STEVEN KELMAN’S ARTICLE (“The Grace Commission: How Much Waste in Government?” Winter 1985) was based upon a two-page press release issued in January 1984 when the final report of the President’s Private Sector Survey on Cost Control (PPSS) was delivered to the President. Mr. Kelman concludes from his research that waste in government was greatly exaggerated by PPSS; therefore, cutting waste cannot substantially reduce the deficit. However, a review of Mr. Kelman’s limited analysis reveals both factual and conceptual errors which invalidate his conclusions. Though PPSS went to great lengths to ensure the accuracy of our reports, we cannot deny the potential for errors in the more than 21,000 pages of documents that were published, nor in the 1.5 million pages of material used during the research for those reports. However, despite this qualification, the inescapable fact is that waste and inefficiency do exist in government, and exist on a massive scale.