the sale for refreshments could hear the sale in process in the salesroom. A total of 900 paddleholders were registered and the grand total of attendance at the sale reached 1,650 persons. It is believed that the atmosphere provided by a crowded room, bright lights, and a spirited auctioneer, who could be heard in every corner of the warehouse, helped to promote higher prices. There was a sense of urgency in the bidding and the feeling that this was no ordinary sale but rather something "special," therefore, making the material appear to be highly desirable. Parke-Bernet, Inc., provided 2 auctioneers, 2 recordkeepers and 6 deposit-takers to work along with disposal personnel in conducting the sale. The depot disbursing officer and an assistant were on hand during the entire sale to verify cash and check deposits and keep double deposit records thus narrowing the margin for error and providing for a double check of the figures. There were no floor demonstrators present for the sale. It is believed that floor demonstrators tend to confuse the bidders and on occasion give the impression that they are bidding for the auctioneer rather than simply describing the material. Disputes during the sale were at an absolute minimum and the few differences of opinion between the auctioneer and the buyers were settled amicably. As was previously mentioned, in an attempt to include as wide a variety of material as was possible in the sale, something over $463,000 worth of electronic tubes were lotted and cataloged. Prior to the auction sale, Naval Supply Depot, Bayonne, had been able to arouse no interest in the buying public in surplus and excess electronics. However, largely for experimental purposes, this enormous quantity of tubes was included. Many of the tubes cataloged were defective (gassy, parts missing, etc.), but it was felt that possibly an auction sale might serve as a means of profitable disposal. However, after examining the tubes, the bidders demonstrated no interest whatsoever. The consensus among the buyers was that, in addition to the fact that many of the tubes were defective, they were largely obsolete or of such a highly technical nature that they would prove to be absolutely worthless on the commercial market. The salvage companies will not purchase them because the labor involved in separating the relatively small percentage of precious metals contained therein is prohibitively high. Thus, after several attempts to sell the tubes, the auctioneer was forced to pass the lots. These tubes were withdrawn from the sale and will be scrapped and sold for whatever crushed glass value they may have. Other than the tubes no other lots were passed. It should be remembered that the enthusiasm and salesmanship exhibited by Mr. Harry E. Loree and Mr. Louis J. Marion, auctioneers, was greatly responsible for the unusually high prices received. There were no lapses between lots and the sale proceeded at a rapid and sometimes frantic pace. This gave the buyers little or no chance to "get together" and again contributed to the high percentage of return. Many categories of material were sold with exceptional results. Materials-handling equipment, automotive equipment, rope, and other types of highly specialized material (exclusive of electronic parts and tubes) fall into this high-return bracket. Some material contained in the sale was utterly worthless from a commercial standpoint and, in many cases, in extremely poor condition. In some instances, this critical material was carried at an unusually high acquisition cost. In spite of these disadvantages, even the undesirable lots were sold. The prices received for this material were, of course, low, but it is believed that in many cases had these lots been sold at a sealed-bid sale, no bids at all would have been offered. The low prices on a few of these critical lots helped to reduce the overall percentage return. For example, one lot of carriertype briefing chairs, carried at an acquisition cost of $10,200, brought $50 for the lot. Since this material was in extremely poor condition, the leather on the chairs torn and dried out, and the metal rusted and bent, even this modest sum was surprisingly high. Other instances such as this, where material was carried at high acquisition cost, having little consumer value, tended to offset the high percentage realized on more desirable material having practical use. It is again worthy of note to point out that the quality of the crowd attending the sale was high. There were very few persons who attended the sale simply to watch. An overwhelmingly high percentage of those in attendance were legitimate dealers in salvage material or represented recognized commercial enterprises. Adequate security and parking facilities were, of course, provided so that the large crowd was handled with a minimum of confusion. It should be noted that in lotting the material, the auctioneer kept two of the most desirable lots until the end of the sale and thus held the crowd for the entire day. Thus, many bidders who came specifically to purchase the Manitowoc crane and the railroad hopper cars (two exceptionally hot items) were forced to sit through the entire sale and in many instances were induced to bid on material for which they had held no prior interest. It is believed that this too was one of the many factors that contributed to the high return on many items. The sale ended at 5:30 p. m. and deposit and bid records verified to the satisfaction of both Parke-Bernet, Inc., and Disposal Division. In addition to the many buyers, Naval Supply Depot, Bayonne, was privileged to play host to the following distinguished observers: Congressman R. Walter Riehlman, chairman of Military Operations Subcommittee of House of Representatives Congressman Alfred D. Sieminski, Representative from New Jersey Mr. Cornelius E. Gallagher, Secretary to Congressman Sieminski Mr. M. P. Baldwan, staff member of Riehlman committee Mr. R. T. Morris, staff member of Riehlman committee Col. Hightower Smith, United States Air Force, accompanying members of Riehlman committee Mr. T. P. Pike, deputy to Hon. C. S. Thomas, Assistant Secretary of Defense (Supply and Logistics) Mr. V. C. Tolino, assistant to Mr. Pike Mr. V. F. Caputo, assistant to Mr. Pike Mr. Harry Spokowski, Bureau of Supplies and Accounts representative Mr. Garrick, staff member of Congressman Bender's Public Accounts Subcommittee Mr. Eugene T. Brennan, General Services Administration representative Capt. C. A. Blick, SC, United States Navy, Office of Naval Material Mr. Jos. D. Trollinger, Naval Gun Factory representative Mr. John Sinopoli, United States Marine Corps representative Mr. John McBride, Bureau of Supplies and Accounts representative Mr. Young, Acting Regional Director, General Services Administration, New York City Mr. Donehoo, Chief, Procurement Section, General Services Administration, New York City Mr. Markowitz, Chief Surplus Property Division, General Services Administration, New York City Comdr. J. C. Burrill, Assistant Officer in Charge, Navy Purchasing Office, New Lt. Comdr. J. F. McIver, Navy Purchasing Office, New York City And others. Cost breakdown of sale EXPENSES Labor: Per diem time expended in transporting and loading material_--- $1,540. 98 Per diem overtime... 214.80 Transportation (sedan used to make trips between Parke-Bernet 38.04 Public works services (auxiliary lighting in building, public address system, etc.)-- 356. 76 Overtime per annum expended in processing sales papers and in generally preparing material for sale____ 1,695. 84 Extra typists to help answer hundreds of requests for catalogs and brochures___. 137.44 Total labor charges 3,983. 83 Printing: Printing 3 editions of catalog and extra sales contracts_-_- 1,200.00 22.20 Total printing charges. Brought forward___ 1,222. 20 5, 206. 06 Cost breakdown of sale--Continued Advertising: Printing costs for 10,000 illustrated brochures (2 colors). Cost of placing display newspaper advertising, and trade paper Total advertising charges. Auctioneer's fee (based on 12 percent of the first $100,000 and 1 percent of the second $100,000) Total expenses $1,000.00 173.00 3,500.00 4, 673.00 2, 369. 51 12, 248. 57 RETURN FROM SALE Total acquisition value of sale__. $1, 261, 453. 51 186, 951. 23 14. 82 NET EVALUATION Total acquisition value of sale_-. Gross return from sale_ Less expenses-. Net proceeds from sale_--- Net percentage of return based on acquisition value of sale---- EVALUATION OF SALE $1,261, 543. 51 186, 951.23 12, 248. 57 174, 702. 66 13. 84 It is difficult to evaluate effectively the merits of the auction method as opposed to the sealed-bid method on the basis of but one sale. In this first sale it was a case of drawing up ground rules while the game was in progress. Policy and procedure were designed on the spot and guides for conducting the sale were drawn up out of necessity. In future sales, with experience and precedent behind us, it may be possible to speed up the entire process, thereby reducing labor costs and raising the overall percentage return. CONCLUSIONS In analyzing the results of the sale, there are certain advantages to the auction method that become apparent. 1. The auction method definitely produces higher prices as opposed to the sealed-bid type of sale. 2. Selling material at auction is a rapid means of disposing of large quantities of material. At the Bayonne sale, the equivalent of 37 sealed-bid sales was disposed of in 7 hours, thus clearing valuable warehouse space. 3. A successful auction sale is dependent upon presenting large and varied quantities of material. Variety draws buyers from every market as was evidenced by the recent sale. 4. The first auction sale cost more than an equivalent number of sealed-bid sales (37), however, the net result proved to be well worth the additional expense and effort. 5. Paid advertising is vitally important to the success of an auction. The lack of this most important tool is reflected in the smaller percentage of return realized under the sealed-bid method. The relatively modest sum spent by Bayonne on the first sale, produced excellent results. Careful attention must be paid to the advertising budget in future sales to maintain the standards set in the initial effort. 6. Buyers almost unanimously favor the auction method. One important reason for this is that their deposit funds are not tied up for lengthy periods. At a sealed bid sale, the unsuccessful bidders must wait 2 to 3 weeks until their deposits are returned. There is no deposit bottleneck at an auction. Small buyers especially favor this means of sale. An auction gives the small-business man, whether he be a dealer or user, an opportunity to compete with the larger 7. Successful auction sales have a tremendous amount of good public-relations value. A great many of the people who received notification of the auction sale, whether by word of mouth, through reading about the sale in the news columns of their papers, or by listening to their radios or TV sets, learned for the first time that there was a naval activity at Bayonne and that this activity was opening its sales facilities to the general public. Sealed bid sales, of course, are open to the public as well, but the fact that this sale was advertised and that auction sales in general make for more of a community feeling, public reaction to the sale was overwhelmingly favorable. Auctions apparently tend to draw out the innate competitive instincts of the public and this, in combination with the fact that all of us labor under the erroneous opinion that one can get a "buy" at an auction, helps to draw interest that would be impossible to attract at a sealed bid sale. Considering all aspects of the Bayonne sale, it appears that the auction method is most certainly a worthwhile medium for the disposal of Navy surplus property. Prices received for material sold at this sale far exceeded those generally realized in sealed bid sales. In addition to the financial advantages, more people than before are aware that there is surplus property to be bought. Prior to the Bayonne auction, bidding on sealed bid sales at this activity was limited to a relatively small segment of dealers in the immediate locality. While it was long suspected, but never proved, in some instances collusion among the buyers existed to the extent that prices were regulated to the dealers' advantage. TO SUM UP The auction sale at NSD Bayonne proved to be a profitable education for Disposal Division personnel. This first sale was in the way of an experiment, the purpose of which was threefold: First, to rapidly dispose of a large amount of material; secondly, to attempt to sell this material at higher prices, thus realizing a more satisfactory return to the Government; and last in order, but not necessarily in importance, to promote an even better feeling of good will between the Navy and the buying public. From all indications this experiment has proved to be highly successful. This experience has been chronicled here in detail in the hope that, together with the information gleaned from the two previous sales at Philadelphia, it will prove valuable in the formulation of Defense Department auction procedure for use in future sales. CATALOG AND INVITATION FOR PUBLIC AUCTION SALE AT UNITED STATES NAVAL SUPPLY DEPOT, BAYONNE, N. J. NAVY DEPARTMENT SURPLUS-MACHINERY, EQUIPMENT, AND SUPPLIES Wednesday, November 4, 1953, commencing at 10 a. m. Exhibition at United States Naval Supply Depot, Bayonne N. J., Monday, October 26 through Friday, October 30, inclusive, and Monday and Tuesday, November 2 and 3 from 8:30 a. m. to 3:30 p. m., Wednesday, November 4 from 8:30 a. m., to time of sale. NOTICE. Catalog Nos. 1 to 268, inclusive, can be inspected and will be sold in Warehouse 55, and Nos. 269 to 364, inclusive, can be inspected and will be sold outdoors at the Depot Salvage Yard, lot No. 222. In the event of bad weather, catalog Nos. 269 to 364 will be sold, from the catalog, in Warehouse 55. auctioneers; Parke-Bernet, Inc. (machinery, surplus and real-estate division), sales conducted by Louis J. Marion and Harry E. Loree. TO BE SUPPLIED BY BIDDER BIDDER REPRESENTS (Check appropriate bars) (1) That the aggregate number of employees of the bidder and its affliates 500 or inore, NAME AND ADDRESS OF BIDDER C SIGNATURE OF PERSON AUTHORIZED TO SIGN THIS BIO TITLE ACCEPTANCE BY THE GOVERNMENT OF THE UNITED STATES OF AMERICA DATE OF ACCEPTANCE TITLE OF CONTRACTING OFFICER STANDARD FORM 114 SIGNATURE OF CONTRACTING OFFICER G. L. PETTINGELL LTjg SC USNR ADDITIONAL GENERAL CONDITIONS AND TERMS OF AUCTION SALES CONTRACT 1. Deposit.-Purchaser will make a deposit of 25 percent of the bid in cash, certified or cashier's check, payable to the Treasurer of the United States or in such other form as may be acceptable to the contracting officer. In default of such deposit being made, the lot may be immediately put up again and resold. All deposits made are applicable to any or all purchases at this sale. 2. Submission of bids.-Bidders will communicate the amount of their bids for each lot to the auctioneer either orally or in an acceptable auction-bid method recognized by all auctioneers. (a) The Government reserves the right to reject any or all bids, the right to waive defects in bids and the right to withdraw any lot from sale prior to written acceptance of bid by the contracting officer with respect to that lot. (b) Each potential bidder will be required to sign a copy of this catalog upon entry into Government premises acknowledging the terms and conditions contained therein. Once a lot is knocked down to a bidder his bid may not be withdrawn. Contracting officer will execute a written notice of award which shall |