Mr. INK. Exactly. Mr. CUNNINGHAM. The hundred percent equals the 4,666 computers. Mr. INK. Of those in the Federal inventory this includes all of them. It doesn't include the operational systems we were talking about earlier which are not included in these figures. Representative BROWN. What about the classified systems? Representative BROWN. They are included. Mr. INK. Yes, sir. Representative BROWN. You say the operational systems, that is the term you are using for Mr. CUNNINGHAM. That is an introduction Representative BROWN. Does it include the mobile systems? Mr. CUNNINGHAM. Yes; this includes the mobile systems. Representative BROWN. So this is the total of all the computers pur chased by the Federal Government and in inventory, is that correct! Mr. CUNNINGHAM. Except for those computers installed physically in missiles and weapons and in things such as the Apollo spaceship that are designed into that system. Representative BROWN. Aircraft? Mr. CUNNINGHAM. Aircraft, yes. It is not included. Representative BROWN. It is not included, and you have no idea how much those are? Mr. CUNNINGHAM. The Defense Department had a figure on that, Mr. Brown, but I don't recall what it is. Representative BROWN. Do you have any indication of where those came from by supplier? Mr. CUNNINGHAM. No. SUPPLIERS OF ADPE TO THE GOVERNMENT Representative BROWN. Do you have any indication whether the Federal Government inventory by supplier has evened out in recent years? Mr. CUNNINGHAM. It has changed dramatically over the past 6 years. Representative BROWN. Could you give me some idea of what the inventory was back in 1960, 1963, and 1966 ? Mr. CUNNINGHAM. Yes. Representative BROWN. As to suppliers. Mr. CUNNINGHAM. I will have to pick ours because the ones I picked Representative BROWN. Pick your own year and give me the figures slow enough so I can jot them down. Mr. CUNNINGHAM. In 1962, IBM supplied 66 percent of the Federal inventory. Do you want all of them? I can leave a copy of this with you if you want or I am perfectly willing Representative BROWN. What did Univac supply, as I believe Univac was the other leading supplier? Mr. CUNNINGHAM. Univac supplied 6.3 percent. Representative BROWN. What was your next largest supplier after IBM? Mr. CUNNINGHAM. Univac. Representative BROWN. Do you have another year? Mr. CUNNINGHAM. 1966, 34 percent. Representative BROWN. 1966, do you want to give me 1966? Mr. CUNNINGHAM. That is of our total inventory then. Representative BROWN. It occurs to me that the National Census may have changed in that time. Mr. CUNNINGHAM. Dramatically. Representative BROWN. Is that the case? Mr. CUNNINGHAM. It has changed dramatically. Both in numbers, it has increased at a much greater rate than our numbers, I don't have the figures again. Representative BROWN. I am interested in the supplier source. Mr. CUNNINGHAM. I would have to look this up-it has changed downward but not to the same degree. Representative BROWN. I don't know what you mean by changed downward. Mr. CUNNINGHAM. It has changed in the sense that one company supplies a large percentage of the national inventory. Representative BROWN. Larger now than formerly? Mr. CUNNINGHAM. No, smaller now than formerly in the national inventory. You have to, if I may, realize that it was not until maybe 1956 that more than two companies were in the general purpose computer business, coming in. Representative BROWN. Let's be specific. Are you suggesting that prior to 1956 IBM had a large portion of the market? Is that right? Mr. CUNNINGHAM. I think it is the other way around. Prior to 1956 Univac had the largest portion. Representative BROWN. I see. Mr. CUNNINGHAM. Let me answer your question, if I may, in another way. The earlier computers were delivered by what is now the Univac Division of Sperry Rand. IBM, to my recollection, did not announce its first computer until 1952 or 1953, and by 1955 or 1956, IBM had a dominant position in the market. Representative BROWN. Do you suppose that they were producing more or less than 66 percent nationally? Mr. CUNNINGHAM. Nationally, I would presume more. Representative BROWN. My line of questioning is stimulated because of the number of computers the Government has available in relation to the number of Government commissions. I seem to recall that over the 8 years previous to the 1968 election about every time we created a Government commission Mr. Tom Watson of IBM was named to that commission. I find it very curious that the number of IBM computers seems to have some kind of a correlation with the number of times Mr. Watson was named to a commission. I don't know whether it is a quid pro quo for his public service or not, but I would like to inquire about the political contributions made in that same general connection. It seems to me that there is a specific connection between those interests and maybe we can pursue that further. Mr. INK. I do think it is a significant though that at the present time their percentage of the Federal market is very significantly smaller than the percentage in the national market. Representative BROWN. When did it start to get smaller? My time is up. Mr. INK. I can't tell you. Mr. CUNNINGHAM. It started down in 1964. They were at their crest in 1962, sir. Chairman PROXMIRE. Congresswoman Griffiths? IMPACT OF DELAY ON INTERFACE PROBLEM Representative GRIFFITHS. I would be interested also. Every day that the Bureau of Standards delays on the interface question aids IBM, doesn't it? Mr. INK. Well, of course, IBM has come out with a separate pricing, but I would agree that the competition, our need for getting more competition, is dependent, in part, upon the interface standards program moving forward and I would certainly agree, Mrs. Griffiths, that it ought to move forward and more rapidly than it is. Representative GRIFFITHS. As a matter of fact, had you ever checked-I understand that it is geared now not to objectivity, but to IBM. Mr. INK. I was not aware of that. Representative GRIFFITHS. Well, maybe you ought to check, if that is within your realm. They are not really studying how you can put these parts in, but how you can put IBM parts in. Mr. INK. I have the impression that the study effort was directed toward how to get more competition and interface which would permit competition. Representative GRIFFITHS. That is what we wanted it to do. The figures that you were giving Congressman Brown were the hardware costs, weren't they? You didn't include software in that figure. Mr. CUNNINGHAM. No, that includes that total cost, operating expenditures for that year includes hardware, software. Representative GRIFFITHS. It does? Mr. CUNNINGHAM. It does. It included our own programing costs. Mr. INK. And, Mrs. Griffiths, at the top of the legend here you will see the breakdown that he is referring to. Representative GRIFFITHS. I see. RECORDS KEPT BY SUBCONTRACTORS VERSUS PRIME CONTRACTORS Did you hear the questions that we just asked the last group that was here? Are you aware that subcontractors must keep 100-percent detailed records of reporting to prime contractors, or inventory issued to or owned by the Government? 100-percent records? And yet, the last people who testified pointed out that the prime contractors really didn't want to keep records, real detailed records, on the inventory owned by the Government. Don't you think that you could correct this? You see the primes have real good sense. I mean they are in the business to make money, so they want to know exactly what we are issuing to subcontractors because they are going to move the prices down. Mr. CUNNINGHAM. You are speaking there, Mrs. Griffiths, about all kinds of equipment. Representative GRIFFITHS. Yes. Mr. CUNNINGHAM. Well, there have been, I am not competent to comment on them, but there have been changes made in the OEP regulations and in defense regulations, and I am sure that the defense people would be able to tell you about it. I can tell you though with respect to that group of questioning that we do have an inventory of ADPE that we provide to contractors or which they own that is used exclusively for the benefit of the Government and the figure is in the order of magnitude of 850 out of that 4,666 computers. Representative GRIFFITHS. Couldn't we set up one of these computers to keep check on the computers? Mr. CUNNINGHAM. Well, I think in a sense that is what the information system we put in with GSA has done. The GSA computer is used to evaluate, as Mr. Ink testified, to identify those areas in which we could replace installed equipment at a lower cost. Mr. INK. I assume this inventory is a computer printout, Mrs. Griffiths, so I think your comment Representative GRIFFITHS. That is one of 1 million sheets. Mr. INK. So I think you are very perceptive. We haven't come to that million yet. USE OF BREAKOUT IDEA FOR OTHER EQUIPMENT PURCHASES Representative GRIFFITHS. May I ask you also, since we have found that you really can save money by having the Government buy these parts of a computer separately from the whole, have you ever considered how much money we might save if we applied this to the Defense Department, for instance, in airplanes, and any big piece of equipment? Mr. INK. Well, yes; and that is a very legitimate but also very difficult question. Just as here, one of the offsets, and that is part of the study and part of the experience we have to gain, is the amount, the price we pay for integrating, that is when you do go to a manufacturer for a package system, of course, he provides the service in terms of integrating. Now, I agree with you that in most instances that is more than offset through competition by, one, the greater selectivity you can have with respect to the components that you really need, whereas in a package you may be purchasing things that are part of the package and that you really don't need. Second, I am a great believer in competition and competition does, I think, tend to drive costs down. LACK OF IN-HOUSE CAPABILITY IN GOVERNMENT But the problem of integrating is a tremendously complex management undertaking when you are talking about these large systems, and I think that in a good many instances we don't have really the in-house capability that we perhaps ought to have in this kind of integration. In the case of Admiral Rickover's program you have a great deal of very strong in-house capability to tie together whatever needs to be tied together. In some areas, in my judgment, we have not really retained the kind of strength and the kind of management capacity to fully take advantage of the potential of competition that I think is there, I think industry can afford, if we are able to take advantage of it. Representative GRIFFITHS. I would like to thank you for the answer. That is really as good an answer as I have received, and I have been sitting here 16 years with a bill in this Congress that would require all subs to tell the prime and up through the subs the costs, and then the prime can give to the Government the price they pay to subs down to the last one. For three administrations I have been told that it would be humanly impossible to do it. NEED TO KNOW ITEM COSTS Now, of course, I know it isn't, and with all these computers it certainly isn't. I was told in World War II that the auto companies beat the Government on this business of integrating the purchases. They just couldn't make the line run. Of course, that is silly; they could have done it. But people didn't want to do it. They could have acquired that skill. We really ought to be able to acquire the skill in these purchasing departments to know the cost of every single item, and put them together so that we can reduce the prices we are paying. I hope you dedicate the whole new department of which you are a part to seeing to it that we do it. I think you really gave the best answer I have had in the 16 years I have been sitting here. Thank you. Chairman PROXMIRE. In the prepared statement you speak of developing an interface standard. Is it developed by the Government. examined by the Government, is the determination as to whether it is possible to implement it made by the Government? Mr. CUNNINGHAM. As Mr. Ink testified, Senator, we had a meeting of Government people to try to pull together the problem of how to handle procurement in, let's say, the environment that we now have. That group looked at the problem and said, "You now have certain kinds of equipment installed. There is nothing you can do with that. So put some speed into developing a standard which we can hope the industry will follow in the newer announcements of computers to come." Chairman PROXMIRE. You see what I am getting at is the role of the industry, the role of the private parties here. Are these decisions dependent upon the views of private industry representatives serving on committees. Do, for instance, the private parties through organizations such as ASI, or USASI have a practical or effective veto over what the Department of Commerce has? POSSIBLE FOOT-DRAGGING ON INTERFACE STANDARDS Mr. CUNNINGHAM. No, I don't think they have with respect to Government procurement. But they may footdrag as seems to be the case in trying to get a standard interface through the standards program. But if we specify it, if we can design something that is workable. and specify it. I am sure that they will support it. Now those that don't support it |