Now, there must have been items in there for warehousing. You have to have it. Mr. GILPATRIC. Yes. BUDGET SHOULD SHOW CUT-BACK OF $20,500,000 Mr. CURTIS. Now that you are not doing it, we should show a cutback in your expansion program. I will grant you there will be an expansion program, but so often Congress goes ahead and issues a general directive, and then when we try to find out where we have saved any money, we don't see it in the budget that comes before us. Therefore, the budget never seems to reflect these savings that we are supposed to get by changing our overall policy. Mr. GILPATRIC. I think you are right. I think we ought to show in our fiscal 1954 public works program where we started from and where we end up so you can get some conception of the program and our warehousing requirements. Mr. CURTIS. I again say warehousing is simply one of the many examples in this tremendously complicated supply field. If you are going into a new program like this, you would have to ask for additional money. Mr. GILPATRIC. We will try to do a better job of identifying the budget category in this field when we come up with our fiscal 1954 budget. We are at a point where we can place that into the budget system more readily than we could late last June when you were asking the questions, but when we didn't, I don't think we gave you the information you wanted. (The information requested follows:) Hon. HERBERT C. BONNER, DEPARTMENT OF THE AIR FORCE, Chairman, Intergovernmental Relations Subcommittee, House of Representatives. DEAR MR. CHAIRMAN: During the hearing conducted by your committee at Wright-Patterson Air Force Base on August 19, 1952, you asked me whether or not any savings could be made in the Air Force public works programs for fiscal year 1953 or for fiscal year 1954 as a result of the suspension of interservice transfers of supply responsibilities from the Army to the Air Force. As you are well aware, the Air Force is in a period of rapid expansion: from the 48 wings we had before Korea to the 143 wings approved by the Congress. A good portion of the supplies and equipment needed to support and maintain this greatly enlarged force goes directly from factory to Air Force units; another substantial portion flows through our depot system. Obviously, the warehousing system which had been reduced to meet the relatively small requirements of the 48-wing program was not capable of fulfilling the needs of our new strength. At the present time we have in the continental United States less than twothirds of the warehouse space needed to handle efficiently the technical type of supplies required for our 143 wings. This estimate includes the space that would be needed for the Air Force to house common-use items. As a direct result of this shortage, many valuable goods are stored outside, and our warehouses are filled to the extent that working space and fire lanes have been reduced dangerously. We have a program to correct this condition. Over the next 4 years we hope to provide the minimum space required by the air technical items, but not the common-use items. Even at the end of 4 years, therefore, some open storage must be resorted to. This program may seem to be unduly extended in time, 25062-53-2 but we have adopted it so that more of our funds can be devoted to installations, the need for which is even more pressing than warehousing, and so that our requests to the Congress will be truly rock bottom. As you can see from the foregoing, there is not much immediate hope for reductions in the Air Force's long-range warehouse requirements. We have, however, deleted some warehousing from earlier estimates of our overseas requirements: warehousing which would have been used for common-use items. As a result, our fiscal year 1954 public works program will be $20,500,000 less than it would otherwise have been. Sincerely, ROSWELL L. GILPATRIC. Mr. CURTIS. Thank you, sir. That is all I have, Mr. Chairman. Mr. BONNER. General Rawlings, will you have each of the witnesses identify himself when he gives his presentation so all of us will know who he is? Mr. BROWNSON. Is it understood that each of the witnesses will state when his discussion concerns restricted material? Mr. BONNER. Yes, sir. STATEMENT OF LT. GEN. E. W. RAWLINGS, COMMANDING GENERAL, AIR MATÉRIEL COMMAND, WRIGHT-PATTERSON AIR FORCE BASE Lieutenant General RAWLINGS. We have tried to prepare our presentation so it will be the kind of information you can use directly, and it would only be in relation to questions that might come up where we might get into restricted matter so far as we know at this point. Mr. Chairman, members of your subcommittee, and staff members, I am General Rawlings, Commanding General of the Air Matériel Command, and I would like to say we are most happy to have you with us and to have an opportunity to tell you a little bit about our organization and operation, what we are trying to do here at the Air Matériel Command headquarters in our field organization. We have tried to lay this presentation on such a basis that it would give you a broad understanding of our organization and procedures, and so forth, and it should consume only about an hour without questions. Then we are prepared to proceed however the subcommittee desires. AIR MATÉRIEL COMMAND Wright-Patterson Air Force Base is the home of the headquarters of the Air Matériel Command. We have approximately 20,000 people here engaged in that activity, and in addition to that it is the headquarters of the Wright Air Development Center, where a good deal of the research and development work of the Air Force is directed and carried out. Historically it is the home of the research and development activity of the Air Force, having started out at old McCook Field back in 1917 and eventually ending up at Wright Field here at this base. In addition to those two activities, we have the Air Institute of Technology, which is a part of our air university system set-up for the purpose of giving education to our officers in the technical field of aeronautical engineering and the management aspect of our engineering program. That is located here primarily in order to be near to the technicians at the laboratories, and it also gives them an opportunity to learn first-hand about our operations in that field. We also have located here the general representatives of the Bureau of Aeronautics for the central district of the United States, under Admiral Peal, and he has approximately 100 Navy personnel who work on their engineering production problems in the aircraft procurement program of the Navy and have very close contact with us. Then we have a small joint operation called APRA, which is under the Munitions Board and which is an operation set-up for the purpose of coordinating our technical production procurement problems between the Bureau of Aeronautics and the Air Force. The Army also has representatives on that committee. That is primarily for the purpose of handling materials critical components that are common in our aeronautical programs and that sort of thing. We also have a fighter unit that is located at this base for its protection. MISSION OF AIR MATÉRIEL COMMAND The Air Matériel Command is the Air Force agency which is charged with providing logistical support to the Air Force. With the exception of subsistence and medical supplies, for which we have no supply responsibility, we are responsible to General Vandenberg and to the Secretary for getting the matériel required for effective logistic support to our Air Force combat forces world-wide. As you know, we receive a good deal of help in carrying out this mission from the Army and Navy and General Services Administration in conection with the various aspects of procurement, bulk storage, and maintenance. In the United States, the Air Matériel Command ships supplies direct to Air Force bases, or asks the Army to do so, whereas in overseas areas, we, or the Army, distribute to a theater depot which ships to Air Force bases. We prescribe supply and maintenance procedures which are mandatory upon Air Force organizations world-wide. We do not control the logistics arrangements overseas. These are arranged by the theater commander, subject to directions from the Secretary's level in Washington. Our relationship in the Air Force structure is roughly comparable to that of the bureaus of the Navy or the technical services of the Army, with two exceptions. AIR MATÉRIEL NOT STATUTORY We are not a statutory agency as are the Army and Navy agencies. Secondly, we have a single supply organization within the Air Force, not several bureaus or technical services in the supply system. It is a single supply system. In our general organization we have eight air matériel areas which are geographic in scope, and you will get a detail of them a little later. Our major depots also are at these air matériel area headquarters located at Middletown, Pa., Mobile, Ala., Ogden, Utah, Oklahoma City, Okla., Sacramento, Calif., San Antonio, Tex., San Bernardino, Calif., Warner Robins in Georgia, and the Spokane depot coming into the picture at Spokane, Wash. Currently it is being jointly used with the Strategic Air Command and as one of their new bases comes in we will be able to utilize that with some units remaining from SAC. To man that part of our operation on the 1st of July-actually the 30th of June is the date of the figures-we had 122,231 civilians, 14,490 enlisted personnel, and 1,930 officers, for a total of 138,651 personnel. Each of these depots was built either before the war or early in World War II. So, none of these depots was built since the last war. In addition to that, we have seven specialized depots which are specialized storage depots. They are at Rome, N .Y., Gadsden, Ala., Cheli, Calif., which is outside of Los Angeles, Mallory at Memphis, Tenn., Wilkins, Ohio, Gentile, Ohio, and Topeka, Kans. These depots are manned with 17,256 civilians and 185 officers for a total of 17,441 personnel. These depots were all built during the last war with the exception of Rome, which was in the process of construction as part of the depot system before the war came along. In addition to that, we have six procurement district headquarters generally located in the heart of the industrial centers of the United States. The central is located in Detroit, Mich., eastern located at New York City, midcentral located in Chicago, northeastern located in Boston, southern located at Fort Worth, Tex., and western located in Los Angeles, Calif. The Air Matériel Command organization has been designed generally along the lines of a large business organization, in contrast to the usual military type of organization that you find in most military set-ups. In fact, this is the largest single business organization in the world, probably. The magnitude of our buying effort exceeds in dollar value the total annual buying operations of General Motors, Standard Oil of New Jersey, American Telephone & Telegraph, U. S. Steel, and the E. I. du Pont de Nemours Co. To operate this, you can see from the figures, we have a very high proportion of civilian employees. For example, the total strength as of June 30 within the command was 193,408 personnel, and of that total 168,966 were civilians with the balance of some 25,000 being military. GROWTH OF AIR MATÉRIEL COMMAND Since the start of the Korean action, Air Matériel Command has undergone a very rapid growth. It has been along the lines of growth of the over-all Air Force. For example, in June of 1950 we were at a low ebb as a result of the postwar cut-back. At that time having a goal of a 48-wing program, and the aircraft industry which produces the aircraft that equip our forces was then at a level of 1,000 aircraft deliveries in the year of 1947. The Air Matériel Command was administering at that time about 10,000 active prime contracts with a total face value of about $2 billion, and we had at that time about 103,651 military and civilian personnel. As the Defense Establishment geared itself to meet the attack in Korea and the broader implications of the world situation, there was an increase in all parts of this establishment. Within the course of a comparatively few months, the number of contractual instruments written here increased 66 percent. The dollar value of procurements jumped to $13 billion, which was a 650-percent increase in dollars. In 1 month alone we were trying to get this program moving along to meet that initial threat. In that month, in the period between January and June of 1951 we put out 2,400 contracts with a total dollar value of over $1 billion. Our increase in operations was the result not only of the increased bulk of material being procured, but also of a phenomenal increase in the actual number of separate inventory items required. In 1941, at the beginning of World War II, the separate items of Air Force supply numbered about 90,000, and by the beginning of the Korean war, the number had risen to 408,000. By July of 1952, it was in the neighborhood of 700,000, or almost 800 percent increase over the comparatively simple days of 1941. The reason for this increase lies principally in the increased complexity of the weapons we are procuring. For example, the manufacture of electronic equipment alone in a B-36 requires more in-plant man-hours than it took to build an entire B-29 in the last war. Radar equipment, of course, requires thousands of parts, as you know. In the midst of this tremendous increase in business came the problems that dictated the need for a careful look at our organization to see if we were set up so that we could do an efficient and proper job. So, in January of last year I appointed a committee of senior personnel here at this headquarters, from our depots, from Headquarters USAF, and a man from a management engineering firm of national reputation to take a look at our over-all organization and method of operation, and to see what we could do to improve it. That also stems from the fact that our method of operation was based upon a very high concentration of activity here in this immediate area which meant that we had a lot of people in administrative work to administer and that in case of an all-out expansion, we would have many, many more necessary under that philosophy. This group exhaustively researched every phase of our activities. They made a very careful comparison of our activities with those of the Army, the Navy, and industry. Their conclusion was that a great part of the work being done at this headquarters could be decentralized to the various depots of the Air Matériel Command with a probable increase in effectiveness of our operations, particularly in the field of improving our calculations of requirements and speeding up our paper work. As a result, we undertook a program of decentralization which ultimately resulted in the transfer of about 2,000 civilians and several hundred officers to our various depots in the field. Also, and probably more important at this particular time, by changing our methods of operation, in the case of future expansion, we would be able to do it without further building up of this organization here in this area. This program is about 50-percent complete. It is going to be rough and tough, because any time you start uprooting things and moving them you have a difficult problem, but we think that we are going to make it work and improve our operation. CONTRACTING AT AIR MATÉRIEL COMMAND I would like to offer you a brief but significant comparison of our present program with that of World War II so that you can get a feeling of the comparability. In the fiscal year 1943, which was our largest procurement year during the war, we had a total of 26,355 personnel who were writing and administering a total of 39,913 |