Mr. HORTON. This is a recap of the engines which we have on the base at the present (indicated on chart). The majority are R-3350 engines originally designed for the B-29.

Mr. HOLIFIELD. There are 869 engines which have been used and are repairable, and only part are serviceable?

Mr. BALWAN. Are all engines on the base for the excess program? Mr. HORTON. We cannot determine that. We ship them as requested by the prime depot.

Mr. HOLIFIELD. Are they all used engines?

Mr. HORTON. Yes, sir.

Mr. BALWAN. You have a report of the number of engines from the excess of Spring Clean study, located on the base?

Mr. PORTER. As far as I know, the project Spring Clean for engines is handled separately.

Colonel LEE. This particular property is special storage for the other depots. This may be included in their project Spring Clean.

Tons
Value

CHELI AIR FORCE DEPOT EXHIBIT No. 13

Class 27-Account code 7-property on hand as of Oct. 30, 1953

Source: 822d DSO account records.

3,360

$5, 791, 954. 69

Mr. HORTON. In this class 27 or account code 7, the value of the property on hand as of October 30, 1953, was $5,791,954.69.

Mr. HOLIFIELD. You arrived at that figure as a result of instructions from the prime base to declare these excess?

Mr. PORTER. Those figures were computed from the stock record account of the property.

Mr. HOLIFIELD. All of that material there has been transferred there as a result of directives from your prime base, from the authority above you?

Mr. BUTLER. Either from Air Force stock lists or from various lists from higher headquarters.

Mr. HORTON. The next chart summarizes the sales conducted the past year at Cheli. Spot-bid sales produced revenue of $60,000; $85,000 were realized from sealed bid sales; and $1,200 from retail sales. We would like to point out here since lumber became scarce we are reclaiming all scrap lumber on the base and no retail sales were made in October.

Mr. RIEHLMAN. Do retail sales consist of lumber?

Mr. HORTON. Yes; people came in and bought small items such as that. On allocations, this is primarily scrap metal which National Production Authority said to sell to this smelter or that one.

CHELI AIR FORCE DEPOT EXHIBIT No. 15

Scrap and Waste Property Sold, Period Nov. 1, 1952-Oct. 31, 1953

Estimated acquisition cost.

Total revenue..

Source: Air Force disposable property report (AF 488).

$2, 147, 835. 16 $77, 548. 61

Mr. HORTON. The next chart summarizes the Air Force Disposable Property Report the past year at Cheli. In this category 75 percent of this material handled is obtained from within the area, from prime contractors, subcontractors, and the airplane industry. It is pulled in from other places. This is, for that reason, a very rough estimated acquisition cost of $2,100,000.

Mr. BALWAN. I would like to develop that later on in the afternoon session. The total revenue was from junk.

CHELI AIR FORCE DEPOT EXHIBIT No. 16

Salvage and usable property sold, period Nov. 1, 1952-Oct. 31, 1953

1 Includes $26,000 in vehicle transferred to CAP with $640 reinbursement. Source: Disposable property report.

Mr. HORTON. On this next chart, we have itemized, by report line the salvage and usable equipment which was sold. As we go through the list we notice the majority is in "All other". We have a listing which shows you a breakdown for this majority which is metal, structural steel, brass and sheeting, and so forth.

Mr. HOLIFIELD. You show your acquisition costs over $4 million and recovery $81,000. Does that include the cost of screening, personnel necessary to handle this?

Mr. HORTON. No sir. It is not a net recovery to the Government. Mr. HOLIFIELD. Then it might well be a complete loss to the Government.

Mr. HORTON. The salaries were about $8,000 for the year in sales. account benefits in addition to this. where Mr. Butler gets an additional goes back to stock.

roughly $72,000, so the profit was This however, does not take into There is a reclamation program return because of property which

Mr. HOLIFIELD. Let me understand this. In addition to this property which has been reduced to salvage or sold as usable property, you also have another value in your program in the shape of property which has been reclaimed or repaired for continued usage. Is that right?

Mr. BUTLER. Yes, sir.

Mr. HOLIFIELD. To what extent?

Mr. BUTLER. I have some figures here I did work up. The dollar value covering the past year amounted to $738,538 for material we've claimed through reclamation.

Mr. HOLIFIELD. Where is the cost of reclamation reflected?

Mr. BUTLER. The cost of personnel performing that has not been deducted. The figure is the total value of the material that has been reclaimed-total value.

Mr. HOLIFIELD. You have no cost figures as to how much it costs you to do that?

Mr. BUTLER. No, sir.

Mr. HOLIFIELD. If it was a motor overhauled you put the value of the motor after overhaul. This is a gross figure which does not reflect the net value to the Government, because your cost of reclamation is not subtracted from it.

Mr. BUTLER. As Mr. Horton said, a lot of the material is received from the outside, from contractors, and so forth, which is identified under various other stock numbers. It comes in and is screened and it might be good serviceable property. Then it is returned to Air Force stock.

Mr. HOLIFIELD. It isn't a matter of repairing or servicing; it is a matter of identifying, is that correct?

Mr. BUTLER. That is right, sir.

CHELI AIR FORCE DEPOT EXHIBIT No. 17

Depot stocks property processed as excess, period Nov. 1, 1952–Oct. 31, 1953

Mr. HORTON. Here we have the depot stock property processed as excess (indicated on the chart), which has been transferred from account code 1 or account code 7 to the disposal officer as surplus. For the year this had a valuation of $22 million; property in account code 7, listed on standard form 120 about 22 million.

Mr. BALWAN. You have no release for that?

Mr. HORTON. The part for which we have received no release is shown at the bottom of the chart, value of $1.8 million.

Next is the evaluation of the Q plan. As the Q plan has so recently been put in effect we do not feel qualified to give an evaluation, for the short period. The summary of what we think the plan will do and its benefits are indicated on the chart shown in the brochure.

CHELI AIR FORCE DEPOT EXHIBIT No. 18

EVALUATION OF Q PLAN

1. Summary.-Excess property generated within the Air Force must be screened for possible utilization by other agencies within the Department of Defense and the Federal Government. The Department of Defense has devised a procedure by which all generated reportable material will be divided into two major categories, i. e., P and Q type properties. This procedure was placed into effect in order to economically expedite the screening of property of low value and low utilization potential and provide for selective screening of property of high value and high utilization potential. Q type property is defined as property having low value and/or low utilization potential. P type property is the property having high value and/or utilization potential. Property falling within General Services Administration common item commodity groups, with some exceptions, must be reported on standard form 120, Excess and Personal Property Report. Such property is broken down into P and Q type property prior to reporting. Q type property with a total line item dollar value of less than $100 regardless of condition may be transferred direct to disposal without reporting on standard form 120.

2. Benefits. As a result of the adoption of the Q plan at Cheli Air Force Depot, a larger volume of disposal action is authorized. Under the new system, items which prior to July 1, 1953 were reportable on standard form 120 are now authorized for direct transfer to the disposal activity. Of those standard forms 120 which have been submitted to the prime depots for P and Q type property since implementation of this plan, results have indicated more expeditious screening and disposition of property falling within the P category of high-value items.

Mr. BALWAN. This has not been explained to the committee. Mr. HOLIFIELD. What is the Q plan? Can you explain that, Colonel Betz?

. Colonel BETZ. It is a Department of Defense plan to release restrictions formerly placed on certain property-high-cost property. The Q category is the low-cost material. Since the large majority of the items handled are low cost, it means a lot less paperwork in circularizing stock available to other agencies.

Mr. BALWAN. What places material in Q category?

Mr. BETZ. Material with a value under $100 per line item.

Mr. BALWAN. The understanding I have is that there are two classes of reportable property to SMD's. If material is over $300 every prime depot has to report to SMD and also if less than $300 but more than $100 per line item. For instance, a rug or uniform worth $200, there is no use to list these so they advertise regionally only, in the western area. That reduces the cost of advertising and the time to get it cleared. If less than $100 it is not reportable, and put in X category and sold. That is as I understand it.

Mr. HOLIFIELD. Mr. Hull, do you have a correction?

Mr. HULL. I couldn't give you a correction.

Mr. HOLIFIELD. Colonel Betz, do you accept Mr. Balwan's explanation?

Colonel BETZ. Yes, sir. I have never seen the Q plan. I have had it explained to me.

Mr. HORTON. That concludes the presentation if there are no other questions.

Mr. HOLIFIELD. I want to determine whether the Q plan was an extension of this plan you spoke of Colonel Betz or just part of it?

Colonel BETZ. It is not a part of our program at all. Ours applies to the determination of excess items by nature, and this plan is for handling excess items according to their dollar value.

Mr. BALWAN. This is a paper-expediting proposition. The Surplus Materiels Division (Navy) at Washington was getting a flood of requests and eliminated it by making an analysis of the kind of material they were screening, including items possibly over $300. About 70 percent of paperwork was eliminated. It doesn't pay for any man from a distant city to bid on a Q item as it wouldn't pay him to move it.

Mr. BUTLER. The Q plan is hard to explain on account of the dollar value and the utilization rate feature. It could be either type of property, Q or P according to condition and fair value.

Mr. RIEHLMAN. We are ready to take our tour.

(Adjourned at 10: 45 a. m.)

AFTERNOON SESSION

Mr. BALWAN. We have one question we might want to developfrom the form 488 disposal property report that you give to AMC,