The following Labor Surplus Areas include adjacent communities in other states. Data are on a net basis representing the value of new awards and contract increases minus the value of contract terminations and decreases reported by the military departments. b/ Geographic boundaries of areas are designated by the Department of Labor in "Directory of Important Labor Market Areas". All areas include more than one community, but most of them have been designated by the Department of Labor with the names of one or more of the larger Comities in the area. Net value for the period of time each area was designated labor surplus ares subsequent to January 1, 1958. d/ Area individually certified as an area of substantial labor surplus by local state employment service offices at the request of firms located in the area. The certification is for a specific procurement only. / Removed from Department of Labor substantial labor surplus list in October 1958. 1/ Removed from Department of Labor substantial labor surplus list in September 1958. / Does not include data for January-March 1958. Textile Industry data for this period are not available. h/April-September 1958 preference data cover procurement actions of $10,000 or more while data for January-March cover actions of $25,000 or MILITARY SUPPLY, SERVICE AND CONSTRUCTION PRIME CONTRACT AWARDS OF $10,000 OR MORE IN April - June 1959 A net total of $2,205 million in military prime contract procurement actions of $10,000 or more was awarded to firms in substantial labor surplus areas and industries for supplies, services and construction during the April-June 1959 quarter, compared with $1,708 million in the preceding quarter. The increase of about $500 million in the total of such awards, despite the removal of many important production areas from the list of those having a substantial labor surplus, is primarily the result of the heavier volume of total procurement in the April-June quarter. Awards of $10,000 or more for work performance in the United States totalled $7,426 million in this quarter, compared with $4,782 million in the previous quarter. The ratio of awards in labor surplus areas to total procurement in the April-June quarter was 30%, compared with 36% in the preceding quarter, reflecting the reduction in the number of areas classified. For areas which had a substantial surplus of labor in the entire 6-month period from January to June 1959, the ratio of awards to total military procurement actually increased slightly from 27% to 28%. Table 1 shows procurement in these areas for the current quarter (April-June 1959), for the previous quarter (January-March 1959) and for Fiscal Year 1959. During the Fiscal Year, a total of $9,323 million was awarded to firms in labor surplus areas, compared with $3,752 million in Fiscal Year 1958. It is noted that data for the first half of Fiscal Year 1958 do not include service or construction contracts, nor supply awards between $10,000 and $25,000, but it is estimated that such awards would not have added significantly to the Fiscal Year 1958 total. Table 1 lists 310 areas that were designated by the Department of Labor as having a substantial labor surplus during all or part of Fiscal Year 1959. This number includes 78 that held such designations earlier in the year but were reclassified prior to June 1959. Also listed are 53 areas for which local state employment service offices issued, at the request of a bidder, certificates of labor surplus covering an individual procurement involving a set-aside. Changes in Labor Department designations of areas of substantial labor surplus in the AprilJune quarter included the addition of 4 minor areas, the deletion of 14 major and 25 minor areas, and the certification of individual procurements in 11 areas. Department of Defense procurement actions involving set-aside or tie-bid preference during the April-June quarter resulted in the award of 338 contracts of $10,000 or more with a net value of $27 million in labor surplus areas and industries, bringing the total of such awards in Fiscal Year 1959 to $96 million. Preference actions by department and area are shown in Table 2. The authority for set-asides was established by Defense Manpower Policy No. 4, which was originally issued in March 1952 and revised in November 1953 to encourage the placing of contracts and facilities in labor surplus areas. From that date through December 1957, the Department of Defense issued quarterly reports showing the net total of supply contracts of $25,000 or more placed for work performance within areas of labor surplus. However, coincident with the increase in the labor surplus problem, the Department of Defense placed greater emphasis on the labor surplus area program and, effective January 1958, obtained reports on all types of contract awards of $10,000 or more including supply, service and construction awards in order to obtain a more comprehensive picture of military contracts placed for work in the areas In a set-aside preference, portions of the proposed procurement are reserved for negotiation exclusively with firms in labor surplus areas, at prices no higher than those paid on the non setaside portion of the procurement. In a tie-bid preference, awards are made to bidders in labor surplus areas whose bids match those of competing firms outside labor surplus areas. (Normally in a tie-bid situation a drawing is held to determine which bidder is to receive the award.) Office of the Secretary of Defense 5 October 1959 |