you went the other direction, we would probably have to double our procurement staff, because you would multiply the pieces of paper involved enormously and we have a large operation now.

Mr. BROWNSON. That clears up the point I had in mind. I hadn't realized that the Small Business staff was screening these items first before the request for bid on the 20 items was compiled. That is all I have.

USE OF TRAVEL VOUCHERS

Mr. CURTIS. First, I want to say I have certainly learned a great deal in going over the general procedures set up here.

I would like to ask about three specific questions. One question I have in mind, I notice the Air Force ordered 5,641,000 travel vouchers, which incidentally was 21⁄2 times what the Navy ordered and more than the Army ordered. It seems to me that that item must have filled up the pipeline, and I wonder if anyone could comment on that specific item.

Lieutenant General RAWLINGS. I believe, Mr. Curtis, we would have to research those specific things like that; we would have to take a look at it, unless someone just happened to know it. We haven't been alerted to those items.

Mr. CURTIS. I will ask it in a general way. What review is made on matters of this nature? Could these figures for your procurement of standard forms for the Air Force, Army, and Navy, be obtained? Who would review this and pick up this very same item which I have picked up in relation to the Army and Navy and ask the question why is it we are ordering so many and what happened?

Lieutenant General RAWLINGS In other words, your question really is, "What is our requirement procedure"? And, second, to try to stop overprocurement, or changing requirements that are higher than they should be. Is that your question?

Mr. CURTIS. Yes, sir, that is essentially it. Of course, I would be interested in the follow-through on that specific item later.

Lieutenant General RAWLINGS. We can check on that particular

item.

Mr. BONNER. If you can supply that information for the record at this point, it will be fine.

(The matter referred to is as follows:)

Standard forms used by the AF are procured by the Air Adjutant General of the AF Headquarters, USAF, Washington, D. C. The Air Matériel Command distributes standard forms through its warehouses and provides the Adjutant General periodically with a statement of the quantity on hand, the monthly consumption rate, and the quantities due in and out. The Air Adjutant General determines the quantities required and the desired delivery dates and procures them for delivery to the Air Matériel Command.

Whenever the quantity of a specific standard form on hand in the Air Matériel Command depots is reduced to a 6 months' supply, a requisition is forwarded to the Air Adjutant General for replenishment. The stockage objective is an 18month supply; therefore, the quantity procured is an 18-month requirement less the quantity on hand and due in. Depending upon the quantity required, delivery may be all at one time or a portion every 3 or 6 months.

Prior to July 1952, the Air Matériel Command furnished the Air Adjutant General with the quantity to be procured at the time the order was placed as well as information on the quantity on hand, the monthly consumption rate, and the quantities due in and out. The Air Adjutant General reviewed these figures and procured the amount requested or determined some other quantity to be procured.

Mr. Curtis stated that the AF procured 5,641,000 travel vouchers (Standard Form 1012) during fiscal year 1951 for use in fiscal year 1952. This requirement was based on past consumption experience, and the projected future size of the AF. Our records show that actual consumption experience for fiscal year 1952 was 5,156,784.

Lieutenant General RAWLINGS. I would like Colonel Light, who works in the requirements field, to explain that procedure.

Colonel LIGHT. In that particular area the Air Adjutant General in Washington computes all form requirements and actually makes the procurement. We do not compute the form requirements here at AMC.

Mr. BONNER. Do I understand that you do not estimate what is needed; someone else does the estimating on this item as to what you need?

Lieutenant General RAWLINGS. That is correct, Mr. Bonner.

Mr. CURTIS. Don't you even compare that with usage figures in case they order considerably more than has been customary before? Colonel LIGHT. We do furnish the consumption reports to the Air adjutant general and he computes the requirements on that.

Mr CURTIS. But you have no basic authority at this command to ask them to check?

Colonel LIGHT. We do ask the questions when that work requirement is prepared.

Mr. BONNER. Do you have the figures that would show the consumption data you reported to them?

Colonel LIGHT. Yes, sir.

Mr. BONNER. And he increased them?

Colonel LIGHT. He might increase or he might decrease them, sir. Mr. BONNER. Well, supply that for the record-the data that you furnished on this subject.

Colonel LIGHT. All right, sir.

Mr. CURTIS. Then we still have this remaining question and possibly you could answer it here in this particular instance. Would there be anyone in the Air Force who would look over general figures of this nature, such as I have here, to notice anything that seemed out of line and to question it as far as these forms are concerned-the Air Matériel Command would not do it as far as these forms are concerned-but you probably do it as far as other items are concerned; is that correct?

Lieutenant General RAWLINGS. Colonel Mullins can tell how we do our checking of requirements, but to compare our figures with Army and Navy figures, no; we would not do that, but we have our internal procedure for checking, and Colonel Mullins can describe that to you.

Mr. CURTIS. Let me interject just a minute to be sure-no one would compare it with the Army and Navy even for items where you know it is a matter, to a certain extent, which would reflect the number of personnel you have rather than the particular equipment?

Lieutenant General RAWLINGS. At this level, obviously, it would be a very involved and detailed task.

When the budget is reviewed, the Department of Defense and the budget examiners in working with the departments, they do make checks, but the extent to which they go I don't know; they are spot checks of items that are common to the services to see whether they look out of line; they do check those up, but to do it at this level, the cross-servicing would be a terrific operation.

The main thing would be to have our own requirements computation arrangements and check twice so we wouldn't make mistakes. If another service had supplies that were excess of our requirements, then they could become available to us in the form of excess supplies. Those lists are circulated and we could pull them off and they would be on our stocks and we would take a credit on our computation and wouldn't get them; but, in terms of checking the requirements, no.

Colonel MULLINS. We have within the directorate of Supply and Services an independent audit system of requirements computation. This system is independent of the actual individuals who are responsible for the commodity or the computation of requirements and initiation of procurement.

We not only carry that to the extent of auditing the requirements for procured items, but also attempt to audit the major portion of budget estimates which are submitted so we can begin with the budget estimate on particular items and follow it all the way through until we come to an actual procurement after the money is appropriated. This system is directly under the directorate of Supply and Services, General Parker, and is also extended to the air matériel areas, the depots, and we have requirements analysts at each one of the depots who are independent of the individual computing requirements.

In the larger procurement areas each and every procurement is audited.

Where our procurement covers a large range of the consumption type matériel, we can only spot check each commodity class and take corrective action on a general basis for that commodity class.

Mr. CURTIS. Don't you have some sort of formula as to usage, as either being a certain percentage beyond what you anticipated or below that, and where those items are scrutinized? Doesn't your system include something like that?

Colonel MULLINS. The system would take into consideration any changes in consumption factors and we would either be procuring for a deficiency or would be reducing procurement because consumption had been lower than had been anticipated.

In cases where consumption is developing to an extent that the item has to be isolated for expediting action or you have to cut back procurement, adjustments are made. We audit the requirements formula itself and the programing information that goes into each requirement computation and the data that is used. We check back against the actual document from which the inventory and consumption information is developed.

Mr. CURTIS. I would think this would be one of the methods you would have of checking back to see where errors might exist.

Let's take another thing, we were discussing this morning excesses of spares. If you have an excess usage of a particular spare, certainly something should be directed over to your design and engineering department-probably something must be wrong and that is probably true more in supply than in maintenance. And the same way, if you have an item like this travel voucher, which looks like it is an excessive amount although there may be a very legitimate explanation for it; but I don't quite see how your system would benefit from catching items like that, or whether you are actually set up to catch them.

Colonel MULLINS. To come back to the item which you have mentioned.

Mr. CURTIS. I know you don't use that, so that wouldn't be a good example, but assuming it was an item that you do have concern, I think your usage figure in the past would be utilized for the new order.

Colonel MULLINS. Do you mean where consumption information appears to be excessive?

Mr. CURTIS. Yes, sir. Either that or your new order-your order for next year appears to be out of line with your past consumption. Colonel MULLINS. That is correct. That is the type of thing which could be audited. Of course, requirements computations are designed to reflect factors which are changed. Where there is an error in factors to the extent that we are procuring something that appears abnormal the audit system applies.

Mr. CURTIS. You send it back as a check to be sure there is a logical explanation for the change?

Colonel MULLINS. That is correct. And if there is no logical explanation, we take the necessary action to either cancel the procurement, if it has gotton that far, or do whtatever is necessary to correct the situation at that time.

Mr. BONNER. I understand this order was increased in Washington over the estimate that was made here, is that correct?

Colonel MULLINS. No, sir; the actual requirements were established in Washington based on the consumption information which was furnished by this command, but the procurement quantity was not estimated at this command.

Lieutenant General RAWLINGS. On this particular situation we have no information, but we will be able to provide you with what our consumption shows or we can provide that to Washington and find out from them what you want.

Mr. BONNER. You don't estimate how much you require; you let Washington estimate that.

Colonel MULLINS. In particular categories of supply and equipment, I believe I pointed out in my presentation yesterday that headquarters, USAF, does not control some specific items and they compute the requirements at that level.

Lieutenant General RAWLINGS. And they do on these forms.

Mr. BONNER. How many of those items are there of that nature, generally speaking?

Colonel MULLINS. This particular commodity classification, Standard Forms, they are all computed at headquarters. And, of course, the larger items they compute there are the complete aircraft, guided missiles, and that type of thing.

Mr. WARD. Who places the order on the Government Printing Office?

Colonel MULLINS. The Air Matériel Command actually places the order.

Mr. WARD. From here?

Colonel MULLINS. Yes, sir.

Mr. WARD. You send Washington your consumption data and they add on what they are going to or change it and send it back to you? Colonel MULLINS. Yes, sir. It is more or less in the form of a directive procurement.

Mr. WARD. You would have copies of your orders, showing what orders have been placed against it, during fiscal 1951?

Colonel MULLINS. Yes, sir.

Mr. WARD. And you will have the consumption data?

Colonel MULLINS. Yes, sir. We can make a complete check of what this appears to be-whether it appears to be normal procurement, or whether the assets were depleted and that was the cause for the increase, or whether or not it appears to be excessive.

Mr. WARD. Will you also show how many travel vouchers were used during fiscal 1951?

Colonel MULLINS. Yes, sir; we can obtain the information. I am not positive whether it is here or not.

I would like to say a few words about the review by the Department of Defense of procurement. Of course, you probably know that the Munitions Board has certain items for which-each department presents to the Munitions Board and must receive Munitions Board approval before any procurement is initiated and they do designate categories especially where any materials are critical or large dollars are involved and they review that procurement before it is initiated.

Mr. CURTIS. As a matter of fact, they are the ones who really decide where we are going to spend the dollars that Congress has appropriated; and Congress has appropriated so many dollars, they can't possibly be spent in our industry with our present industrial capacity. That expenditure is decided by the Munitions Board.

The other point I had is in regard to an article which appeared in Air Force, the Magazine of American Airpower, the May 1952, edition, and the article is entitled "Special Report, the Airpower Dollar" on page 22. In there is this statement, and this is what I want to ask the question about:

Even the Air Force clothing requirements creates sizable difficulties in an economy still essentially geared to peacetime. For $17,000,000 worth of critically needed clothing, mess equipment, blankets, etc., Air Matériel Command had to canvass the ranks of wholesalers, jobbers, and retailers of World War II surplus supplies and establish special local emergency purchase procedures. Meanwhile wholesale prices had risen an average of 14 percent since the beginning of the Korean war.

As an example, I want to run through that and ask some questions. First of all, when did this occur?

Liuetenant General RAWLINGS. This occurred when Korea started, and the very rapid expansion within a period you remember of aboutwell, I don't remember the exact timing, we could get it in the recordwe had a build up that started in the fall; we had another one in December, as I recall, and a final appropriation in March, when we went from a program of 48 wings in the Air Force up to a program that was pointed toward the 95 wing program, and the rate of buildup, which was based on the decision of the Joint Chiefs that we had to have this strength within a given period, required that we take these actions in order to supply the men. If you will recall, we had considerable difficulty with bringing in our recruits and being unable to properly cloth them and give them blankets and that sort of thing because of this rate of build up.

Mr. CURTIS. On blankets, for example-the date that this occurred, this reference as you interpret it, refers to a period of over several