Page images
PDF
EPUB
[blocks in formation]

curements include commercial and commercialmodified as well as those of purely a military design. Data referenced above are outlined in table 2.

*DOD Military Prime Contract Awards by Service Category and Pederal Supply Classification, Fiscal Years 1969, 1970, 1971, and 1972, Department of Defense ASD (Comptroller).

? Letter from the General Accounting Office to the Commission, Oct 16, 1972.

Military Prime Contract Awards and Subcontract Payments or Commitments, July 71-June 72, Office of the Secretary of Defense, p. 9.

5,844,104

TABLE 2
DOD MILITARY PROCUREMENT BY SERVICE CATEGORY AND FEDERAL

SUPPLY CLASSIFICATION

(Thousands of dollars) Section A-Research, development, test, and evaluation Section B-Other services and construction J5 Maintenance and/or repair of equipment 501-505—Aircraft and engines, missiles, vessels, and combat vehicles

546,324
K5 Modification, alteration, and/or rebuilding of equipment
531-535—Aircraft and engines, missiles, vessels, and combat vehicles

586,337
Technical related services
541-545—Aircraft and engines, missiles, vessels, and combat vehicles

50,629
M6 Operation and/or maintenance of Government-owned facilities
601-602—Aircraft and missile system facilities

19,645 P6 Salvage services 622—Vessel salvage

3,021 R642 A-E Services

203,516 Y9 and Z9 Construction, maintenance, and alteration of real property

1,775,006 Total noncommercial

3,184,478 Commercially related services

5,112,273 Total Section B Section C-Supplies and equipment 10, 12-17, and 19–Weapons, fire control equipment, ammunition, missiles, aircraft,

aircraft components and accessories, aircraft launching, landing, and ground handling equipment, ships, small craft, pontoons, floating docks

11,070,549 2305 and 2350_Ground effect vehicles, tanks, and self-propelled weapons

102,037 6920 and 6930—Armament and operational training devices

74,627 8415, 8455, 8470, and 8475—Special-purpose clothing, badges and insignia, personal armor, specialized flight clothing and accessories

83,122 Total noncommercial

11,330,335 Commercially related equipment

8,934,722
Total Section C
Purchases under $10,000 not included in the above statistics

Total DOD procurement
Total DOD expenditures for transportation
Freight by Government bills of lading (GBL)

948,886 Passengers by Government transportation requests (GTR)

289,257 Total DOD procurement with GBLs and GTRs

8,296,751

20,265,057

3,885,689 38,291,601

1,238,143 39,529,744

APPENDIX B

Associated Equipment Distributors Position Report to Study Group 13A

The Associated Equipment Distributors organization, represented by thirteen of its member firms and staff personnel, was pleased to be invited by Study Group 13A of the Com mission on Government Procurement to offer suggestions on how local distributors can be of service in supplying Federal Government requirements for construction equipment, parts, and service.

As a result of the comments offered at the meeting held at the Sheraton O'Hare Motor Hotel, Chicago, Illinois, on September 8, 1971, it was decided that AED as an association should prepare an industry position report to the Commission covering those areas where it is felt that greater economy, efficiency, and effectiveness could be realized by the Federal Government through the services offered by local AED equipment distributors, as contrasted to the present centralized purchasing system used by the Government. The Government does not make maximum use of these local suppliers at the present time.

However, before detailing some of the specific areas for improvement, it appears appropriate to first review some of the past procurement methods used by the Federal Government in obtaining construction equipment, parts, and service.

As early as 1940, an Army engineer unit used commercially available construction equipment very successfully. This was followed by the activation of many engineer units during World War II, and they too used commercially available equipment with only such minor modifications as: lifting eyes, OD paint, and RIS electrical components. In 1942 the Navy

and the Marines also activated engineer units, and they too utilized commercially available construction equipment. So World War II was fought with commercial construction equipment, all without the kind of support which is available today through a worldwide distribution network.

During the Korean conflict, engineer units were again equipped with commercial construction equipment.

Between the Korean war and the start of the war in Vietnam, we saw the introduction of Mil. Spec. construction equipment and centralized parts supply for Army and Marine Corps requirements.

Product qualification, standardization, extensive testing, provisioning, FSNs, special manuals, etc., duplicating that done in the commercial market, all costing considerably more to the Government and to the taxpayer make for doubtful increases in performance and reliability.

In many instances, the Mil. Specs. and APL requirements did not incorporate the latest designs.

Today there are over 20,000 contractors who are dependent on five billion dollars worth of commercially produced equipment to perform their jobs efficiently and economically per year so that they can make a profit and retain the good will of their customers. This figure does not include field inventory. Many of these same contractors perform services for the Federal Government without the benefit of special equipment. Commercial equipment is currently being used in Vietnam by RMK-BRJ to lay highways, and the performance on the equip ment has been excellent.

With this short summary, the reasoning of the Government might well be questioned.

Why Mil. Spec. construction equipment?

It is often heard that the equipment must operate under a wide variety of terrain and environmental conditions.

In answer to that perhaps it should be remembered that commercial equipment has been used under the most rigid conditions at the North and South Poles and most of the land masses in between.

With this background information in mind, AED wishes to offer the following comments which the Association members feel will aid the Federal Government in its cost cutting role without sacrifice to effectiveness:

(1) Utilize standard commercially available equipment whenever and wherever appropriate, especially when the functional performance is the same and yet there could be considerable savings in cost and maintenance to the Government.

Where would the savings come from? (a) There would be no special de

velopment expense. (b) The equipment is now in high

production and available. (c) No special tooling is required. (d) Testing costs would be mini

mized. (Many suppliers cannot undergo the expensive testing required to meet Government

specs.) (e) There would be reduced ad

ministrative expense. (f) Local distributor service teams

can be utilized. (g) Equipment inventories can be

kept to a minimum. (h) Buy equipment to suit the need

rather than use what is avail

able.
Other advantages are:

(a) Faster delivery (mobilization)
(b) Latest technology
(c) Less recordkeeping
(d) Training and service manuals

available.
There are over 800 AED local distributors

strategically located throughout the United States and others in many foreign countries.

(2) Utilize local distributor stocks. Parts and components stocks of suitable mix and quantity are available on a local basis where they are needed. The Government does not have to maintain parts warehouses, parts stock, trained people, maintain costly records, separate manuals and reports, special packaging facilities and pay for shipping to the using unit. There would be no loss through obsolescence.

Local equipment distributors maintain 85-90% of parts availability at all times in order to prevent costly downtime with contractor customers. This service is available to local Government installations.

(3) The Government should take advantage of equipment rental when permanent ownership is not really needed. The newest most modern equipment can be rented from local distributors for short duration (only for the time needed) at the lowest cost per equipment hour.

Other savings to the Government
through rentals:
(a) Service and repair remains the

responsibility of the local dis

tributor. (b) Equipment need not be moved

long distances from one job site to another at great ex

pense. (c) Exact usage costs can easily be

maintained—there is just one

rental billing. (d) The cost of disposing of owned

or obsolete equipment is eliminated. Overhauling for resale and the time and money required to find buyers is an

important factor. (e) Funds are available for other

use. (f) More effective service can be

expected on equipment either rented or sold to the Government in a local area because a distributor has a better knowledge of the terrain and the conditions where the equip

« PreviousContinue »