entire executive branch. This includes standard contract forms and clauses as well as policies and procedures. Mr. THOMAS. Why can you not combine activities 5, 6, and 7, and cut down a third of your personnel, upgrade perhaps the first onethird of your personnel here? You are doing the same or kindred work here. You have a lot of chiefs and few Indians. Why not combine these three and upgrade your top people? You could reduce your personnel load there by 25 or 30 percent. You ought to upgrade these. These are your top people in here. Why can you not combine them and reduce your personnel by 20 percent and increase the grades and have more 14's, 15's, 16's, and maybe a 17 or 18 in the crowd. You could combine the three. Mr. YATES. I understand they are combined but separated by function. Mr. BEAN. These are entirely different functions. The work in Procurement Policy is performed by personnel highly trained in procurement policy and contract law. It affects all Government procurement agencies and all segments of American industry with which the Government does business. Its policies and regulations are adopted and followed by many of the State governments. Mr. YATES. Explain to Mr. Thomas why you cannot do it. Mr. THOMAS. There is a difference in words, difference in name, but they all do the same or kindred subject matter. These are your top people. Mr. BEAN. Our Office of Procurement Policy is concerned with the promulgation of policies and regulatory principles which govern the procurement practices of Federal agencies and inform the public at farge. On the other hand, the Office of Supply Management is involved in studying agency internal supply management systems to bring about operational improvement and appropriate application of procurement and other supply policies. These are two entirely separate functions. Mг. THOMAS. In words, yes, but in substance it is very kindred. Mr. BEAN. The people in Procurement Policy are involved in the development and promulgation of policies and regulations in the procurement field for Governmentwide use. The people in supply management study the specific supply operations of individual agencies in an effort to improve and strengthen them in procurement as well as all other aspects of supply. Mr. THOMAS. Mr. Bean, back in your good old active merchandising days you had a staff of people and you did not compartment them like you are doing here. Mr. BEAN. I was in the operating department and I did not deal with the lawyers upstairs making the rules. Mr. THOMAS. You cannot get along with or without your lawyers, you have to have them around, but you want them right at your elbow. It is not a separate compartment either. Mr. BEAN. There would certainly be no reduction in number of people by consolidation, because these are already rather barebones activities, and we have maintained them at the same level even though our business has doubled. Mr. OSTERTAG. How long has this been going on? Ever since GSA started? Mr. BEAN. As a matter of fact, our law directed us to assure effective supply management of other executive agencies as well as to promulgate procurement policy. It is only in recent years that we have been able to expand our capabilities in the procurement policy area. Mr. EVINS. Are you more successful in getting other agencies of Government to adopt your recommendations than we are in getting you to accept the recommendations of this committee? Mr. BEAN. I consider this committee to be my board of directors. I will do whatever you tell me to do. ADMINISTRATIVE OPERATIONS Mr. YATES. Put into the record the chart on page II-29. (The page follows:) OPERATING EXPENSES, FSS Administrative operations HIGHLIGHT Financial, administrative, and legal services, field supervision, and legislative and business services to support this program are provided by the integrated staff organization of GSA financed by transfers to the administrative operations fund from funds provided for the respective programs. This estimate is based on a projection of 1960 cost reports for administrative operations support adjusted for changes in the operating program, as follows: The ratio of A.O. cost to total OE-FSS program obligations for 1962 reflects a reduction under 1960, notwithstanding pay act increases and substantial workload increases. Mr. YATES. You have testified what all these services are. What is the one on II-29? Mr. TURPIN. That is for administrative operations. Mr. TURPIN. In GSA we have integrated staff offices that provide legal, personnel, accounting, budget, and other support for all programs of GSA. At the end of our justifications this is all brought together in one place. These staff services are financed from each of the appropriation items of GSA in relation to the amount of work performed for each particular program. The item on page II-29 is the portion of the total administrative operations cost charged to this appropriation, Operating expenses, Federal Supply Service. As you will notice, percentagewise we have shown a decrease from 16.2 percent to 15.9 percent in 1962. 1 Includes capital outlay as follows: 1960, $219,000; 1961, $119,000; 1962, $49,000. Mr. YATES. Let us go over to Expenses, Supply Distribution. Now we are going into the buying operation. We will put in the record the charts that appear on pages II-32 and II-33. (The pages follow :) "EXPENSES, SUPPLY DISTRIBUTION” Summary reconciliation of 1962 estimate to comparable amounts for 1961 1961 appropriation in annual act.... Comparative transfer from "Operating expenses, FSS". Proposed transfer from “Strategic and critical" materials for: Pay act increases.... Wage board increases_-_ Transfer from "Operation and maintenance, Army". Comparative total for 1961 original submission__ Proposed transfer from "Strategic and critical materials” to handle increased sales.... Revised total for 1961_. $22, 950, 000 993, 600 536, 600 338, 000 43, 000 24, 861, 200 700, 000 25, 561, 200 Increases in 1962: Handling the increase in sales from $364.6 million to $397.8 mil- Increase for warehouse relocations_. 1962 estimate, amended___. +2, 924, 800 888, 000 3,812, 800 29, 374, 000 |