1 Sales conducted at Hill Air Force Base by Department of Navy for Department of Air Force in accordance with consolidated sales procedures established by Department of Defense.

TAB C-Continued

USAF spot bid sales, July 1, 1954-May 31, 1955—Continued

1 Sales conducted at Hill Air Force Base by Department of Navy for Department of Air Force in accord ance with consolidated sales procedures established by Department of Defense.

Mr. BALWAN. It would be some indication on the progress being made on the recommendations besides the assurance that you people are giving us that you feel that it must be better since you have issued a regulation to that effect.

Lieutenant D'ANGELO. At the disposal conference that was held in March down at Kelly Air Force Base, we emphasized that point, spot bid sale should be used to the fullest degree for small generations of property that would get a fair return on the local market.

Mr. BALWAN. How do you police such a recommendation or directive of yours that they should resort more to the spot bid sales?

Colonel MCCAMPBELL. We go through our AMA's, we set the policy procedures and guidance in that based upon headquarters, Headquarters, USAF. That is given to our depots around the United States, 15 in all, 8 of them being AMA's. Those 8 AMA's, air materiel areas have the responsibility for policing their geographical area. In other words, you have supply activity teams that visit each of the surrounding Air Force bases periodically. The supply activity teams offer assistance, make a report on what is being done.

That report is analyzed by the geographical decentralized Air Materiel areas.

Mr. LIPSCOMB. How do you set up an auction sale?

Lieutenant D'ANGELO. It is the prerogative of the disposal officer. First of all, we restrict our auction sales to the larger generators like the AMA's, and the depots. If the disposal officer feels that the auction type of sale would lend itself best to the type of property and to the volume of property he has to sell, then it is his prerogative to use it. Do you mean the details now, sir, of the auction sale?

Mr. LIPSCOMB. I'm just wondering, I'm not clear in my mind, how you determine to set up a spot bid sale or a sealed bid sale or an auction sale.

Lieutenant D'ANGELO. By the volume and the type of property that we have generated in marketable condition.

Mr. LIPSCOMB. And in an auction sale is the material all originally located in one spot or do you ship into the base?

Lieutenant D'ANGELO. No, sir; it is one spot. We have no shipment of surplus property.

Mr. LIPSCOMB. What percentage of your total sales do the 20 auction sales account for?

General O'KEEFE. I think we have that figure for the first 4 months of this year.

Colonel BURGESON. I don't have it broken down, Mr. Chairman, by percentages. However, for the first 4 months of this year we sold property of an acquisition value of $102 million. Of this quantity, $15,709,000 was sold by the auction method.

Mr. LIPSCOMB. How many auctions was that?
Colonel BURGESON. I can't answer that.

Lieutenant D'ANGELO. I don't know either, sir.

Colonel BURGESON. No, sir.

Colonel MCCAMPBELL. We would have to check that. It must have been a value of around 8 or 10 or 12.

Lieutenant D'ANGELO. I don't believe it was that many, sir.

In order to set up an auction sale, to get more of the details of this, that auction sale is coordinated through the Department of Defense. I believe MRD has a selection of date so we would not have an auction sale at the same time somebody else was having one.

In other words we would not compete with the Army, the Navy. Mr. BALWAN. How would MRD be the central point for this? They are a screening organization.

Lieutenant D'ANGELO. They are a control point, a centralized control point between the three services to coordinate anything that might come in conflict.

Sir, is the MRD there?

Colonel BURGESON. It is within the Office of the Secretary of Defense, Mr. Balwan, that that control is exercised.

Colonel McCAMPBELL. I am in error.

Mr. LIPSCOMB. You have no idea of the exact significance of this $15 million, what the size of this action sale or sales were?

Lieutenant D'ANGELO. We can give you that information, sir, but not now. We don't have it now.

Mr. LIPSCOMB. When were the 20 auction sales held?

Mr. BALWAN. This says during the past year.

Colonel MCCAMPBELL. I believe that is a fiscal-year figure, sir, rather than the calendar year.

Mr. BALWAN. What fiscal year?

Colonel MCCAMPBELL. That would be from July 1954 to July 1955, which will be up to now, the present.

However, the figures that Colonel Burgeson gave you were for the first 4 months of this calendar year. Our dollar value and the dates of our sales are not on the same year basis.

Mr. LIPSCOMB. Are auction sales slowing down, or are you having more now?

Colonel MCCAMPBELL. No, sir; auction sales-there is no slowing down of it. It is a matter of property generation, movement of property into the area, and selecting the proper type of property for an auction sale. In our Air Force system, we compute requirements at the first of the fiscal year. That is in July. We come up with certain excess. Those excesses are then transferred for disposal.

Either through redistribution or through utilization, and eventually for sale, it takes probably 6 to 8 months to go through this gyration of determining where your excess is, moving it out of that warehouse to the segregated area, screening it for utilization and then into the disposal area. Therefore, we will get our big property surplus generation at a cycle in the year, generally at the end of the fiscal year, and that is the time when we start setting up our auctions, and our auctions now, being lax during that period of screening and so on and so forth, will now be on the upswing during the next 3 or 4 months because we now have the property available for disposal.

Mr. BALWAN. That is a big clearance sale, is that right?
You get a lot of property and want to clear it fast.

Colonel MCCAMPBELL. That's right, but we are very careful in the selection of the type of property we put in there. We do not hold an auction sale just to be holding an auction sale. We attempt to use good merchandising methods.