other interested organizations, plans, policies, and procedures to govern the donation of surplus personal property.

Your invitation to me to participate in this hearing indicated the special interest of the subcommittee in two particulars.

The first relates to any problems which the present donation program may be encountering. In administering this program we long have worked in close harmony with the agencies concerned with the several donation programs, particularly the Department of Health, Education, and Welfare; the State agents for surplus property and their association called the NASASP; and have maintained close liaison with Mr. Ray Ward, the staff administrator of your subcommittee. While minor procedural problems arise from time to time, I believe these have been and in the future will be resolved on a cooperative and understanding basis. We are not aware of any major problems existing in the program at the present time.

One matter of potential significance deserves special mention. Personal property available for both Federal utilization and State. donation has been decreasing over the last several fiscal years. fiscal year 1958, for example, we reached a high point in available property, $7 billion at acquisition cost. The following year, available excess property decreased to $6.9 billion, and in fiscal 1961 the decline continued to $5.1 billion at acquisition cost. During the current fiscal year the pattern of a declining volume of property available continues. Notwithstaiding this decline, however, the total annual volume of donations has, as previously pointed out, continued to rise. While we hope that the relationships will continue to improve between total available volume and volume donated, we must recognize that maximum potential will eventually be reached, particularly if total volume continues to decline.

The subcommittee asked for our suggestions for improvement in the donation program. As previously mentioned, the agencies, both State and Federal, involved in the administration of this program, work together in close cooperation for its vigorous promotion. Regulations and procedures governing the program receive our constant attention for the purpose of improvement, clarification, and simplification. I am not aware of any policy or procedural problems which cannot be satisfactorily resolved by the interested organizations. We believe that the test of time has established that the legislative authority under which the program is administered is adequate to assure that its purposes are achieved, and we have no suggestions at this time for its improvement.

Some of the statistics I have discussed today are set forth in greater detail in the table attached to my statement, which I would like to submit for the record.

Mr. MONAGAN. Without objection, that may be made a part of the record at this point.

Mr. BOUTIN. Thank you, Mr. Chairman.

(The table referred to follows:)

1 Based on reports by all military and civilian Federal agencies. Includes items not suitable for donation or Federal utilization due to military nature or condition.

2 Based on General Services Administration approvals.

3 1st quarter actual, 2d quarter estimated.

Mr. BOUTIN. Thank you again, most sincerely, for the opportunity to appear before your committee. We shall be happy to answer any questions that we can. I have with me the Commissioner of the Útilization and Disposal Service, Mr. Joseph Moody, who will assist me in any testimony the committee may require.

Mr. MONAGAN. We thank you for the statement, and also compliment you on the way you have taken hold of this important job as Administrator. You have made an excellent record in a brief time.

I am very much interested in the central office, the Donation Division. Is there anything further any of you would like to say about the operation of this office?

Mr. BOUTIN. The big think that we tried to do here, Mr. Chairman, was to establish an organization of people who would devote their full time to that single facet of the entire Utilization and Disposal Service program in relation to personal property. We have done that by putting together the best people we had available. Their sole function is to coordinate the donation program, to work with HEW, FAA, the Department of Defense, and the State agencies. We think it will be very significant in our total, overall operation. Do you want to add anything to that, Mr. Moody?

Mr. MOODY. I think not, Mr. Boutin. I think most of you gentlemen know who is the head of that Division, for he has been in the program a long time-Mr. Kleinstuber, who works under Mr. Garvey. I am sure he is well known to the other people who are concerned with it.

Mr. MONAGAN. Mr. Boutin, you say that the utilization of excess personal property amounted to $310 million during the last fiscal year, and the total surplus was $390 million. So, you really have a total of $700 million which is distributed between these two programs. Is that so?

Mr. BOUTIN. The total of the two, that is correct, Mr. Chairman. Mr. MONAGAN. You spoke of the declining volume of property available. To what degree is this due to a greater utilization within either the Department of Defense or the Federal Government apart from the Department of Defense?

Mr. BOUTIN. I assume, Mr. Chairman, you are speaking of the decline in donations in fiscal 1961. It is due in part to greater utilization, to better screening processes, but it also is due in greater part, I would say, Mr. Chairman, to the fact that, for instance,

obsolete airplanes which are scrapped help neither of these programs. It is scrap. This constitutes a great deal of dollar volume.

Right now, for instance, on our B-52 program we are not getting these planes scrapped. The planes are being kept in service much more than they were a while ago when a vast number of airplanes were being scrapped. This has a great effect on the total amount available.

Mr. MONAGAN. One of the suggestions made by witnesses from the Department of Defense was that there might be a change in the law so the so-called special-interest organizations, particularly those which do not have a military orientation, might be put on the same basis as those organizations which are set forth as donees under the donable. property program. Would you have any feeling about that suggestion?

Mr. BOUTIN. In broad, general terms, Mr. Chairman, it would be my feeling that if we were to expand the various groups, and God knows a great many of them certainly deserve it, the more we expand it, the more difficult time we shall have, the longer these personal items will be retained in our inventories while these determinations are made. I am sure the chairman and the committee know that every year a vast number of bills come in for boys' ranches and for a long list of various organizations and operations. The more expansion we have, I think the more difficult will be our task of doing a proper job.

There is one exception to that. I think there is a lot of merit to some consideration being given to public libraries. I think this is in line with what the Congress has been interested in, educational opportunity. To make this a widespread donation program, I think, will hurt the State program, will make our job extremely difficult, and the job of the HEW next to impossible.

Mr. MONAGAN. I just wondered whether you had had any experience or had any feeling concerning the suggestion that these nonmilitary programs or organizations, such as the Boy Scouts, Girl Scouts, and Red Cross, should be put on the same level of priority as the educational and health organizations.

Mr. BOUTIN. On the program which is limited to those organizations which have a special interest to the Department of Defense, where it is handled strictly by the Department of Defense, so far this has run along very nicely. I was not aware, principally because I have been on the road, that Red Cross will be joining in the Department of Defense program. The amount so far donated has been a very small amount, has it not, Mr. Moody?

Mr. MOODY. In relation to the volume donated for other educational, health, and civil defense activities, as the tabulation shows, last year, for example, it ran $23 million in acquisition cost as against $364 million.

Mr. MONAGAN. Of course, within the $23 million you could divide between the Military Academies, Coast Guard Academies, and so forth, and the nonmilitary ones. That is the point I was raising.

Another question has been raised which may not be as acute as we thought, the question of the application of 201(c) and the exchange sale program by the Department of Defense. The Secretary indicated that is under study at the present time, and they do intend to make a distinction at least between property that was nearly ready

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for the junk pile and property that might be rehabilitated. I wonder if you have any feeling about the application of that section to the

program.

Mr. BOUTIN. Only to the extent, Mr. Chairman, that originally when we were made aware of what was contemplated at DÖD, it appeared to us that if they were to sell the potential volume that they might sell, it would not only seriously affect the donation program as such, but also seriously affect the utilization program, the utilization by other agencies of the excess generated by DOD.

We notified the Department of Defense that we would want to give this a very long and hard look, to talk with this committee, and to talk with the Comptroller General, who traditionally has definite thoughts on this, before we would give them any answer at all.

I understand, however, that now the Department of Defense has delayed the issuance of any such order and, therefore, we are waiting to see precisely what they are going to do.

Serious objection was voiced by HEW. I had a very nice visit from the president of the State association and some of his colleagues. They were aware, as we were, that this would have very extensive repercussions on their program. This is really in a kind of limbo at the present time.

Mr. MONAGAN. Will it be up to you to approve the regulations of the Department of Defense when they are issued?

Mr. BOUTIN. It will be up to us to have the final say as to what items, if any, we would agree to on a sales exchange basis. Is that not correct, Mr. Moody?

Mr. MOODY. Yes, sir.

Mr. BOUTIN. I hope, Mr. Chairman, this may be resolved to everyone's satisfaction without too much action on our part.

Mr. MONAGAN. I think perhaps there have been some second thoughts, and with all the facts available, I am very hopeful that it will be worked out in that way.

Mr. BOUTIN. The Department of Defense has expressed great willingness to discuss this at length with us, and I presume this is also true as far as HEW is concerned, that Defense would be glad to talk with them, before making any far-reaching decision like the one contemplated.

Mr. MONAGAN. Do you feel that eligible donees have an adequate period in which to do the screening which is necessary?

Mr. BOUTIN. It seems to us, Mr. Chairman, that they do have. I think the success of the program has pretty well demonstrated that. We would be very happy to hear anyone who wants to talk to us who feels this is not so. Certainly we want this arranged so it meets everyone's satisfaction, or as nearly that as is possible.

Mr. SCHWEIKER. How does that work now from the time angle, limitations, screening, and so forth?

Mr. MOODY. At the present time, once property is determined surplus by GSA or under the procedures prescribed by GSA, the State agencies have a 15-day screening period that follows after the end of the 60-day excess period. As a practical matter, we believe that the State agencies are aware of this property all during the excess screening period while it is being considered for possible Government

So, they have up to a total of 75 days. There is a 60-day Federal screening period plus a 15-day donation screening period, a

total of 75 days. They cannot make their request for the property until the end of the 60-day period. We believe they have adequate notice. This is with respect to reportable property.

With respect to nonreportable property, they also have access to it for purposes of screening for not less than 15 days.

I believe they get adequate time.

Mr. SCHWEIKER. One complaint was made earlier this morning on the fact that some of the States were ready to receive this property, and then at the last minute it would be withdrawn. Is this because we are not following the 60-day limitation, or what has entered in here?

Mr. BOUTIN. Really, Congressman, the reason for this is that we say, as a matter of our policy, that Federal utilization must have the first priority. If we can save the Federal Government from going out and buying something new by obtaining something which is excess, this must come first.

Occasionally it does happen. It is unfortunate when it does, because it just casts a shadow on the whole program. We do not like, at the end of 65 days, after the screening period is over, all at once to get an emergency request for something which they have once passed over, but because of the importance of trying to save money wherever it is possible, if there is a bona fide need, which we require that they demonstrate, we will then sanction a withdrawal for continued Government use. This is not a frequent thing. do not like it when it happens, and would like to avoid it. But sometimes it just does happen, either because the agency was not aware of the need at the time it was passed over, or perhaps the attention was not given which should have been given.

We

Mr. SCHWEIKER. One other point brought up this morning-I do not understand the mechanics of this, so you may have to explain that, too—is that GSA tended to bypass the State agencies in certain respects, and assigned property directly without going through the procedure prescribed by the law. I wonder if one could say how this is done and why it is done.

Mr. MOODY. I believe this has reference to the service educational allocations by the DOD. It is a fact that under our present regulations, the Secretary of Defense makes the transfers direct, as distinguished from transfers to the State agency for distribution to the eligible donee as determined by the Secretary of Defense. I understand that today the State agents have made a recommendation that we modify the procedure to conform with the letter of the law as distinguished from the spirit. Certainly we are willing to reexamine the procedure and see what might be accomplished by way of benefit to all interests.

Mr. SCHWEIKER. The question I immediately raised was, if you did modify the procedure, then who does say who gets the property at this point? In other words, if you were to put it through a State agency and they determined that they had a need which they felt was just as justifiable as the Defense Department's earmarking a certain need, the question would come up, Who would have the final say in a case like that?

Mr. BOUTIN. It would have to be predetermined, Congressman, that actually this is the way it was going. I realize what the law says specifically, but we have tried all the way through here to ease the