27,389, 887

32,258, 846

85-568-68-7

BARTER PROGRAM ACTIVITIES

During the year ending June 30, 1967, the Commodity Credit Corporation signed 144 barter contracts valued at $259.6 million. Contracts valued at $210 million were signed to procure goods, equipment, and services required by the Army, Navy, and Air Force installations in Europe and Asia. Barter procurements of goods and services for delivery abroad on behalf of the Agency for International Development were valued at $40.8 million. Barter contracts for strategic materials for transfer to the supplemental stockpile totaled $8.8 million.

The Department of Agriculture reports that barter procurements for other U.S. Government agencies reached a new high of $250.8 million during the fiscal year 1967.

Reimbursements to the Commodity Credit Corporation for barter procurements included $186 million from the Department of Defense, $56.8 million from the Agency for International Development, and $15.6 million from the Atomic Energy Commission to cover delivery of uranium concentrates obtained by barter. The Commodity Credit Čorporation is reimbursed for materials, goods, or services procured under barter transactions on behalf of other Government agencies.

The barter program is conducted under authority of the Agricultural Trade Development and Assistance Act of 1954 (Public Law 480, 83d Cong.), and the Commodity Credit Corporation Act, as amended. These acts provide broad authority for the exchange of surplus agricultural commodities for strategic materials and for goods, equipment, and services needed by Government agencies. In recent years the barter program has emphasized the use of U.S. surplus agricultural commodities in the procurement of goods, equipment, and services for other Government agencies, primarily for the Department of Defense and the Agency for International Development. Barter transactions procuring items and services for other Government agencies substitute payment in agricultural commodities for expenditures of U.S. dollars abroad and result in balance-of-payment savings.

Cumulative deliveries of strategic materials since the inception of the barter program have amounted to $1,623.5 million. Strategic materials valued at $28.8 million were delivered to the Commodity Credit Corporation under existing and new barter contracts, which compares with $30.4 million the previous year. The following table indicates the value of materials procured by barter for the national stockpile and the supplemental stockpile as of the end of the fiscal year 1967:

1 Materials acquired for long-term (maximum) stockpile objectives but transferred to the supplemental stockpile. 2 Materials originally acquired for other Government agencies but transferred to the supplemental stock pile.

SMALL BUSINESS

Section 701 (a) of the Defense Production Act provides that it is the sense of the Congress that small business enterprises be encouraged to make the greatest contribution toward achieving the objectives of

the act.

Each department and agency performing functions under the Defense Production Act has been requested to summarize its activities to encourage small business during the past year. The summaries of the various departments and agencies are included in the appendix of this report. The appendix also includes a report from the Small Business Administration, the administrative agency having primary responsibility for small business matters.

The Government liaison staff of the Small Business Administration reviews current and proposed procurement regulations and policies of the Department of Defense and civilian agencies, initiates and proposes additions, deletions, or revisions, which will increase the opportunities of small business for participating in military and civilian procurement, property disposal activities, and subcontracting. The Small Business Administration reports that civilian agencies awarded 40 percent of procurement to small business last year, and that the Department of Defense awarded 20.6 percent of procurement to small business in the past fiscal year.

The Administrator of the Small Business Administration is authorized to approve small business pools. A small business pool is a group of small firms joined together for one or more of the following purposes: defense production, research and development, and acquisition of raw material and equipment. It is usually the aim of the pool members to participate in contracts of greater value and broader scope. Pools approved by the Small Business Administration are exempt from the provisions of the antitrust laws and the Federal Trade Commission Act. As of June 30, 1967, eight pools had approved status.

At the close of the fiscal year 1967, the Small Business Administration was cataloging the productive capabilities of all U.S. small firms which comprise the 39 major standard industrial classification categories under manufacturing. This fiscal year, SBA will list 15,000 small firms and physically survey their plants to verify the types of products which they are capable of producing.

The General Services Administration reports that, in cooperation with the Small Business Administration and the Department of Commerce, disposals of strategic materials are made in such manner as to assure that small business can participate through various techniques including set-asides when deemed appropriate. GSA reports that in the fiscal year 1967, such sales amounted to $78,359,027.96. This is reported to be approximately 18 percent of the total sales to industry of $436,038,476.65, including those sales to industry which resulted from indirect Government-use requirements.

The Department of Defense reports that efforts were made in the fiscal year 1967 to afford small business every opportunity to compete for prime contract awards. It is stated that small business specialists in offices throughout the procurement organization assisted small business by actively searching for new sources; by including names of established and potential small business suppliers on the military