reduction from 90 days. To achieve these reductions, OST models were developed with eight distinct processing segments. The key to achieving the model OST goals was a -reduction in vendor delivery leadtimes as well as timely ocean and in-country distribution movement. Although initially some shipments met the reduced OST goals, certain time segments of the model could not be consistently achieved. Most notably were late vendor deliveries to DDMP resulting in container surges which stressed the overseas transportation/distribution systems. Actual OST during the latter half of 1985 averaged 88 days for depot shipments and 70 days for sourceloads. In February 1986, the eight segments of the OST model were revised to establish new OST goals of 75 days for DDMP shipments and 60 days for sourceloads. A 14 day front end delivery window was established for sourceloads because we were convinced the potential was there to meet the original 46 day sourceload goal. A similar window was established for DDMP shipments except a 7 day window was added to allow for a more consistent depot workload and smoother van arrivals in Europe. Since the new model became operational in April 1985, except for some external, uncontrollable events which negatively impacted the pipeline either directly or indirectly, brand name shipments have been generally delivered on time. Some external transportation problems have had to be resolved in our effort to reduce ** TOTAL PAGE.004 ** Other initiatives are ongoing to further reduce OST to Europe and improve brand name support. These include a joint DPSC/Services/American Logistics Association program to shorten vendor delivery times, the tightening of van booking and reporting procedures to maximize lifts on scheduled sailings, and establishment of an eight day incountry delivery time standard by the Military Traffic Management Command and the Military Sealift Command. Vendor responsiveness has increased as highlighted by the Proctor and Gamble Company initiative to consolidate their east coast warehouses, thus permitting more sourceload shipments for timely overseas support. With respect to systemic improvements, DPSC is pursuing an initiative with selected vendors to transmit orders and shipment information via Electronic Data Interchange (EDI) which will reduce processing times. A forthcoming expansion of our Defense Integrated Subsistence Management System (DISMS) will increase the potential for multistop sourceload shipments, thus reducing overall average OST to Europe. Our efforts to reduce the OST to Europe have been moderately successful and are ongoing. Some of the required changes are long term and significant resources have been invested. As these changes are successfully implemented, selected reductions in the number of days required to replenish the overseas commissary stores may be realized. Our goal is to meet the established OST timeframes of 75 and 60 days on a long-term, consistent basis and seek such other minor modifications that may be possible. DLA POLICY ON DEBARMENT AND SUSPENSION UNDER DPSC SUBSISTENCE BULLETINS The DLA policy is designed to balance the rights of the suppliers and of the commissary customers to obtain desired brands of food products against the Government's need for protection from contractors who lack integrity. We are sensitive to the impact that DLA's actions can have on the commissary supply system and have changed our policy to ensure that this impact is minimized during the time period prior to an official Agency decision regarding a supplier's integrity. We are, however, directed by statute to do business with responsible contractors. Upon a recommendation by DPSC for suspension or debarment, all commissary users will be notified by electronic means that the recommendation has been made, the reasons for the recommendation, and a point of contact at DPSC for questions regarding the recommendation. Commissaries will be free to place contracts using the Bulletin based upon their own determination of the contractor's responsibility. DPSC wiil not place orders for DSR-Europe without the prior coordination of DLA Headquarters in accordance with current Agency procedures. Otherwise, the DPSC decision to recommend the contractor for suspension or debarment represents their determination of nonresponsibility. Upon a decision by the DLA debarring official to propose the contractor for debarment or suspension, the DPSC Bulletin will be cancelled. Where the activity or product of a Bulletin contractor is determined to represent an imminent hazard to the customer, notifications to commissaries will be made under an All Food Access System Alert. Such notifications, when required to protect the public health, shall be exercised independent of any associated suspension or debarment decisions in accordance with established procedures. Mr. HUTTO. Thank you very much, General Voorhees. I realize that this happened before you folks came on the shift, but let me ask you about the military involvement. You are the Commander of the Defense Personnel Support Center. In that position do you wonder why the Commander did not know a little more about what was going on? General VOORHEES. Yes, 20-20 hindsight is good. I am not surprised, having been in a number of procurement situations including the research and development area where there are a large number of long-term civilians as well as military folks in key positions. I am not surprised that there is the assumption that the system will take care of itself. I am not surprised with what I call the best engineer syndrome. We develop confidence in long-term civilians who have over 30 years proven technical expertise and built the confidence of commanders and managers that work with them. Frank Coccia to whom I was exposed for about 6 months exuded confidence. Mr. HUTTO. He was a pretty smooth individual? General VOORHEES. He was, well depending on who you talked to. He was smooth in the sense of certainly developing confidence of senior officials. For those who worked under him, he was a very hard taskmaster. He demanded performance. He understood the business very well. But at the same time he was manipulative, and those above made the assumption that Frank would take care of the situation, and those below dared not take exception to the decisions that Frank made. Mr. HUTTO. I guess it is a natural thing for the boss to have confidence and trust in his employees, especially if they show evidence of being efficient. Having said that, I would assume that since this has happened you probably look a little more closely. Do you have recommendations on how the military, since you have a relatively short tenure there, can handle this? I am not speaking just about the DPSC, but I suspect in many other facilities. General VOORHEES. Yes sir, I think that the comment made by Mr. Dennis was totally appropriate. While we have every right to expect the performance of those beneath us and to make some assumptions with regard to their competence, we also have the right and the responsibility to demand accountability of everyone, regardless of rank and position. I reserve the right to ask questions, and I expect everybody who works with me to do likewise. Institutionally, we talk about diversifying our decision process. There are a lot of low-level decisions that were made by Mr. Coccia. If they had been made at the proper place by the proper person, it would have precluded some of the situations that we got ourselves into. Mr. HUTTO. What would have been the right place and the right person? General VOORHEES. At almost every level you can name in the organization, beginning with the very low-level contract administrator and the supply person, the item manager who on a daily basis makes hundreds of decisions compared to the two or three that are supposed to filter to the top. Those decisions- Mr. HUTTO. Excuse me. Why were the decisions made? As I understand you, they were probably made by the wrong people. Was that by regulation, or do we need regulations on some of this? General VOORHEES. Quite the contrary. Had they been done according to regulation and expected procedure then most of those decisions would not have gravitated to the top. When I say gravitate, I do not believe they gravitated at all, I think they were forced to the top by Mr. Coccia who knew the system very well. I think that some individuals who initially exercised their responsibility and attempted to make the decisions at the appropriate levels were then brought into the reality of the senior person wanting to manipulate and make those kinds of decisions and force the issues. Frank was an excellent micro-manager. He could ask six questions and intimidate an item manager very quickly. So over time those people who at the grass roots would ordinarily make mundane, everyday, routine decisions found themselves going forward for decisions or found their decisions being reversed with some fervor, and they learned very quickly that they were not going to make those routine decisions. Mr. HUTTO. General Voorhees, how long have you been in your present position? General VOORHEES. Two-and-a-half years. Mr. HUTTO. Mr. Molino, how long have you been at DPSC? Mr. HUTTO. Did you know Mr. Coccia? Mr. MOLINO. I was with him for about a year. Mr. HUTTO. Did you suspect anything at all like this? Mr. MOLINO. By that point there was a strong undercurrent about Frank. Mr. HUTTO. So the investigation was underway then? Mr. MOLINO. It was in process. I personally was not aware that it was in process, but it was in process. Mr. HUTTO. General Voorhees, last year DPSC awarded contracts for clothing and textiles totalling over $1.2 billion. I understand, and I believe you testified, that over 70 percent, or over $700 million, was set aside for small businesses. Further, while there are about 35,000 clothing and textile producers in the United States and a bidder's list of more than 1,400, 55 contractors received the bulk of this business. Why did such a small number of firms receive this business? General VOORHEES. I think there are a couple of principal reasons. Number one, with respect to the small business prevalence, the nature of the C&T business is such that about 70 percent of the people we do business with are in fact small businesses. The mode of doing business, as was mentioned earlier, the predominance of specifications is a mixed blessing. Over the past 10 years or so we became more sensitive to rising problems of quality in the product. The services necessarily thought that one of the avenues for tightening quality assurance was to tighten the specifications. In point of fact, in hindsight, we see that tightening the specifications was a two-edged sword. While we knew definitively what we thought we wanted and knew how to test for it, the people we were dealing with became smaller in number because number |