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Statement of Regulatory Priorities
The Department of Defense (DoD) is the largest Federal Department, 
consisting of three Military Departments (Army, Navy, and Air Force), 
nine Unified Combatant Commands, 16 Defense Agencies, and nine DoD 
Field Activities. It has over 1,600,000 military personnel and 900,000 
civilians assigned as of June 30, 1994, and over 500 military 
installations and properties in the continental United States, U.S. 
Territories, and foreign countries. The overall size, composition, and 
dispersion of the Department of Defense, coupled with a new and 
innovative regulatory program, presents a challenge to the management 
of the Defense regulatory program under Executive Order (E.O.) 12866 of 
September 30, 1993.
Because of its nature, composition, and size, the DoD is impacted by 
the regulations issued by regulatory agencies such as the Departments 
of Energy, Health and Human Services, Housing and Urban Development, 
Labor, and Transportation, and the Environmental Protection Agency. In 
order to develop the best possible regulations that embody the 
principles and objectives embedded in E.O. 12866, there must be 
coordination of proposed regulations among the regulating agencies and 
the affected Defense Components. Coordinating the proposed regulations 
in advance throughout an organization as large as the DoD is 
straightforward, yet a formidable undertaking.
The DoD is not a regulatory agency, but in the course of its 
operations, does issue regulations on occasion. These regulations, 
while small in number compared to those of the regulating agencies, can 
be significant as defined in E.O. 12866. In addition, these regulations 
may impact the regulatory agencies. An example of this is the Base 
Closure Community Revitalization requiring coordination with the 
Departments of Housing and Urban Development and Health and Human 
Services. DoD, as a part of its new program, is not only receiving 
coordinating actions from the regulating agencies, but is coordinating 
with the agencies that are impacted by its regulations.
The regulatory program for the DoD fully incorporates the provisions of 
the President's priorities and objectives under E.O. 12866. 
Promulgating and implementing the new regulatory program throughout DoD 
presents a unique challenge to the management of our regulatory 
DoD has been receiving regulatory plans from those agencies that impact 
the operation of the Department through the issuance of regulations. A 
system for coordinating the review process is in place, regulations 
have been reviewed, and comments have been forwarded to the Office of 
Management and Budget. The system is working in the Department and the 
feedback from the Defense Components is most encouraging. For the first 
time, they are able to see and comment on regulations from the other 
agencies before they are required to comply with them.
In a similar manner, DoD has coordinated its significant regulation on 
community revitalization with the Department of Housing and Urban 
Development, the Department of Health and Human Services, the General 
Services Administration, and the public. The coordination process in 
DoD is working as outlined in E.O. 12866.
Through regulatory program points of contact in the Department, we have 
established a system that provides information from the Vice President 
and the Administrator of the Office of Information and Regulatory 
Affairs (OIRA) to the personnel responsible for the development and 
implementation of DoD regulations. Conversely, the system provides 
feedback from DoD regulatory personnel to the Administrator, OIRA. The 
changes in the internal communications on the regulatory program have 
been well received within the Department.
Overall Priorities
The Department of Defense needs to function at a reasonable cost, while 
eliminating ineffective and unnecessarily burdensome regulations. The 
process should respond in a timely manner, be efficient, cost-
effective, and both fair and perceived as fair. This is being done at a 
time when there is significant downsizing in the Department and it will 
need to react to the contradictory pressures of providing more services 
with fewer resources. The Department of Defense, as a matter of overall 
priority for its regulatory program, adheres to the general principles 
set forth in E.O. 12866 as amplified below.
Problem Identification
Congress typically passes legislation to authorize or require DoD to 
issue regulations and often is quite specific about the problem 
identified for correction. Generally, DoD does not initiate regulations 
as a part of its mission. The significant regulatory action for this 
year on community revitalization is an example. DoD will work closely 
with the Congress and the Administration in this area to identify the 
problem requiring solution, assess its overall significance, and 
identify the performance-based outcomes desired for a regulatory 
solution to the problem.
Conflicting Regulations
DoD does not have a large number of significant regulations and the 
probability of developing conflicting regulations is low. On the other 
hand, DoD is impacted to a great degree by the regulating agencies. 
From that perspective, DoD is in a position to advise the regulatory 
agencies of conflicts that appear to exist using the coordination 
processes that have been developed as a part of the new way of doing 
business in the DoD and Federal agency regulatory programs. It is a 
priority in the Department to communicate with other agencies and the 
affected public to identify and proactively pursue regulatory problems 
that occur as a result of conflicting regulations both within and 
without the Department.
DoD will identify feasible alternatives that will obtain the desired 
regulatory objectives. Where possible, the Department encourages the 
use of incentives to include financial, quality of life, and others to 
achieve the desired regulatory results. For example, in the significant 
regulatory action planned for 1995, the public sector is encouraged to 
acquire base closure properties through outright purchase, or where 
markets are not ready, to have the property conveyed without cost to 
the redevelopment authority. As a further incentive, developers are 
encouraged to acquire the property through a conveyance and still repay 
the DoD through a profit-sharing mechanism. This innovative approach 
fully supports the President's regulatory initiatives.
Risk Assessment
A priority in DoD is the assessment and minimization of risk. In the 
proposed regulation on community revitalization, the risk is 
ameliorated by incorporating the alternatives involving the risk into 
the regulation. The Department will either recover the cost of the 
property through outright sale, or in the case of conveyance, recover 
the cost later in a financial arrangement with the redevelopment 
One of the highest priority objectives of DoD is to obtain the desired 
regulatory objective by the most cost-effective method available. This 
may or may not be through the regulatory process. If a regulation is 
required, DoD will consider incentives for innovation to achieve 
desired results, consistency in the application of the regulation, 
predictability of the activity outcome (achieving the expected 
results), and the costs for regulation development, enforcement, and 
compliance. These will include costs to the public, government, and 
regulated entities, using the best available data or parametric 
analysis methods, to be used in the cost-benefit analysis and the 
decisionmaking process.
In the current significant regulatory action involving community 
revitalization, the cost of the regulation to the Government is 
basically the cost of developing the procedures to dispose of excess 
real and personal property in the event of a base closure. In return, 
the Government will receive reimbursement in the event of a direct sale 
or profit sharing in certain conveyance situations. Cost-effectiveness 
will be achieved.
Conducting cost-benefit analyses on regulation alternatives is a 
priority in the Department of Defense so as to ensure that the 
potential benefits to society outweigh the costs. Evaluations of these 
alternatives are done quantitatively or qualitatively or both, 
depending on the nature of the problem being solved and the type of 
information and data available on the subject. DoD is committed to 
considering the most important alternative approaches to the problem 
being solved and providing the reasoning for selecting the proposed 
regulatory change over the other alternatives.
DoD furthers its commitment to the use of cost-benefit analysis through 
its involvement in the Cost-Benefit Subgroup of the Regulatory Working 
Group. That sub-group is now working on the draft Regulatory Impact 
Analysis Guidance that will have Governmentwide implications for its 
implementation and use in the regulatory process.
Information-Based Decisions
Lack of information in the rulemaking process has been a serious 
problem and it is a priority regulatory issue with the DoD. The new 
thrust of E.O. 12866 with open communications among other Federal 
agencies, State, local, and tribal governments, public interest groups, 
and the public at large is a great step towards solving this problem.
In addition, the pressures of time also require agencies to make 
decisions without as much information as they would like to have. To 
solve this problem, in part, a priority of the DoD is to use the latest 
information technology to provide access to the latest technical, 
scientific, and demographic information in a timely manner through 
world-wide communications which are available on the ``information 
highway.'' Furthermore, the Department intends to use more automation 
in the Notice and Comment Rulemaking process, which should also reduce 
time pressures in the rulemaking process.
DoD is an active participant in the Information Technology Subgroup of 
the Regulatory Working Group and is sharing information about the use 
of technology in the regulatory process with other agencies.
Performance-Based Regulations
Where appropriate, DoD plans to develop performance-based standards 
that will allow the regulated parties to achieve the regulatory 
objective in the most cost-effective manner.
Outreach Initiatives
DoD is taking steps to seek the views of appropriate State, local, and 
tribal officials and the public in implementing measures to enhance 
public awareness and participation both in developing and implementing 
regulatory programs. In its most recent significant regulation 
concerning revitalization of the communities, the Department has 
received hundreds of comments from the public and held a public hearing 
involving focus groups. Reaching out to organizations and individuals 
who are affected by, or involved in, the particular regulatory action 
is a significant regulatory priority of the Department.
DoD has embraced the coordination process between and among other 
Federal agencies in the development of new and revised regulations. 
This year, the DoD has coordinated its significant regulatory action 
with the Department of Health and Human Services, the Department of 
Housing and Urban Development, and the General Services Administration. 
In addition, for the first time ever, DoD has received regulatory plans 
from key regulatory agencies and has established a systematic approach 
to providing the plans to the appropriate policy officials within the 
Department. Feedback from the DoD Components indicates that the 
communication among the Federal agencies is a major step toward 
improving regulations and the regulatory process, and improving overall 
Government operations as well.
Minimize Burden
In the regulatory process, there are more complaints concerning burden 
than anything else. In DoD, much of the burden is in the acquisition 
process. By reforming the acquisition process, DoD can make a 
significant contribution to reducing this burden, but DoD cannot do it 
alone. Over the years, acquisition regulations have grown and become 
burdensome principally because of legislative action, enacted for 
laudable reasons.
In coordination with Congress, the Office of Federal Procurement 
Policy, and the public, DoD plans significant reforms to the 
acquisition system. The result is anticipated to be major reductions in 
the regulatory burden on the government and public sectors. To effect 
these changes, DoD has established and staffed the Office of the Under 
Secretary of Defense for Acquisition Reform.
Simple Design
Ensuring that regulations are simple and easy to understand is a high 
regulatory priority in the Department of Defense. All too often the 
regulations are complicated, difficult to understand, and subject to 
misinterpretation, all of which can result in the costly process of 
litigation. The objective in the development of regulations is to write 
them in clear, concise language that is simple and easy to understand.
In summary, the rulemaking process in DoD should produce a rule that 
addresses an identifiable problem, implements the law, implements the 
President's policies including E.O. 12866, is in the public interest, 
is consistent with other rules and policies, is based on the best 
information available, is rationally justified, is cost-effective, can 
actually be implemented, is acceptable and enforceable, is easily 
understood, and stays in effect only as long as is necessary.
Specific Priorities
For this Regulatory Plan, there are four specific DoD priorities, all 
of which reflect the regulatory principles established in E.O. 12866. 
For 1995, there is only one significant regulatory action, but in those 
areas where rulemaking or participation in the regulatory process is 
required, DoD is developing policy and regulation that incorporates not 
only the provisions of the President's priorities and objectives under 
E.O. 12866, but also the National Performance Review, dated September 
The DoD has focused its regulatory resources on the most serious 
environmental, health, and safety risks. Perhaps most significant is 
that each of the four priorities described below promulgates 
regulations to offset the resource impacts of Federal decisions on the 
public or to improve the quality of public life such as those 
regulations concerning base closures, the wetlands, acquisition, and 
health care delivery.
Revitalize Communities Due to Base Closure
On July 2, 1993, President Clinton announced his five-part plan for the 
economic revitalization of communities where military bases are slated 
to close. The plan, ``A Program to Revitalize Base Closure 
Communities,'' is a high administration priority. DoD has worked with 
representatives of the National Economic Council and the Congress to 
develop legislation that would enable DoD to implement the plan. Title 
XXIX of the National Defense Authorization Act for fiscal year 1994 
includes the enabling provisions. The interim final rule published at 
59 FR 16123, April 6, 1994, encompasses two supporting DoD significant 
regulatory actions that promulgate guidance required by section 2903 of 
the Act, and provides interpretive guidance concerning other changes to 
the base realignment and closure process generated by Title XXIX of the 
In recognition of the President's goal to minimize the impact of base 
closure on the local community's prospects for employment and economic 
recovery, DoD will be working closely with others to identify problems 
requiring solutions and identify performance-based outcomes for each 
base closure initiative requiring regulation. DoD has worked closely 
among all of the Military Departments, with other Federal agencies and 
State and local authorities, as well as Congress. In the case of real 
property screening, after DoD identifies what it needs to retain, the 
procedures provide for the Departments of Housing and Urban Development 
(HUD) and Health and Human Services (HHS) to be involved in determining 
the suitability of and interest in surplus property for homeless use. 
Specifically tailored for base closure properties, an additional 
screening is aimed at early identification of the needs of the 
homeless. In order to accomplish this and the subsequent processes of 
identifying property for disposal and the process for its disposal or 
conveyance to another, the DoD has emphasized participation by the 
public. This ensures that the new community has optimum opportunity for 
achieving revitalization that is in the interest of the public good.
 In this instance, DoD has developed innovative approaches to ensure 
that property is conveyed in the most cost-effective way possible. One 
of the most effective mechanisms in this regard has been that DoD has 
empowered the Military Departments throughout the entire process to 
work directly with other Federal agencies, homeless providers and reuse 
planners. Furthermore, when conveyance is not possible, Military 
Departments have been delegated disposal authority, thereby resulting 
in responsibility and accountability for real property from ``cradle to 
grave.'' One more alternative has been included in the regulations 
involving the leasing of real property early in the reuse process. This 
process was established as an effective way to quickly attract new jobs 
to replace those that have been lost by the base closing. In addition, 
it is an alternative to allow suitable economic reuse to occur until 
clean-up measures can correct contaminated property and thereby make it 
available for conveyance.
DoD has minimized the risk of proposed base closure regulations by 
achieving the desired objectives by the most cost-effective methods 
which will result in optimizing the cost benefit to all parties 
involved. Throughout the process, DoD has ensured that potential 
benefits to society outweigh the costs. Prior to the interim final 
rule, there was no guidance for ensuring that local redevelopment plans 
would be comprehensive and embrace the range of feasible reuse options 
that will result in rapid job creation. When appraising property for 
disposal, the procedures have been established to take into 
consideration uncertainties and risks in property development as well 
as the impact of base closure on market conditions. Moreover, the 
appraisal will reflect the most likely range of uses consistent with 
local interests rather than highest and best use. To assist in 

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