The Smithsonian did not take "a consistent and businesslike approach" in selecting a site for the annex to the National Air and Space Museum, the General Accounting Office reported at a sometimes caustic congressional hearing yesterday.

The hearing made clear that the decision to build the annex at Dulles International Airport cannot be considered final even though the Smithsonian's Board of Regents on Monday reaffirmed its choice of that site. The regents selected Dulles last year, rejecting competing offers to put the annex at Denver's Stapleton International Airport or at Baltimore-Washington International Airport.

Congress is still evaluating whether the annex should be built in light of current financial restraints. Rep. Sid Yates (D-Ill.) said his Interior appropriations subcommittee also will consider whether the Smithsonian should spread some of its wealth by locating the Air and Space annex or other collections outside the Washington area. If so, the Smithsonian may be asked to reopen the bidding for the annex, which is expected to attract millions of tourists and millions of dollars to its host region.

"I think Maryland's hopes are still alive," said Rep. Ben Cardin (D-Md.) after the hearing. "I'm encouraged that there will be a process whereby the best bid will win. I don't think the Smithsonian did that."

"My impression of the hearing is that Congress and Rep. Yates are going to follow the GAO recommendation and take a thorough look at the site-selection process," said Chris Duercks, who works with a group hoping to bring the annex to Denver.

The fact that the site-selection process is not over was underscored by the presence throughout the hearing of Reps. David Skaggs (D-Colo.) and Frank Wolf (R-Va.), who attended as observers. Both want the annex in their home states. Sens. Charles Robb and John Warner and the rest of the Virginia congressional delegation sent a letter to Yates urging funding to plan an annex "within reach of the Mall" and stressing Virginia's "longstanding commitment to easing {financial} pressure" created by the project.

The GAO analysis, done at Yates's behest, concluded that the "only fair and reasonable way to convince the Congress and the public that it has selected the best site ... would be for the Smithsonian to use a more formal, systematic and cost-conscious process." The testimony concluded that "Dulles might possibly be the best site, but the Smithsonian's process cannot be relied upon to objectively defend the selection of Dulles."

The GAO found that there "has still been no thorough cost analysis of the BWI, Dulles or Denver proposals." The Smithsonian did not adequately define its requirements for the annex; nor did it adequately identify potential sites for the project or communicate its needs to possible bidders, the GAO concluded.

"One reason given for selecting Dulles over BWI -- its symbol{ism} as the prime gateway to the nation's capital," was never spelled out as a criterion for selecting a site, the GAO said. Another reason, the larger size of the site offered by Dulles, also was never identified as an important requirement, the testimony added.

Smithsonian Secretary Robert McC. Adams said he had "some problems" with the GAO analysis. If the GAO approach were applied consistently, "there would be no museums on the Mall," he said. Considering the symbolic value of Dulles is "a legitimate exercise of discretion by the regents," he said, adding, "There is a greater possibility in the regents' judgment of securing help from the private {sources} if the project is associated with the nation's capital."

Even before the GAO submitted its findings, subcommittee member Chester Atkins (D-Mass.) complained that Logan Airport in Boston had been rebuffed by the Smithsonian several years ago. "It was rather a closed deal from the beginning," Atkins said. After the GAO offered its critique, Atkins asked whether the Smithsonian would object to allowing a national competition for the annex. Adams replied that doing so might be "much more complicated" than anticipated.

At the outset, Yates said the hearing would focus not on site selection, but on the Smithsonian's mechanisms for establishing its institutional priorities. With money tight, Yates asked, "Do we protect, do we polish, do we embellish the jewels we have in existence or does the Smithsonian expand and expand and expand?" The Air and Space annex and the planned National Museum of the American Indian together would cost more than $500 million, "leaving existing activities of the Smithsonian gasping for funds," Yates said.

Adams said the Smithsonian must decide whether to pursue its mission of educating the public or simply shelter the existing collection. "We're faced with a choice and therefore this appropriations subcommittee is faced with a choice," he said.

Yates has long been one of the Smithsonian's most ardent congressional champion and the hearing had some moments of unusual strain. When Air and Space Museum Director Martin Harwit said the Smithsonian is talking with "a reputable firm" about the possibility of underwriting some of the expense of building the annex, Yates quickly asked, "Are you talking about {building} a theme park?"

Yates said he had heard "a rumor" that the institution was considering "the possibility of constructing a theme park like the one that was installed in the Natural History Museum" -- a slighting reference to the Dinamation display of robotic dinosaurs. That exhibit marked the first time in recent history that the Smithsonian has charged admission to an exhibit at one of its museums on the Mall.

Harwit replied that the museum would accept corporate funding only "if we were given complete freedom to exhibit what we want to exhibit, the way we want to exhibit it." The incentive for the sponsor, Harwit said, would be having its name associated with the institution.

"You mean like the Freer Gallery, you would call it the Disney Gallery? Or Philip Morris?" Yates asked.

"If it were IBM, we might consider it," Harwit said.

Later, Yates asked Adams what other museums were giving up to accommodate such planned projects as the Indian museum, a construction project at the Natural History building and renovation of the Old General Post Office.

"I don't think that's a fair way of putting it," Adams said.

Yates replied tartly: "Life is not fair."

Yates also expressed irritation at the institution's plan to add an administrative building without congressional approval. Congress approved funds to lease such a facility but not to acquire one, Yates observed.

"Staff tells me the authorization we gave you was to undertake a lease, but now you're going ahead and constructing a new building," Yates said. "I'm not telling you what to do. I'm telling you if you have federal expenditures ... I think you ought to ask the Congess."

Yates asked about rumors that the museum had considered raising money by leasing the Hope Diamond and the space shuttle Enterprise to the Japanese. Adams said that the museum is considering a proposal to put part of its collection "on loan to American museums and incidentally Japan" during a restoration of the Gem and Mineral Hall next year. Spokeswoman Madeleine Jacobs said after the hearing that the regents on Monday approved a study of the feasibility of a nine-month tour, including potential public reaction as well as "financial, curatorial, security and marketing issues."

While Adams said the rumored lease of the spacecraft was "totally spurious," Harwit said he receives several proposals every year to borrow the Enterprise and has scheduled an appointment with unspecified individuals to learn more about such an offer from a Japanese firm.

Yates asked whether the Smithsonian could simply sell the Hope Diamond or other parts of its collection to raise money, observing that then officials wouldn't "have to worry about a federal appropriation."

"These are wonderful thought experiments, but I think frankly the regents would fire me," Adams responded.