in reading this article that perhaps there had been some cases, some instances where this could be demonstrated. Evidently that is not so. Mr. MALLOY. Mr. Counsel, the chairman asked the departments to be prepared in this hearing to address themselves to this question. They are prepared to talk specifically to it. Mr. ROBINSON. Specifically or generally as factors.? one of nine other Mr. MALLOY. It obviously is one of nine other factors. That is the way the policy is established. Mr. ROBINSON. Thank you. Mr. CORMAN. Questions? Mr. WILLIAMS. No questions, thank you. Mr. CORMAN. Mr. Secretary, we very much appreciate your cooperation. Sorry we had to run as long as we did. That is the hazard of the Hill these days. Mr. MALLOY. Thank you very much, Mr. Chairman. DEPARTMENT OF THE ARMY (The subcommittee's invitation to testify and Army's response follow :) SELECT COMMITTEE ON SMALL BUSINESS, Hon. STANLEY R. RESOR, DEAR MR. SECRETARY: Subcommittee No. 2 on Government Procurement and Economic Concentration of the House Select Committee on Small Business has scheduled hearings to review small business procurement practices and programs of military and major civilian procurement agencies. In connection with these hearings, we invite you and such officials as you may designate to testify on October 17 at 10:45 a.m. in Room 2359, Rayburn House Office Building, regarding the following: 1. Prime contract awards in fiscal years 1964-1967 to all business firms for work in the United States, to small business firms in dollars and percentages and small business set-asides in dollars and percentages. 2. Awards by claimant program in the same period to all business firms and to small firms in dollars and percentages. 3. Research and development awards in the same period to all business firms and to small business in dollar amounts and percentages. 4. Multiyear contracts awarded in the same period to all business firms and to small firms, showing items procured, number of contracts, dollar amounts, percent to small firms, and remaining term of those currently in force. 5. Various existing regulations and policies are designed or can be utilized to encourage and assist small business firms in receiving and performing prime awards and subcontracts. Small business participation depends largely upon the application of such regulations and policies by contracting officers and contract administration officers. Please provide actual cases in fiscal years 1966-1967 showing procedures followed, regulations utilized, procurement and contract administration offices involved, items procured, manner in which small business benefitted, and other details, including the role of the contracting officer, the contract administration officer, and the Army small business specialist, if any, regarding each of the following subjects and any others you deem appropriate : (a) Set-asides class, total and partial. (b) Total package procurement. (c) Weapons system buying. (d) Break outs. (e) Dividing procurements into small lots suitable for small business. (f) Multiyear contracts. (g) Sole source procurement. (h) Elimination of restrictive specifications. (1) Mobilization planning. (j) Profit factors for contractors' input to total performance under weighted guidelines policy. (k) Profit factors for contractors' performance record under weighted guidelines policy. (1) Utilization of make-or-buy approval authority to increase small business subcontracting. Identify regulations and policies which conflict with others regarding their effect on small business, e.g., multiyear procurements versus dividing pro- 4 curements into lots suitable for small business, and in each instance describe criteria in reaching final determination. 6. Coordination with Small Business Administration in fiscal years 19661967 in furtherance of small business programs, including set-asides and subcontracting. 7. Procedures followed, criteria and guidelines applied, in the same period, to determine each of the following: (a) Goals for awards to small business. (d) Avaliability of small business for bidding. (e) Decisions not to invite small business to bid. (f) Reasons for failure to award procurements to small business. (g) Lack of capacity and credit. (h) Irresponsibility other than capacity or credit. (i) Ample time for submitting bids and proposals. (j) Adequacy and reasonableness of specifications. (k) Procurements from foreign sources. (1) Effectiveness of small business subconstracting programs, including make-or-buy decisions. 8. Analysis of small business procurement by dollar amounts during fiscal years 1964-1967, showing procurements (a) not offered to small business with reasons for exclusion, and (b) offered but not awarded to small business with reasons for failure. 9. Such comments as you may wish to make regarding the subject matter of the hearings. It will be appreciated if you would furnish names of witnesses and 12 copies of their statements by October 10 and additional copies at the time of your testimony. Sincerely yours, ABRAHAM J. MULTER, Chairman, Procurement Subcommittee. SELECT COMMITTEE ON SMALL BUSINESS, Hon. STANELY R. RESOR, HOUSE OF REPRESENTATIVES, Washington, D.C., September 28, 1967. Secretary of the Army, Department of Defense, DEAR MR. SECRETARY: This is in further reference to our September 19 letter regarding procurement hearings scheduled for October 17. In the event you should find it inconvenient to attend, we request, in view of the level of policy involved in various matters to be reviewed, that your Assistant Secretary (Installations and Logistics) testify in your place. Chairman, Procurement Subcommittee, Select Committee on Small Business, House of Representatives. DEAR MR. MULTER: This is in response to your 28 September 1967 letter of invitation to Secretary of the Army Stanley R. Resor to appear before your Committee on 17 October 1967. Secretary Resor has asked that I acknowledge your letter and express his regrets to attend your small business hearings. A review of my commitments through the dates of your proposed hearings indicates that I too will be unable to appear as the Department of the Army witness. With your permission, however, it is proposed that Major General Roland B. Anderson, my Director of Materiel Acquisition, appear in my stead. General Anderson is fully qualified to discuss the Department of the Army policy in the small business area, since he has for many years been in touch with the Small Business Community and the Small Business Program. I trust that General Anderson's nomination as the Army witness will meet with your approval. Sincerely yours, ROBERT A. BROOKS, Assistant Secretary of the Army (Installations and Logistics). TESTIMONY OF MAJ. GEN. ROLAND B. ANDERSON, DIRECTOR OF MATERIEL ACQUISITION, OFFICE OF THE ASSISTANT SECRETARY OF THE ARMY; ACCOMPANIED BY JACK ASKINS, SMALL BUSINESS AND LABOR SURPLUS ADVISER; AND ERNEST L. WALKER, ASSISTANT TO MR. ASKINS Mr. CORMAN. Maj. Gen. Roland B. Anderson, Director of Materiel Acquisition, Office of the Assistant Secretary of the Army. We are pleased to have you here to testify before our subcommittee. Perhaps you would like to identify the gentlemen who accompany you for the record. General ANDERSON. Mr. Chairman, members of the committee and committee staff. I am Gen. R. B. Anderson, Director of Materiel Acquisition and Procurement Policy and Review, in the Office of the Assistant Secretary of the Army for Installation and Logistics. I have with me today, Mr. Chairman, Mr. Jack Askins, who is the Small Business Adviser to the Army; also his assistant, Mr. Ernest Walker. Mr. Chairman, in the interests of time I would like to, with your permission, present my full statement for the record, and at this time limit my remarks to a summary of the Army's position in this matter. Mr. ČORMAN. Thank you, General. The full statement will be inserted in the record. We appreciate your willingness to summarize it for us. General ANDERSON. Mr. Chairman, for many years the Army has continuously and consistently supported, implemented, exercised, and carried out what we believe to be a realistic and objective policy toward the small business community. This is clearly in our best interests because we in the Army reognize the importance and necessity of a healthy small business community whether they be in the role of a prime contractor or subcontractor. We think that our record of accomplishment is evidence of our sincerity to see to it that qualified small business concerns get their fair share of the supplies and the services that we procure. During the last year, the fiscal year 1967, we made prime contract awards to business firms throughout the United States as follows: First, to large business firms we awarded $10.9 billion and to small business concerns, $2.1 billion. Of this $2.1 billion, $507 million was awarded to the small business concerns on a set-aside prime contract basis. This, of course, is about one-quarter of the total amount given to small business. Now, percentagewise this was only slightly better than we did in 1966, but in terms of dollars, and this is what we think perhaps counts the most, we saw an increase of some $205 million or an increase of 11 percent over our performance in 1966. These awards to small business concerns, including the set-asides, are the results of the combined efforts of our procurement personnel and most certainly we consider the Small Business Advisers to be a very important member of our procurement team. In this respect we have 232 full- and part-time small business personnel. The full-time advisers, of course, are assigned to our major buying offices throughout the country. We place great reliance on these people to see to it that our small business program prospers and thus far they have not disappointed us. Aside from the routine day-to-day participation we have done a number of things that we hope will sharpen our image and better prepare us to get greater participation of the small business concerns. For example, we have participated in some 30 procurement counseling conferences or clinics as they are sometimes referred to. We have held numerous procurement fairs. We have had meetings of our own Army Small Business Councils. And we have cooperated with industry associations in a great number of cases. As a result of this, we think our small business advisers are becoming more experienced and perhaps more aggressive. We have expanded their training and hopefully have broadened their visibility. Thus, we feel that, as we go along, they can detect more opportunities for participation and this should produce even better results than we have heretofore enjoyed. As you may know, Mr. Chairman, the Army has an aggressive program of publicizing advanced procurement information. This is peculiar to the Army at the present time, where in addition to synopsizing our procurement, we go out in advance based on 5-year planning documents to indicate to industry as a whole, both large and small, what our procurement plans far into the future might be. Now, in doing this we give the industry as a whole, and, of course, small business included, more time to consider whether or not they might wish to participate in any particular procurement action. This is a relatively new program, Mr. Chairman, but we have seen some specific benefits from it. Up through last year we had inserted in the Department of Commerce Business Daily some 700 such proposed procurements. Now, another area that we are just beginning, I think, to feel our way in is in the multiyear procurement area. We are just feeling our way here but I think that this area may well provide a new avenue for the small businessman. Of course, there seem to be a number of advantages. First, he can expect a longer production run and perhaps more, thus giving him better amortization of his investment. He can stabilize his planning much better. Hopefully, in the coming year we can work a little harder on this and get more small business participation in areas that heretofore have not been open to them. We are constantly seeking new ways, new ideas, new approaches, new techniques in which to assist the businessman to become interested in participation in our requirements for supplies and services. We are receptive to any and all practical ideas that are to the mutual advantage of the Defense Department and to the small businessman. 84-790-68- -8 |