WORLDWIDE PERSONAL PROPERTY INVENTORY OF THE DEPARTMENT OF DEFENSE, EXCLUDING FINANCIAL ASSETS OF THE DEPARTMENT REPORTED ELSEWHERE IN THE REPORT, AS OF JUNE 30, 1966

[In millions of dollars]

Office, Secretary of Defense and other Defense agencies

Defense Supply Agency..

Department of the Army.

Corps of Engineers, civil functions..

Department of the Navy (including the Marine Corps).
Department of the Air Force.__.

Total

$382 2,391

26, 874 311

62, 921

51, 146

14.1, 025

42

INTRODUCTION AND SUMMARY

Introduction

The National Security Act of 1947 requires the Secretary of Defense to report annually to the President and to the Congress on the property records on "... the fixed property, installations, and major equipment items, and stored supplies of the military departments maintained on both a quantitative and monetary basis ..." (Section 410 of the National Security Act of 1947, as amended, as codified in Section 2701 of Title 10, United States Code).

This report showing the status of Department of Defense real and personal property as of 30 June 1966 has been designed to meet the statutory requirement.

Construction in

The values reflected in the report for land and buildings and for long-life equipment, such as ships, represent acquisition cost. Acquisition costs of ships as well as land and buildings are often substantially below current replacement values. progress is valued on the basis of cost of material and labor incorporated in the projects under construction. The value of items other than major equipment in supply system inventories is generally based upon standard prices, representing replacement or estimated purchase price. The value of major equipment is derived from the unit cost

based on the most recently executed contract for large quantity production.

As has been the case in each year, coverage of the report has been improved in some areas. In December 1965 there was included in Army supply system inventories the value of complete non-strategic surfaceto-air and surface-to-surface missile systems under the management of the Army Missile Command.

Prior to that time, it had been believed,

under an interpretation of the reporting instructions, that these missiles, like complete aircraft, were to be excluded from supply system reporting, although the value of these items was included in the equipment in use area. The inclusion of Army non-strategic missiles in the supply system totals, therefore, does not represent new coverage for Department of Defense assets in total; the value of these items in store at 30 June 1966 amounts to $680 million. Representing completely new coverage, reported for the first time by Air Force, are the values of cryptologic equipment ($9 million), and of some special project and account materiel ($117 million), and the value of secondary separable items which represents that portion of the total of all reparable items that statistical experience shows would have been condemned if repair had been attempted on all items. Heretofore, these have been discounted, but until they are, in fact, condemned, a decision was made to include their value ($285 million at 30 June 1966) in the Air Force supply system inventory and to stratify them as potential DOD excess. The foregoing represent examples of entirely new categories of reporting in the supply system; new weapons systems or other new items added to the inventory as a result of procurement are considered as normal addition which for the purpose of this report require no special

comment.

The total value as reported is exclusive of: (1) properties and

equipment of the National Industrial Plant and Equipment Reserve, which is under the custody of the General Services Administration; and (2) properties and supplies under the jurisdiction of the Civil Works Division, Office of the Chief of Engineers, Department of the Army. The value of properties in these two excluded segments are shown separately, however; the value of the National Industrial Reserve is shown in Section C of Part II of this report and the value of Civil Works properties shown in a footnote to Table 2.

Although reports on some of the inventories of the Department of Defense contain details which, for reasons of military security, cannot be publicly released, detailed, classified data will be made available to appropriate committees of the Congress as required.

Department of Defense Summary (Tables 1 and 2; Charts 1 and 2)

The value of Department of Defense property at the end of the fiscal year, 30 June 1966, was $183.6 billion, $7.3 billion more than was reported a year ago. Of this increase, $0.8 billion represents the increased cost

of real property which rose from $37.6 billion to $38.4 billion during The value of personal property increased $6.5 billion, from

the year.

$137.2 billion to $143.7 billion.

Slightly more than $1 billion of this

increase was as a result of the increased coverage cited above.

As has been the case each year, more effective and more expensive equipment has been acquired together with improved facilities. This results in an increased value of Department of Defense-owned property, but the rising costs of individual weapons and facilities may be offset to some extent by disposal of much larger quantities of obsolete and unneeded property which was acquired at a lower cost. As a possible indicator of