WEDNESDAY, MARCH 8, 1961.

OPERATION AND MAINTENANCE, ARMY NATIONAL

GUARD

WITNESSES

MAJ. GEN. DONALD W. MCGOWAN, CHIEF, NATIONAL GUARD

BUREAU

MAJ. GEN. CHARLES B. DUFF, DIRECTOR OF ARMY BUDGET, OFFICE, COMPTROLLER OF THE ARMY

BRIG. GEN. M. W. SCHEWE, DEPUTY ASSISTANT CHIEF OF STAFF FOR RESERVE COMPONENTS

COL. C. G. METCALFE, CHIEF, ARMY, COMPTROLLER DIVISION, NATIONAL GUARD BUREAU

CHARLES F. STIER, ARMY COMPTROLLER DIVISION, NATIONAL GUARD BUREAU

Mr. MAHON. All right, gentlemen, will you proceed with the statement of your requirements for operating and maintenance funds for the Army National Guard?

General McGowan, I assume you will carry the ball on this presentation. Will you proceed?

General McGowAN. I have an opening statement, Mr. Chairman, if you wish that I read it.

Mr. MAHON. I assume it will be well to proceed with the reading of

the statement.

General McGowAN. Very well, sir.

GENERAL STATEMENT

Mr. Chairman and members of the committee, I welcome this opportunity to appear before you again to further report upon the activities of the Army National Guard. Recently before this committee I reported on appropriation for "Army National Guard, personnel." Today I will present the fiscal 1962 requirements for "Operation and maintenance, Army National Guard," for the support of its 27 infantry and armored divisions and its nondivisional combat and service units now organized under the pentomic structure and all engaged exclusively in unit training.

Army National Guard operation and maintenance activities

encompass:

(a) Maintenance: to include: repair parts, technicians and shops, the purchase of stock fund items, all relating to a total current equipment inventory of approximately $1.5 billion.

(b) Logistical support: including petroleum, oil, and lubricants, transportation of impedimenta, and operating supplies for field training.

(c) Opening, operating, and closing costs for field training sites. (d) Training and operating costs for 82 on-site NIKE missile

batteries.

(e) Repairs and upkeep costs for supply and maintenance facilities in the States.

(f) Travel for active Army advisors.

(g) Supply and fiscal accounting technicians for USPFO offices in the States, and administrative, training and supply technicians in the troop units.

Before proceeding with the fiscal 1962 budget, I would like to report on the major program and management activities related to this budget.

INVENTORY MANAGEMENT

The inventory management plan of the Army National Guard includes two major facets; first, standardized stock control based upon item accounting under the Army field supply system, and second, financial inventory accounting (FIA), implemented by the Army National Guard in fiscal 1958.

These two management tools are enabling us to achieve an optimum balance between resources and minimum requirements.

This chart shows our warehouse inventory of operating supplies from September 1957, the beginning of FIA, through June 30, 1960. Through June 30, 1958, and June 30, 1959, progressive reductions are evident.

As of June 30, 1960, the stockage objective was further reduced to $15.1 million and the stock level to $14.6 million (half the fiscal 1957 level).

The criteria for stockage is based upon recurring demands. Excess inventory thereby is not permitted to accumulate. Like sound commercial enterprises, success in inventory management is largely measured by the turnover. Slow moving or dead items serve only to increase the costs of operation.

For the 3-year period reflected on the chart; our stockage objectives were reduced by $9.5 million and our warehouse inventories were down $17 million. The current $15.1 million stock objective is approaching validity.

DISPOSITION OF EXCESS PROPERTY

Disposal of excess property, both in warehouses and at unit level, continued to receive major attention in our supply management

program.

The excess has not been caused by overprocurement. It has resulted principally from the recent reorganization as well as from obsolescence and ordinary wear and tear.

During fiscal year 1960 we disposed or redistributed $147.8 million which represents 81.4 percent of the total excesses.

(The following chart was submitted for the record.)

Distribution of that excess property is indicated on this chart: As shown, $20.6 million or 14 percent was distributed laterally between the States and utilized within the Army National Guard; $86.3 million or 58 percent was utilized by other Department of the Army agencies, a total of 72 percent utilized within the Department of the Army; $9.5 million or 7 percent was transferred to other Federal and State agencies. Finally, $31.4 million or 21 percent was turned over to property disposal officers. Thus 79 percent continued to be remuneratively utilized.

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