Mr. HOLIFIELD. Would you like to use that letter?
Mr. DYESS. No.

Mr. HOLIFIELD. I have not yet placed it in the hearings, and therefore you are at liberty to testify from it if you wish to.

Mr. DYESS. It is very brief, but I thought you might have referred to it, and it may contain some of my answers to some of the suggestions. As I said in the letter, in the acceleration of the aircraft program, time is of the essence in getting this material back into hands where it can be used.

As Admiral Ramsey said, it might have come as a sort of surprise to some people when he said that it was not economical to scrap the material in the Pacific and bring it back here. Frankly, we will not argue on that point, but we do not want the inventories that are lying idle now in other parts of the country, to come to a status where eventually they will have to be scrapped and not made available at points where they are needed, say in California, and other places, where they can use them. They ought to have this program on a sound basis of screening of parts that have been bought, as between one contractor and another, and the procurement of them set up in that way.

If we had an agency like the Air Force proposes to handle the redistribution of this program, I think we could utilize these parts and it would mean a great saving at the present time.

That is the general text of my letter to you, Mr. Chairman.

Mr. HOLIFIELD. You believe that a declaration of excess Government materials, through some clearing agency, which would be Governmentcontrolled, would facilitate the redistribution much better than the attempt of the Government contractors themselves to dispose of that among themselves?

Mr. DYESS. That is right.

Mr. HOLIFIELD. You are a representative of manufacturers of aircraft parts at the present time?

Mr. DYESS. Yes.

Mr. HOLIFIELD. And you also add to your stocks of manufactured articles, component parts which you pick up where you find excess parts?

Mr. DYESS. We have done that in the past, but we are not doing it at the present time.

Mr. HOLIFIELD. In other words, you are not adding to your inventory things that are declared excess?

Mr. DYESS. No; in the past we have done that.

Mr. HOLIFIELD. I was wondering why you are not picking them up. Mr. DYESS. The chief reason we are not doing that is because we represent quite a number of manufacturers, like the National Screw, and other concerns, and I might say, in representing them we represent them in handling their merchandise.

Mr. HOLIFIELD. Would you say that there is an appreciable amount being offered at this time, enough to interest a few of those who would be interested?

Mr. DYESS. I think there is quite a bit being offered now, but not of the particular type that we deal with. I have seen some offered, radio accessories, and other electrical accessories that we do not deal with. We concentrate mostly on hardware. Also, we manufacture ourselves-I want to add that we do manufacture parts, and from that

angle we know that when a contractor wants a part, they usually want it in a hurry, and, as indicated before, they know where to go to get it, and it is hard to visualize their wanting to go through a lot of paper work.

Mr. HOLIFIELD. In other words, going to the trouble of hunting up the material and going to the contractor involved.

Mr. DYESS. That is right.

Mr. HOLIFIELD. But your thought is that if there were concentrated in one place a service, where the different agents throughout the country could have the opportunity to know and obtain them, there could be a redistribution, a more efficient and added distribution, resulting in a better return to the Government.

Mr. DYESS. Yes.

Mr. HOLIFIELD. Any question, Mr. Chairman?

Mr. DAWSON. I was interested in the reason you gave in your thought that the Government set-up for redistributing excess parts could operate better than the effort of the companies by corresponding with each other, or otherwise through a central office to redistribute the surplus parts. Your idea is based on the fact that the Government-owned group would be charged with the sole responsibility of doing that thing, and would naturally center their attempts upon it, whereas otherwise it would be a completely voluntary act on the part of the manufacturers to redistribute among themselves.

Mr. DYESS. That is generally right, yes. Of course, it is my opinion that after the last World War they finally developed a pretty good way, after the Air Force had had some experience from the last war, they got around finally to developing a program which was fairly good.

Now, with the experience they have had in the past, they can now develop and do a real efficient job, resulting in saving money, in saving time, and time in the procurement of the necessary parts for the contractors. It will, I think, save money, because when you see a part that can be used today, say, it will cost $2 or $3 for each, in 6 months or 12 months from now it may be no good, and all you have is a piece of metal that you can put through the smelter, with little return from it.

If we could get an effective program developed as soon as possible, where these excess, idle inventories could be put back into proper channels, it would result in saving time and money. I think every day that is wasted we are losing money. As the admiral stated previously, these engineering changes are going on continuously, as a result of which they obsolete a part, and it is no good. But at the same time we need that part when needed, and need it badly.

Mr. DAWSON. Do you know whether or not the industry has been importing scrap from other countries?

Mr. DYESS. Importing scrap?

Mr. DAWSON. Yes.

Mr. DYESS. I do not.

Mr. HOLIFIELD. Thank you very much, Mr. Dyess, for your testi

mony.

Mr. DYESS. Thank you.

Mr. HOLIFIELD. Has Mr. W. D. Wynant, of the Parker Appliance Co., arrived? Apparently he is not here.

Has Mr. Tolino of the Munitions Board come in? I understand he will be here shortly.

The subcommittee will stand in recess for a few moments until Mr. Larson arrives.

(Short recess.)

Mr. HOLIFIELD. The subcommittee will be in order. The chairman would like to state for the information of Mr. Larson that the subcommittee has had 2 or 3 days of hearings now on the subject of better utilization through a better system of distribution of excess critical materials and parts that are in the hands of the aircraft and airframe manufacturers throughout the United States. There has been a plan presented by the Air Force which some believe would do a better job than is being done at the present time through the more or less informal method of redistribution.

The APRA organization has been functioning in this line, as you know, and their function has been mostly through listings which have been circulated amongst industry. There has been some testimony from the Navy that in the circularization of these listings they had very few bids in relation to the number of people contacted, which would seem to indicate there is a laxness on the part of the aircraft manufacturers to utilize these excess materials. They prefer to order directly from the basic manufacturer because they can do it easier; they can get the quantities they want without trouble, and this plan is presented by the Air Force as their own plan. It has not been approved by the Secretary of Defense, as I understand, or by the Munitions Board. It is their thinking on how to do a better job. Has the plan been brought to your attention?

STATEMENT OF JESS LARSON, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION

Mr. LARSON. No; the plan has not been brought to my attention except that I have been made aware in a very general way that a plan was being considered. The details of the plan have not been brought to my attention and they have not been brought to the attention of my staff, so far as I know.

Mr. HOLIFIELD. I will have the clerk hand you the plan which has three charts in the back of it. I think a quick look at it will give you an idea. I will have to leave the room for a call from my office. Mr. Dawson will take the chair.

Mr. LARSON. Mr. Holifield has asked me to take a look at this chart here, which is a part of this document that I hold in my hand and is entitled "Chart No. 1." The chart indicates an organization. I am sorry, but this is the first time I have ever seen it and I do not know what Mr. Holifield wants to bring out. Maybe I can study it a minute. I might say in the course of my appearance before the subcommittee here this morning, Mr. Dawson, this subcommittee, and particularly Congressman Holifield, who because of his intense interest in maintaining a high degree of efficiency in the whole surplus property disposal program, perhaps is more aware than anyone else in Government, or anyone in the Congress certainly, as to the great need for emphasis on utilization in the operation of the Government's program under the executive branch. That is why we find in Public Law 152-sometimes referred to as the Holifield Act-and rightly so-a great em

phasis on utilization. I think primarily that what we have here is a problem of utilization. To me, the utilization benefits far transcend the surplus disposal requirements, as I see them. I think this is primarily a problem of utilization.

Mr. HOLIFIELD. That is the testimony that has been before the subcommittee, of course, and to obtain that better utilization this plan for a better system of redistribution has been offered.

Mr. LARSON. Well, in that connection I personally feel, and I know that my agency feels, that anything that can contribute to a higher degree of utilization is justifiable within the Government.

As my boys told me quite briefly about what they had heard in previous testimony regarding this plan, it seems to me that this, being primarily a problem of utilization, is an operating problem within the agencies concerned.

As you know, we envisaged that under GSA there would be general broad supervision of utilization, and that within GSA there would be facilities for properly supporting the agencies in their programs of utilization, to furnish the leadership, so to speak, to point the way to methods and procedures for a higher degree of utilization, and equally as important, to report to the Congress whether or not progress was being made.

GSA has not fulfilled that function as completely as we would like. It has not been because we did not want to; it has been because we have not been able to sell the appropriating authorities on such a program to the extent that sufficient funds would be made available for carrying out such a program in all of its details.

You have commented on that on the floor and have commented on it publicly. I think it is a regrettable thing. It is somewhat disturbing to me, and I know it is to you gentlemen, and if the public at large realized it it would be disturbing to them-that all the benefits that were counted as a result of the enactment of legislation leading to the reorganization of the executive branch can go by the board, and many of such benefits have gone by the board because of the inability perhaps of those of us in the executive branch to sell another arm of the Congress, namely, the Appropriations Committee, on the importance of building a central supervisory organization that can ride herd on all these things that we envisaged when we considered Public Law 152.

Perhaps I am restless. Perhaps progress comes more slowly than I had imagined, but we have been in existence 3 years now, as you know.

Now, back to this specific measure which you have before you, I repeat that any plan that will lead to a higher degree of utilization will receive the favor of GSA. Without having detailed knowledge of the plan, I cannot say much more than that.

Mr. HOLIFIELD. Will you refer to the chart there in that plan, chart No. 1?

Mr. LARSON. I have it before me.

Mr. HOLIFIELD. Now, look at that chart and keep in mind section 202 (a) of Public Law 152, which reads as follows:

In order to minimize expenditures for property, the Administrator shall prescribe policies and methods to promote the maximum utilization of excess

property by executive agencies, and he shall provide for the transfer of excess property among Federal agencies.

*

* *

Then it goes on for two more sections there which I will skip, but which are complementary to that one I read, and the next section says:

Under existing provisions of law and procedures defined by the Secretary of Defense, and without regard to the requirements of this section, except subsection (f)

and that is the accounting section—

excess property of one of the departments of the National Military Establishment may be transferred to another department thereof.

It seems to me that gives adequate authority to the Secretary of Defense to form such a plan as is outlined there for the purpose of distributing excess property among the military departments, and that is where most of this excess property is located and is being generated. If such a plan as that were approved-a coordinated effort to redistribute excess property advocated by the Department of Defense-I am sure that you would be perfectly willing to delegate any authority that you have in section 202 (a) to them to facilitate that redistribution, would you not?

Mr. LARSON. I think we have already done that under Personal Property Management Regulation No. 3.

Mr. HOLIFIELD. They have the authority at this time, in your opinion, to perfect any kind of coordinated plan for better utilization and better redistribution?

Mr. LARSON. I feel certain they have. It was my intention that the regulation so provide.

Mr. HOLIFIELD. Would they have to come to you for any further delegation of power to effectuate that?

Mr. LARSON. I do not think so. My technicians are here. My intention in promulgating Personal Property Management Regulation No. 3 was to accomplish just what you have stated.

I recall in our discussions on the staff level, prior to the promulgation of that regulation, by the terms of that regulation property does not become excess under the definition set forth in the act until it has been screened through all the services within the Department of Defense. In other words, it has to be a departmental excess, so within the services of the Department of Defense they are completely free to set up such procedures as they might feel desirable to accomplish the highest utilization of property that may be excess to one service within the Department of Defense and under procurement in another

service.

Mr. HOLIFIELD. Then it would be their responsibility to effectuate effective redistribution of excess amongst the Army, the Navy, and the Air Force?

Mr. LARSON. Well, most certainly so, and I would be extremely reluctant for GSA to be brought in to perform a function which is primarily a Department of Defense operational function, because I think it is the responsibility of the Secretary of Defense under the Unification Act as well as the provisions of Public Law 152 to see that it is done.

Mr. HOLIFIELD. I think that an effort is being made to do this in the Department of Defense, but that method apparently is the method of