FIELD CONFERENCES ON FEDERAL SUPPLY MANAGEMENT PART I (Meeting held at Headquarters, Air Matériel Command, WrightPatterson Air Force Base, Dayton, Ohio) TUESDAY, AUGUST 19, 1952 HOUSE OF REPRESENTATIVES, INTERGOVERNMENTAL RELATIONS SUBCOMMITTEE OF THE COMMITTEE ON EXPENDITURES Dayton, Ohio. The Subcommittee on Intergovernmental Relations met at 3 p. m., Tuesday, August 19, 1952, at headquarters, Air Matériel Command, United States Air Force, Dayton, Ohio, Hon. Herbert C. Bonner, chairman, presiding. Present: Representatives Herbert C. Bonner, chairman; (Mrs.) Cecil M. Harden, Charles B. Brownson, and Thomas B. Curtis. Staff members present: Thomas A. Kennedy, general counsel; Ray Ward, staff director, and Herbert Roback, staff director, Executive and Legislative Reorganization Subcommittee. Air Force members present: Hon. Roswell Gilpatric, Under Secretary of the Air Force; Lt. Gen. E. W. Rawlings, commanding general, Air Matériel Command, Wright-Patterson Air Force Base; Maj. Gen. W. H. Tunner, deputy commander; Maj. Gen. M. E. Bradley, Jr., directorate of procurement and production; Maj. Gen. C. A. Brandt, directorate of maintenance engineering; Brig. Gen. L. R. Parker, directorate of supply and services; Brig. Gen. W. T. Hefley; Col. C. Pratt Brown; Col. James A. Mullins; Col. Lester W. Light; Col. W. E. Carter; Col. W. B. Packard; Col. Lee W. Fulton; Col. William E. Sault; Clarence Dahm; J. N. Cunningham. Mr. BONNER. The subcommitee will come to order. Lieutenant General Rawlings, I want to thank you and your staff for the interesting tour of the Wright-Patterson Air Force Base this morning. We visited the air tunnel, power plant, laboratories, and the Aero Medical Laboratory and other installations on your base, which proved to be most interesting and very informative to me particularly as chairman of the subcommittee, and I am sure to the members of the subcommittee and the staff. 'Name changed to Committee on Government Operations, July 4, 1952. 25062-53- -7 89 Now, we are assembled to ask such questions as members of the subcommittee might desire. Mrs. HARDEN. Mr. Chairman, General Rawlings, Colonel Brown, and members of your staff, I wish to express my gratitude and appreciation for your most generous hospitality and cooperation during the past 2 days. It has been very interesting and very informative. Lieutenant General Rawlings, I am very happy to know that you are in complete agreement with our subcommittee's objectives. I should like to ask one question in regard to the suit that we saw demonstrated. What is the cost of that? STATEMENT OF COL. C. PRATT BROWN, COMMANDING OFFICER, WRIGHT-PATTERSON AIR FORCE BASE Colonel BROWN. That is an experimental suit and I am not sure a total cost has been developed on it yet. Lieutenant General RAWLINGS. Was that a pressurized suit? Colonel BROWN. It was this ventilated suit which is over in the aero medical laboratory and they did say it was a developmental item. I am not sure that the cost has been developed. Lieutenant General RAWLINGS. In other words, the cost of a piece of equipment of that kind would finally be determined when the specifications were finally set, based on the development and then sent out for bids and development on the control and time standards. You would then get your bids and determine what the cost would be. I am not familiar with the particular item, but that is where we develop these special pieces of equipment that are essential to the crew and aircraft and related equipment being able to carry out the mission. Mrs. HARDEN. Thank you. How many Waf's do you have on the base? Colonel BROWN. We have 158 enlisted Waf's and 27 officers. Mrs. HARDEN. Could you use more? FURTHER STATEMENT OF LT. GEN. E. W. RAWLINGS, COMMANDING GENERAL, AIR MATÉRIEL COMMAND, WRIGHT-PATTERSON AIR FORCE BASE Lieutenant General RAWLINGS. I should like to say that we have asked headquarters on several different occasions to provide us with a very much larger WAF program, but they have been unable to do so, because the recruiting program has been behind the planning program, and, therefore, they have not been available. We feel that there are a good many positions in this command where women in uniform could perform the functions very satisfactorily and I would be delighted to have them. The ones we have are doing a grand job. Mrs. HARDEN. Thank you. I am always interested in the women. of the Armed Forces. Mr. BROWNSON. Would they replace civilian employees you have now or military personnel? Lieutenant General RAWLINGS. You always have a very difficult problem in determining whether the person doing the job should be a civilian or military. We try to civilianize the maximum number of jobs so that we are not tying up people in uniform on jobs where they are not required. It to some degree depends upon the particular skills that we require and the skills that are available in uniform or in the civilian capacity. So, it depends to some degree upon what the particular job is. Mr. BONNER. Since you are developing that, has the cost been estimated for a similar employee as a civilian or a Waf? Lieutenant General RAWLINGS. I have not seen any figures developed on that; they could be developed, and it may be that they have been at headquarters. However, we have not developed such figures and I do not know what they would be. BIDS VERSUS NEGOTIATIONS Mr. BROWNSON. General, I wonder if we could have a little discussion. It isn't exactly on the subject of this subcommittee, but it is a subject which is very close to it, and it is one in which all of us as• individual Congressmen are very interested. That is the matter of procurement as it is now carried on in your command and how much of it is done on a bid basis and how much of it is done on a negotiated basis. What philosophy underlies the determination as to which basis. will be used in your procurement? Lieutenant General RAWLINGS. Yes, sir; we would be glad to discuss that. We have discussed this subject before other congressional committees. I don't have at my fingertips the statistics. We could have developed them if we had known you wanted them and I would have had them here. Generally, the policy we are following is one of trying to get the maximum amount of competition that we can get in our procurement, because we feel that in our American system competition generally forces the price down. There are many cases, however, especially technical items, where you have people who have special technical ability and that sort of thing, because they have developed the item of equipment and have the know-how and where you have to have them within a specified period of time, where it would be more economical to the Government to go out and negotiate. So, we do that in a great deal of our highly technical equipment. On the items that are not as technical we attempt to the maximum degree to get competition through competitive bidding. From a dollar point of view, obviously, since our aircraft and highly technical items are high priority, a good many of the dollars are on the basis of negotiated procurement where we have priceredetermination contracts and that sort of thing as opposed to "cost plus fixed fees," of which we have not very many. We use those where you have had no prior experience with cost-where the item is a new item-and no one has enough information on which to base cost to come up with a fixed-price type of contract. We do not like to use cost-plus-fixed-fee contracts because they are difficult to administer, but we are forced to use them in a lot of cases. NEED TO AMEND PROCUREMENT LAW Mr. BROWNSON. Do you, or the members of your command that are actually doing this job, have any reaction as to changing that legislation to help you in your job? Have you found it cumbersome or difficult? Lieutenant General RAWLINGS. I am personally not aware of any problems that have come up to my level on the statute that we are operating under for procurement. However, I would like to ask General Bradley, who is the Director of Procurement and Production, if he has any that are bothering him; they just haven't come up yet. I am not aware of them. FURTHER STATEMENT OF MAJ. GEN. M. E. BRADLEY, JR., DIRECTORATE OF PROCUREMENT AND PRODUCTION Major General BRADLEY. No, sir. I would say the basic procurement laws have proven adequate to our use, and we find them reasonable and not too restrictive in operation. In general, they cover the conditions wherein it is necessary to negotiate rather than advertising; if we have to negotiate, we are allowed to do so. There are some other things that have been added to our job which we have to go through which make the job a little more difficult, but they apparently are necessary, such as small-business representation and the rules and regulations regarding the distressed areas. However, the procurement laws as such are, in my opinion, adequate. DISTRESSED AREAS Mr. BROWNSON. Do you have to make your decisions here on this level in regard to your purchasing from distressed areas, or does that come down from the Secretary, or where does it come from? Major General BRADLEY. We get the policies from headquarters, and they are set up by the Defense agency. We have to make the decisions here as to implementing those policies in each individual case, and we do. Lieutenant General RAWLINGS. I might add to that a little for the record, and that is that these additional steps which cover the smallbusiness activity, distressed labor areas, and a few others do complicate and involve the procurement process. It means it makes more paper work and more time. But those are statutes that have been considered by the Congress, and we must follow them. They are not unworkable; they just make the task a little more laborious, and obviously they may have some considerations that are beyond the scope of our task. We do make a very conscientious effort, and it causes us additional work and time and red tape. In the field of small business, we have a very good small-business organization in the Air Force, and I think it has done a very fine job, but it is complicated. It does take more time and involves, obviously, additional steps and more paper work, but it is working out well, and they are generally doing a very fine job for us. H. R. 6887 Mr. BONNER. In that connection, I would like to ask General Bradley if he has had an opportunity, or if he is familiar, with the bill H. R. 6887, which was introduced by me as chairman of this subcommittee as a result of the subcommittee's studies with respect to contracts? Major General BRADLEY. No, sir; I am not familiar with that bill. Mr. BROWNSON. In your purchasing of such common-use items as fall within your purchasing category, how does your use of negotiated purchases and bid-contract purchases compare in volume? Major General BRADLEY. Well, I think it would be best for me to get some of our later figures on the over-all picture. Mr. BROWNSON. What is your policy generally on procurement of common-use items? Do you have to go into negotiations much there, or are you able to do it almost entirely by bid? Major General BRADLEY. By bid. Mr. BROWNSON. The overwhelming volume in your purchasing in your common-use type of item is by bid? Major General BRADLEY. That is correct. Our policy is to do it by bid. It is very seldom that we have to do it any other way. Lieutenant General RAWLINGS. I might make a comment for the record. Of course, we run into pressure. In policy direction you can negotiate, but you run into a lot of pressure on the side that you should have had competitive bidding; and, likewise, where you have competitive bidding, you find people who object very strenuously, because they have gotten into a situation where they are doing a satisfactory and good job for us; they are fearful that some man who is pretty sharp might come in and underbid him for enough reduction to be one you would have to accept, but then maybe failing to meet the contract, having all the learning period to pick up and that sort of thing. Then, maybe, the next year he will not be back in the program, and that would result in losing two sources. You get those pressures on both sides, and we just try to use our best judgment in getting the maximum competition we can get. Mr. WARD. During the time that what is now Public Law 413 was being developed, it was sold, I am sure, to the Congress and across the board-certainly to the General Accounting Oflice and Bureau of the Budget-on the theory that there are certain instances where it is necessary to negotiate. One, where you cannot draw up a proper specification concerning some of your technical equipment; and, two, where you do not have a competitive market. It was, however, felt that the thing to do is to get competitive bids where practicable in order to prevent collusion, favoritism, nepotism, and those other things that Revised Statute 3709 was intended to stop. That was the premise which was made for Public Law 413 and I would like to ask if that isn't still the correct way to operate; that is, to get competitive bids. through advertising where you can do that reasonably? Lieutenant General RAWLINGS. I would like to say that that should be modified-not the statute providing for this-but what you have said, I feel, should be modified to the extent that it has to tie in to the urgency of the situation. Mr. WARD. No objection, if there is a bona fide emergency Lieutenant General RAWLINGS. In other words, when Korea first occurred, the pressures were terrific because we were short of a lot of |