changed with, another Federal agency before the shelf life period has expired, thus minimizing the destruction of such medical supplies. The proceeds derived from such transfers would be credited to the current appropriation or fund of the transferor agency and would be available for acquisition of new medical supplies or materials. Any materials or supplies not transferred to or exchanged with another Federal agency would become available for disposal as surplus property. The bill further provides that the head of the agency holding such supplies make the determination to transfer or exchange the materials in sufficient time before expiration of the shelf life period as would permit other agencies to use the materials before deterioration or spoilage. Section 2 of S. 406 would add new subsections (b) and (c) to section 402 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 512), which is the basic authority for the disposal of foreign excess property. The new subsections would authorize the donation of foreign excess medical materials and supplies for use in any foreign country, to nonprofit medical or health organizations, including those qualified to receive assistance under sections 214 (b) and 607 of the Foreign Assistance Act of 1961, and also, under such regulations as the Administrator shall prescribe, the return of foreign excess property to the United States for handling as excess or surplus property under the provisions of sections 202 and 203 (j) and (1) of the Property Act. BACKGROUND This bill emanated from hearings which were held by the Joint Economic Committee during the 89th Congress when it was reported to the committee that medical supplies held in storage for a national emergency had deteriorated to such extent that they had to be destroyed, because there was no legal authority for rotation or transfer to another Federal agency. Senator Proxmire, sponsor of this legislation, stated on the floor of the Senate that *** Under existing law Federal property can be given away only if it is declared to be surplus to Federal needs. If this is the case, the property may be donated to public or nonprofit private State and local organizations. Some items have to be destroyed because they never become surplus to Federal needs. They simply lose their efficacy. This is the case with stockpiled medical supplies. Substantial amounts of these supplies, which are stored in more than 2,500 packaged disaster hospitals, have short shelf lives. They cannot be declared surplus because they are needed for use in case of emergency until this shelf life expires. Yet, when they lose all of their value to the Federal Government they also are worthless for donation purposes. When S. 406 was introduced in the Senate, the sponsor reported that some progress had been made by the agencies involved in the admin S. Rept. 91-424 istration of the national medical stockpile program but that additional legislative authority was needed to attain more effective utilization of such supplies. He reported further as follows: I am happy to say that since the time I first introduced this legislation back in the 89th Congress the situation has improved somewhat, however. In 1967, General Counsel at the Department of Health, Education, and Welfare, the Department responsible for the medical stockpile, found that items from the stockpile could be declared unsuitable for civil defense purposes because of limited remaining shelf life and disposed of as excess property. This means that the material could be transferred without reimbursement to other Federal agencies. The procedure is still under study by the Office of Emergency Planning. The major problem is simply that of funding the replacement of materials that have been declared excess. *** *** I am happy to say that the bill I am introducing today has the approval and support of the General Services Administration, which administers the surplus property disposal program, as well as the concurrence of the Department of Health, Education, and Welfare-the Department in charge of the emergency medical stockpile program—and the Bureau of the Budget. In fact, today's legislation represents a substitute suggested by the General Services Administration for S. 1717, the bill I introduced on this subject in the last Congress. HEARINGS On July 9-10, 1969, an Ad Hoc Subcommittee on Surplus Property held hearings on this bill, at which time it was suggested that it may be appropriate to amend S. 406 to include authority for rotation of similar short shelf life, common use items of supply which are stored by the Department of Defense, GSA, or other Federal agencies. In this connection, Senator Lee Metcalf offered an amendment to authorize and direct Federal departments and agencies to rotate common use items of supply, such as ink, carbon paper, paint, and so forth, before they are retained in storage too long for issue. On the assurance of the Deputy Assistant Secretary of Defense, Mr. Paul H. Riley and Mr. Lewis Tuttle, Assistant Commissioner, Office of Personal Property Disposal, General Services Administration, Senator Metcalf withdrew his proposed amendment because he was assured that there was adequate authority for rotating such items of supply and that the agencies are now rotating such stock pursuant to an order issued by the Bureau of the Budget and other implementing regulations issued by the individual Departments. It was also reported to the committee that an interagency committee was established and has been coordinating activities in this area among the various agencies so that nonmedical items are rarely allowed to spoil or deteriorate into a useless state. S. Rept. 91-424 AGENCY COMMENTS The following letters, recommending enactment of the proposed legislation have been received from the Bureau of the Budget, General Services Administration, Department of Health, Education, and Welfare, and other affected agencies: EXECUTIVE OFFICE OF THE PRESIDENT, Hon. JOHN L. MCCLELLAN, BUREAU OF THE BUDGET, Washington, D.C., July 9, 1969. Chairman, Committee on Government Operations, DEAR MR. CHAIRMAN: This is in response to your request for a report on S. 406, a bill to amend the Federal Property and Administrative Services Act of 1949 to permit the rotation of certain property whenever its remaining storage or shelf life is too short to justify its retention, and for other purposes. The purpose of the proposed legislation is to provide a means to insure that medical materials and supplies which are stored for national emergency purposes are utilized before they reach a stage of deterioration which renders them unsafe for use and which requires their destruction. In addition, S. 406 would authorize such property to be transferred between agencies and if not utilized by any agency would authorize its donation or sale as surplus property prior to the expiration of its useful life. Similar provisions are included for application to foreign excess property. We believe it is desirable to provide assurances that property will be utilized in the public interest and not be allowed to deteriorate to a point requiring its destruction. Accordingly, we would have no objection to the enactment of S. 406. Sincerely yours, WILFRED H. ROMMEL, Assistant Director for Legislative Reference. Hon. JOHN L. MCCLELLAN, GENERAL SERVICES ADMINISTRATION, Chairman, Committee on Government Operations, DEAR MR. CHAIRMAN: Your letter of Jan. 27, 1969, requested the views of the General Services Administration on S. 406, 91st Congress, a bill to amend the Federal Property and Administrative Services Act of 1949 to permit the rotation of certain property whenever its remaining storage or shelf life is too short to justify its retention, and for other purposes. The principal objective of the bill is to provide authority for the rotation or other disposal of medical materials and supplies, stored for national emergency purposes, when the remaining storage or shelf life of such materials or supplies is of too short duration to justify their continued retention for national emergency purposes. As a result of the efforts of an interagency committee headed by GSA, some rotation of medical materials is being accomplished through agreements S. Rept. 91-424 under which such materials move, while they are still useful, to the Department of Defense or the Veterans' Administration, with replacement being made by DOD or VA. We believe, however, that the additional authority for rotation provided by S. 406 is desirable and we therefore favor enactment. The bill would authorize such medical materials and supplies to be determined excess property and, in accordance with regulations of the Administrator of General Services, to be transferred to any other Federal agency or exchanged with any other Federal agency for other medical materials or supplies. The proceeds from any such transfers may be credited to the current applicable appropriation or fund of the transferor agency and shall be available only for the purchase of medical materials or supplies to be held for national emergency purposes. Any materials or supplies not transferred to or exchanged with another Federal agency would become available for disposal as surplus prop erty. Section 2 of S. 406 would add new subsections (b) and (c) to section 402 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 512), which is part of title IV of the Property Act, covering the subject of foreign excess property. The new subsections would authorize the donation of foreign excess medical materials and supplies for use in any foreign country, to nonprofit medical or health organizations, including those qualified to receive assistance under sections 214(b) and 607 of the Foreign Assistance Act of 1961, and also, under such regulations as the Administrator shall prescribe, the return of foreign excess property to the United States for handling as excess or surplus property under the provisions of sections 202 and 203 (j) and (1) of the Property Act. We recommend the following minor corrections on page 3 of the bill. The words "SEC. 402" should be changed to read "SEC. 402." on line 5. On line 10 the word "in" should be inserted between the words "out" and "the". GSA has no basis upon which to estimate the financial effect of enactment of the bill. The Bureau of the Budget has advised that, from the standpoint of the administration's program, there is no objection to the submission of this report to your committee. Sincerely, ROBERT L. KUNZIG, Administrator. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Hon. JOHN L. MCCLELLAN, Chairman, Committee on Government Operations, July 16, 1969. DEAR MR. CHAIRMAN: This letter is in response to your request of January 27, 1969, for the views of this Department on S. 406, a bill to amend the Federal Property and Administrative Services Act of 1949, to permit the rotation of certain property whenever its remaining storage or shelf life is to short to justify its retention, and for other purposes. S. Rept. 91-424 S. 406 would amend the Federal Property and Administrative Services Act of 1949 by adding a new subsection (e) to section 201 thereof, to allow the head of any executive agency to determine that the remaining storage or shelf life of any medical materials, held by such agency for national emergency purposes, is of too short a duration to justify their continued retention and their transfer or disposal would be in the interest of the United States. Such excess medical materials or supplies could be transferred to another Federal agency or exchanged for other medical materials or supplies. The proceeds from any such transfer would be credited to the current applicable appropriation or fund of the transferor agency, and would be available only for the purchase of such medical materials or supplies. If not transferred to any other Federal agency under section 202 of the Federal Property and Administrative Services Act of 1949, the materials or supplies would be available for donation as surplus property to public bodies. The head of the executive agency disposing of such supplies would make the determination as to disposal at such times as to assure that such medical materials or medical supplies could be transferred or otherwise disposed of in sufficient time, to permit their use before they are rendered unfit for human use. The bill would also amend section 402 of the act to authorize the return to the United States of any excess property which any executive agency has in a foreign country, in accordance with regulations prescribed by the Administrator of General Services for handling as excess or surplus property whenever the head of an executive agency determines that it is in the interest of the United States to do so. The transportation costs incident to this return would be borne by the recipient. In addition, pursuant to regulations prescribed by the Administrator of General Services, any executive agency having any medical materials or supplies in a foreign country which have not been so returned to the United States and which would be available for donation under section 203 if situated within the United States, would be authorized to donate without cost such materials or supplies to nonprofit medical or health organizations for use in any foreign country. We are in favor of the objectives of S. 406-to provide a mechanism to minimize waste resulting from loss of efficacy of dated and other short-shelf-life items, particularly stockpiled medical items. Giving the head of any executive agency the option to declare such medical items excess property before they become unfit for human use because. of deterioration would provide maximum use for them and should effect significant savings in medical costs incurred by Federal agencies and State and local organizations. Inasmuch as S. 406 would, both by authorizing rotation of Federal supplies, especially medical supplies, having a short shelf life, and also by authorizing the return of excess and surplus Federal property from abroad for transfer or donation in the United States, promote more efficient handling and disposal of such property, we favor its enactment. We are advised by the Bureau of the Budget that there is no objection to the presentation of this report from the standpoint of the administration's program. Sincerely, ROBERT H. FINCH, Secretary. S. Rept. 91-424 |