Evening star., 1961-07-02
Continued From First Page

Dfle1caSeS spread OUT on Jne
bed, tried to negotiate.
Though normally it takes six
or seven months to place a
contract in major space "hard-
ware" our Mr.. Jones declares,
I've seen contracts gotten out
in five days"
What's more, nobody's sig
nature is needed if the circum-
stances are right.
A "Built-In" Evil
Most company men would
rather have it in writing, but
have the authority to make a
commitment on the phone" he
adds, even though I could
claim later I never said it."
Representative Flood, Demo-
crat of Pennsylvania. put it
this way:
"This is one of the built-in
evils of all procurement. If you
don't spend what you have, you
won't get the same budget the
next year.
"And it's true of every Of
flee, not just the military. It's
one Of the great fears of the
bureaucratic mind"
Mr.. Flood emphasizes that
the Defense Department had
improved its way in recent
years in June spending.
You'll find in any league re-
sponSible budget people who
deplore the Irregularities" he
says. I'm the Defense Depart
ment there's a sincere effort
by budget officers now. and it's
an encouraging trend"
Law Curtains Practice
"All departments are guilty, I"
growled Representative Pass
man, Democrat of Louisiana.
The lawmaker, who heads a
House subcommittee dealing
with money for foreign aid,
long has been a Sherlock in
spotting irregular fund man
agement in Government.
Helping the bureaucrats to
mend their ways are several
laws written right into the
appropriations bills every year.
The most celebrated and
probably the most effective, is
the So-called 20 per cent
statute. This declares that a
department must not spend
more than 20 per cent of its
money for the year in the
final two months of May and
, June.
For the Defense Department,
the rule has been in effect
since 1855, when the outcries
from Congress reached thun-
derous proportions and Sena-
tor Mansfield, Democrat of
Montana, charged that for
years Defense had been getting
more money than it was able
to obligate in a year for the
military side of foreign aid.
THE result has been," he
said, that during the last
months-indeed during the last
days Of each fiscal year-the
Defense Department engages in
an orgy of financial manipula-
tions to salt away excess funds
so that they will not revert
to the national Treasury"
No Solution Seen
This rule was applied to the
foreign aid program in 1856,
and now applies also to other
funds appropriated to the
President.
I'm fully aware of what
you're talking about" said
Rear Admiral R. K. James,
Chief of the Navy'S Bureau of
Ships, in an interview last
week.
Probably the problem never
will be completely licked as
long as we have one-year ap-
propriations. The year end
does generate money, but it
has significantly dropped.
Things are much better than
they were a few years ago."
The Bureau Of Ships uses
several techniques to even out
the rate of obligating money
over the year. In addition to
observing the 20 per cent law,
it draws up a schedule for pro-
curement long beforehand to
help keep the spending on a
level rate. 1t also queries Of
ficialS periodically to expose
any bulges in funds that may
appear.
This June will show a high
rate of contracts" declares
Captain George C. Wells, di-
rector of contracts for the
Bureau of Ships, "but not in
dollar value. I'd say last No
vember and February were our
most active months in dollar
value"
GAO Examines Closely
To make sure the 20 per cent
rule Is observed, the GAO rides
herd on the agencies, look
ing into their records after
the June 80 deadline has
passed. Purchasing officers
can conceal their love for the
GAO with great effectiveness.
"They report only the bad
things an agency does, not the
good things" grumbled one Of
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