The General Accounting Office and the Office of Management and Budget, two federal watchdog agencies, disagreed sharply yesterday over the need for proposed legislation aimed at curbing abuses in the government's use of outside consultants.
"This is not a problem which legislation can effectively remedy," argued Karen Hastie Williams, administrator of OMB's Office of Federal Procurement Policy. "You cannot legislate good management."
Instead, Williams told a Senate subcommittee, agencies should more strictly adhere to existing policy directives, regulations and guidelines which, if followed, could adequately police procurement and consulting services.
But Elmer Staats, comptroller general of the GAO, said that agency regulations alone won't solve the problem.
"Congress needs to legislate in this area if we are to have adequate controls," he testified at opening day hearings on a bill that would require federal agencies and private consultants to open up their contracting activities to public scrutiny.
The legislation, proposed jointly by Virginia Rep. Herbert E. Harris and Sen. David Pryor (D-Ark.), is intended to expand public access to information about contracting services sought by the federal government. The bill would also require consultants to disclose the roles they played in preparing reports for use by federal officials.
The Pryor-Harris legislation was introduced last June following reports in The Washington Post that 63 percent of federal consulting contracts are awarded without competitive bidding.
"The consulting problem has been with us for at least two decades, and federal managers have done little to bring it under control," said Pryor, who chairs the Subcommittee on Civil Service and General Services which is holding hearings on the proposed legislation.
Saying that his own investigation had convinced him that government contracting work is "duplicative, senseless and overpriced," Pryor said Congress should "seize control" of the problem and not bury it in another layer of bureaucracy.
"I'm wondering if we can regulate good management," he told the OMB's Williams. "You say regulation is the best way. I'm saying regulation has failed, and the GAO seems to agree."
Along with its testimony yesterday, the GAO also released a review of the use of consulting services by seven federal agencies. The GAO said it found that outside consulting services were used to meet more than 40 percent of the agencies' reports required by Congress.
During fiscal years 1977-1979, according to the GAO, the seven agencies paid about $17 million to outside consultants for that purpose -- nearly two-thirds of the total costs of preparing the reports.
The agencies studied were the Environmental Protection Agency, Department of Housing and Urban Development, Department of Transportation, Federal Communications Commission, Federal Trade Commission, National Aeronautics and Space Administration and the Nuclear Regulatory Commission. The GAO singled out EPA, HUD and DOT for their extensive use of outside consultants.
Administration officials and members of the Senate subcommittee seemed to agree yesterday on the need to curb contracting abuses. But they disagreed about what consulting procedures and services should be covered by specific statutes.
Sen. William S. Cohen (R-Maine), who chairs the Committee on Government Affairs of which Pryor's subcommittee is a part, said he wanted the legislation to impose additional restrictions on the awarding of noncompetitive contracts.
But he said he opposed a provision in the bill that would set a ceiling of 20 percent as the amount an agency could spend from its budget for outside consultants in the last quarter of the fiscal year.
Pryor said the restriction was intended to stop agencies from rushing to spend any surplus congressional appropriations for fear Congress would cut their budget requests for the next year.
Cohen said he supported suggestions by the OMB that the government increase incentives for good management and reward agency employes who save money.
"Perhaps Sen. (William) proxmire could make a 'Golden Scrooge' award each month," said Cohen in a joking reference to the Wisconsin senator's regular "Golden Fleece" awards for wasteful government spending.
Pryor complained that government agencies, many with huge staffs of their own, are hiring outside consultants to draft legislation, research budget justifications and prepare government testimony. Often, he added, the consultants' involvement with the agency and with other outside clients or influences is not disclosed to the public.
Whatever the reason for the abuses, the subcommittee members made it clear they want to correct them.
"I looked at your investigation with some skepticism at the outset," said Sen. Charles Percy (R-Ill.). "But now I think it's cost-effective. It's just extraordinary how much government money is poured down a rat hole."