as to need, pricing and the method of contractin 3 3. If the request is to add funds to an ongoing contract with a Government Owned Contractor Operated facility, a Federal Contract Research Center, or a Federally Funded Research and Development Center, is Are such the requirement clearly defined, is it fully justified? contracts being used as a means to circumvent procurement requirements? Are subcontract awards being directed by the Federal agency? 4. Funds obligated to cover unpriced items, such as changes. spare parts and data, should not be in excess of current best estimates of need for Additional obligations in excess of the original those items. procurement request must be clearly justified. 5. Funds for letter contracts should not be obligated in excess of that allowed by regulations, nor should letter contracts be used solely as a vehicle to obligate funds that would otherwise lapse. Other open end types of contracts without firm requirement should not be used. 6. When contracts are modified or supplemental agreements issued to increase the level of effort or procure additional tasks, items or services, the additional requirements must be validated. The subcontracting of substantial parts of such modifications, change orders or tasks may indicate contracts are being used as vehicles to avoid competition. 7. Funds for contractor operated supply stores or other logistic support-type contracts should not be obligated in excess of current requirements or used as a vehicle to make directed procurements nor should they otherwise be used to avoid agency internal management controls. D. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Good Procurement Practice and Accountability 1. Is there time to ensure that normal procurement practices e e followed? 2. A cost or price analysis, and a determination that the Government is paying only fair and reasonable prices and will receive all appropriate should be made for all contracts or discounts and credits, modifications. 3. All noncompetitive proposals should be audited or audit information ...an be established clearly by obtained, unless reasonableness of r other means. . 4 4. Certification of current cost or pricing data should not be used as a substitute for preaward price negotiation. 5. Initiation of procurements in the fourth quarter for award in the fiscal year should generally be limited to small purchases or to emergency unscheduled requirements. Standards of Conduct 1. Have employees been advised of the standards of conduct as they apply to wasteful spending and the possible sanctions and penalties? 2. Have employees been apprised of waste and fraud hotline telephone numbers and the protections that are available to employees making waste and fraud reports? 3. Funds should not be transferred to other agencies to avoid funds lapses. 4. Contracts or other documents must not be post dated. 5. Procurement actions should not be delegated or assigned to field or base stations, regional or other subordinate offices or other activities or agencies, nor should any other action be taken, to avoid proper review, clearance, approvals or other such internal controls. 6. Contracts to former Government employees must be closely reviewed and clearly justified. 11411....., https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis l ENCLOSURE 2 EXECUTIIE OFFICE OF THE PRESIDENT OFFICIIIIF MANAGEMENT AND BUDGET • vw ASHINGTON, D C 2D503 OFFICE OF FEDERAL PROCUREMENT POLICY AUG 13 1981 POLICY LETTER 81-1 ABLISHMENTS TO THE HEADS OF EXECUTIVE DEPARTMENTS AND EST SUBJECT: and Procurement Procedures, Advance Procurement Planning, Review of End-of-Year Purchases agency to assure efficient and It is the responsibility of the head of each bility is an obligation to economical procurement. Consistent with that responsi or unnecessary end-of-year reduce wasteful practices resulting from hurried , the Head of each Executive procurement. In carrying out these responsibilities owing management controls: Department or Establishment shall establish the foll https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1. 2. cut-off dates. Procurement procedures providing lead time and sufficient lead time Each agency shall develop procedures that allow bids or proposals, audit, to prepare solicitations, obtain and evaluate manner. The negotiate, and make contract awards in an orderly and establish firm procedures shall specify the lead time required of requests for cut-off dates for submission to procurement offices fiscal year. The contract action to be completed by the end of a e of contract lead times and cut-off dates may vary with the typ time and cutaction and dollar thresholds. Exceptions to the lead roved only off date procedures should be kept to a minimum and app under extraordinary circumstances. issue procedures Advance Procurement Planning. Agencies shall (APP) for that require an Advance Procurement Planning System each activity. The procedures shall include: Establishment of a specific threshold procurements are to be considered major; above which procurement Development and mainte..-mce of an advance ents and other plan to cover major procurement requirem y, such as requirements with high waste vulnerabilit odicals, consulting services, certain equipment, peri should be pamphlets, or audiovisual products. The plan in which the developed well in advance of the fiscal year acquisition will be made; 2 ▪ Flexibility to allow revisions to the plan, but only to reflect budget changes, emergencies, and changes in program direction; - Procurement planning that begins concurrently with the agency budget process; - A requirement that needs are specified in a form that permits effective competition and innovation; A means to resolve disagreements between procurement and project offices; - Close control of major and high waste vulnerability purchases to assure that they are consistent with the advance procurement plan; and An ongoing program to assess the appropriateness of the methods used to satisfy needs, including cost effectiveness, whether gold-plating will result, and life cycle costing, where appropriate. 3. 4. cy shall Review procedures for the last quarter spending. Each agen rol of develop review procedures that require: (a) close cont consistent purchases made in the last quarter to assure that they are need for with the advance procurement plan,(b) reevaluation of the practice purchases made in the last quarter, (c) good procurement ded only if and accountability to assure that contracts are awar on the basis of prices are reasonable, and (d) award of contracts to the competition unless award on some other basis is significantly advantage of the agency. keep a log of Contract Action Log. Each procuring activity shall major or high waste vulnerability contract actions. this letter the head of each Lgency shall Within 60 days after the effective date of ement the provisions o this Policy Letter. impl to n take on acti the P OFP to rt repo procurement planning process, the nce adva the ribe desc shall rt The repo dates, the review procedures, and the procedures to require lead time and cut-off implementation of the contract log. this policy directive, contact Mr. Jack to ect resp with ion rmat info her furt For ent Practices, telephone 395-3455. Nadol, Assistant Administrator for Procurem ctive August 28, 1981. EFFECTIVE DATE: This Policy Lter is effe in by the Director of OMB. CONCURRENCE: This letter has been concurred https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C6 : 4G .Sowle Don Ad mistrator III SYSTEM II 90492 THE WHITE HOUSE WASHINGTON July 22, 1982 MEMORANDUM FOR THE VICE PRESIDENT THE SECRETARY OF STATE THE SECRETARY OF THE TREASURY THE SECRETARY OF DEFENSE THE ATTORNEY GENERAL THE SECRETARY OF THE INTERIOR THE SECRETARY OF AGRICULTURE THE SECRETARY OF COMMERCE THE SECRETARY OF LABOR THE SECRETARY OF HEALTH AND HUMAN SERVICES o 1-4 ..,-: , CD SECRETARY OF HOUSING AND URBAN DEVELOPMENT THE .. •• -ir--._ THE SECRETARY OF TRANSPORTATION r7.:. ...... c.-. :.z.,: THE SECRETARY OF ENERGY :-_,:.,/•:>. ic.L. c--,:rz-ct: THE SECRETARY OF EDUCATION THE COUNSELLOR TO THE PRESIDENT BUDGET t.„ THE DIRECTOR, OFFICE OF MANAGEMENT AND o __, --I Cr6 cc 7:D THE DIRECTOR OF CENTRAL INTELLIGENCE -4 'c.r. 44.J al THE CHIEF OF STAFF TO THE PRESIDENT ZZ ODD 44 LiCr) THE DEPUTY CHIEF OF STAFF TO THE PRESIDENT C.) AL THE ASSISTANT TO THE PRESIDENT FOR NATION SECURITY AFFAIRS DEVELOPMENT THE ASSISTANT TO THE PRESIDENT FOR POLICY T AFFAIRS THE ASSISTANT TO THE PRESIDENT FOR CABINE TO THE ASSISTANT TO THE PRESIDENT AND DEPUTY THE CHIEF OF STAFF . THE CHAIRMAN, JOINT CHIEFS OF STAFF LOGY POLICY THE DIRECTOR, OFFICE OF SCIENCE AND TECHNO THE ADMINISTRATOR OF GENERAL SERVICES THE ADMINISTRATOR OF VETERANS' AFFAIRS N AGENCY THE ADMINISTRATOR, ENVIRONMENTAL PROTECTIO AGENCY THE DIRECTOR, FEDERAL EMERGENCY MANAGEMENT THE POSTMASTER GENERAL THE DIRECTOR OF SELECTIVE SERVICE THE THE CHAIRMAN OF THE BOARD OF GOVERNORS OF FEDERAL RESERVE SYSTEM COMMISSION THE CHAIRMAN, FEDERAL COMMUNICATIONS AGEMENT THE DIRECTOR, OFFICE OF PERSONNEL MAN SUBJECT: DD-47) Emergency Mobilization Preparedness (NS National Security The President has approved the attached ion Preparedness. Decision Directive on Emergency Mobilizat FOR THE PRESIDENT. William P. Clark Attachment https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NSDD 47 SYSTEM II 90492 THE WHITE HOUSE WA SH I NG TO N July 22, 1982 NationaZ Secutity Dec-Lon Di/Lective Numbet 47 EMERGENCY MOBILIZATION PREPAREDNESS PREAMBLE A fundamental obligation of government is to provide for the and security of the Nation and to protect its people, values, in its social, economic, and political structures. Inherent that obligation is the requirement to have an emergency mobilization preparedness program which will provide an effective capability to meet defense and essential civilian stic needs during national security emergencies and major dome emergencies. This directive aims not to commit the Federal to Government to a particular course of action, but rather of grave assure that a range of options are available in time national emergency. UNITED STATES EMERGENCY MOBILIZATION PREPAREDNESS POLICY emergency It is the policy of the United States to have an ensure that mobilization preparedness capability that will the private government at all levels, in partnership with ond decisively and sector and the American people, can resp y with defense of effectively to any major national emergenc . of the United States as the first priority PRINCIPLES FOR EMERGENCY MOBILIZATION PREPAREDNESS PROGRAMS on's ability Programs developed to ensure or improve the Nati ciples that follow. The to mobilize will be based on the prin y programs, while the general principles apply to all emergenc stic emergency division between national security and dome ve and appropriate principles emphasizes that the respecti Taken together, however, response for each category may differ. lization these principles define a common ground upon which mobi discretion of the programs can be developed and used at the ies, to combat and reduce President to prevent avoidable emergenc unavoidable, and to mitigate the the effects of those that are effects of those that do occur. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I 2 Authorities for direct economic controls (wage and price controls and consumer rationing) in national security emergencies need to be provided to give responsible policymakers flexibility to deal with circumstances that can be judged only as they arise. These controls should be used only when they are clearly superior to the efficiency of the market as a means to achieve essential objectives, and not as an automatic response to all national security emergencies. General Principles ies Emergency mobilization preparedness programs for all emergenc will be based on the following principles: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Where applicable, preparedness measures should emphasize the partnership and interdependence between Federal, State, and local governments. To the maximum degree possible, consistent with security requirements, the private sector should be brought into a planning partnership with responsible government agencies prior to the outset of an emergency. Plans and procedures should be designed to retain maximum flexibility for the President and other senior officials in the implementation of emergency actions both above and below the threshold of declared national emergencies and wars. Plans should avoid rigid "either-or" choices that limit Presidential options. Preparedness measures should reflect functional interness dependencies among agency activities and across prepared tary programs. Close and continuous coordination between mili and civilian agencies is required to ensure consistent approaches to common problems. rm Initial preparedness measures should focus on short-te improvements and make effective use of the existing mobilization base. Measures to increase adequate the mobilization base capabilities should be developed in longer term. Preparedness measures that involve the waiving or y modification of socioeconomic regulations that dela n. emergency responses should receive priority attentio by Preparedness measures that are, or may be, impeded task. legal constraints should be identified as a priority S 3 ed to increase Preparedness programs should also be design rtages arising from capabilities to cope with resource sho m foreign sources, disruptions of essential supplies fro g., transportation and serious disruptions of services (e. al security. or communications) that threaten nation ncies Principles for National.Security Emerge grams for national security Emergency mobilization preparedness pro ing principles: emergencies will be based on the follow the full spectrum of Preparedness measures should address national security emergencies. policies, plans, The development of the structure of l mobilization should authorities, and requirements for ful ns for total receive priority attention. Foundatio uced concurrently. mobilization planning should be introd ization programs Resource management and economic stabil ures for governmental should include standby plans and proced ket place to ensure intervention, as necessary, into the mar ocation of resources to the enhancement of supply and the all These mechanisms military and essential civilian needs. abrupt replacement of should provide for both gradual and tions. market forces by governmental regula a rapid and effective Preparedness measures should emphasize operations and should transition from routine to emergency of any periods of time be designed to make effective use the receipt of strategic and that may be available following t must develop capabilities tactical warnings. The Governmen required for emergency responses. to minimize the start-up time Federal agencies to identify by en giv be t mus ty ori pri h Hig nts for national resources and prioritize their requireme needed in a mobilization. of Federal agencies to identify Improvement in the capabilities their cognizance to meet and manage the resources under requirements in a mobilization an ili civ ial ent ess and ry ita mil will be achieved. lude all appropriate Preparedness measures should inc coordination with our allies. es Principles for Domestic Emergenci programs for domestic Emergency mobilization preparedness following principles: emergencies will be based on the the Constitutional roles Preparedness measures must reflect governments. In peacetime, al loc and te, Sta l, era Fed the of paring for, and responding pre for ty ili sib pon res pal princi te and local governments. Sta h wit ts res es nci rge eme ic to, domest https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis S 4 on natural disasters or Primary emphasis should be placed astrophic nature that other domestic emergencies of a cat hout substantial Federal cannot be managed effectively wit eres of activity in which sph hin wit se ari or, ce; sen pre l preeminence. there is an established Federa should assist State and local Federal preparedness measures ir capabilities to meet their jurisdictions in increasing the responsibilities. should be developed in close Domestic preparedness programs sector. coordination with the private ocation of resources during Preparedness measures for all y on market-based mechanisms. domestic emergencies should rel ess measures should provide Economic stabilization preparedn the imposition of direct mechanisms that do not rely on economic controls. ic emergencies should Preparedness measures for domest be necessary for only facilitate responses which may s from established public temporary and selective departure should aim for the prompt policies. Equally, such measures and programs. restoration of routine policies SPECIFIC POLICIES AND PROGRAMS preparedness policy ion zat ili mob ncy rge eme al ion nat Based on the grams are to be directed and principles stated above, the pro ability a credible and effective cap of nt pme elo dev the at lly tia ini ial of America in support of ent pot ion zat ili mob the s nes to har y needs of the national econom the g tin mee le whi , ces For ed the Arm requirements. These programs, ess edn par pre ncy rge eme il civ and other le, will contribute to: sib pos re whe ms gra pro ng sti exi making use of nuclear attack, on the United deterrence of attack, especially and defeat of attacks should States, our allies and friends; deterrence fail; coercion, nuclear blackmail, at ts emp att to se pon res effective and economic warfare; https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis government; preservation of constitutional as and the restoration of prompt recovery of affected are the Armed Forces; national systems, including continuation of cooperative the and ces ian all of ce nan mainte during, and after armed , ore bef ies all our h wit relationships activities; and conflict or disruptive 5 effective allocation and management of essential resources. In the case of major domestic emergencies, emergency mobilization preparedness programs will contribute to: improving the survivability of the national security capability; effective natural disaster predictions, risk assessment, and warning systems; reducing the vulnerability of production, services, and the infrastructure to catastrophic events; prompt and coordinated Federal assistance to affected State and local governments and communities; effective management and allocation of Federal resources to facilitate both emergency response operations and long-term rehabilitation and recovery. Military Mobilization and plans It is the policy of the United States to develop systems are available that will ensure that sufficient manpower and materiel and sustain to guarantee the Nation's ability to mobilize, deploy, defense military operations; and that, consistent with national assist priorities, military manpower and materiel be available to te. civilian authorities when civil resources are inadequa The program will increase capabilities to: to expand the size of the force from partial through full total mobilization; ain them in deploy forces to theaters of operations, and sust protracted conflict; and istent provide military assistance to civil authority, cons legal with national defense priorities and applicable guidelines. Industrial Mobilization to have a capability to It is the policy of the United States ly and sufficient mobilize industry in order to achieve time riel needed production of military and essential civilian mate conflict, to lend to prosecute successfully a major military ond to credibility to national strategic policy, and to resp national security emergencies. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6 The program will: to meet improve the capability of United States industry ing current and mobilization requirements by identify actions production and supplNr c'eficiencies and initiating to overcome them; re systems, increase the capability of industry and infrastructu onal security including transportation and energy, to meet nati urce-claimancy, needs through use of improved guidance on reso appropriate continued use of import and export controls, and where the use of Defense Production Act authorities in cases the free market cannot be reasonably expected to provide a timely manner; required national security capability industrial base provide for assessment of the impact on the for coresulting from existing and proposed agreements arrangements production of defense materiel, related offset ements; and with our allies, and other reciprocal trade agre materials ensure the availability of strategic and critical kpile; the by primary reliance on the National Defense Stoc in those President may authorize the use of DPA Title III onably expected instances where the free market cannot be reas bility in a to provide the required national security capa timely manner. Human Resources systems and plans It is the policy of the United States to develop available in the to ensure that the Nation's human resources are to support and sustain the Armed requisite numbers and skill s. Forces, and to provide for essential civilian need The program will: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ly l identify the required civilian skills and potentia supp nse l problems for support of the Armed Forbes, essentia defe industries, and other critical mobilization tasks; rd the facilitate the channelling of skilled workers towa most critical mobilization needs; ms to provide for maximum reliance on voluntary mechanis r allocate human resources to critical industrial and othe emergency mobilization tasks; provide for a standby system for attracting workers to critical mobilization tasks, if necessary, during national security emergencies; nsion minimize the impact of labor-management conflicts on expa of defense production; 7 enhance the availability of the requisite scientific, engineering, technical and other human resources to support both military and industrial mobilization needs; and ensure that human resources policies complement economic stabilization plans and procedures for mobilization. Health It is the policy of the United States to develop systems and plans to ensure that sufficient medical personnel, supplies, equipment, and facilities will be available and deployed to meet essential civilian and military health care needs in an emergency. The program will: enhance the Nation's ability to recover from major emergencies and protect the population from the spread of disease; supplement medical services provided by State and local governments and the private sector with medical resources during a domestic emergency; provide medical care to military casualties in civilian and Federal facilities; and allocate scarce supplies and skilled professionals (specialists) to the highest priority needs. Economic Stabilization and Public Finance It is the policy of the United States to develop a variety of authorities and plans which could be used in maintaining stable economic conditions during national security emergencies, giving particular emphasis to measures which will minimize inflation and shortages; enhance morale and assure that the burdens of the emergency are being fairly shared; facilitate an orderly return to a normal economy as soon as possible; and allow the allocative efficiencies of the free market to operate where possible, with alternative measures involving direct Government .intervention in the economy to be used only at the latest appropriate time. The program will increase capabilities to: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis minimize economic dislocations and distortions associated with national security emergencies by carrying out appropriate fiscal, monetary, and regulatory policies, including controlling inflation and shortages arising from the transfer of resources from non-essential to priority uses; 8 facilitate resource reallocation necessitated by any relocation of the populace; assure an equitable distribution of consumer goods; provide for the protection of United States financial resources including currency production, Federal check disbursement facilities, and precious monetary metals; preserve and facilitate operations of public and private financial institutions systems, and provide for any necessary restoration of their functioning after a major emergency; provide the Government with efficient and equitable financing sources and payments mechanisms for emergencies; and provide fiscal authorities with adequate revenue-raising powers to stabilize the economy in the face of any additional resource requirements needed to deal with or recover from an emergency; available fiscal measures should be selected , to provide maximum efficiency and equity, preserve incentives and minimize administrative burdens. Civil Defense nal The United States civil defense policy is contained in Natio Security Decision Directive 26, a Secret document, dated d February 26, 1982. In addition, it is the policy of the Unite and States that all Federal agencies shall participate in, , support, the civil defense program for population protection communications and warning, training and education, and industrial protection. Earthquakes op systems and It is the policy of the United States to devel property, plans to reduce the loss of life, destruction of our national economic instabilities, and the adverse impact on catastrophic earthquake. defense capability that would result from a catastrophic earthquake by The program can reduce the effects of a risk assessment, improving earthquake prediction, hazard and awareness, response and warning systems, public education and earthquake resistant recovery; by developing further and applying land use planning. The design and construction techniques, and ornia, but attention will initial action will be focused on Calif deration of their be focused later on other regions in consi relative risk from an earthquake. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • 9 The program will increase capabilities to: evaluate current earthquake prediction activities, foster the application of advanced scientific and engineering techniques for prediction and mitigation, increase and accelerate basic and applied research efforts; develop a coordination and integration mechanism between Federal and State governments; identify and allocate financial, medical, transportation, shelter, communications, and other resources necessary to assist recovery operations; reduce the negative effects on military installations and defense related industries; ensure more effective public awareness programs to equip all levels of the populace with specific information to help them survive; promote international cooperation to increase scientific ; and engineering knowledge in applying mitigation measures provide for the preparation, implementation, and exercising of preparedness procedures; and ensure the adequacy of current Federal legislation and regulations to facilitate an effective response. Government Operations ems and It is the policy of the United States to develop syst y government plans that will ensure the maintenance of necessar provide functions at the Federal, State, and local levels and y modes of for a timely and effective transition into emergenc operation. The program will: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis nt ensure continuous performance of essential governme functions; y provide timely and effective transition to emergenc government operations; operations provide a mechanism for the reconstitution of the required; and of government following a nuclear attack, as capable ensure that government officials at all levels are emergency of responding predictably and effectively to conditions. 10 • Emergency Communications It is the policy of the United States to ensure that communications resources be available and adequate to respond to the Nation's needs. The program will: assure viable communications operations concepts; make information available on communications needs and resources; identify and correct communications deficiencies; provide adequate communications planning guidance and the basis for funding; and arrange for smooth transition from normal to emergency operations. Law Enforcement and Public Safety It is the policy of the United States to develop systems and plans that will provide for the public safety and ensure continued enforcement of Federal, State, and local laws; and ensure internal security and the control of United States borders, and waters subject to the jurisdiction of the United States. The program will increase capabilities to: maintain law and order in a variety of emergencies, particularly terrorist incidents, civil distuibances, nuclear emergencies, and relocation of large numbers of people; ensure the physical security of critical public and private facilities; provide for control of enemy aliens and persons entering or leaving the United States; guarantee control of United States seaports,. airports, and land and sea borders; provide a response capability to sabotage and espionage; and ensure an intensified counterintelligence effort. Food and Agriculture It is the policy of the United States to develop systems and plans that will provide an adequate flow of agricultural products to our interthe general population and the Armed Forces, and to meet https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • national responsibilities. These plans must reduce the vulnerability of our food and fiber resources; ensure a responsive production, delivery, and distribution system during emergencies, and contain provisions for the rapid recovery of the agricultural system. The program will: plan for adequate research, production capabilities, and reserves of agricultural products, including livestock and poultry, to provide the Nation's farmers with production resources, including emergency financing capabilities; provide for the most effective allocation of resources for the production and use of available food and fiber during l emergencies; and the assessment of national and internationa requirements upon supplies of food and fiber, so as to decrease dependence on foreign sources; ensure maximum availability of food and fiber supplies to our Armed Forces and our allies; maintain production capabilities to contribute to our world agricultural trade objectives, and reduce susceptibility to manipulated economic pressures; on establish emergency marketing, processing, inspecti yand grading systems for government-owned and privatel sportation held agricultural commodities; establish civil tran and make resource priorities to support agricultural needs; ritie's; provisions for secure storage capabilities and prio the Nation's plan to protect the health and well-being of crops and livestock and poultry; ensure the protection of croplands, and the Nation's forest resources; and y conditions provide for timely information under emergenc on, and priority to assure adequate food and fiber producti distribution to the normal wholesale level. Social Services es to develop systems and It is the policy of the United Stat to provide emergency plans that will increase capabilities of the population. social services to meet survival needs and on State Maximum reliance will be placed on voluntarism and local governments. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12 The program will: and provide services for persons with special needs selves prepare families and individuals to care for them to the maximum extent possible; ate maintain existing Federal, State, local, and priv programs to meet ongoing social services needs; of provide for the reception, care, and resettlement gency; and personnel evacuated from overseas during an emer emergency provide for a management structure through which rately social services requirements can be assessed accu meet highest and necessary services delivered efficiently to priority needs. MANAGEMENT y Mobilization Consistent with this directive, the Emergenc planning guidance, Preparedness Board will formulate policy and progress. In coordinate planning, resolve issues, and monitor assign additional accomplishing these functions, the Board may stance of tasks to its Working Groups and require the assi h cannot be resolved individual Federal agencies. Any issue whic Administration by the Board within the framework of current Council for policy will be referred to the National Security resolution and Presidential decision. lization Preparedness Accordingly, I direct the Emergency Mobi the programs Board to prepare a Plan of Action to implement n for programs detailed in this directive. Plans of.Actio directive will be developed subsequent to publication of this . prepared within 45 days of program approval nts and agencies manage I further direct that all Federal departme nt with the provisions their financial and human resources consiste andother directives to of applicable law, and provisions of this capabilities. Resources assure the development of the required capabilities will be obtained for improvements in our preparedness overall context of the through the normal budget process. In the budgeting, and President's budget and current regulatory, rtment and Agency will legislative review processes, each Depa those preparedness program and budget funds and personnel for missions and functions. activities which are integral to assigned rescinded. Presidential Directive/NSC-57 is hereby https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .."-: 4‘77,.,u ).•',_:,•* , EXECUTIVE OFFICE OF THE PRESIDENT Mi.. OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503 JUL 1 5 1982 F EXECUTI E OF' THE. FIWOP S FECTRAL RESERVE t281 JUL 21 EPARTMENTS AND AGENCIES FROM: DO SUBJECT: Implementation of E.O. 12352, Procurement Reforms LD E. SOWLE The purpose of this memorandum is to keep you apprised of the actions taken and planned to implement E.O. 12352, Federal Procurement Reforms. The Federal Procurement Council (FPC) comprised of representatives from the 24 largest agencies, met in March 1982, shortly after E.O. 12352 was signed, to discuss preliminary plans and to set up a task group to develop a model charter for procurement executives. Subsequently, an Executive Committee of the FPC was established to facilitate more frequent meetings, and task groups were set up to develop guidance to agencies on each element of E.O. 12352. Attached for information are: o o o Executive Committee Charter Minutes of the Executive Committee Meeting of June 1, 1982 Agenda for Executive Committee Meeting on July 14, 1982 The Model Charter for Procurement Executives was approved on June 30, 1982 and heads of departments and agencies by the Director of OMB on was sent July 8, 1982. toin If you have any questions or suggestions, please call me at 395-5802, or LeRoy Haugh at 395-6166. Attachments Copy to: Agency Contact Points https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PM 9:02 R OFFiCE EVED CEIOr THE CHAIRMAN OFFICE OF FEDERAL PROCUREMENT POLICY MEMORANDUM FOR: HEA BoAlzo or GC VE EXECP1VE OFFICE OF THE PRESIDE*" OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503 CHARTER EXECUTIVE COMMITTEE ON FEDERAL PROCUREMENT REFORMS I. Establishment: rms is The Executive Committee on Federal Procurement Refo It is under the established effective May 18, 1982. et and leadership of the Office of Management and Budg urement chaired by the Administrator for Federal Proc Policy. Purpose: in assist to is Committee this of purpose The forth in implementation of the procurement reforms set cy review Executive Order 12352 by providing broad poli son on and counsel to OMB through the Committee's Chairper Interagency task all proposed implementation guidance. V to groups will be appointed as set forth in Section y develop guidance that will enable agency heads to full utive accomplish their responsibilities under the Exec be to Order. One of the functions of the Committee will dations. review and evaluate these task group recommen ion Other functions of the Committee are set forth in Sect IV. III. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Membership: ent The Committee is composed of the agency level Procurem Executive from each of the following organizations: Department of Agriculture Department of Defense Department of Energy Department of Interior Department of Transportation General Services Administration National Aeronautics and Space Administration Veterans Administration the Membership will also include a representative from l Small Business Administration and the Office of Personne Management. in his capacity A member may appoint an alternate to act ing if he is and represent his organization at a meet However, principals are expected to unable to attend. attend meetings whenever possible. Notice will meeting. be given at least two weeks prior to a & • , 2 IV. Activities: The Executive Committee will: V. o Provide advice with respect to the organization of interagency task groups and the nominations of individuals selected to chair task groups. o Review and provide advice with respect to each task group's charter. o Review task group plans to ensure they encompass all the areas needed to fully implement the Executive Order. o Review and evaluate task group progress. o groups task by raised questions Resolve otherwise provide guidance to task groups. o Review the proposed guidance developed by the task recommend changes, modifications or group and acceptance for transmittal to the agencies. o Advise and counsel OMB/OFPP on content of periodic reports to the President on the accomplishments and progress in implementing the Executive Order. o Review Government-wide proposed policies, recommend areas for the development of new policies and identify statutory provisions that need to be amended or repealed. ,. and Task Groups: Interagency task groups will be established to develop guidance which will facilitate agency accomplishment of the specific objectives of Executive Order 12352. Each task group will be chaired by a General or Flag Officer, Responsibilities of the or civil service equivalent. Chairperson include: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 0 o of terms in membership balanced a Ensuring perspective and agency mission responsibilities. o Developing a charter and presenting Committee for review and approval. o Developing a plan of areas and issues to be examined by the task group. it to the • • 3 VI. o Briefing the Committee on progress. o and presenting Developing recommended actions. o Ensuring all actions in the charter and plan are completed or disposed of. to the Committee Meetings: Meetings of the Executive Committee will be held as necessary at the call of the Administrator for Federal Meetings will be held, on the Procurement Policy. average, once a month. VII. Staff Support: ded by Staff support to the Chairperson will be be provi The Administrator will designate an Executive OFPP. a, and Secretary to plan, coordinate, prepare the agend maintain minutes of each meeting. Approved: Approved: h R. Wright, D..uty Director ffice of Management and Budget Donal E Sowle Admin strator for Federal Procurement Policy DATED: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis June 25, 1982 EXECUTIVE COMMITTEE ON PROCUREMENT REFORM MINUTES OF MEETING JUNE 1, 1982 1. The initial meeting of the Executive Committee on Procurement Reform was held at 10:00 a.m. on June 1, 1982, in Room 9104 of the New Executive Office Building. Purpose of the meeting was to: (1) review the proposed organization and planning for the implementation of Executive Order 12352, and (2) review the proposed Model Charter for Procurement Executives. Attendees Procurement Executives (or alternate) of the eight largest procuring agencies and the special representatives of the Small Business Administration and the Office of Personnel Management - are listed in Attachment 1. 2. The agenda for the meeting is appended as Attachment 2. Notebooks containing the documents for discussion as indicated by the agenda were S. S istributed to the atendees on May 28, 182. a. Following are the principal points made by Mr. Sowle in his opening remarks: • o This group is an Executive Committee of the Federal Procurement Executives' Council (FPEC). Will meet every month or so, with preset agenda. FPEC will continue to meet, but less frequently. General purpose and functions are covered in the charter. In addition, this Committee should be a sounding board for OFPP initiatives, legislative needs and a forum for exchange of ideas and discussion of policy issues. b. 3. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Discussion following the opening remarks: o The way the Committee was formed — i.e., by OMB Memorandum rather than by the FPEC. However, there was general agreement that an Executive Committee is needed. • All agreed that this should be a Committee of Membership. Procurement Executives, and that they would be expected to participate whenever possible. However, the charter should provide for an alternate who could speak for the Procurement Executive when the Procurement Executive could not attend. Darleen Druyun of OFPP, Executive Secretary of the Committee, gave a briefing which covered the agenda items. The briefing charts are appended as Attachment 3. Principal points of discussion were the following: a. Executive Committee's Charter: o 'Purpose" needs to be more specific. For example, it is unclear to whom "guidance and broad policy review" is to be provided. a • 2 b. c. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Activities of the Committee: o Question was raised whether formal task group charters are necessary. Agreed that they are. Charters will define the purpose, scope, authority, and agency support to accomplish the tasks. Detailed plans will flow from the task listing. o Divergent opinions among Committee members will be fully aired. The purpose of this whole effort is to furnish guidance to Agency Heads in implementing the Executive Order and advise OMB on the progress for the periodic reporting to the President, not to dictate what the agencies should do. o Committee role vis-a-vis Task Groups. The Committee will review the TG charters and provide advice and guidance to the TGs. Approval of Task Group Chairmen: o Civil agencies unable to nominate a chair for most task groups because of the rank/grade criteria. To provide agency balance, agreed that task groups on Simplifying Small Purchases (115) and Career Management Programs (1i6) would be chaired by DOD representative, with vice chairperson from GSA. o Previously proposed task groups on Establishing System Criteria, Standards for Competition and Certifying Systems were consolidated into single TG. DOD nominees to chair separate TGs were approved as chair and vice-chair of consolidated TG. o OMB (Financial Management) is already chairing a task group to implement P.L. 97-177 (Timely Payments). However, the committee decided that a procurement group was needed as well. Accordingly, ageKcies will nominate representatives for such a task group to interface with the existing OMB task group. Mr. Mathis, OFPP contact on the OMB group, will coordinate this effort. o Completion of the FAR should not be listed as a Task Group effort in the same sense as the other TGs will function. This is an ongoing joint DOD/GSA/NASA effort, and a Memorandum of Understanding is being prepared to ensure successful completion. o Nominations approved to chair the following Task Groups: - Establish Clear Lines of Contracting Authority Establish Government-wide System Criteria _ Reduce Administrative Costs and Burdens Simplify Small Purchases Career Management Programs https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 A Memorandum will be sent from OMB to Agency Heads in the next few days requesting nominees from procurement and other disciplines for a task group on balancing needs and priorities. o d. e. Other Implementation Plans o Each task group will be briefed next week, on the implementation plans in general and with respect to its particular responsibility. o A private sector briefing (approximately 35 associations) is scheduled for the week of June 14. Committee members are invited. o A public hearing is planned in Nov 1982. Periodic Reports: Task Groups should establish means of measuring improvements and reporting results, to facilitate compliance with reporting requirements to the President in accordance with E.O. 12352. o f. Status of 1102 Classification Standards: OPM advised the standards would be sent to agencies for review and that agencies would be invited to a final "markup" session. o g. h. 4. Draft of Procurement Executive's Charter: o Agreed to add a definition of procurement. The phrase "how needs are described" will be clarified. o Charter should recognize importance of grants function in some ,agencies, and that Procurement Executive, at agency discretion, may also be the person responsible for grants policy. o Transmittal letter with final charter should require appointment of Procurement Executive within 60 days and report name to OMB. Next meeting of the Committee July 14,1982. o Briefings by Task Group Chairpersons. o Briefing on status of FAR. The meeting was adjourned at 12:00 noon. 40 / earleen/un Executive Secretary Attachments https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Attachment 1 MEETING OF THE EXECUTIVE COMMITTEE ON PROCUREMENT REFORM ATTENDEES June 1, 1982 Committee: Name Donald E. Sowle Frank Gearde, Jr. William E. Long Hilary Rauch William Ferguson Ronald W. Piasecki Leroy Hopkins Paul Katz Robert McDermott Robert Fairman William Sullivan Agency OFPP USDA DOD DOE GSA DOI NASA OP M SBA DOT VA Others: Agency Name Harvey Gordon Cdr. Edwar I;ano Barnett Anceleitz William Mathis LeRoy J. Haugh Darleen Druyun Joseph L. Hood - DOD DOD DOT OFPP OFPP OFPP OFPP Attachment 2 • 4110 PROPOSED AGENDA EXECUTIVE COMMITTEE ON PROCUREMENT REFORM JUNE 1, 1982 o o https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Comprehensive planning for including: review of the proposed organization and implementation of the Executive Order oo Executive Committee's charter oo Interagency Task Groups proposed oo Review of proposed Task Group assignments oo Review of sample Task Group Charter oo Development of mechanism for reporting President on agency and overall progress of Review Executives proposed Model Charter on to the Procurement Identification of topics and date for next meeting https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis EXECUTIVE COMMITTEE'S CHARTER ESTABLISHED EFFECTIVE MAY 18 , 1982 CHAIRED BY ADMINISTRATOR FO R FEDERAL PROCUREMENT POLI CY PURPOSE 0 ASSIST 0 PROVIDE BROAD POLICY REVIEW 0 REVIEW IN IMPLEMENTATION OF EXECUTIVE ORDER AND GUIDANCE AND EVALUATE TASK GROUP RE COMMENDATIONS MEMBERSHIP 0 EIGHT LARGEST PROCURING AGEN CIES 0 SBA AND OPM https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ACTIVITIES 0 OF THE COMMITTEE PROVIDE 'ADVICE ON TASK GROUP ORGANIZATION 0 _ NOMINEES TO CHAIR - CHARTERS _ PLANS - PROGRESS _ QUESTIONS AND OVERALL GUID ANCE ADVISE AND COUNSEL OMB ON PERIODIC REPORT TO PRESIDENT • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ACTIVITIES OF TASK GROUPS 0 CHAIRED BY GENERAL / FLAG / SES EQUIVALENT 0 RESPONSIBILITIES OF CHAIRPERSON ENSURE BALANCED MEMBERSHIP • DEVELOP -- CHARTER AND BRIEF EXECUTIVE COMMITTEE PLAN ON AREAS AND ISSUES TO BE EXAMINED (INCLUDING SCHEDULE FOR COMPLETION) -- MECHANISM FOR COLLECTING AND DISSEMINATING IDEAS BRIEF COMMITTEE ON -- PROGRESS -- RECOMMENDED ACTIONS ENSURE ALL ACTIONS COMPLETED • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MEETINGS AS FIELD NEEDED. . .AVERAGE 1 PER MONTH Ex ECUT I VE SECRETARY DES I GNATED BY ADM I N I STRATOR FOR COMM I TTEE SUPPORT 0 PLAN 0 COORDI NATE 0 PREPARE AGENDAS AND MI NUTES OF MEET I NGS • • TASK GROUP TITLE ESTABLISH AGENCY PROCUREMENT EXECUTIVES CHAIR NOMINEE/AGENCY OFPP CONTACT NO. OF AGENCY. PERSONNEL IDENT)FIED TO WORK ON TASK GROUP Le HOPKINS - NASA L. HAUGH 30 Co ARMSTRONG DOI W. COLEMAN ESTABLISH CLEAR LINES OF CONTRACTING AUTHORITY 3 ESTABLISH GOVERNMENT-WIDE SYSTEM CRITERIA, INCLUDING COMPETITION, AND CERTIFY SYSTEM TO AGENCY HEAD DOD (B/G DRENZ) (ED TRUSELLA) L. HAUGH 15 4 REDUCE ADMINISTRATIVE COSTS AND BURDENS DOD (B/G CONNOLLY) C. CLARK 6 5 SIMPLIFY SMALL PURCHASES DOD (A,. clilESA) GSA (u. DODGE) B. GLOTFELTY 9 6 CAREER MANAGEMENT PROGRAMS DOD (R. ADM. SANSONE) GSA (T. LAMouRE) W. HUNTER 9 • SPECIAL TASK GROUP BEING ESTABLISHED WHICH WILL INTERFACE WITH PROCUREMENT 7 SPECIAL 8 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BALANCING PROGRAM NEEDS AGAINST MISSION PRIORITIES AGENCY CHAIRED Jo HOOD 2 W. MATHIS 3 SUBTASK GROUP TO INTERFACE WITH OMB GROUP TIMELY PAYMENT OF ALL CONTRACTS AGENCY CHAIRED https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OTHER 0 IMPLEMENTATION PLANS EACH TASK GROUP SEPARATELY BRIEFED ON EFFORT (WEEK OF JUNE 7), INCLUDING: • CONCEPTS - RESPONSIBILITIES, INCLUDING CHAIRS SCHEDULES - PROGRESS REPORTS - 0 MEETING WITH PRIVATE SECTOR (WEEK OF JUNE 111) • 0 PUBLIC HEARING (NOVEMBER 82) _ PROGRESS BEING MADE SOLICIT IDEAS AND COMMENTS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SAMPLE TASK GROUP ON ESTABLVSHING CLEAR LINES OF AUTHORITY AND ACCOUNTABILITY • FORMAT: I• II III. IV. V. VI ESTABL I SHMENT (OF TASK GROUP WI TH EFFECT I VE DATE) PuRPOSE MEMBERSHI P TASKS MEET I NGS SUPPORT • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis i IV. TASKS 0 TASK GROUP -- PROPOSED GUIDANCE _ TASK PLAN TO BE DEVELOPED BY SPECIFIC DATE _ 0 IDENTIFY SPECIFIC AREAS • CHAIRPERSON'S RESPONSIBILITIES _ SAME AS EXECUTIVE COMMITTEE CHARTER - COPIES OF ALL DOCUMENTS AND PROGRESS REPORTS GIVEN TO OFPP CONTACT 0 OFPP CONTACT RESPONSIBILITIES - PARTICIPATE IN MEETINGS _ KEEP EXECUTIVE SECRETARY INFORMED OF PROGRESS INCLUDING COPIES OF DOCUMENTS _ SCHEDULE BRIEFING TO EXECUTIVE COMMITTEE THROUGH EXECUTIVE SECRETARY • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis F PERIODIC , TO PROGRESS REPORTS PRESIDENT EXECUTIVE ORDER REQUIREMENT "REVIEWING AGENCY IMPLEMENTATION OF THE PROVISIONS OF THIS EXECUTIVE ORDER AND KEEPING ME INFORMED OF PROGRESS AND ACCOMPLISHMENTS" NEED 0 COLLECT DATA / REPORTS FROM: - 0 AGENCIES TASK GROUPS FREQUENCY • . . QUARTERLY INITIALLY • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ROLE OF OMB / OFPP 0 ISSUE A BULLETIN 0 COLLECT AGENCY REPORTS IN RESPONSE TO BULLETIN 0 PREPARE REPORT 1 • ROLE OF EXECUTIVE COMMITTEE 0 REVIEW AGENCY REPORTS 0 REV I EW OMB / OFPP DRAFT REPORT TO PRESIDENT • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis DRAFT EXECUTIVE'S PROCUREMENT CHARTER PROPOSED ADDITIONS / CHANGES 0 NEED DEFINITION OF PROCUREMENT INCLUDES ALL STAGES OF THE PROCESS OF ACQUIRING PROPERTY AND SERVICES, BEGINNING WITH HOW NEEDS ARE DESCRIBED AND ENDING WITH THE CLOSE OUT • OF THE CONTRACTUAL INSTRUMENT 0 NEED EXPLANATION OF How PROCUREMENT EXECUTIVE CAN ENHANCE OVERALL EFFECTIVENESS OF MISSION 0 NEED IDEA OF SUPPORTING AGENCY'S. MISSION ACCOMPLISHMENT 0 RESPONSIBILITIES SHOULD ALSO INCLUDE DESIGNATING AREAS FOR AGENCY UNIQUE STANDARDS ESTABLISHING CLEAR LINES OF CONTRACTING AUTHORITY 0 RECOGNI7E DUAL PROCUREMENT / GRANTS ROLE IN SOMF AUNriFS • . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis JULY PROPOSED 14 FOR NEXT DATE MEETING '%. TOPICS 0 wii AND APPROVE TASK GROUP CHARTERS AND PLANS _ 0 INDIVIDUALLY BRIEFED BY CHAIRPERSONS IftjIis1i STATUS ON: IMPLEMENTATION _ TIMELY PAYMENT OF CONTRACTS PROPOSED AGENDA EXECUTIVE COMMITTEE ON FEDERAL PROCUREMENT REFORM JULY 14, 1982 10:00 - 11:15 Review and approve task group charters and plans Task Groups Briefer Establish Clear Lines of Contracting Authority C. Armstrong Establish Government-Wide System Criteria Including Competition and Certify System to Agency Head B/G Drenz Reduce Administrative Costs and Burdens M/G Connolly - Simplify Small Purchases R. Chiesa - Career Management Programs R. Adm. Sansone 11:15 - 11:30 Status Report on FAR implementation including effective date of FAR and agency implementation and status of CAP Council H. Gordon W. Ferguson L. Haugh 11:30 -11:35 Status report on Timely Payments R. Sanders 11:35 - 11:45 Status Report on 1102 Standards P. Katz 11:45 - 12:00 Establish date and agenda for next meeting https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ; 1 . 1 • • EXECUTIVE OFFICE OF THE r)ith ERti. PRESII:Lt.tt) OF GOY 07 1 IlL OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503 82 JUL 13 RI RECUVED JUL 8 1982 OFFICE CHA1P.V .. :N Or iiiE MENTS AND AGENCIES MEMORANDUM TO HEADS OF EXECUTIVE DEPART FROM: David A. Stockman SUBJECT: ives Appointment of Procurement Execut , 1982, identifies a number Executive Order 12352 of March 17 ing Federal procurement. of major initiatives aimed at improv ement for all agency Among these initiatives is the requir cutive with agency-wide heads to designate a Procurement Exe procurement of nt pme elo dev e rse ove to ty ili sib respon in accordance with ce man for per tem sys te lua eva systems, management of the procureapproved criteria, enhance career the agency head that ment work force, and certify to teria. procurement systems meet approved cri ion on this initiative, an In order to facilitate agency act ped a model charter which elo dev has up gro k tas cy gen intera ent of the Procurement cem pla te ria rop app the s identifie zational structure, sets ani org 's ncy age an hin wit Executive ties, and lists functions ili sib pon res and ies dut y out primar procurement ordinate sub to n tio ega del for appropriate The model rs. ice off ng cti tra con and ds organization hea de and may be adopted or charter is intended as a gui tent ary so long as it is consis ess nec ent ext the to ed ifi mod A copy the Executive Order. of pe sco and e pos pur the with ed. of the model charter is attach es that have not already nci age all t tha ted ues It is req do so within 60 days of ive cut Exe nt eme cur Pro designated a name of the individual The m. ndu ora mem s receipt of thi placement, anizational org r /he his h wit er eth designated, tog to forwarded be should ilities, sib pon res and , ies dut Federal of Office ator, str ini Adm e, wl So E. Donald Budget, and Management of ice Off , cy li Po nt eme Procur Washington, DC 20503. Attachment 1 -., https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • •0 _ MODEL CHARTER FOR PROCUREMENT EXECUTIVES Developed By the Procurement Executive ncil Task Group of the Federal Procurement Cou Interagency Task Group Leader: OFPP Contact: LeRoy E. Hopkins LeRoy J. Haugh https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PROCUREMENT EXECUTIVE 2, titled "Federal Executive Order 12352 of March 17, 198 1 as follows: Procurement Reforms," provides in Section support of "To make procurement more effective in executive mission accomplishments, the heads of ucts and agencies engaged in the procurement of prod gnate a services from the private sector shall: Desi onsibilProcurement Executive with agency-wide resp systems, ity to oversee development of procurement ce with evaluate system performance in accordan nt of the approved criteria, enhance career manageme the agency procurement work force, and certify to approved meet systems procurement that head criteria." PROCUREMENT EXECUTIVE each procuring agency Under the Executive Order, the head of ent Executive who in is responsible for designating a Procurem ent and oversight of turn is responsible for the developm agency-wide procurement systems. process of acquiring Procurement includes all stages of the s are described property and services beginning with how need ual instrument. and ending with the close out of the contract rs to the develop(The phrase "how needs are described" refe be used in the ment of the statement of work that will of the It does not include the development solicitation. "mission element needs statement." the (1) appropriate This model charter contains guidance as to within an agency's placement of the Procurement Executive ies and responsibilorganizational structure, (2) primary dut gation to (3) functions appropriate for dele ities and heads and contracting subordinate procurement organization may be adopted as is officers. It is intended as a guide and so long as it is or modified to the extent necessary the Executive order. consistent with the purpose and scope of the efficiency and The fundamental goal is to improve which plays a vital effectiveness of the procurement function role in accomplishing agency missions. ORGANIZATIONAL PLACEMENT Background ement was highlighted in The importance of organizational plac Commission on Government the findings of the Report of the page 43. Procurement (COGP), Volume 1, Chapter 5, ) N https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • • • 2 l "Technical personnel tend to dominate personne Procurement engaged in the procurement process. personnel do not receive the management support they must have in order to bring their professional g expertise into play in awarding and administerin contracts and, as a consequence, they must often bow to the desires of requisitioners who do not have expertise in procurement." need to As a result of its study, the COGP stated the whose reevaluate the place of procurement in each agency ent. program goals require substantial reliance on procurem should Under the general oversight of the OFPP, each agency the ensure that the business aspects of procurement and urement multiple national objectives to be incorporated in proc in the actions receive appropriate consideration at all levels organization. (COGP Recommendation No. 12) Placement Procurement The head of each Federal agency will appoint a tion or a Executive which should normally be a full-time posi official will primary function of that position.* Since this the agency's be responsible for management direction of experienced procurement system, the Executive should be an directly to, no procurement professional and be at, or report t administrator lower than the assistant secretary or assistan may designate level. Procurement Executives of large agencies in sub-agency subordinate Procurement Executives, as needed, elements. responsibilities, the To effectively carry out his/her high level in the Executive must be placed at a sufficiently organization to ensure: * grants function Some agencies which have a significant onsibility. It have combined procurement and grants resp cy separate is not intended in such cases that the agen vidual whose these functions in order to have an indi So long as primary function is Procurement Executive. Executive meets the individual designated as Procurement set forth in the criteria and can carry out the function procurement of assignment the charter, this nt of grant responsibility does not preclude the assignme Procurement functions in those agencies where the Executive also has grants responsibility. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 - Direct access to the head of the major organizational element served; - Sufficient status to deal with contractor executives; and - Comparative equality with organizational elements. major mission and program RESPONSIBILITIES 1. The Procurement Executive is delegated Delegation. and authority from the agency head to oversee development ent provide management direction of the agency's procurem and laws applicable with accordance in system Specificalloy, the Procurement Executive regulations. is authorized to: a. b. Prescribe and publish agency procurement policies, (When the Federal regulations and procedures. Acquisition Regulation (FAR) becomes effective, be agency policies, regulations and procedures will e limited to those unique to the agency or otherwis necessary to implement the FAR. Repeating or para phrasing the FAR will not be permitted.); s and Enter into, make determinations and decision ate take other actions, consistent with appropri ect policies, regulations and procedures with resp ts to purchases, contracts, leases, sales agreemen law and other transactions, except those required by or regulation to be made by other authority; c. tatives Designate contracting officers and represen thereof; d. Establish clear lines of contracting authority; e. f. ority on If appropriate, exercise priorities auth the behalf of the agency, in accordance with (50 provisions of the Defense Production Act of 1950 Defense U.S.C. App. 2071, et seq.), Department of dated Authority, Priorities of Delegation policies and October 21, 1958, and applicable regulations; monitor and Evaluate system performance; the agency's procurement 1, • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 Manage and enhance career procurement work force; development of the OFPP, the the with coordination Examine, in procurement system to determine specific areas where Government-wide performance standards should be established and applied and participate in the procurement Government-wide of development (The standards. and regulations policies, standards will be the criteria used for measuring cost, time, i.e., effectiveness; operational quality, accuracy, quantity, qualifications, etc.); Determine areas for agency unique standards develop unique agency-wide standards; i. and Be the advocate for competition; and Certify to the agency head that system meets approved standards. k. 2. the procurement Redelegation The authority delegated in paragraph 1.a. may be redelegated only with respect to agency interanal procurement policies, procedures and regulations. a. None authorized with respect to paragraph 1.f., i. and k. b. The authority delegated in paragraphs 1.b., c., d., e., g., h. and j may be redelegated in writing with the power of further redelegation. C. Approved: Approved: Wright, Dep y Director Of ce of Management and Budget Dona • E. Sowle Admin strator for Federal Procurement Policy DATED: June 30, 1982 GOVE,RtiORco BOARD OF :tr,h • • THE WHITE HOUSE ftDERM. 1V82 Jki% -9 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis i11'. 10 WASHINGTON June 2, 1982 D RECEIVECtiAIRM OFFICE OC MEMORANDUM FOR GERALD P. CARMEN ADMINISTRATOR OF GENERAL SERVICES DAVID A. STOCKMAN 1 DIRECTOR, OFFTCE 1 OF MANAGEMENT AND BUDGET 11 IL FROM: R„,.._t•vvv\_.-\. , EDWIN L. HARPEI CHAIRMAN, PROPERTY REVIEW BOARD SUBJECT: Transfers of Excess Federal Property Executive Order 12348 established the Property Review Board (PRB) to oversee the President's program to improve the management of Federal real property. The Office of Management and Budget has decided with a the Administrator of GSA that property excessed by Federal agency should be transferred to another Federal agency only upon payment of the full fair market value for the property. the To implement this policy, the Board is providing following guidance: 1. 2. 3. 4. CC: Any exception to this policy must be endorsed by . the head of the executive department or agency The unavailability of funds alone is not sufficient to justify an exception. GSA The request for exception should be submitted to for referral to the Director of OMB, and include r an explanation of how the exception would furthe essential agency program objectives and at the same time be consistent with Executive Order 12348. If the Director of OMB approves the exception, the Administrator of GSA shall be notified and may then A copy of the OMB approval complete the transfer. should be sent to the PRB. The agency requesting the exception should assume responsibility for protection and maintenance costs where the disposal of the property is deferred for more than 30 days because of the consideration of the exception. Heads of All Executive Departments and Agencies https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • June 16, 1982 Ms. Virginia Knauer Special Assistant to the President The White House Washington, D.C. Dear Ms. Knauer: We will be pleased to review Professor Morse's proposal for a "uniform standard for interest rate disclosure° which is described in the attachment to your letter of June 4, 1982. I will be back to you as soon as we have completed our analysis. Sincerely, GG:ja WH-24 MI-020321 cc: Chairman's Office (2) • • ,gY THE WHITE HOUSE WASHINGTON CD June 4, 1982 rT1 --"1 rrt -s-) -4 "r1 < r-. 17 : ,) 4-rri rri rm •-•••• C7) 1r, CX) Dear Chairman Volcker: Dr. Richard L. D. Morse, Professor and Head, Department of Family Economics, Kansas State University, and a nationally recognized spokesman on consumer credit matters, has proposed in a letter to me a Universal Standard for Interest Rate Disclosure. Enclosed is a copy of that letter and the proposal which I find to be a very fascinating concept. Certainly, if there could be a single, relatively uncomplicated method to assist consumers universally to assess and compare interest rates, consumers would have a very valuable aid in evaluating their credit options in today's complicated marketplace. Such an approach meshes well with President Reagan's view that "an informed and educated consumer is vital to the longterm healthy growth of our economic system. Would you please review this proposal and give me the benefit of your views as to its merits. I am also enclosing a critique form prepared by Dr. Morse which may be of assistance in your review. Sincerely, V,ifinia H. Knauer stant to the President Special A Mr. Paul Volcker Chairman Federal Reserve Board 20th & Constitution Avenue, N.W. Washington, D.C. 20551 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis < I!" r 77-1 S. Department of Family Economics No miammiamillikal Justin Hall Manhattan, Kansas 66506 913-532-5515 .1S ICA/•7M.,.6 E STATsrry trisinniut https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis May 15, 1982 Virginia Knauer Special Assistant to the President on Consumer Affairs Executive Office Building Washington, DC Dear Mrs. Knauer: umers do not have an For many years I have been concerned that cons ntly savings options adequate understanding of savings. Until very rece sions based more on were so limited thac most consumers made savings deci alternatives. habit and convenience than on factual knowledge of y a wide assortment of That picture has changed. Consumers now enjo range of rates, maturities savings opportunities. There is a considerable breakthrough is that and liquidity options. One consequence of this le to understand and interpret even sophisticated consumers are usually unab for a traditional correctly the myriad of terms being offered. Even t ways to figure interest passbook account there are over 12,000 differen With the advent of creative at any given advertised interest rate. le interpretation for consumers financing, the varieties of systems defy simp their self-confidence may We must encourage consumers to save. Yet arly true of our elderly population be shaken by insecurity. This is particul g they do not understand. who dare not risk their savings in somethin if they are apprehensive and They cannot be enthusiastic about savings s are being made on merely a concerned whether their savings decision "best guess" basis. nces of consumers feeling insecure I am concerned about the conseque think something needs to be done and about their savings decisions. I ing of confidence that they have a good can be done to give them a feel grasp on the facts. that have been suggested: Let me outline three approaches nature of a "quick fix". The "quick fix" the of is osal prop t firs The interest is figured on all savings. would be to standardize the way might be required. Yet, even though ing ound comp us inuo cont ple, For exam tually reduce or eliminate confusion, a mandatory standard might even nt problems over an extended transiit would create tremendous adjustme e whether any single method of figuring tion period. Also, it is debatabl interest is feasible or desirable. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Virginia Knauer May 15, 1982 Page 2 0• • • A second alternative is Truth in Savings which would require full disclosure of the various methods and terms in carefully defined terminology. You will recall that in 1973 William E. Simon, then Deputy Secretary of the Treasury, and you urged the adoption of such legislation. Truth in Savings was Title I of the administration's bill on financial reform, introduced by Senators Tower and Sparkman in the 90th Congress. That bill would require savings institutions to use the same defined terminology, but not restrict the variety of ways savings programs are offered. A more serious problem is that it would require legislative enactment, and the prevailing mood of the Congress and this Administration is not to seek legislative initiatives. A third alternative is to establish a Universal Standard for Interest Rate Disclosure. This would not replace present methods, but provide a means for translating interest into a standard format. It would permit direct comparisons of interest rates internationally as well as between different types of financial instruments. It would do this without disturbing prevailing methods of figuring interest and trade practices of private industries or governments. Like all standards, it would be well defined and recognized universally. Its use would be optional and not required, but if used, it would be required to adhere to established standards. It has been proposed as a Universal Standard for Interest Rate Disclosure and submitted to the International Standards Organization for consideration. Of the three approaches, I believe the universal standard has merit and offers viable movement in the right direction. It will move, however, only as rapidly as it gains acceptance by the financial community. Acceptance, in turn, depends on its merit as judged by your expert advisors. My reason for writing you is to solicit your thoughts and ideas as to the strengths and weaknesses of the enclosed proposed standard. Succinctly, the standard proposes that interest be expressed as an equivalent of that daily rate which, compounded daily on daily balances, would cause the beginning principal amount to result in a specified closing principal amount over a specified period of days. For example, a 182-day Treasury bill purchased at $9,521.90 to mature in 182 days at $10,000 would be quoted as having a bank discount rate of 9.45%, or an "investment yield" of 10.10%, for leap year or 10.07% for one year, neither of which may be directly comparable with the rate quoted for a savings certificate. And the yield on the CD can vary depending on whether the nominal rate has a 360 or 365-day base. The proposed standard would report that an investment which grows from $9,521.58 to $10,000 in 182 days would be the equivalent of one which if compounded daily at a daily rate of 2.6921ct per $100 would have an annualized equivalent APR of 9.8267 and Annual Percentage Yield of 10.324%. I find the proposal attractive because (1) I believe the cents per $100 per day can be understood and used confidently by all literate consumers, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • Virginia Knauer4I0 May 15, 1982 Page 3 •• and (2) I believe every bank, credit union, savings and loan teller can run through the calculations in less than a minute using a $35 hand calculator. I am excited about what this can do for consumer education and advance our understanding of interest rates. In closing, a word of caution: You will notice under "Unfinished Business" recognition of its limited applicability and that adjustments for more complicated financial situations will need to be developed. Meanwhile, I look forward to your response and learning whether you consider the proposal worthy of future consideration. Thank you. Sincerely yours, Richard L. D. Morse Professor and Head RLDM/mw Removal Notice The item(s) identified below have been removed in accordance with FRASER's policy on handling sensitive information in digitization projects due to copyright protections. Citation Information Document Type: Summary statement Citations: Number of Pages Removed: 4 Morse, Richard L.D. "Summary Statement: Universal Standard for Interest Rate Disclosure." May 15, 1982. Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org • • • • CRITIQUE OF PROPOSED UNIVERSAL STANDARD FOR INTEREST RATE DISCLOSURES 1. 2. Is the proposal technically (mathematically) sound for situations involving a known beginning amount, known ending amount and known number of days intervening with no activity? _ Yes No Comment: The word "annual" in APR refers to a 365—day year thereby removing ambiguity arising out of leap year and of other numbers of days such as 360, 362, and 368. The actual number of days in the calendar year would not change; there will continue to be one extra day in leap year. However, APR will always convey a rate for a 365—day time period. Does the definition of the word "annual" present any major problems beyond those of making the transition to the standard? Yes 3. If so, what other one concept would be preferrabl e? No Suggestions for substitute terminology. Are there other terms you would prefer to substitute for APR and APY expressing the same concepts? Yes 6. No The concept of Annual Percentage Yield likewise refers to a 365—day time period and expresses as a percentage the hypothetical yield. Do you find the definitions of APR and APY to be sufficiently tight that they can be adhered to and not be misused? Yes 5. If so, what are the problems? Other than under the Truth in Lending Act, the annual rate is not precisely defined. The proposal uses a precise defin ition of APR as the Periodic Percentage Rate times the number of periods in a (365—day) year. The APR is often and correctly referred to as the "nomi nal" rate since it is a derived rate, obtained by annualizing the working perio dic rate. Does the concepts of APR present a conceptual problem? Yes 4. No No Suggestions for substitute terminology. Since it is not customary to quote the rate paid each compounding period, but to give only the nominal rate, it would not be surprising for you to question why the daily rate quotation is necessary. I would expect you to consider its use an unnecessary burden and source of confusion. The arguments for quoting the daily rate are two: (1) It is the rate actually being paid each day; it is not a "nominal" or "hypothetical" rate. (2) It can be stated in a way that is meaningful to consumers; they can identify with the cents, 100 dollar units, and a day, as in "cents per $100 per day." Would you agree with this position? Yes https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis No If no, how would you suggest having the rate paid daily quoted? III 7. No Comment: Would you or your staff be interested in participating in a conference to r further explore this and other ideas for bringing greater clarity to consume savings rate quotations. Yes 9. • • In summary, do you feel the proposal merits further consideration? Yes 8. -2- No Comments: To whom in your organization would you prefer the further correspondence on this matter be directed? Please return to: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Virginia Knauer Special Assistant to the President on Consumer Affairs Executive Office Building Washington, DC