Senator CHILES. Is it by some chance related to the fact that these items were also not on an inventory list; there is no control? Mr. GRANETTO. It is a combination of both problems. Since nobody knows by item what is in the basement, nobody can say "Don't buy that, we have one in the basement."

Senator CHILES. There is nobody in the Department of Agriculture to tell one of the individual agencies within that department, "Look; you can't buy any furniture," or "You haven't turned in your old furniture," or "You have plenty of furniture." Anybody wanting furniture can order it?

Mr. GRANETTO. Yes, sir; if they have the money.

Senator CHILES. If they have the money in their budget.

Mr. GRANETTO. Since each individual agency of the Department of Agriculture has its own procurement authority, it doesn't have to go to another agency or a central office for approval of procurement.

Furthermore, there appears to be no real policy which requires or forces an agency within the Department to check a new procurement against excess. Similarly, if such a policy existed, there seems to be no method of enforcing it within the Department because each agency has its own procurement authority.

Senator CHILES. So no one is controlling the store. When GSA gets an order, they are the storekeeper for the Federal Government, so they fill the order. Within the Department of Agriculture itself, nobody has an inventory, nobody has a control, and any agency that wants any furniture, all they have to do is if they have the funds to order that; no one is checking the excesses to see whether it is turned in, either the Department of Agriculture or GSA, in regard to determining excess. So we have all of this furniture, as a result?

Mr. GRANETTO. Yes, sir.

Senator CHILES. It is kind of obvious that you have to take some out to the loading dump. There's not that much space to store the old furniture. They probably have to get rid of some of it. Could this be happening at other agencies?

Mr. GRANETTO. It not only could be, Senator, I am sure it is happening at NASA and possibly the Departments of Interior and Commerce.

Senator CHILES. Explain what you found at NASA.

Mr. GRANETTO. I made an unannounced appearance at the NASA warehouse location in Crystal City, and I was very impressed with what individuals in charge were doing there. But, Senator, they had no idea at the moment of how much new or used furniture was on hand.

Senator CHILES. My understanding is that furniture funding comes from a budget line item called SLUC, standard level user charges, and this line item includes the cost for agency rent, heat, utilities, and furniture; is that correct?

Mr. GRANETTO. As far as I understand it, it is.

Senator CHILES. I think we need to encourage OMB to do some real budget analysis on that particular line item, and I think that is something the Appropriations Committee needs to look at also. We need to perhaps get GAO to look into how agencies budget for

furniture and where they come up with the item that they are going to put in, that line item for that.

But you are telling me that NASA has no inventory?

Mr. GRANETTO. Furniture in the warehouse, that is right, Sena

tor.

Senator CHILES. Do you have any idea of the value of new or used furniture in the warehouse you looked at?

Mr. GRANETTO. There was a substantial quantity of used furniture of the old metal type, and the prior inventory about 1 year ago shows a total dollar value of new furniture of about $1.9 million.

Senator CHILES. $1.9 million in one warehouse?

Mr. GRANETTO. Yes, sir, and it is probably lower now because it was transferred, but because there was no inventory and no detail, nobody could tell you what the value was today.

Senator CHILES. Can people at NASA order new furniture even though they have the same type in their old stock?

Mr. GRANETTO. There is a basic NASA policy which says "no" but I have reason to believe that this policy is overridden by "higher authority" quite a bit.

Senator CHILES. What you are saying is, if I had sufficient authority in the agency, I could usually get the kind of furniture I want?

Mr. GRANETTO. Yes. I can't tell you the frequency of the incidents, however. I should add, Senator, that the two individuals currently in charge of this NASA storage location only took over in March. They are well on their way to cleaning up their inventory and storage problems. They are not, however, the final authority on procurement.

Senator CHILES. Are there regulations which govern the procurement of furniture by various agencies?

Mr. GRANETTO. Yes, sir. That is the Federal Property Management Regulations.

Senator CHILES. Doesn't this buying of new furniture while you have suitable but older stock on hand-does that violate any regulations, or is that proper to do?

Mr. GRANETTO. It appears to violate the regulations. Let me quote from the general policies section of this regulation:

Acquisition of new items shall be limited to those requirements which are considered absolutely essential and shall not include upgrading to improve appearance, office decor, status, or to satisfy the desire for the latest design or more expensive lines.

Similarly, it says:

Generally acquisition of additional furniture or office machines from any source will be authorized only under the following curcumstances, limited to the least expensive lines which will meet the requirement, and the justification for the action shall be fully documented in the agency files.

Further on there are a couple of exceptions, Senator, but basically the exceptions allow for increase in personnel, essential requirements arising from quantitative increases in onboard employment, for essential requirements arising from a need not related to onboard employment increases but which are determined necessary to avoid impairment of program efficiency:

Each agency shall restrict replacement of furniture or office machines either to usable excess rehabilitated or the least expensive new lines available which will fill the requirement under the following circumstances.

Basically there are two exceptions to that.
Another part of the policy says:

Each executive agency shall to the maximum extent practicable, fulfill its requirements for property, including those of its cost reimbursement type contractors, by obtaining excess from other Federal agencies instead of initiating a new procurement. Agencies receiving or transferring excess personal property shall establish controls over the processing of transfer orders and shall establish and maintain an adequate system of property accountability.

The policy also says:

Executive agencies shall accept to the fullest extent practicable the reasonable substitution of such excess property instead of new procurement.

Senator CHILES. If those regulations had been followed to the letter and in the spirit, you wouldn't have this furniture around the warehouse?

Mr. GRANETTO. No, Senator, we wouldn't.

Senator CHILES. And we wouldn't be expending $150 million a year for furniture more than is being turned in?

Mr. GRANETTO. It would appear that way, Senator, yes.

Senator CHILES. You mentioned that the Farmers Home Administration of the Department of Agriculture was buying new furniture. How was that justified within the regulations?

Mr. GRANETTO. They are expanding by some 52 people, Senator. Senator CHILES. That is an exception?

Mr. GRANETTO. Yes, sir.

Senator CHILES. Where did those people come from?

Mr. GRANETTO. Other departmental agencies via transfers.
Senator CHILES. They weren't new hires?

Mr. GRANETTO. No, sir.

Senator CHILES. What happened to their old furniture?

Mr. GRANETTO. I suspect it will end up in the basement. It might be it was more economical to buy new furniture than move the old furniture, but I don't know.

Senator CHILES. We find orders in effect for new furniture for the entire 52, and we don't know what happened to the old furniture? Mr. GRANETTO. Right.

Senator CHILES. The regulation doesn't say anything when you get a transfer, you get all new furniture?

Mr. GRANETTO. No, Senator, it doesn't.

Senator CHILES. Let's go back to the Department of Agriculture basement again. If I correctly remember, you mentioned five agencies with substantial stocks of furniture in the Department of Agriculture basement. We have discussed four of these. Is there anything special about the fifth cache?

Mr. GRANETTO. The fifth agency was the Operations and Finance Division, the Department of Agriculture's administrative people. This was the furniture that had been declared excess or surplus by other agencies.

Senator CHILES. What was the condition of this furniture as compared to the other caches of furniture?

Mr. GRANETTO. I would say as much as 80 to 90 percent of the other stocks were usable. Only 50 percent of this furniture was usable, and even some of that would need some minor repair.

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Senator CHILES. You did say that GSA had responsibility for the excess or surplus furniture?

Mr. GRANETTO. Yes; I did.

Senator CHILES. Why didn't GSA get this furniture out of the building?

Mr. GRANETTO. It was never reported to GSA, Senator. As a matter of fact, the Department of Agriculture headquarters building had only reported about $13,500 worth of furniture as excess during all of fiscal year 1979. Interestingly, on a couple of occasions when somebody came to pick up this reported furniture, it couldn't be found.

Senator CHILES. Even the $13,000 that they did report as excess, when someone came from GSA to pick it up, they couldn't find it? Mr. GRANETTO. On a couple of occasions they couldn't find it. Senator CHILES. Yet, the Department did call the furniture excess as far as their cache?

Mr. GRANETTO. Yes, and reported it.

Senator CHILES. And reported it. Does anyone know how long the furniture has been in the basement?

Mr. GRANETTO. I couldn't find anybody to tell me how long it had been in the basement.

Senator CHILES. Are there any regulations which cover the retention of this furniture by an agency? How long are they supposed to keep it before reporting it to GSA?

Mr. GRANETTO. That regulation would be the Federal Property Management Regulation, and I quote from it.

Agencies shall review inventories on a continuing basis to ascertain those items which can be economically rehabilitated and institute programs for their orderly repair and rehabilitation. All such items which are not required for immediate needs shall be reported as excess.

Senator CHILES. Well, it is safe to say that the Department of Agriculture is not in compliance on this either.

Mr. GRANETTO. It appears so, Senator.

Senator CHILES. If I remember correctly, you portrayed four possibilities as to where the furniture might be going. I think we have just one of these; that is, furniture is being stored in various warehouses. How about the other possibilities? Did you find any furniture just left in offices?

Mr. GRANETTO. Yes, sir, I did. In the last few days, I was notified of a building at 225 14th Street SW. This building is called the South Auditors Building, and it is across 14th Street from the Department of Agriculture. The first floor of this building is full of furniture, both new and used.

Senator CHILES. Who does it belong to?

Mr. GRANETTO. The furniture in the front half of the building belongs to the Department of Interior Fish and Wildlife Service, while the furniture in the back half belongs to the Department of Commerce.

Senator CHILES. What was the condition of this furniture, and how long has it been there?

Mr. GRANETTO. The Department of Agriculture people in the next building state that his floor of the building has been empty and full of furniture for over a year. Some of the offices in the

front of the building look like to people just moved out and left the furniture in place.

Senator CHILES. This was whose furniture?

Mr. GRANETTO. It appears to belong to the Fish and Wildlife Service of the Department of the Interior. I noted there were a number of their publications laying around. The latest publication was dated 1975, so I cannot tell you when they last occupied the space.

Senator CHILES. I guess we are also paying rent for this building? Mr. GRANETTO. Yes, sir.

Senator CHILES. It is not a warehouse?

Mr. GRANETTO. No, sir.

Senator CHILES. And this was the Department of Interior, and you said Fish and Wildlife's furniture?

Mr. GRANETTO. Yes, sir. Some of the furniture was new, still in boxes, and other furniture was used but in good condition. In the back half of the building was Department of Commerce. Some of that furniture that belonged to Fish and Wildlife Service was new. Other furniture was used.

Senator CHILES. What were the dates of the publications lying around?

Mr. GRANETTO. 1975.

Senator CHILES. So some of this had been there since 1975? Mr. GRANETTO. I presume so, Senator.

Senator CHILES. What about the back half of the building?

Mr. GRANETTO. That appears to have furniture in good condition. I could only see through the windows, however, as that portion of the floor was locked up. The building manager told me over the phone that the area was used by the Department of Commerce and had furniture in it. It also had not been occupied for maybe as long as 1 year, and I would say from the dust on the furniture in both parts of this building that it has been a long time since anybody was in there.

Senator CHILES. You said you discoverd this a couple of days ago and hadn't had time to follow it up. Do you know if these agencies are buying new furniture.

Mr. GRANETTO. I don't know about the Department of Commerce, Senator, but I do know that if you go to the cafeteria in the Department of Interior Building at 18 and C Streets, NW., you see lots of new furniture which has just arrived.

Senator CHILES. Still in the carton?

Mr. GRANETTO. Yes.

Senator CHILES. We will have to wait and see. I hope the situation is better than at Agriculture, but I think we are going to have to ask the Inspector General at Interior and Commerce to take a look at this.

I think we have now covered two of the four possibilities you mentioned as to where $150 million per year of furniture might be going. How about the others?

Mr. GRANETTO. One of the last two would be furniture left in occupied offices even though no one is using it. For example, an office with three people might have four or five desks.