Charter for Task Force for Study in Connection with Jcae Request of April 2, 1952

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Charter for Task Force for Study i n Connection with JCAE Request of April 2, 1952 The basic purpose of the study is to obtain as comprehensive and definite answers as possible t o the five questions raised by the JCAE letter of April 2, 1952. The report will center around the basic issues raised by the J CAE a) contract policy with respect t o use of cost type b ) delegation policy as regards more government operation o r more nearly independent contractor c)policy with respect t o obtaining the maximum benefits of competition i n all its forms. The basic issues raised with respect t o contract and management policies o f AEC may require examination of allied problems whose relevancy i s not now apparent. bear on t h e primary problems and considering the time schedule herein problems where it seems necessary o r appropriate. These topics will be explored tothe extent they R.ecommendations may be made for further study of related The Task Force's report is expected t o present an objective examination and evaluation of the policies and practices of AEC i n these areas i n the light of experience and of alternatives and possible improvements. The report of t,he Task Force should include a)the policy recommendations it finds appropriate, b) t h e conclusions upon which the recommendations are based, and c ) the factual data and analysis thereof which it assembles. The organization of the report is the responsibility of the Task Force. A comprehensive and imaginative treatment is, i n general, desired.

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An interim report, including an apt line of the methods t o be used in making the study, should b e submitted by October 1,- 1952, t o the General Manager for consideration and, i f necessary, discussion with prepared by the Task Force and submitted tothe Qeneral Manager is Joint Committee is tobe submitted tothe General Manager on January 23, 1953, for consid:eration by t h e Commission. The Task'Force should make every effort to adhere t o these dates but as a primary concern it will have to satisfy itself that a thorough and adequate study has been given t o the issues raised, The target date for the comprehensive report to be A summary report suitable for transmission t o the

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CONGRESS OF THE UIiITED STATES Joint Committee on Atomic Energy Attention: Mr. Gordlon Dean, Chairman A s you know, the Joint Committee on Atomic Energy has from its inception had as an overriding concern the achievement of the greatest 'possible atomic strength, a t t h e lowest possible cost. On January 30, 1948, the Joint Committee reported tothe Congress, i n part, a s follows: 'lThe joint committee is a legislative committee which was created a:; a special servant of the Congress t o follow this vast and complex /;?tonic7 program within the terns of the act..,.As a legisTativecommittee, it does not feel that it should at this time draw any find conclusions respecting the operation of this program on the administrative policies in Sufficient time has not elapsed t o warrant conclusions On October 13, 1949,$t he Joint Committee reported t o Congress, i n part, I:mt- Hanford the Commission clearly purchases managerial talent, as well as know-how and t h e services of a technical and operating staff, Yet the Commission must keep watch upon activities, and for that purpose it has its own staff 6f 340 people located on How, on the one hand, may GE's managerial talent be put to full use with t h e Commission people sharing i n every important decision; and how, on the ot ner hand, may the Commission feel certain that the national defense and security are being properly promoted unless it insists upon consultation before its contractor acts? ,, Only a lump sum, unit-price, o r similar-type contract, offering maximum opportunities for profit,creates highest incentive t o keep down costs. This system has been applied successfully i n the case of certain feed material processes; but whether i t might work inthe operations a t Oak Ridgc, Hanford, and Los Alamos isa difficult, question which the Commission must face a t How avold overlapping effort and duplicate personnel?

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On October 19, 1951, the Joint Committee again reported t o Congress, on this occasion, i n part, as follows: eratioms i s that, of lr,EC relations with contractors, e spec iau y two aspects: 09.(2) the desirability of awarding a s many contracts as feasible through competitive bidding and on a lump-sum o r unit-price basis, rather than through negotiation and on the basis of cost-plusfixed-fee.. .cGreater effort is recommended toward extending the use Atthe end of 1-952, the Commission will have been i n charge of this nation's atomic entc-i'prise for six full years. now elapsed and sufficient experience has now been gained t o make possible a basic assessment of the central policy problems which are cited in the above-quoted excerpt:; and which have continually troubled the Joint Committee. I feel that enough time has Ma;f I therefore request that you submit for the Co comprehensive report, by January, 1953, on t h e followin four nts: (1) whether o r not it i s now advisxble ( i f only on an experimental basis)to operate a major segment o r segments of the program--such as the Oak Ridge gaseous diffusion complex, orthe Hanford piles--through a lump sum o r unit-price contract; (2) whether o r not it i s desirable, a s an experiment, t o undertake direct government oper2tion of 3mzjor segment o r segments of the ( 3 ) the extent t o which the use of lump-eum contracts can now be increased i n construction projects; (4) whether o r not the number of Commission employees i n the field may now be reduced, thereby vesting greater responsibility in Commission contractors and making fuller use of the managerial skills purchased by contract; and (5) the extent to hi ch competition in all its forms--between contractor and contractor, govcmment and contractor, small con tr xt or and large contractor, l2boratory and laboratory, and the like--can be enhanced both t o strengthen thc prog rm and reduce costs, I would appreciate it i f your rep0r.t could be submitted i n a form such that the main lim3f reasoning and the main conclusions could be seg rep ted and mde public. Twnk you very much indecd for this impcrtmt assis hn ce. Bri en HcMah on