FIXED PRICE VERSUS COST REIMBURSEMENT CONTRACTS Fixed-price type contracts decreased slightly to 75.8% of total procurement in fiscal year 1969 from 77.6% in fiscal year 1968. However, the relative use of this type of contract has increased by 32% since fiscal year 1960. TABLE 12.-NET VALUE OF MILITARY PROCUREMENT ACTIONS, BY TYPE OF CONTRACT PRICING PROVISIONS, 1Includes Army, Navy, Air Force and the Defense Supply Agency (DSA). DSA was established on Jan. 1, 1962. Excludes data for the Armed Services Petroleum Procurement Agency through December 1956, but includes data for the Military Petroleum Supply Agency, the successor to ASPPA, beginning 1 January 1957. Excludes Army procurement overseas prior to FY 1958 and also excludes some Navy letters of intent in FY 1952 for which type of pricing provision was not determined. Excludes intragovernmental procurement. Excludes procurement actions less than $10,000 in value. Source: "Military Prime Contract Awards and Subcontract Payments or Commitments, July 1968June 1969," Office of the Secretary of Defense. UTILIZATION OF MILITARY STOCKS From fiscal year 1958 through fiscal year 1966, the amount of intraservice and interservice utilization rose steadily from $213 to $1,859 million. During the next two years, total utilization decreased more than $750 million primarily due to an overall decrease of approximately $1,600 million of property disposed during 1968. In fiscal year 1969 it rose $146 million, as the result of an increase in the reclamation of Air Force and Navy aircraft. DISPOSITION OF DOD SURPLUS STOCKS The volume of disposal of surplus DOD personal property, with some fluctuations, declined steadily from fiscal years 1959 to 1968. In fiscal year 1969, however, dispositions took an upward turn, primarily due to the large volume of military-type aircraft sold as scrap. The rate of return on usable property has also increased, but the percentage of total gross proceeds to total acquisition cost has declined, due to large sales of high-cost items with little commercial adaptability. The percent of sales costs to gross proceeds declined approximately 24% between fiscal years 1968 and 1969. This can be attributed to the achievement of the lowest costs of disposal since fiscal year 1959, coupled with an increase in gross proceeds. TABLE 14.-TOTAL DISPOSITIONS 1 (AT ACQUISITION COST) OF DOD SURPLUS PERSONAL PROPERTY, FISCAL 1 Exclusive of DOD interservice transfers. * Includes sale of $86,000,000 of missile phaseout property. Includes sale of $290,000,000 of missile phaseout property. 4Includes sale of $225,000,000 of missile phaseout property. TABLE 15.-PROCEEDS FROM DISPOSAL SALES OF SURPLUS PERSONAL PROPERTY BY THE MILITARY Percent of total gross proceeds to total acquisition cost. Percent of proceeds to acquisition cost (other than scrap and salvage)................... $128 55 $140 $124 $106 $87 $59 $61 $55 $48 48 40 42 53 51 ། 103 108 99 183 212 194 167 135 99 ༞། $36 52 88 5.460 7,366 5.983 6.123 3,482 3,446 4,815 3.958 3.418 3.063 3.38 2.88 3.24 2.71 3.87 2.87 2.14 2.72 2.90 2.91 2.72 2.69 TABLE 16.-COSTS OF DISPOSAL SALES OF SURPLUS PROPERTY BY THE MILITARY DEPARTMENTS, FISCAL YEARS 100 COMPANIES AND THEIR SUBSIDIARY CORPORATIONS LISTED ACCORDING TO NET VALUE OF MILITARY PRIME CONTRACT AWARDS Fiscal Year 1969 Corporate acquisitions and mergers in FY 1969 continued to affect the makeup of the DOD list of 100 companies which together with their subsidiaries were awarded the largest dollar volume of military prime contracts of $10,000 or more. These 100 companies accounted for $25.2 billion, or 3.8% less than in FY 1968, while total awards to all United States companies were down by 5% to $36.9 billion. The top 100 companies received 68.2% of the FY 1969 total compared with 67.4% in the previous year. Contributing to the higher percentage awarded the top 100 companies was not only corporate restructuring, but also increases in the procurement of ammunition and of missile and space systems, highly concentrated industries, while concurrent decreases were being experienced in the procurement of clothing/textiles and other commercial type items. The following table shows that the first five companies received 18.9% of the total received by all U. S. companies in FY 1969. This was lower by 1.7 percentage points than was recorded in FY 1968; however, the percentage for the next 20 companies totaled 25.9% or almost 1% more than in FY 1968. The largest company in FY 1969 received awards aggregating $2,040 million compared with $2,239 million for the largest in FY 1968. To get on the list in FY 1969 required $48 million in awards, against $50 million in FY 1968. The FY 1969 list of the top 100 companies shows 12 companies which did not appear on the list for FY 1968. Of these, 2 appear between positions 51 and 75 and the remaining 10 between positions 76 and 100. Of the 88 companies appearing in both the FY 1968 and FY 1969 lists, 49 bettered their position, 33 were in a lower position and 6 showed no change. Companies are considered as appearing on the list in both years despite mergers and name changes if a major component of a newly constituted company made the list in both years. The greatest positive change occurred for Teledyne, Inc. which went from 67th place last year to 22nd place this year, the result of the acquisition by Teledyne of the Ryan Aeronautical Company. Other companies with major position changes were: Federal Cartridge Corp. from 82nd to 49th; HarrisIntertype Corp. from 96th to 80th; Kaiser Industries Corp. from 18th to 45th and The Signal Companies, Inc. from 36th to 71st place. In addition to the turnover indicated above, the following changes affecting companies on the FY 1969 list were noted: Newport News Shipbuilding & Dry Dock Co., a shipbuilder and producer of heavy machines and equipment was merged into Tenneco, Inc., a gas transmission, investment, chemical and paper company. General Precision Equipment Corp., an instrument manufacturer was merged into Singer Co., a sewing and business machine producer. Ryan Aeronautical Co., a producer of aircraft and electronic navigation and missile components was acquired by Teledyne, Inc., a supplier of scientific research products, electronics and a specialty metals producer. McLean Industries, Inc., a ship line and freight transportation holding company and Reynolds Tobacco Co., a maker of tobacco products merged into Reynolds Industries, Inc. Crucible Steel, a maker of stainless and specialty steel was merged into Colt Industries, Inc., a producer of gas-turbine fuel pumps, machinery, small arms and aircraft and missile components. Vitro Corp. of America, a provider of electronic equipment and missile systems engineering was acquired by Automation Industries, Inc., a maker of instruments and aerospace parts. |