property on donation that is either excess or surplus. In other words they are being discriminated against. Is that right?

Mr. HULL. That is right.

Mr. HOLIFIELD. What is that? Is it a matter of basic law, or matter of regulation?

Mr. HULL. I understand it is a matter of basic law.

Mr. HOLIFIELD. They are not considered a local tax supported institution?

Mr. HULL. No, sir; I believe certain recommendations can go to Congress to correct that. The Carson City School, when I was there in November a year ago, was very much in need of typewriters but we could not give them to them.

Mr. HOLIFIELD. I think this is something the staff should look into and make different recommendations to the committee on internal and insular affairs.

Mr. HULL. We can give typewriters to the University of California but the Indian school has to pay a price set according to condition.

Mr. HOLIFIELD. It doesn't seem fair to give Federal property to State institutions and withhold from a completely Federal supported school.

Mr. HULL. That is right.

Mr. BALWAN. After excess screening through DOD and lists go GSA, then GSA can screen the Indian schools, can't they?

Mr. HULL. They do.

into

Mr. BALWAN. And give them property at the fair exchange value, and after property has been screened by GSA and placed in surplus to agencies of the Federal Government, and before 10 days, institutions can come in and claim donable property. Indian schools are excluded from that type of program?

Mr. HULL. Right.

Mr. HOLIFIELD. Unless it is allocated to them while in GSA control. They are excluded during this 10-day period; however, they can still get it if they pay for it.

Mr. HULL. No, they have to ask for it when it becomes surplus because everyone already has had a crack at it.

Mr. HOLIFIELD. The advantage the University of California has is that they are given it for nothing, and the Indian school has to pay

for it.

Mr. BALWAN. The University of California is not screened by GSA-the University of California gets it after GSA has declared it excess to the need of the Federal Government and before Mr. Butler gets a chance to sell it. University of California comes in and looks to see whether it wants it.

Mr. HULL. They come in and tell Butler what they want as far as the State of California is concerned. It all goes into surplus property at Sacramento where it is allocated.

Mr. BUTLER. No individual school comes in and picks up what they want.

Mr. HOLIFIELD. That is one of the loopholes we stopped. We made one officer in the State education system responsible for disposal so that they would keep schools from fighting each other. He allocates fairly, impartially. That individual comes in and claims what he feels he needs for the whole State.

Mr. RIEHLMAN. You have a man in the North and one in the South to take care of that.

Mr. BUTLER. The man from the southern area picks up a large enough quantity for all. He then contacts the man in the North, asking him if he can use any part of that.

Mr. BALWAN. Do you have data on that material with respect to the input and output?

Mr. BUTLER. Yes, sir. Our individual report for our base shows that.

Mr. BALWAN. Could you read for the record to us how many pounds of material were sold?

Mr. BUTLER. For September, total receipts into surplus, 637,355 pounds.

Mr. BALWAN. That includes salable scrap and salvage and usable material?

Mr. BUTLER. Yes, sir.

Mr. BALWAN. How much is salvage and usable material alone?

Mr. BUTLER. Salvage material alone was 637,000 pounds in September as received into surplus.

Mr. BALWAN. How much did you sell or get rid of?

Mr. BUTLER. The quantity sold during September was 185,755 pounds.

Mr. BALWAN. Then you are receiving more in September than you are selling. How was it in August?

Mr. BUTLER. There are other actions-I transferred 172,199 to other agencies.

Mr. BALWAN. Can you give me the total figure for shipments for September?

Mr. BUTLER. I can work them up.

Mr. RIEHLMAN. Better give us a breakdown for 3 or 4 months. will give you an exact picture.

Mr. HOLIFIELD. Before leaving this point in the discussion, I reiterate my lack of understanding of the conversion from dollar value into pounds. It seems to me you lose complete control of your percentage of recovery in terms of dollars. When you transfer from a dollar accountability to pounds it is like changing bananas into apples. The record of pounds and cents per pound would have no relationship to the acquisition cost in the transfer from dollar acquisition to pounds--you lose one trend and pick up another. It would be a great opportunity to confuse Congress or any other person as to what became of the dollar-and-pound relationship of reconciliation. I hope that we can get clear explanations as to why that method changed from dollars to pounds when we get to another base. Colonel Smith has assured me they will be made available. There may be a perfectly good reason for it. We want to know. I would appreciate your getting these questions on the record.

Mr. BALWAN. Could you explain exactly what a spot-bid sale is? Give us some indication of the success you are having.

Mr. BUTLER. The spot bid is a type of sale to expedite and cut down the cost of disposing of surplus property. It cuts paperwork approximately 50 percent.

Mr. BALWAN. How?

Mr. BUTLER. By comparison with sealed bids you will find that in the sealed-bid procedure two copies of the invitation have to be sent to the bidder. There is a deposit of 25 percent required on all items bid which necessitates paperwork, in addition to making up special forms to deposit into finance. Then there is paperwork after awarding of property. We create an additional amount prior to the delivery of any property. After delivery there are papers billing the man on what he received.

Mr. BALWAN. Don't you do all that anyway?

Mr. BUTLER. No, sir.

Mr. BALWAN. This spot bid is a regular bid. These invitations for bid are sent out to a selected list of prospective customers?

Mr. BUTLER. Yes, sir.

Mr. BALWAN. Is the distribution of this invitation as wide as on a regular bid?

Mr. BUTLER. Yes, if not larger.

Mr. BALWAN. Does the prospective bidder have to come in and look at this material?

Mr. BUTLER. He does not have to, but we always suggest that he do. Mr. BALWAN. He does have to mail to you this catalog with bids, and there is a certain day on which you open the bids. Is there any difference between that procedure and the regular sealed bid one?

Mr. BUTLER. There is not much didfference up to that point.

Mr. BALWAN. The advantage lies with the purchaser. He does not have to tie up his capital.

Mr. BUTLER. Yes, sir.

Mr. BALWAN. Isn't that the good point of merchandising?

Mr. BUTLER. Yes, the main point is that he does not have his capital tied up. We make the wards and get the material out.

Mr. BALWAN. You won't find this in the Army or Navy. This spot-bid sale is peculiar with the Air Force. It appears to be a good thing.

Mr. HOLIFIELD. On a spot-bid sale, you would notify people that you have a list of these materials that would be subject to spot-bid acquisition.

Mr. BUTLER. Yes, and they would come and look it over, and you would have a date they would put in their bids. Then we have a stipulated date and time of the opening. The bids must be in the box prior to that time. These people all come on the morning of the bid and, at that time, drop in their bid.

Mr. HOLIFIELD. That bid does not have any money in it?
Mr. BUTLER. No, sir.

Mr. HOLIFIELD. When opening bids, you open at a set time in the morning you find one of these bidders, read them off and make the award to the highest bidder? At that time, he pays you?

Mr. BUTLER. We go through a formal opening, and inform the highest bidder of the bid, and inform them they owe us so much. Mr. HOLIFIELD. He doesn't have to be present?

Mr. BUTLER. No, sir.

Mr. HOLIFIELD. He is not tied down unless he comes in, so that means you must have a time limit for him to appear.

Mr. BUTLER. We have a 10-day payment and removal period.

Mr. HOLIFIELD. What if he does not come in? Does it go to the next man in line?

Mr. BUTLER. It can be worked that way. We have never awarded to the next highest bidder.

Mr. HOLIFIELD. You mean the high bidder always came in?

Mr. BUTLER. We have had two cases where bidders refused to take delivery, and therefore I withdrew the lot rather than passing to the next highest.

Mr. HOLIFIELD. Why?

Mr. BUTLER. There is too much chance for collusion, because two bidders might get together. One bids high, the other low. The high man takes it if there are other bidders in between. If there are no bidders between them, then the high man would say "I don't want this stuff" and split the profit with the low man. So, I protect the Government by withdrawing it completely and readvertising.

Mr. BALWAN. How frequently would you withdraw items from the sales after getting bids?

Mr. BUTLER. On numerous occasions, I have rejected lots on the basis that we felt there wasn't a large enough return.

Mr. BALWAN. Was that not true on spot-bid 154.

Mr. BUTLER. That is so, sir. Sometimes they are withdrawn because a certain portion of one lot may be required here. Mr. HOLIFIELD. You reserve the right to withdraw at Mr. BUTLER. At any time up to the time awards are made and in the mail.

any

time?

Mr. RIEHLMAN. After bids are opened, and you come to an item that is advertised for sale on which you feel you are not getting what you should for that item, you still can withdraw it and put it up for sale at a later date?

Mr. BUTLER. Yes sir.

Mr. HOLIFIELD. You have not had to do that? In most instances, the spot-bid sales have been satisfactory and you have gone through with the sale?

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