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The present value of our inventory is $40 million. That has been increased by the receipt of major end items. The present number of line items is 70,000 as of October 30.

The money value of items awaiting disposition is $2,926,611 and there are 2,399 line items.

Mr. RIEHLMAN. What makes an item surplus?

Colonel ROBINSON. Mostly change of mission. For instance, oceangoing vessels are now under the Maritime Ship Transport System. Many of the items in stock are rollup items with the establishment of the Transportation Corps as a permanent part of the Army-no longer new mission item.

Mr. Balwan. What are some of your main items?

Colonel Robinson. Booms for large ships, lifejackets—any number of items which are no longer the support mission of Transportation Corps.

Mr. Balwan. Maritime material which the Transportation Corps had on ships-would that be disposed of through the Army or is the Navy selling it ?

Colonel ROBINSON. The Army is selling martime material, but it has heen screened by the Navy Bureau of Supply and Accounts.

Mr. Balwan. How is this material merchandised? Do you have any record of the returns received ?

Colonel ROBINSON. The property disposal officer can answer those questions.

Mr. RIEHLMAN. Thank you, sir.
Colonel CLEARWATER. Thank you, Colonel Robinson.

Gentlemen, you will now hear from Col. E. F. Wilson, Chief, the Miscellaneous Services Office, who will first define the nature of his operating responsibility in general terms, and through and with his Chief, Salvage Branch, is prepared to provide information covering all phases of the surplus property disposal function.

HEADQUARTERS SECTION

STATEMENT OF LT. COL. EDWARD F. WILSON, QMC, CHIEF, MISCEL

LANEOUS SERVICES OFFICE, SHARPE ARMY GENERAL DEPOT, LATHROP, CALIF.

Colonel Wilson. Gentlemen, the Miscellaneous Services Office, Headquarters, is a group of dissimilar service agencies. It is merely an administrative head for the various types of headquarters support to the technical supply agencies: Depot property, operating supplies, L. and V. pool, laborers and materials handling equipment, and salvage, property disposal for the technical services.

I would like to call on Captain De Garmo to brief you gentlemen on the property disposal activities.

Mr. HOLIFIELD. Is the disposal activity a branch of the Miscellaneous Services Office?

Colonel WILSON. Yes, sir; it is a branch of the Miscellaneous Services Office. However, the disposal officers are responsible to the Ariny area headquarters.

Mr. BALWAN. Is there an Army Headquarters here?

Colonel Wilson. The property belongs to the Technical Services until it is turned over to the disposal officer as surplus and reported to Army commanders. The Technical Services lose control at that point and have no knowledge as to how much property the disposal officer has sold.

A consolidated report on which the property disposal officer shows disposition made during the month is submitted to Sixth Army headquarters monthly. This report shows acquisition costs, donations, transfers, and revenue received. Property disposal is a class I function. Class I functions come under the Army commander.

Mr. Balwan. Do you have a civilian assistant to the disposal officer? STATEMENT OF CAPT. IVAN M. DeGARMO, QMC, CHIEF, SALVAGE

BRANCH, MISCELLANEOUS SERVICES OFFICE, SHARPE ARMY
GENERAL DEPOT, LATHROP, CALIF.
Captain DEGARMO. There are 2 assistants; 1 is bonded.
Mr. Balwan. How long have you been here?
Captain DEGARMO. Approximately 6 months.
Mr. Balwan. How long has your civilian disposal officer been here?

Captain DEGARMO. Almost 7 years. I depend on him for continuity as I was not a fully qualified disposal officer. Prior to assignment here, he worked at the ordnance depot, which was located in Stockton. He is a veteran of the Spanish-American War.

Mr. Balwan. What type of work did you do before coming in as property disposal officer?

Captain DEGARMO. I was statistician for the Eighth Army quarterquartermaster in Korea, and quartermaster supply officer for the second transportation major port in Japan.

Upon return to the States, I attended maintenance school at Utah General Depot.

I served 2 years in salvage work in World War II at Boston Quartermaster Depot.

Mr. Balwan. What grade does your assistant hold?
Captain DEGARMO. GS-8. The second civilian assistant is a GS-6.

Mr. Balwan. How much property is sold through this office in a year? What are the acquisition costs and revenue !

Captain DEGARMO. I will show charts. Our receipts from surplus property sales for the month of September 1953 were sixty-somethousand dollars. Our average rate of return on property sold for the first 28 sales was 22 percent.

Mr. Balwan. What type of property was that?

Captain DEGARMO. This is varied. We are handling 3 technical services, and I might have items from all 3 on 1 sale. It might be new, used, or a mixed sale.

Mr. Balwan. What was most of the equipment sold?

Captain DEGARMO. The largest amount was Transportation Corps marine-type equipment.

Mr. HOLIFIELD. Is your return as high on this marine-type equipment as it was on the other equipment you quoted which brings 22 percent on the dollar?

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Captain DEGARMO. On some of it, yes. I have a list of percentage of return running from 5 to 40 percent.

Mr. RIEHLMAN. What method do you use to sell !
Captain DEGARMO. Sealed bids.

Mr. RIEHLMAN. How much deposit does the Army require in a sealed bid?

Captain DEGARMO. Twenty percent.

Mr. Balwan. Do you state acquisition cost in the catalog next to the item description?

Captain DEGARMO. Yes; on every item.

Mr. Balwan. The Navy and Air Force refuse to put acquisition costs on their catalog. The Army is one place where you can pick up a sale catalog and get some idea of acquisition cost. Some acquisition costs date back to 1941.

Captain DEGARMO. This gives the bidder an idea of the value of property. We state whether the equipment is new or used. It can be inspected.

Mr. HOLIFIELD. May we see an advertisement ?

Captain DeGarmo. This is some that our local newspaper has been printing; this is free publicity. Of the 90 pieces of material handling equipment sold, we realized a 28 percent return.

Mr. Balwan. Does revenue from sale of material handling equipment go back into replacement funds!

Captain DeGarmo. Yes, if the new replacement property is purchased within 1 year.

Mr. Balwan. Do you specifically state on your catalog that this replacement property is not surplus ?

Captain DEGARMO. Yes; it is stated to be section 201 (c) exchange provision property sold under the authority granted by the Federal Property and Administrative Services Act of 1949.

Mr. BALWAN. Does that 22 percent average return on surplus sales include revenue received from sale of scrap?

Captain DEGARMO. No; we cannot figure acquisition cost on scrap. The Army has not been able to formulate acquisition cost for scrap. The figures quoted do not include the sale of salvage and scrap.

Mr. BALWAN. Can you give us a recent sales catalog on which bids are being opened today?

Captain DEGARMO. I would not have them here. I can get you a copy in the office. I have two copies of each sale Nos. 1 through 28.

Mr. Balwan. We would like to see bids on forklift trucks being sold on Sale No. 23; bids were furnished.

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REMARKS

TONNAGE 1. The most significant factor influencing the Salvage Branch operations is the continuously heavy increase in material received.

2. Disposition of property has been expedited but lagged behind tonnage received in all but the fourth quarter of fiscal year 53.

3. The increasing workload is clearly reflected by the upward surge of total tonnage handled.

4. Increased disposal activity in the last two quarters charted has held down the accumulation of tonnage on hand. Even so, tonnage on hand is 514 percent more than in the same period 1 year ago.

Tons received Tons shipped

Tons reware

housed

Total tons
handled

Tons on hand

at end of quarter

FISCAL YEAR 1953

1st quarter. 2d quarter.. 3d quarter.. 4th quarter.

895
1,385
1, 911
3, 123

1, 106
1, 204

764
3, 189

297
253

357
1, 530

2, 297
2, 842
3, 022
7, 842

1, 058 1, 239 2, 395 2, 329

PISCAL YEAR 1984

1st quarter..

6,630

2, 521

1,030

9, 181

& 438

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