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Office of the Press Secretary

For Immediate Release February 10, 1996
                             PRESS BRIEFING


                    REGULATORY AFFAIRS, SALLY KATZEN                

                           The Briefing Room
                            February 9, 1996      

2:37 P.M. EST

MR. JOHNSON: Okay, this briefing is ON THE RECORD but embargoed until the President signs the bill tomorrow, which is scheduled for 8:00 a.m., as Mike said earlier.

This briefing concerns the DOD authorization bill and in the aspects that we have uncovered already during the earlier briefing which took place before Mike's daily briefing. The briefers today are going to be Robert G. Bell, who you all know from yesterday, the Senior Director for Defense Policy and Arms Control from the National Security Council; and also John Koskinen, the Deputy Director for Management of the Office of Management and Budget. Bob Bell is going to speak to most of the provisions of the bill. John is here to address the provisions relating to procurement reform for information technology.

Also available, should you have additional questions, are Steve Kelman, the Administrator for the Office of Federal Procurement Policy at OMB; and Sally Katzen, the Administrator of the Office of Information and Regulatory Affairs at OMB.

Again, this is ON THE RECORD, but it's embargoed until this bill is signed tomorrow morning.

MR. BELL: Thank you, David. In the wake of the President's December 28th veto, the conferees on the Fiscal Year 1996 defense authorization bill completed their renegotiation of the bill on January 19th, and over the course of the next week, passed that bill in the House and the Senate.

In our view, the revised bill satisfactorily corrected the three principal issues that had led to the original veto. First, the section in the original bill that would have mandated the deployment by the year 2003 of a 50-state missile defense that, in our view, most likely would have put us on a collision course with the ABM Treaty, that provision was deleted in its entirety. Second,the section of the original bill that would have required the President to certify or waive the law to assign U.S. Armed Forces to U.N. tactical or operational command was also deleted in its entirety.

And third, and last, the section in the original bill that would have mandated a requirement for supplemental budget request to fund overseas military contingency operations was changed from a binding provision to a nonbinding sense of the Congress section.

Now, in a case where Congress has overreached on fundamental matters concerning the President's prerogatives and responsibilities as Commander in Chief under the Constitution and the President has said, no, and that no has been sustained by the Congress in votes on the veto, and then Congress relents and corrects the bill, there is merit in confirming that outcome by signing the revised bill into law.

That said, there were a number of other issues which the administration had identified, which Secretary Perry had pushed hard on on the Hill, which the White House and the National Security Council had made clear on the Hill were objectionable provisions, including: the provision requiring the mandatory separation of HIV service personnel, the provision in the bill on abortion, changes in the "buy American" list, directed procurement in a noncompetitive way of ships at certain shipyards, cuts in the technology readiness program, and the Nunn-Lugar program.

Consideration for vetoing the bill on the basis of these objectionable provisions also had to be weighed, however, against other aspects of the bill which provided for very important advances in national security and our need to have a defense authorization bill that would fund certain military programs for the coming year.

For these reasons, on balance, then, the President decided to sign the revised bill. What I would like to do is briefly review these other provisions in the bill which we had earnestly sought and which in combination with the corrected objectionable provisions led the President, on balance, to decide to accept the bill.

First, the bill contains a $1 billion military housing privatization initiative established by Secretary Perry which provides new authority to acquire and improve family and unaccompanied military housing and supporting facilities in areas where base housing is very short and often inadequate. This initiative uses private expertise and capital to meet our military needs. And in our view, and in the view of the Department of Defense, this is an extremely important initiative in terms of maintaining the quality of life in our military and therefore maintaining high retention levels in our all-volunteer force.

Second, the bill contains necessary authorization for the full increase in pay and allowances. Now, after the veto of the original bill, the President had used his executive authority to grant a two percent pay increase for the military which fell short of the 2.4 percent request in our original budget. With the enactment of this bill, the military will now receive the full 2.4 percent increase for pay, a 2.4 increase in the basic allowance that's provided for food and subsistence, and a 5.2 percent increase in the allowance that the military receives for quarters. So this is important in terms of the morale and well-being of our military.

Third, it's because of this authorization bill, and only because of the authorization bill, that we will extend certain bonuses that are paid to military servicemen and servicewomen in critical areas that are instrumental in maintaining the retention of those individuals.

Just to mention a few: Without this bill, the authority for special bonuses would lapse in the area of aviation, which means that pilots who might otherwise go to the airlines; nuclear submarine and nuclear surface ship operations, which means otherwise those skilled personnel might go to the domestic nuclear power industry; nurses, reservists and hazardous duty pay for jobs that aren't that attractive in the military in every case.

So the bill provides very important bonuses and it's only because of this bill that they can be extended. During the Reagan administration, these bonuses were not sunsetted, but after President Reagan's veto of an authorization bill in the 1980s, Congress changed the bonuses so they would lapse, and they did that to try to build some protection into the process against vetoes of the authorization bill.

Next, the bill provides an authorization for necessary military construction in terms of new starts and, most importantly, in terms of the NATO infrastructure program of special importance to our current operation in Bosnia. Without this bill, the United States cannot contribute its share of necessary infrastructure construction going on with IFOR in Bosnia today. That's a $161 million share that goes to building headquarters, air fields, railroads and other parts of the transportation network.

And last, I would just mention on the issue of Bosnia, this bill also includes an administration proposal to change law to allow the United States to extradite indicted war criminals and provide evidence directly to the International War Crimes Tribunal in Yugoslavia, therefore encouraging others to fully cooperate with this process. There are two other parts of this that are very, very important to us that I' m going to turn to John now to outline in the areas of acquisition reform and information technology reform.

MR. KOSKINEN: Thank you, Bob. It's actually a pleasure to be here taking about something other than the government shutdown. I'm pleased to talk with you today about a continuation of this administration's three year effort, led by the Vice President and the National Performance Review, to provide a government that works better and costs less.

The NPR began by looking at how the government works, and focused on cutting red tape, empowering employees to achieve better results and putting customers first. The restructuring of the government that has taken place includes reducing federal employment by 200,000 people. We now have the smallest government in 30 yrs, all accomplished without significant RIFs or furloughs. Sixteen thousand pages of regulations are being eliminated. The $200 billion procurement operation of the government has been streamlined to save the taxpayers money. We have provided better tools to government employees to allow them to provide better service.

It's now easier for the government to buy goods off the shelf. Procurement executives can use streamlined procedures for purchases under $100,000, an increase from the previous $25,000 limit. We've made it easier for employees to make purchases under $2500 with government credit cards. We're pleased to discuss significant steps forward in the campaign to improve government performance across the entire government. These provisions apply not only to the Defense Department, but to all government agencies, even though they're provided as part of the DOD Authorization Bill the President will sign tomorrow.

The legislation is the product of a substantial bipartisan effort. The administration worked closely with Senators William Cohen and John Glenn in the Senate, after they introduced legislation in the mid-1995 era focused on information technology. We also worked with Senators Nunn, Levin, and Thurmond on procurement as the bill moved through the Defense authorization conference. In the House we worked with Congressman William Clinger, chairman of the Government Reform and Oversight Committee, and Congressman Cardiss Collins and Carolyn Maloney. It just shows you can work together on some things.

This bill focuses on the government purchase and management of information technology. We spend $25 billion a year in this area, which is a lot of money even by Washington standards. A major achievement of the new legislation is to make the agencies individually responsible for the effectiveness of the information technology they purchase.

The Brooks Act, under which GSA oversaw all IT procurement, has been repealed by the passage of this Act. GSA will now work with OMB to provide guidance and expertise to the agencies, but the agencies will be held responsible. The legislation provides criteria for evaluating information technology systems. We adopted these guidelines from the best practices of major companies in the private sectors. A significant lesson learned from commercial companies was the importance of restructuring the way work is done before you consider automating it. Agencies are also given more flexibility on how they purchase information technology. They can now buy systems in smaller, incremental phases rather than having to buy major systems in one multi-year contract.

Repeal of the Brooks Act also ends the jurisdiction of the General Services Board of Contract Appeals in the information technology area. This has been a source and a cause of lengthy delays and significantly increased costs in agency purchases. Appeals will now go to GAO, which has a much better track record of efficient oversight of procurement policies. The bill also elevates the visibility and importance of information technology in the agencies by creating the position of chief information officer in each agency. This position is now a common one in the private sector.

We also will be able to build on the good work GSA has done under the leadership of Roger Johnson in developing inter-agency task forces to tap the experience and expertise of government executives across all of the agency lines. There is also separate, very significant continuations in the procurement reform that has been the focus of the reinvention efforts of this administration in the past. The Act allows the Office of Federal Procurement Policy to waive any special government contract clauses when the government buys commercial, off-the-shelf products.

The bill also allows the government to reduce the number of suppliers with whom it has further negotiations after receiving initial proposals in order to conduct more efficient procurements. And the government is also allowed under this bill to develop special, simplified procedures for buying commercial items with a value of up to $5 million, rather than the present $100,000 cut-off.

As Bob noted, Sally Katzen, the administrator of the Office of Information and Regulatory Affairs and Steve Kelman, the administrator of the Office of Federal Procurement Policy, are here with me today, and I think there are press packets that have the highlights of these two sections of the bill. And so Sally and Steve or I would be happy to answer questions you may have about this area of the bill, and Bob, I'm sure, will answer any questions you have about the more normal provisions in the authorization bill.


Q When it comes to the oversight scheme now, OMB's going to have more authority rather than GSA. Is there any concern that OMB have enough staff experience in evaluating technology and technology spending to handle that oversight duty?

MR. KOSKINEN: We actually right now review all the information technology acquisitions in the budget process. Sally and her staff have a very experienced staff that, in fact, have just completed putting together a guidebook not only for OMB but for the agencies in the Acquisition and Management of Information Technology, and they oversee the major government circular in this area.

So what really happens is that instead of having a bifurcated or duplicitous -- duplicative -- maybe duplicitous too --(laughter) -- but duplicative review process that caused agencies to have to go both to GSA and then continue to be reviewed in the budget process, this will, in effect, put the responsibility on the agencies. And there will be a single level of review which continues from the present process of working through the budget reviews.

Q When do the different pieces of the law take effect? When does the GSPCA jurisdiction go away? When does the FIRMR go away? And what is the -- do you have a schedule yet for the implementing regulations?

MR. KOSKINEN: The bulk of the Act is implemented in 180 days after the President signs it.

Q Has this new process eliminated all of the criticism of the $600, $800 coffee pots and so forth? And how about the rivalry in the services of each doing their own different buying and so forth? Is there more of a leveling out of -- that's the wrong word, but --

MR. KOSKINEN: The whole -- the process over the whole three years, and as I say there's been a significant amount of focus on procurement reform and, in fact, we've had major cooperation with the Defense Department because everybody is concerned about this, and we think that the government is moving, as you can tell by the emphasis on purchasing commercial items off the shelf, is moving to become not only a better buyer, but a much more competitive buyer in the private sector area.

So we think that the legislation already passed, and this legislation, will give us the building blocks and the tools we need to make a significant different. I mean, there are areas in which the government functions very effectively. When we, as private citizens, send a Federal Express package, for instance, it costs, depending on the weight, as much as $25. The government sends Federal Express packages for under $3. We just re-bid the FTS2000 telecommunication costs for the government under a rebidding process that we're supporting in other areas in the government, and the real savings will be $200 million a year. So there are a number of areas in which the government already is a very effective purchaser.

Q What did you save on not having Star Wars, or a missile defense in every state?

MR. KOSKINEN: I would turn to my defense colleague.

Q How much would that have been in the way of an outlay?

MR. BELL: Well, Helen, if by Star Wars you mean the original recommendation that President Reagan made for an astrodome that would have provided an impenetrable shield over all of America against even a massive Soviet missile attack --

Q I guess I meant the 50 states missile --

MR. BELL: In this Act -- and our estimate is that an effective, operationally effective defense of all 50 states would require a multiple site, land-based ABM defense that's cost would be in the $20 to $30 billion range.

Other questions?

Q Under the old way agencies used to have to file the federal IRM regulations. Since the Brooks Act has been repealed, do those regulations go away, too, or do they have to be modified? Will they be used as guidance? What the status of FIRMR might --

MR. KELMAN: The Federal Opposition Regulatory council will decide what, if anything, from the traditional, special procurement rules for information technology will be preserved in the government-wide regulation, and those decisions will be made over the next few months. But the likelihood is that most of the specific provisions for information technology will disappear.

Q Thank you.

MR. KELMAN: Thank you all.

Q How fat is this bill? Ten thousand pages?

MR. KELMAN: My deputy here, Captain Sosnik, has got a copy of it, Helen. I can show it to you. It's about 1300 pages. And I'd give it to you and suggest a quiz in the morning, but -- (laughter.)

MR. KOSKINEN: Our section is very efficiently a small part of that.

MR. KELMAN: It's 982 pages.

MR. KOSKINEN: Thank you all.

THE PRESS: Thank you.

END 2:50 P.M. EST