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(2) Excess ranges (shells) and/or utensils could certainly be brought together to make a complete unit if requirement exists.

Question. What four items are missing that are now permitting prime depot to declare stoves excess?

Answer. The shells were not declared excess because of missing parts. They were declared excess because we have adequate stock of complete units based upon Springclean disposal computations.

Question. Did the prime depot at any time declare 100 stoves excess because of missing parts?

Answer. No.

Question. Did we purchase additional equipment for the stoves?

Answer. No.

Question. We would like a complete history of what is procured in the way of pots, bowls, kettles, utensils, and all equipment that goes with each range. Answer. Pack B is the range, including fire unit, cabinet, pots and pans. Pack A is minor utensil and accessories kit.

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Ten-gallon milk cans have had wide usage within the Air Force as storage cans for various fluids and were used extensively in field and organizational mainte

nance.

This item was critical during World War II and therefore ample procurement was initiated during the Korean conflict to insure adequacy of stocks to support combat and other requirements. The last procurement of the item was made in March 1951, for a quantity of 1,744 each, based on continuing requirements. With the cessation of hostilities in Korea, and phase out of aircraft which had required utilization of these cans in conjunction with maintenance, and the resultant deletion from authorization documents, utilization has been considerably reduced. In computing Air Force excesses under project Springclean a quantity of these cans were determined to be excess to Air Force requirements, and are being offered to other Government agencies.

Mr. HOLIFIELD. The record might show that Congressman Hardy, who was chairman of this same subcommittee explored the automotive

program. In the case of jeeps, they found out they bought enough parts to fix every part on every jeep, so they had more parts for each part on the jeep than could ever possibly be required and found they had an inventory of spare parts far in excess of need. They ran up a procurement of millions of dollars. Applies to other types of automotive equipment also. He uncovered a tremendous amount of spare parts.

Mr. RIEHLMAN. You gentlemen are closer to the problems of this activity than we are, and we are here for specific information, and we are trying to dig it out by questioning, interviewing, and looking at surplus property. I think at this time it would be most helpful if any one of you gentlemen could tell us what your current problems are in this field, the problems there are in carrying on this program successfully and expediting some of your activities. The matters you should like to put on the record which would be helpful to this committee.

Colonel LEE. I can't think of anything in detail, Mr. Riehlman. I think that with the program which the Air Force has set up and got started under Springclean, and from what Colonel Betz has told me of the plans for an annual program for getting rid of surplus, that will clean up the situation. We have to have a starting point and as we get the fine points worked out, I think it will work all right. We have had some difficulties in getting procedures lined up and schedules for pushing stuff out.

Mr. RIEHLMAN. That program has only been under way about 9 months, is that right?

Colonel LEE. Yes, sir.

Mr. BALWAN. As operators, you are concerned with getting the stuff out of your system. What are your ideas concerning steps which might bring the Government a higher return? Are you aware of any hindrances that keep you from doing a better merchandising job? Would you rather let someone else come in and do that?

Colonel LEE. No, I think we will get more value for the Government by continuing as we are. I think our salvage operation has been very successful and we are just getting into other things. I feel we are getting more important things into the disposal system rather than scrap.

Mr. HOLIFIELD. When any material is declared to be scrap and is sold as scrap, do you have any followup to see that the material is actually converted into scrap-basic scrap?

Mr. BUTLER. After it leaves here; no sir,

Mr. BALWAN. Do they have to sign a pledge of some kind?

Mr. BUTLER. Yes, there is a scrap warranty in the contract which the successful bidder signs. They are checked, I know, because the FBI has examined my files as to who bought scrap material and I assume they go out and check those bidders.

Mr. HOLIFIELD. You know during the War Assets operation, there were frequent occurrences where certain items were declared scrap and bought at scrap prices. Then they were placed on the market in their original form in competition with manufacturer, and they never had been converted to scrap. If it is to be as scrap, in my opinion it should be converted into scrap, and it is the Government's responsibility to see that it is done and that it does not get back on the market in competition with regular business. Scrap is sold on the basis that it will be turned into scrap. If it is not, it becomes a fraudulent operation on

the part of the scrap buyer. What do you do to be sure that it is turned into scrap? For example-you sell some aircraft frames to a junkyard for smelting, ultimately. Do you know that it is melted down?

Mr. BUTLER. We try to take any item that can be sold as an item rather than sell it for scrap so that all scrap we do sell is fit for nothing but smelting. On airframes, combat type, we demilitarize them and cut and smash them, so they can never be used as a complete item again. On cargo ship frames, we will sell them as cargo ship frames and not as scrap. We are pretty well assured that all of our scrap is fit for nothing but scrap.

Mr. HOLIFIELD. My reason for bringing this up is that I remember during WAA operations, there were many instances where teams who had the power to declare scrap would go into a warehouse and declare certain amounts of material as scrap and that material was not scrap; it reappeared in its original form later to the great advantage of whoever was in collusion on the deal. You think you have got that thoroughly covered in your present operation?

Mr. BUTLER. It is well under control.

Mr. BALWAN. Do you people have any opinions on individual agencies assisting the military in disposal of salvage property_and helping Federal agencies in disposing of products? Colonel Lee? Colonel Betz?

Colonel BETZ. I do not have any opinion on that. If you mean individual experts, they can be used as advisers, but I'd rather let the local people express an opinion on calling people in at the base.

Colonel LEE. Mr. Butler does invite people in to see

Mr. BALWAN. I mean here for certain categories of material, such as kitchen equipment, the market on kitchen or bakery material, you might not know the market exactly as well as some specialist might. What would be the advantage of calling in some people who know kitchen or restaurant equipment and give them the material on a consignment basis, 60 percent to the Government and 40 percent to them.

Mr. BUTLER. We would lose money, because he is going out and try to resell even though the man is an expert. If there is anyone that knows better than these scrap dealers what anything is worth, I would like to know who. Those boys know.

Mr. BALWAN. They do know what the standard going rate is and, at the same time, they know the rate for getting stuff out of Cheli, which is the figure they know they can get it for. If the total amount of bids is 1 percent of cost, that is all they're going to put in. They can't put in much more than that, it ties up too much money.

Mr. BUTLER. The sales you are comparing now are strictly condition-condemned property. Those sales do not cover any excess property. When we start getting kitchen equipment and clothing, which is excess and not condition condemned, you will see our sales double and triple from what they are now. I feel that we will get just as much money for our excess and serviceable property as an outside civilian agent coming here and acting as our disposal agent.

Mr. HOLIFIELD. When selling excess new material, you mean? Mr. BUTLER. Yes, sir. I feel that we will get as much money for excess new serviceable property as outside civilian agents acting for us. Mr. BALWAN. How about auctions?

Mr. BUTLER. I feel it is fine if you have large enough quantities and are in a particular rush to get material out. You should have large quantities.

Mr. BALWAN. How large a quantity would you say you should have? Mr. BUTLER. I would not say, that is a hard one.

Mr. HOLIFIELD. This index to bidders list. I don't know how many hundreds of names are here, or are all of these people notified on sealed bid sales?

Mr. BUTLER. No, sir. That first group is the master list, the balance of those are individual lists to whom we send invitations.

Mr. HOLIFIELD. What do you mean? How many are in that first list?

Mr. BUTLER. I think between 900 and 1,000. The index is the master bidder's list. The balance are individual lists which we send out on invitations, depending upon type of material.

Mr. HOLIFIELD. On this first list-there are 900 or 1,000 names-do you have to send a complete brochure to each one of these?

Mr. BUTLER. No, sir; not to each one. Only to those interested in the type of property listed on that invitation.

Mr. HOLIFIELD. You go through the master list of bidders and break it down. Who would you notify on stoves?

Mr. BUTLER. It would go to all scrap-metal dealers and surplus dealers. Most of your surplus dealers handle various types of stoves. Mr. HOLIFIELD. That would be in the western region?

Mr. BUTLER. Yes, sir, normally in the western region, although we have some in the eastern region, only we don't send East too much because the cost of freight is too much and they are not interested.

Mr. HEYSER. May I point out one thing-you will notice on each tab or section the particular invitation to bid is listed, which indicates that those names were submitted on that particular one. That is a list of bidders for each sale that we have on sealed bid sale.

Mr. HOLIFIELD. These are people that were sent invitations to bid. It usually runs to 300 to 500 invitations. Would that invitation to bid be on a number of articles you put up on one bid?

Mr. BUTLER. Yes, sir, partially on a number of articles. The average run from 300 to 500 invitations.

Mr. HOLIFIELD. Do you group those items pretty much in classes and send to people interested in that classification?

Mr. BUTLER. Yes, sir.

Mr. HOLIFIELD. Do you publish it in any trade journals?

Mr. BUTLER. Yes, sir. We have an arrangement with a company in the East that we send copies of Invitations for Bid to, and they advertise our sales in their journals. I don't know the exact names of them. The Waste Trade Journal published in Chicago gets some of them.

Mr. HOLIFIELD. You would probably notify them of everything you have? People who are interested subscribe to these journals and that is the way they make their money out of it?

Mr. BUTLER. Yes, sir.

Mr. MORRIS. How many different categories of bidders do you have and what are they?

Mr. BUTLER. There is 1 list and each bidder has a card-there are codes from 1 to 10, the different types of property are broken down to these codes. Some of those cards have 10 codes, some 6 and some only 1. One bidder could be in several categories.

Mr. MORRIS. There would be separate lists for clothing, metal, scrap, usable items, and so forth.

Mr. BUTLER. Yes sir. The bidders could be in several categories. Mr. BALWAN. What is the difference between a small-lot sale and a spot-bid sale?

Mr. BUTLER. They are the same. They were called small-lot sales until volume 13 came out and dropped that term and called them spot-bid sales.

Mr. RIEHLMAN. Do you have any questions Mr. Doyle?

Mr. DOYLE. No sir. I've enjoyed listening to you gentlemen.
Mr. RIEHLMAN. Mr. Morris?

Mr. MORRIS. No sir.

Mr. RIEHLMAN. Colonel Lee and members of your staff, we want to express our appreciation to you for the splendid manner in which you have cooperated in giving us the information that we have requested here today, and the efforts you have put forth to take us around the base, and for the particularly fine dinner served to us. We appreciate it very much.

Mr. HOLIFIELD. I would like to say that I enjoyed being here again in the position of a visiting Congressman and not the Representative for this district. As you know, I represented this congressional district for 10 years and had to give it up, not of my own volition. It is a pleasure to be here again. I have always been very proud of this base and the way it has been handled. We have handled it without any major scandals. We have been fortunate in having good commanding officers and assistants here, and I am sure you will continue to be. It has been 4 years since I have been in surplus work and now that I am back on this same committee, I have had to go back to school. Mr. RIEHLMAN. The committee appreciates your sincerity and interest in this project, and we certainly feel that you are one of its strongest members in this field of activity, and we need your support and help because of your background in years past. We don't want to neglect to give any other person present an opportunity to speak. Mr. HULL. I would like to say that GSA appreciates remarks made this morning about our supply system. We are very happy to hear that our supply system is saving you money.

(Meeting adjourned at 1: 15 p. m.)

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