Military Procurement -- 1955, Hearings Before a Subcommittee of ... 84-1 on ... April 20, 21, 22, 25; May 4 and 5, 1955

MILITARY PROCUREMENT—1955,

64-1

HEARINGS

BEFORE A

SUBCOMMITTEE OF THE

SELECT COMMITTEE ON SMALL BUSINESS
UNITED STATES SENATE

EIGHTY-FOURTH CONGRESS

FIRST SESSION

PARTICIPATION OF SMALL BUSINESS IN
MILITARY PROCUREMENT

63038

APRIL 20, 21, 22, 25, MAY 4 AND 5, 1955.

Printed for the use of the Select Committee on Small Business

UNITED STATES
GOVERNMENT PRINTING OFFICE

WASHINGTON: 1955

CONTENTS

Statement of-

Askins, Jack, small-business adviser to the Assistant Secretary of the

Army for Logistics and Research and Development---

Bachman, John S., Chairman, Contract Finance Committee, Depart-

ment of Defense_.

Bannerman, G. C., Assistant Director, Procurement Division, Office
of Naval Material, Department of the Navy-

Coates, Capt. L. D., USN, Deputy and Assistant Chief of Naval Re-
search, Department of the Navy..

Cone, Col. John M., Chief, Purchases Branch, Procurement Division,

Office of Deputy Chief of Staff for Logistics, Department of the

263

Curtin, Comdr. Neale W., Chief, Office of Navy Small Business, De-
partment of the Navy..

72, 85, 101, 263

DeAtley, E. F., Assistant Chief, Standards Branch, Office of Deputy

Chief of Staff for Logistics, Department of the Army

Flatley, J. W., Deputy Commissioner, Federal Supply Service, GSA_

Fogler, Hon. R. H., Assistant Secretary of the Navy-

Gasque, Charles W., Jr., Assistant General Counsel, GSA...

Gerrity, Brig. Gen. Thomas P., Director of Procurement and Pro-

duction, Headquarters, United States Air Force

Grimsley, George, Purchase Division, Federal Supply Service, GSA__

Hamlin, John, small-business adviser to the Assistant Secretary of

Defense (Supply and Logistics) - -

Higgins, Hon. F. H., Assistant Secretary of the Army (Logistics and

Research and Development).

Johnson, Maurice L., executive for small business, Headquarters, Air

Materiel Command, Dayton, Ohio___

Keller, R. F., assistant to the Comptroller General of the United

States

197

Kelsey, Gen. N. S., Deputy Director for Research and Development,

Headquarters, United States Air Force-

262, 266

Lewis, Hon. Robert, Assistant Secretary of the Air Force (Materiel). 115

Martin, John F., small-business specialist, Headquarters, Quarter-

master, Market Center System, Chicago, Ill

Pike, Hon. Thomas P., Assistant Secretary of Defense (Supply and

Logistics)

Questal, M., assistant to Commander Neale W. Curtin, USN

Ramsey, Ralph E., Associate Chief, Office of Investigation, General

Accounting Office...

197

Royar, Vice Adm. M. L., Supply Corps, United States Navy, Chief of
Naval Material_

72, 78

239

Taylor, George C., Assistant Director for Supply, United States

Atomic Energy Commission..

Weddell, Kennard, assistant for small business, Headquarters, United

States Air Force

115, 123, 153, 270

Welch, J. E., Assistant General Counsel, General Accounting Office__ 197

Westphalinger, Brig. Gen. H. R., Chief, Procurement Division,

Deputy Chief of Staff for Logistics, Department of the Army... 24,57

III

EXHIBITS

1. Letter dated May 19, 1955, from Assistant Secretary of Defense T. P.

Pike, to Senator Smathers, supplying additional information re-

quested by Senator Duff at April 20, 1955, hearing, concerning

negotiated procurements_.

2. Letter dated March 11, 1955, from Assistant Secretary of the Navy

R. H. Fogler sent to presidents of 250 large companies performing

Navy work, urging the utilization of small-business concerns in

subcontracting..

3. Reprint of Radio Corporation of America advertisement entitled

"You Don't Have to Be Big to Make This All-American Team".

4. List of small-business personnel for the Navy Department, February 1,

1955.

5. List of Navy inspection offices having industry cooperation repre-

sentatives

6. Navy directive from Assistant Secretary of the Navy R. H. Fogler,

dated January 3, 1955, on the subject of Maintenance of the Mobil-

ization Base (attachment (A) of Comdr. Neale W. Curtin's prepared

statement).

7. Navy directive from Assistant Secretary of the Navy R. H. Fogler,

dated February 28, 1955, on the subject of Maintenance of the

Mobilization Base (attachment (B) of Commander Curtin's prepared

statement)

8. Navy directive from the Secretary of the Navy (NCPD 57-54 [NPD

15-101] dated April 1, 1954, on the subject of Negotiated Procure-

ment During Present National Emergency (Attachment (C) of

Commander Curtin's prepared statement).

9. Navy directive from the Secretary of the Navy, dated June 9, 1954, sub-

ject: Negotiated Procurement During Present National Emergency

(NPD 15-101) (attachment (D) of Commander Curtin's prepared

statement)_

10. Agenda, National Conference Small-Business Specialists, Wright-

Patterson Air Force Base, Dayton, Ohio, March 15-18, 1955.

11. Bidders' mailing list applications, extract from AFPI 2–204.2 (a).

12. Proposal for an approved small-business program, endorsed by the

Air Force Advisory Group on Small Business, at its January 28,

1955, meeting-

13. Letter dated April 19, 1955, from E. J. Fitzgerald, Chief, Small-Busi-

ness Division, Boston Air Procurement District, to J. K. Weddell,

Assistant for Small Business, Headquarters, United States Air Force,

Washington, D. C., giving brief résumé of two projects conducted by

that office during past year..

14. Air Force Procurement Čircular No. 10 (amendments to AFP-1 53–
101).

15. Summary of depot maintenance, contract maintenance, and modifica-

tion, from budget projects 431, 414, 141, 421, and the contractor

technician program, submitted by Kennard Weddell____

16. Letter dated May 12, 1954, from Kennard Weddell, Assistant for Small

Business, Headquarters, United States Air Force, to Col. A. M.

Meulenberg, Warner-Robins air materiel area, re joint determination

situation at Warner-Robins.

17. Letter dated May 12, 1955, from Joseph Campbell, Comptroller Gen-

eral of the United States, to Senator Sparkman, supplying additional

information to the committee, in response to request from Senator

Goldwater, during the May 4, 1955, hearing--

Enclosure (1). Letter dated March 12, 1954, from Comptroller

General Lindsay C. Warren, to Hon. Paul Brown, United States

House of Representatives, expressing views as to adequacy of

the Armed Services Procurement Act of 1947-

Enclosure (2). Letter dated March 12, 1954, from Comptroller

General Lindsay C. Warren, to the Secretary of Defense, re

administration of Armed Services Procurement Act of 1947, to

negotiate contracts without advertising (sec. 2 (c) (1)).

Enclosure (3). Letter dated August 20, 1954, from Secretary of

Defense C. E. Wilson, to Acting Comptroller General of the

United States Frank H. Weitzel, responding to the Comptroller

General's letter of March 12, 1954, re negotiated procurement

under section 2 (c) (1) of Armed Services Procurement Act____

Enclosures (4), (5), (6), and (7). See exhibits 19, 20, 20 (a)

Page

165

18. Letter dated May 13, 1955, from Joseph Campbell, Comptroller

General of the United States, to Senator Smathers, supplying addi-

tional information requested at May 4, 1955, hearing_-.

Enclosure (A). Inventories under accounting control as of June

30, 1954

Enclosure (B). Letter dated May 10, 1955, from W. J. McNeil,

Assistant Secretary of Defense, to the Comptroller General of

the United States, transmitting a summary of Defense Depart-

ment inventories of material held in stores under stock funds

and financed by appropriations_ _ _

Enclosure (C). Property management and accounting survey (by

agency).

19. Letter dated March 17, 1955, from Joseph Campbell, Comptroller

General of the United States, to the Secretary of the Army, con-

cerning protest of Samuel N. Zarpas, Inc., against rejection of bid

for construction work at Forest Glen Section, Walter Reed Army

Medical Center (enclosure 5 of Comptroller General's letter of

May 12, 1955) __-.

20. Letter dated October 8, 1954, from Acting Comptroller General of the

United States Frank H. Weitzel, to the Secretary of Defense, re

cost-plus-a-percentage-of-cost system of contracting (enclosure 6 of

Comptroller General's letters of May 12, 1955).

20 (a) Letter dated February 10, 1955, from R. C. Lanphier, Jr., Deputy

Assistant Secretary of Defense, to the Comptroller General re

cost-plus-a-percentage-of-cost subcontracts (enclosure 6 of Comp-

troller General's letter of May 12, 1955) ___.

20 (b) Excerpt from Armed Services Procurement Regulation (1955 edi-

tion, revised), April 4, 1955, No. 4 (enclosure 7 of Comptroller

General's letter of May 12, 1955)

21. Letter dated May 23, 1955, from Joseph Campbell, Comptroller

General of the United States, to Senator Sparkman, supplying addi-

tional information requested by Senator Goldwater at May 4, 1955,

hearing_

Enclosure (1). Letter dated September 3, 1954, from R. F. Keller,

Acting Comptroller General of the United States, to the Secre-

tary of the Army re Excello Paper Products Co. contract_

Enclosure (2). Notice of suspension of production, contract No.

DA 11-070-Ord-9658, Excello Paper Products Co..

Enclosure (3). Decision, September 9, 1954, rendered by Ordnance

Corps to effect that Excello Paper Products Co. is not small-

22. Procurement by GSA, 6 months ending December 31, 1954 (figures

given at small-business hearings, Senate and House, March and

May 1955, respectively) -

230

23. Letter dated May 13, 1955, from Edmund F. Mansure, Administrator,

GSA, to Senator Sparkman, supplying requested information ré

Comptroller General's decision B-121926-Multiple awards_

Enclosure (1). Letter dated May 13, 1955, from Edmund F.

Mansure, Administrator, GSA, to the Comptroller General, re

multiple- and single-award contracts_

232

233

Enclosure (2). Letter dated April 12, 1955, from Frank H. Weitzel,

Assistant Comptroller General of the United States, to Edmund

F. Mansure, Administrator, GSA..

24. List of Atomic Energy Committee small-business representatives_.

25. Department of Defense Directive No. 7840.1, dated April 22, 1954-

Defense supply contract financing-Progress payments based on

26. Summary of progress payments on prime contracts at December 31,

1954 (not including public works construction).

257

26 (a) Progress payments, by procuring activity, at December 31, 1954

(not including public works construction).

26 (b) Progress payments, by size of contract, at December 31, 1954 (not

including public works construction).

27. Table showing distribution of research and development procurement

by Office of Naval Research among educational and nonprofit insti-

tutions for current fiscal year through April____

257

258

264

27 (a) Table showing portion of dollar amount going to big business-

27 (b) Table, ARDC small-business activity during calendar year 1954,

Research and Development_-

264

268

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