In keeping with Department of Defense policy to release as many Reserve Plants as possible to private corporations, 10 of the 11 plants have been sold subject to appropriate restrictions and recapture clauses and one is being operated under lease or contract agreement.

The status of the 11 plants by category of product is shown in

Table 46. bearings.

The plant still owned by the Government produces jewel

3. Equipment Reserve

The National Industrial Equipment Reserve on 30 June 1966 contained 9,172 items of metalworking machinery and 849 nonmetalworking items of industrial production equipment. The original acquisition cost of the 9,172 items of metalworking machinery was $79.3 million and of the 849 other industrial production items, $1.6 million.

Under existing legislation these tools are available for redistribution to essential civilian industry, Armed Services, qualified nonprofit educational institutions and training schools, and to other Federal agencies.

Department of Defense-wide policies, programs, and projects developed or continued in fiscal year 1966, all aimed at improvement in the

management, recording, and reporting of inventories, are summarized below.

MAJOR POLICY AND PROCEDURAL IMPROVEMENTS

Financial Management Improvement Program

Project PRIME (Priority Management Efforts), started in October 1965, has to do primarily with resources that are financed under operations and maintenance appropriations, and looks toward the integration of programming, budgeting, and management accounting for materials, as well as men, services, and money used by organization units. The goal is to charge an organization with the expenses, including spare parts of consumable materiel, now carried in organization accounts. It is planned to so purify appropriations that expense items are associated with operating, rather than procurement, appropriations, and to do this it is planned to extend working capital fund use to include all consumable materiel at both wholesale and retail level.

The basic concepts of Project PRIME are being tested at Fort Carson, Colorado; Naval Air Station, Quonset Point; and Laughlin AFB.

Supply Management Review Program

In early 1965, the Assistant Secretary of Defense (Installations and Logistics) announced a decision to establish a Supply Management Review Program to appraise supply management policy problems and to serve as an important input source for more uniform DOD-wide supply policy in the major problem areas. A working group was created to develop and recommend

means for carrying out this new program. In October 1965, a Supply Management Review Program Planning Report was completed by the working group, and was favorably received by the Assistant Secretary.

Simul

Subsequently, arrangements have been made for a small number of supply specialists in Installations and Logistics to manage this program. taneously, the military departments have recognized the merits of such an effort and have made internal organizational and staffing arrangements to deal with such common supply problems as are presented in the October 1965 Planning Report. Examples of these problem areas include the computation of peacetime and wartime supply levels, knowledge and control of item assets, and measurement and analysis of supply effectiveness. rently, action is being taken to select and assign the first topics for detailed DOD-wide review and development of improved policy and procedures. Progressive Refinement of Integrated Supply Management (PRISM)

Cur

This study of retail management on the part of the military departments for items assigned to DSA was designed to review existing relationships between the departments and DSA in the light of current concepts and to develop or revise procedures, as required. The PRISM report, which resulted from this study, was, after full consideration, approved early in the year, and designated as an immediate and shortterm plan which would form the base for an improvement program in materiel management.

It was announced that the PRISM report would be implemented as a "growth" document, one to which further contributions and refinements could be made as the implementing means for accomplishing the goals of the PRISM recommendations were developed.

Implementation was approached through two avenues.

Certain recom

mendations were identified to require coordinated implementation actions that must be undertaken by the Services/DSA in concert; others were identified and authorized for unilateral Service/DSA implementation on time schedules acceptable to the originator.

An example of the first technique is the revision of the Management Data List (MDL). The PRISM report recommended that MDLs, which are those parts of the Federal Catalog system that provide management data rather than identification data, be published by each of the military services, drawing on DSA Supply Centers for data or DSA items. An MDL task group,

with representatives from the Services, DSA, and GSA, was formed to determine which MDL data elements must be published and which computer retained, to standardize the MDL format, and to recommend actions for inclusion in the revision of the lists and of the Manual.

During fiscal year 1966, the group developed a system of catalog data transmission and a publication format. In this process, it was found possible to eliminate many publication data field titles, publication codes, and catalog management data notification card codes.

system will require about 18 months for implementation.

Retention and Transfer

The new

DOD Directive 4100.37, "Retention and Transfer Policy", dated 15 September 1965, provided both new and refined definitions of the major purposes for which materiel may be held. DOD Instruction 4140.18, "Management and Transaction Reports for Materiel Assets", dated 15 December 1965, which revises a previous Instruction, prescribes the reporting of supply inventories in terms of the major purposes of the retention and