Senator CHILES. We have found part of that in the Navy Yard where we found buildings full of it. Really, what you are saying is we are never going to know?

Mr. Fox. That is correct.

Senator CHILES. So we have got about one fourth of the $1.2 billion worth of furniture that we purchased over the last 10 years that we know where it is, or excess for about one fourth of the total purchase?

Mr. Fox. I am not sure we do, sir.

Senator CHILES. Seventy-five percent of it is out there somewhere and we don't know where, stolen or walked away or sitting in a warehouse, and we are paying storage on it?

Mr. Fox. Right. There may be an inflation factor involved that would account for part of that three quarters.

Senator CHILES. Mr. Muellenberg, I have had a chance to read the Department of Labor testimony that will be presented by the Deputy Inspector General for that agency, and they say that they were in a position to provide GSA with either or both draft reports of what they have done. My understanding is that their report didn't get in. Is that correct?

Mr. MUELLENBERG. That is correct. I didn't know about the testimony. We had asked for the draft reports from the various agencies and I know that Mr. Fox, as well as my deputy, Mr. Eberhardt, had several conversations with the Department of Labor to obtain a copy of that draft report.

Senator CHILES. It sounds like from their statement as I look at it that you all didn't make much attempt to get a report from Labor, and I want to know did Labor not send us a report? Did you try to communicate with them? If everybody else meets the deadline and if the deadline was changed to set it back a month from the time we originally started, did you tell Labor you didn't want any kind of draft report from them?

Mr. Fox. No, sir. We have contacted Labor on a number of occasions asking about the status of the report. We contacted the auditor in charge of the audit on February 8 to ask him about the deadline for February 15. Again after the deadline had passed we called to ask about the report, and we learned that the report would not be forthcoming until it had been commented on by management in Labor.

Senator CHILES. I would like to hear from either you or Mr. Fox how you would rate the efforts of the individual agencies in terms of full participation in your audit report.

Mr. MUELLENBERG. I think that would have to come from Mr. Fox.

Senator CHILES. Mr. Fox?

Mr. Fox. Most of the agencies did a very credible job. Some did an excellent job I believe on the report. There was some spotty reporting at times but that we expected.

Senator CHILES. That is not being exactly responsive to my question, Mr. Fox. I understand this is putting you on the spot. I want to know what agencies put the kind of resources and time and auditors into their reports and came back with a product that met the guidelines that we set, that you set out to start with and which ones didn't.

Mr. Fox. Well, sir, there was one agency that had some problems with their report in terms of being fully responsive to the audit guide, and that was the Department of Agriculture.

Senator CHILES. What were the problems? How did their report differ from those of the other agencies?

Mr. Fox. The report on the specific questions was abbreviated and some of the questions were skirted around such as the question of do high officials in the agency follow the same use standards as the rest of the agency?

Their answer I believe was they followed their own use standards, something to that effect.

Senator CHILES. How many storage sites were identified in the Washington, D.C., Metropolitan Area?

Mr. Fox. One hundred forty-one storage sites were identified by the individual agencies.

Senator Pryor?

Senator PRYOR. Mr. Chairman, this does not relate specifically to the various agencies supplying this information. Could I ask Mr. Muellenberg a few questions?

Senator CHILES. Why don't you let me cover just a couple more and then I will give you the floor.

To date what areas have been developed as far as findings and observations for the consolidated draft report that is currently in progress?

Mr. MUELLENBERG. Mr. Chairman, we have prepared what has to be a tentative list of recommendations that I think will emerge from this. Some of them are quite obvious, as for example the recommendation that furniture should be under inventory control.

There is a tremendous amount of difference between the various agencies as to how they account for the control. Their furniture inventory should be taken annually and a report prepared and submitted to the General Services Administration.

Unused furniture should be identified at the time of inventory, reported as excess to GSA and GSA should take physical custody of excess furniture. GSA would then determine whether to dispose of the furniture, or have it rehabed or reissued to other Government agencies. All requisitions would be sent to GSA for certification that specific requirements of the FPMR's are complied with, and the office furniture in the Federal Government should be limited to GSA stock items except where a waiver is granted by GSA.

Senator PRYOR. If the General Services Administration finds itself doing business with a firm or a company, a supplier of furniture which allegedly has sold inferior furniture in the past to the General Services Administration or to the taxpayers of this country, what procedures do you have to rectify that situation? Mr. MUELLENBERG. Procedures in that particular situation would be really similar to anybody who does business with the Government. If the goods or services he supplies do not meet the specifications that were contracted for, then the Government agency, whatever it may be, is in a position to start appropriate proceedings which come into the category of suspension or debarment because that particular contractor is not meeting this obligation.

Senator PRYOR. What role does the General Services Administration or more specifically the Office of Inspector General have in

debarment, suspension and the finding of determination of nonresponsibility?

Mr. MUELLENBERG. The role of the Inspector General's Office is limited to the investigative aspects-compiling the facts-and if and when those facts are compiled, to transmit those facts to the appropriate Commissioner of the Service who has jurisdiction over that particular contractor. The Commissioner of that Service will have to make a determination of whether or not the record submitted by us supports suspension and/or debarment.

Senator PRYOR. Is it true that the GSA has only one time in the past 30 years acted on its own in a debarment or suspension case? Mr. MUELLENBERG. That is my understanding. Most of the suspensions or debarments were as a result of another agency's suspending or debarring preceding them, or as a result of a conviction. in court, in which case suspension or debarment is automatic. There has been one case which I am happy to say we had a significant part, in where for the first time we moved to suspend a company doing business with GSA which did then involve a suspension-type hearing before an administrative law judge. The Inspector General's Office was instrumental in putting those facts together. The actual suspension/debarment hearing was handled by the General Counsel's Office at GSA.

As far as I know, that suspension has been upheld by the Federal District Court in Utah.

Senator PRYOR. That has been one suspension in how many years?

Mr. MUELLENBERG. However long GSA has been around.

Senator PRYOR. Would you say that GSA has been aggressive in this field?

Mr. MUELLENBERG. I would say that they have not been aggressive in this field.

Senator PRYOR. Is there reason for it not being aggressive?

Mr. MUELLENBERG. It is very difficult. I haven't been there 30 years. It is very difficult to say what the reasons are. I think there are a combination of reasons. I think it requires, for one thing, a fairly aggressive General Counsel's Office, lawyers who have some experience in litigating such things as suspension and debarment, and all those factors come together-and not be afraid of litigating some of those matters. I think you probably would improve your record.

Senator PRYOR. What I am asking you more specifically is if you have the powers in the General Services Administration of either debarment or suspension or a determination of nonresponsibility, why doesn't GSA avail itself of these powers and use them? One time in 30 years-why?

Mr. MUELLENBERG. With all due respect, Senator Pryor, I think Admiral Freeman will testify. Commissioner Morris will testify. These are the people who have the program responsibility at GSA, and I'm afraid they will have to give you the answer to that. Senator PRYOR. You are the Inspector General.

Mr. MUELLENBERG. I don't suspend or debar anybody.
Senator PRYOR. You make the recommendations.
Mr. MUELLENBERG. I assemble the facts.

Senator PRYOR. Regarding the assemblage of facts, don't you ultimately make the recommendation to the Department of Justice?

Mr. MUELLENBERG. No. Suspension and debarment is simply an internal proceeding within the General Services Administration. If you as a contractor do business with the Government and you are debarred, you have an option of going before the Board of Contract Appeals at GSA, or you can also file appropriate legal action in the Federal District Court and challenge the Government's action in the debarment. The whole question of due process does in fact arise. Our role is limited to compiling the facts.

Senator PRYOR. The taxpayers are entitled to due process, too. Mr. MUELLENBERG. I think they have.

Senator PRYOR. Do you need extra powers to be able to stop doing business with firms that allegedly are defrauding the Government?

Mr. MUELLENBERG. The powers that you have in that area are pretty well determined by the court decisions that have been issued over the years.

What does in fact support suspension and debarment? Some people might argue that if you deal with a contractor who when asked to make available such books and records does in fact not make them available, is he therefore not being responsive or a responsible party with whom the Government should deal, but the court decisions then come into play.

You and I could probably talk about this for a long time and have our own ideas, but that is not really what the rules of the game are.

Senator CHILES. Do you have further questions?

Senator PRYOR. I have a lot of questions, but I am going to refrain from asking them.

I would like to go on the record and clear my own conscience that I am not satisfied with your answers. They sound very bureaucratic, very evasive, and I would just like that to go on the record, sir.

Mr. MUELLENBERG. I appreciate that, Senator Pryor, but I also, based on prior hearings, know what some of the more specific concerns are. That whole area is at this particular time in such a delicate state that I don't want to prejudice anything that is now proceeding within the General Services Administration.

Senator PRYOR. We have done this for over a year.

Mr. MUELLENBERG. At the risk of sounding bureaucratic, and I hate to do that because I do not consider myself a bureaucrat, but this is one of those areas where I cannot in a hearing of this type get into any great details as to what recommendations I may have made to the appropriate officials. I think if I did that I would run the risk of finding myself in difficulty with the U.S. District Court. Senator PRYOR. That's all I have right now, Mr. Chairman. Senator CHILES. Thank you, sir. Thank you, Mr. Fox. Our next witness will be Mr. Jerry Stolarow, the Director of GSA's Procurement and Systems Acquisition Division.

Mr. Muellenberg, I want to say that I understand that this is the first that we have put the Inspectors General together as a task group. I am sure that we can do it better when we get some

N

experience and I am sure that time makes it where you can do things better, but it is a start, and it is a good first start, and for that reason I want to thank you.

Mr. MUELLENBERG. I appreciate that, Mr. Chairman, and also the only reason I made the statement earlier, because there were in fact 140 auditors involved from all the various agencies, and I think they should not be discouraged if and when we decide to approach them again and ask for their assistance.

Needless to say, it is the first time for us. All of us learned from the experience, and next time maybe we can do it faster and do it better, but I think this sort of an approach is a step in the right direction.

Senator CHILES. It is something that we never had before, and in looking at some of the audit reports, some of them are very good and make me very sort of proud of the auditor, Inspector General process when I see the way some of them took the cut into their agencies just calling it like it was. Others appear to me that they might as well be on the staff of the administrative office or something in that agency because it appears the report is written that way, but to see the way an auditor, Inspector General could function if he lets the chips fall, if he reports what he finds, tells me that we are on the right track with the act, and now we have got to get everybody realizing what their duties and responsibilities

are.

Mr. MUELLENBERG. Senator Chiles, I really appreciate your comments. I haven't had much good news lately, so I appreciate it. Senator CHILES. Mr. Stolarow, would you raise your right hand and be sworn in? Do you swear, each of you, the testimony you are about to give before the subcommittee will be the truth, the whole truth, and nothing but the truth, so help you God?

Mr. STOLAROW. I do.

Mr. BOGAR. I do.

Mr. ZADJURA. I do.

Senator CHILES. Mr. Stolarow, we will let you give your report. We will put it in in full, and if there is any way you can brief it for us for the sake of time, we would appreciate it.

TESTIMONY OF JEROME H. STOLAROW, DIRECTOR, PROCURE-
MENT AND SYSTEMS ACQUISITION DIVISION, U.S. GENERAL
ACCOUNTING OFFICE, ACCOMPANIED BY CARL BOGAR AND
EDWARD ZADJURA, ALSO FROM THE GENERAL ACCOUNTING
OFFICE

Mr. STOLAROw. It is a pleasure to be here before you at your request to discuss two elements of your inquiry today-one, our evaluation of the work that has been done by the interagency task force, and second, our comments on the systems furniture program of GSA.

Senator CHILES. We want to thank you for both of those tasks. Those are tasks we asked you to do, and you did them in a very timely fashion, and we appreciate that very, very much.

Mr. STOLAROW. With me today, on my left is Mr. Carl Bogar, and on my right is Mr. Edward Zadjura, who are directly responsible for managing these efforts.

Senator CHILES. I want to thank them, too.