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U. 8. Air Force engine disposal program—Continued
enQuantity of gines to be Quantity of engines, reclaimed
spare surplus for parts
engines and com
(Warner Robing Air Force Base, Ga., see p. 248)
STAFF STUDY ON PROPOSAL ADVANCED BY THE NATIONAL
AIRCRAFT SERVICE CORPORATION
a. The National Aircraft Service Corporation, 1001 Connecticut Avenue, N. W., Washington, D. C., in letter, dated 6 May 1953, proposed to enter into a service test with the United States Air Force whereby that firm would select, store, and sell Air Force surplus property on a commission basis.
a. The proposal pertains to "surplus property", which is defined in Public Law 152, 81st Congress, as "excess property not required for the needs and the discharge of the responsibilities of all Federal agencies". Therefore, the Air Force would be required to complete all Government screening prior to turning property over to the sales agent.
b. Public Law 152, Section 202 (b), requires that property accountability records be maintained for all Government owned property. Property in the hands of the agency would still be Government property and subject to accountability. c. General Services Administration regulations (Title I, Personal Property Management, Section 302:00) require that Government surplus property shall be sold by competitive bid sale after advertising in accordance with detailed procedures set forth in the regulations. Furthermore, presentation to the Attorney General of the United States for review and consideration is required when disposition to private interests of Government property which cost the Government $1,000,000 or more is contemplated.
d. Memorandum from Secretary of Defense, dated 10 November 1950, which is based upon The Neutrality Act of 1939 ond Presidential Proclamation 2776 of 1948 requires the mutilation of any arms, ammunition, or implements of war prior to sale. Combat aircraft and parts and components thereof are characterized as implements of war. A copy of the memorandum is attached.
e. The National Aircraft Service Corporation proposes to “inspect and segregate that (material) which is considered salable and required within the aircraft industry"; therefore, the Air Force would still be required to perform the sales (disposal) operation of residual property.
f. The National Aircraft Service Corporation proposes that selected material be shipped by the Government on Government Bill of Lading to the nearest warehouse facility of the Corporation. Principals of the Corporation are located in the states of New York, California, Ohio, and Oklahoma. Nine of fifteen Air Materiel Command depots and a majority of other Air Force activities are located in other states and at a considerable distance from the cities in which the member firms are located.
a. Control of Property.–Under existing Government contracting provisions, title to Government property does not pass until payment is received (General Sales Terms and Conditions No. 6, Standard Form 114). Since title to the property has not passed to the agent, it would be necessary to maintain accountable records on the property at the agent's location. Furthermore, the proposal states that shipment would be made to the nearest facility of the Corporation. It appears that all the agents would desire "on the shelf" stocks; therefore, there would be many instances of trans-shipments from the initial receiving activity of the Corporation to other principals in the Corporation. Undoubtedly there would be many sales in small quantities, all of which would result in the posting and subsequent auditing of many transactions. All these factors would contribute to the overall administrative costs of the Air Force.
b. Recall of Property.—The proposal appears to be ambiguous with respect to that property which might be required in the event of an emergency. The proposal states : “this group is confident that a very large percentage of this material can be held in readiness in the event of an emergency requiring the recall of older type aircraft”. This seems to be an offer to store emergency reserves for the Air Force; yet there is no statement that such materials would not be offered for sale. The Air Force disposal program is based upon retention of sufficient quantities of material to meet emergency, i. e. mobilization, requirements, and it is inconceivable that any of such reserves should be offered for sale while the known potential requirement exists. The Air Force is currently utilizing commercial warehouse facilities for storage of reserve stocks; however, such warehouses have no sales arrangements and there is no danger that the stocks might be dissipated through sales. It is further assumed that the Air Force would be required to pay the Corporation 40% of the salable or stock-list price of any items recalled.
c. Demilitarization.—A very high percentage of the aircraft parts and components determined surplus under the Air Force disposal program are peculiar to combat aircraft, and, therefore, must be mutilated and sold as scrap in accordance with Department of Defense policy. The principals in the National Aircraft Service Corporation are all former War Assets Administration agents or officials and the requirements for demilitarization have increased greatly since that agency was liquidated, a fact which the individuals comprising the Corporation possibly do not fully appreciate.
d. Effect On Air Force Disposal Operations. The proposed plan would not result in any appreciable decrease in Air Force disposal expense. The Air Force would be required to screen the excess property with other Government agencies in accordance with Department of Defense directives and General Services Administration regulations prior to releasing it to the corporation for sale. Furthermore, the Air Force would still be required to dispose of the property rejected by the Corporation as commercially unsalable, as well as normal Air
Force generations of waste, scrap, and salvage. Having "skimmed the crea1a" from the Air Force surplus property through the proposed plan, the remaining property would be of interest to scrap dealers only, which would tend to lower the prices presently received for Air Force surplus property. In this respect, the proposed plan would result in greatly reduced revenue in the Air Force disposal operation with no reduction in operating expense.
a. The proposed plan is in conflict with General Services Administration and Armed Services Procurement regulations and might be considered a violation of the Anti-trust laws of the United States.
b. The proposed plan might result in a higher return than presently realized by the Air Force for those parts and components selected by the Corporation; however, the additional gro88 revenue received by the Air Force would be greatly reduced by freight charges to the Corporation facilities, and by additional policing, accounting, and other administrative expenses incident to this type of contract. Furthermore, there would be no reduction in operating expenses in the Air Force disposal operation and there would be a considerable reduction in revenue received from the Air Force operations.
RECOMMENDATION a. The service test contract proposed by the National Aircraft Service Corpo ration should be rejected for reasons stated under conclusions.
NOVEMBER 10, 1950. Memorandum for
The Secretary of the Army
The Chairman, Research and Development Board
This Office is concerned over cases involving attempts to export arms, ammunition and implements of war which have been determined surplus and disposed of as scrap directly by the military departments.
It is directed that all military agencies engaged in direct disposal of this equip ment take necessary action, prior to any sale, to insure that sufficient demilitari. zation is effected to predude the reconditioning of the equipment as usable or salable arms, ammunition and implements of war.
I have approved the attached policy governing the demilitarization of arms, ammunition, and implements of war as defined in Presidential Proclamation 2776, published 26 March 1948. The policy is not intended to apply when direct sales to foreign nations of militarized equipment are authorized under existing laws or Department of Defense policy.
This directive supersedes Secretary of Defense memorandum dated 2 July 1948, Subject : “Disposal of Arms, Ammunition and Implements of War."
G. C. MARSHALL 1 Enclosure DD Policy Applicable to Demilitarization of Surplus and/or excess Military
Property in Connection with Disposal
DEPARTMENT OF DEFENSE POLICY APPLICABLE TO DEMILITARIZATION OF SURPLUS
AND/OR Excess MILITARY PROPERTY IN CONNECTION WITH DISPOBAL
1. In order to effect coordination within the Department of Defense of Presidential Proclamation 2776, published 26 March 1948, and the Secretary of Defense memorandum, subject, “Disposal of Surplus Arms, Ammunition and Implements of War," the military departments will be governed by the policy stated herein relating to the demilitarization of excess and surplus arms, ammunition, and implements of war.
a. In all instances, property such as armament, guns and other items of equip ment having definite lethal characteristics will be completely demilitarized to render such property ineffectual for military use and to preclude the possibility of reconditioning such equipment to make it usable or salable as an implement of war. The following categories or property are examples of property having lethal characteristics:
(1) “Small Arms and Machine Guns Rifles, carbines, revolvers, machine pistols, pistols, and machine guns (using ammunition of caliber .22 or over); barrels, mounts, breech mechanisms and stocks therefor."
(2) “Artillery and Projectors Guns, Howitzers, cannon, mortars, and rocket launchers (of all calibers), military flame throwers, military smoke, gas, or pyrotechnic projectors, barrels, mounts and other components thereof."
(3) “Ammunition Ammunition of caliber .22 or over for the arms enumerated under (1) and (2) above; cartridge cases, powder bags, bullets, jackets, cores, shells (excluding shotgun); projectiles and other missiles; percussion caps, fuses, primers and other detonating devices for such ammunition."
(4) “Bombs, Torpedoes, and Rockets Bombs, torpedoes, grenades, rockets, mines, guided missiles, depth charges, and components thereof; apparatus and devices for the handling, control, discharge, detonation or detection thereof.”
(5) "Fire Control Equipment and Range Finders Fire control equipment, range, position and height finders, spotting instruments, aiming devices, (gyroscopic, optic, acoustic, atmospheric or flash), bombsights, gun sights and periscopes for the arms, ammunition and implements of war enumerated in this policy.”
(6) "Tanks and Ordnance Vehicles Tanks, armed or armored vehicles, armored trains, artillery and small arms, repair trucks, military half tracks, tank recovery vehicles, tank destroyers; armor plate, turrets, tank engines, tank tread shoes, tank bogie wheels and idlers therefor."
(7) “Poison Gases and To.ricological Agents All military toxicological and lethal agents and gases ; military equipment for the dissemination and detection thereof and defense therefrom."
(8) “Propellants and Explosives llants for the articles enumerated in sub-paragraphs (3), (4) and (7) above; military high explosives.”
(9) “Vessels of War Vessels of war of all kinds, including amphibious craft, landing craft, naval tenders, naval transports and naval patrol craft, armor plate and turrets therefor; submarine batteries and nets, and equipment for the laying, detection and detonation of mines.”
(10) “Aircraft Tactical and/or combat type aircraft; unassembled, assembled, or dismantled, both heavier and lighter than air, which are designed, adapted, and intended for aerial combat by use of machine guns or of artillery or for the dropping of bombs, or which are equipped with, or which by reason of design or construction are prepared for, any of the appliances referred to below; aerial gun mounts and frames, bomb racks, torpedo carriers, and bomb release or torpedo-release mechanisms; armor plate and turrets for military aircraft; also propellers or air-screws, fuselages, hulls, wings, tail units, and under-carriage units, aircraft engines, unassembled, assembled, or dismantled. In addition to the foregoing any other aeronautical components, parts, and accessories, or items of a classified nature, designed for tactical and/or combat type aircraft will be completely reduced to scrap.
EXCEPTION : That property which may be interchangeable with material
considered to be of commercial nature need not be demilitarized prior
to effecting disposal.” (11) "Miscellaneous Equipment (a) Military radar equipment, including components thereof, radar counter-measures and radar jamming equipment; (b) Military stereoscopic plotting and photo interpretation equipment; (c) Military photo theodolites, telemetering and Deoppler equipment; (d) Military superhigh speed ballistic cameras; (e) Military radiosondes; (f) Military interferences suppression equipment; (g) Military electronic computing devices; (h) Military miniature and sub-miniature vacuum tubes and photomissive tubes; (i) Military armor plate; (j) Military steel helmets; (k) Military pyrotechnics; (1) Synthetic training devices for military equipment; (m) military ultra-sonic generators; (n) All other material used in warfare which is classified from the standpoint of military security.”