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The changes in these items are reflected on the program and financing schedule.

Mr. THOMAS. Gentlemen, lets us look at the general supply fund.

Insert page 19 in the record.

(The page referred to follows:)

APPROPRIATION LANGUAGE

"To increase the General Supply Fund established by the Federal Property and Administrative Services Act of 1949, as amended (5 U.S.C. 630g), $30,000,000."

GENERAL STATEMENT

"Additional capital is required for the General Supply Fund to provide adequate financing for increased sales of supplies, primarily to the Department of Defense, and for procurement of additional equipment" (quoted from H. Doc. 61).

This fund finances on a reimbursable basis a national supply depot system and a system of ordering supplies for direct delivery to agencies. Supplies or

services are sold from the fund at cost to other agencies and the District of Columbia. Related operating expenses are provided for under the appropriation "Operating expenses, Federal Supply Service" (5 U.S.C. 630g). Also financed by the fund and reimbursed by using agencies are operations of interagency motor vehicle pools established in areas of high vehicle density.

The business-type schedules which follow reflect the 1963 program as it would be conducted with this supplemental estimate. The sales volumes currently being realized in 1963 are much greater than can reasonably be supported with the capital presently available.

JUSTIFICATION

The additional $30 million appropriated capital is required primarily to support the steadily increasing volume of sales financed through the fund and assumes continued reliance on customer agencies for advances of $30 million. Total sales were $353.9 million in 1961, $446.9 million in 1962, and are estimated in the budget at $523 million in 1963.

The following tabulation reflects this continuous sales increase:

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1 Includes markup of 4 percent for transportation to use points for comparability to 1963.

Mr. THOMAS. Look at the table on page 20 regarding what the supply fund is doing. You got a couple supplementals in 1961. You had $129.2 million in 1962.

In 1963 you started out with $129.2 million and you require $172 million with the supplemental in 1963 of $30 million.

You go on beyond 1964.

Mr. TURPIN. That is to make it completely tie in with the 1964 estimate, Mr. Chairman.

This $30 million includes $17.8 million for investment in inventory; $2.2 million for investment in equipment, mostly motor vehicles; and $10 million to repay a temporary advance from AID.

Mr. THOMAS. What is in the regular bill?

Mr. TURPIN. $35 million for 1964.

Mr. THOMAS. And $30 million here?

Mr. TURPIN. That is right.

Mr. THOMAS. This was set out in the President's budget?

Mr. TURPIN. That is right.

Let us insert page 20 in the record.

(The page follows:)

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Minimum appropriated capital required to support total GSF sales program of $523,-
000,000 in 1963 and $648,900,000 in 1964.

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[In millions of dollars]

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Minimum cash balance required to insure prompt payments of bills, maintain good
relations with industry, and take advantage of discounts offered.

Accounts receivable, net, for 1963 are based on 44 days (30 billed, 14 unbilled) with
consideration given to customer agencies for permanent advances and are considered
the minimum required to support the projected sales levels. This is a reduction
from 51 days as experienced in 1962.
-30.0 $10,000,000 from AID; $10,000,000 from Air Force; $2,000,000 from Navy; $8,000,000
consolidated purchase advances primarily for nonstores items.

Depot inventories are based on a stock turn of approximately 3.0 times and intransit
inventories are projected at the 1962 level.

Purchase of equipment proposed at minimum level to meet replacement standards and to provide for additional customer demands for sales of supplies and motor pool services.

45.8 Accounts payable are based on 20 days, considered to be the maximum level if discounts are to be taken. 3.0 Estimated retained earnings are projected at the minimum level and will be deposited to miscellaneous receipts to Treasury. the minin

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3. Total financing applied, net

150,0

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