conclusion of the program the stuff is usually pretty well worn out anyway because it has been used for from 5 to 8 years. They will just leave it, under the agreement, with the host government, and the title will revert to the host government.

Mr. SHRIVER. You are not involved?

Mr. SIMPSON. We are not involved, no.

Mr. DENTON. AID can claim that as surplus property as a Government agency would in this country? Mr. SIMPSON. That is right.

Mr. DENTON. Overseas?

Mr. SIMPSON. Yes.

SOURCE OF CASH COLLECTIONS

Mr. DENTON. General Services Administration sells this surplus property. How do you get this money that you have acquired? Mr. SIMPSON. We don't get our money that we report in these cash collections in that way. We get our money when the donee, which is usually a school district or a health agency at the local level, does not live up to the terms and conditions under which the property is made available to them. For example, they may get some real property and lease a portion of it out for a while. One of the things we have in the agreement we make with them is that any proceeds from that lease must be to the credit of the United States. Or, again, they may sell a portion of it that they don't need when their plans don't mature as expected.

Mr. DENTON. And you get that money?

Mr. SIMPSON. The Government gets that money.

Mr. DENTON. The money that comes from the sale of the property is not included in here?

Mr. SIMPSON. It is not included. This is purely the money that comes to us in the program of donation or transfers under certain limited terms and conditions.

Mr. DENTON. That is all.

Mr. FOGARTY. Mr. Flood.

Mr. FLOOD. I am glad you have heard of GSA because this was certainly confusing and to a great extent still is. How did you come into existence? Did Congress give birth to you?

Mr. SIMPSON. Yes, sir.

PURPOSE AND ACTIVITY OF THE DIVISION

Mr. FLOOD. What is the purpose of your division?

Mr. SIMPSON. The primary purpose of this program is to make available surplus Federal properties for educational and for health purposes at the local level.

Mr. FLOOD. Do you do this of your own initiative? Do you handle this directly from your office with the institutions involved? What is your liaison with GSA, who is the general housekeeper? If you talk about surplus property to me, I only think of GSA, I don't think of you at all. What do you do?

Mr. SIMPSON. I am glad to explain that, sir. Once property is reported by Defense or any other agency as excess to its needs, it is circulated among other Government agencies.

Mr. FLOOD. That is under GSA.

Mr. SIMPSON. That is under GSA. When there still is no taker within the Federal Government, then it is declared surplus. During this processing, GSA gives us lists of these properties, and with our field staff in this particular division we go out and inspect them. Mr. FLOOD. Before they are declared surplus?

Mr. SIMPSON. Yes.

Mr. FLOOD. You are one of the Government agencies that by priority gets the first shot at this?

Mr. SIMPSON. That is right, sir, when it actually does become surplus. We make this information available to State surplus property agencies with whom we work. Every State has a surplus property agency. They indicate back to us that which they want, whether it is personal property or real estate. If they have a program for the use of that property that contributes to the ends spelled out in the act, for health purposes or for educational purposes, and the program for that local school district or hospital or health agency is the best program, we then donate the property to them if it is personal property. Mr. FLOOD. You donate it?

Mr. SIMPSON. Yes, sir; because General Service Administration has transferred it to us to dispose of.

Mr. FLOOD. And you now have acquired title?

Mr. SIMPSON. That is correct.

Mr. FLOOD. How do you get title?

Mr. SIMPSON. It is transferred from GSA.

Mr. FLOOD. It is merely a paper transaction?

Mr. SIMPSON. That is right.

Mr. FLOOD. This is bookkeeping, you pay nothing for it.

Mr. SIMPSON. We pay nothing for it.

Mr. FLOOD. You just say to GSA, "I have received your list and inspected the following items, and out of the following we want the first 10"?

Mr. SIMPSON. That is right.

Mr. FLOOD. Then you tip off the States about those 10?

Mr. SIMPSON. Yes.

Mr. FLOOD. What happens then?

Mr. SIMPSON. If the State comes in and we have 20 or 30 applicants for the same 10, we make the choice of that project which offers the best educational or health program.

Mr. FLOOD. Then, if there are a number of applicants for property A, you decide which applicant, for the the following best reasons, gets it?

Mr. SIMPSON. That is right.

Mr. FLOOD. And it is a donation?

Mr. SIMPSON. That is right, sir. If it is personal property, it is a donation. If it is real estate, we give a quitclaim deed where it is an on-site conveyance. If the buildings are portable and can be moved off the site, we make an agreement with them.

CIVIL DEFENSE PROPERTY

Mr. FLOOD. How do you get to the Civil Defense Act? What do you have to do with that?

Mr. SIMPSON. On delegation from the Assistant Secretary of Defense for Civil Defense, we process these cases, because the law also provides that properties can be donated for civil defense purposes as well as health and education.

Mr. FLOOD. Your law provides that?

Mr. SIMPSON. The Federal Property and Administrative Services Act.

Mr. FLOOD. You get into it because the Assistant Secretary of Defense asked you to?

Mr. SIMPSON. He asked our staff to do this job for him of screening the properties that can be used for civil defense purposes, of submitting the lists to the States, of getting back the applications, of processing them.

Mr. FLOOD. And you turn them over to him and that is the end of it? Mr. SIMPSON. Yes.

Mr. FLOOD. You act as his processing agent?

Mr. SIMPSON. That is precisely right.

Mr. FLOOD. It really baffled me. That is all.
Mr. FOGARTY. Is there anything else?

Thank you.

Mr. SIMPSON. Thank you.

This request consists of $1,690 for travel and $830 for increased communications costs.

The Federal Property and Administrative Services Act of 1949, (Public Law 152, 81st Cong.), as amended, assigned to the Secretary the following major responsibilities in the disposal of Federal surplus properties:

1. The determination of surplus Federal personal property needed for eduanal or public health purposes, including research, and the allocation of so h

property to State agencies for surplus property for distribution to eligible donees. By delegation from the Assistant Secretary for Civil Defense, Department of the Army, a similar responsibility was assigned with respect to surplus personal property needed for civil defense purposes.

2. The determination of need for surplus Federal real property for educational and public health purposes, including research, and the conveyance of such property assigned by GSA to the Department in response to the Department's finding and recommendation.

3. Administration of the terms and conditions of donations and conveyances. 4. The promulgation of regulations governing the operation of the program.

Personal property

ACTIVITIES

Personal property determined to be surplus to the needs of Federal agencies is generally inspected by representatives of the Department or authorized representatives of State agencies for surplus property working under the general supervision of the Department. Items determined suitable for health, educational, or civil defense purposes are listed, and these lists are sent to appropriate State agencies for review. Based on requests for property by State agencies, the surplus property regional representatives allocate available property to the State agencies within their region, and to other States through the appropriate regional office. Property allocated is generally sent, or taken to State agency warehouses for further distribution to eligible recipients, such as school systems, vocational schools, colleges, hospitals, etc. In some instances, property is picked up or shipped directly to eligible recipients through arrangements made by the State agencies.

Workload accomplishments and plans

A. Screening utilization, and allocation. In fiscal year 1964 personal property having an acquisition cost of $418,100,000 was allocated to State agencies. In fiscal year 1965 the amount of personal property and its acquisition cost increased to $433,700,000. In fiscal year 1965 this volume of property required the preparation of 76,600 separate lists of property. These in turn generated 82,500 applications, or requests for property which were received and processed by regional offices. Regional representatives made 85,400 allocations of property to State agencies during the year.

One aspect of the program has been requiring an increasing amount of attention since it has a significant effect on the amount and types of personal property made available to and utilized by the recipients. This is the need to develop new ways and methods for health and education institutions to use the ever-increasing surplus scientific and electronic properties, and to secure more adequate screening of these properties. At the present time much of this property and appreciable amounts of other less sophisticated property are being sold for relatively little cash return simply because practical uses have not been developed and disseminated to recipients and those screening it have not been trained to recognize those properties that have health or educational uses. Part-time attention by our field staff to this problem has given good results. We plan to continue this effort and hope to cope during 1967 fiscal year with the increasing workload. Assuming no less time is devoted to this problem in 1967 than in 1966 fiscal year, and there is no major change in the character of personal property which becomes available, we should be able to allocate during fiscal year 1967 property having an acquisition cost of $450 million.

B. Compliance activity.-Single items of surplus personal property having an acquisition cost of $2,500 or more are always donated with certain restrictions placed on their utilization. The period of these restrictions runs from 2 years for motor vehicles to 10 years for aircraft. To assure that these restrictions are being adhered to, the Department has responsibility for making periodic compliance inspections. Since there are additional items in this category allocated each year, the number of such inspections and necessary reports increases every year. During fiscal year 1965, 234 compliance cases were processed.

Through our compliance program moneys are recovered from recipients on sales of unneeded property and deposited in the U.S. Treasury. In fiscal year 1965 the amount deposited was $315,317. A comparable amount can be anticipated for fiscal years 1966 and 1967.