would not be affected if the remedial action taken were confined to the Department of Defense. It is believed that the current Bureau of the Budget regulations and restrictions applicable to civilian agencies amply protect the public interest. Accordingly, the Veterans' Administration's view is that any action to implement recommendation No. 1 be such as would not affect the current regulations applicable to civilian agencies.

RECOMMENDATION NO. 4

"(a) That the Secretary of Defense study and determine whether preauditing of Department of Defense transportation bills is feasible and economic.

"(b) That the General Services Administration make a similar study and determination with respect to transportation bills of the civilian agencies of the Government."

Comments of Veterans' Administration

Subdivision (a) of this recommendation is not applicable to the Veterans' Administration and no comments are indicated.

Subdivision (b) could affect this agency, although it merely provides that General Services Administration make a study and determination on whether preaudit of transportation bills of civilian agencies is feasible and economical. The precise effects on the Veterans' Administration and other civilian agencies, in terms of the results of such a study, cannot be anticipated in the absence of any foreknowledge as to the kind of determinations which would be made following the study.

It may be stated, however, that the Veterans' Administration now preaudits transportation bills prior to payment in its three supply depots and central office. At these points, transportation activities are of sufficient scope to warrant the assignment of transportation operational personnel. Since the most economical rates and routings must be obtained in order to determine the proper mode of shipment, there is at hand at these points the information necessary to audit before payment without incurring delays in payment and without employing additional personnel to perform the preaudit function. It is the experience of the Veterans' Administration that substantial overcharges are corrected before settlement. Under the circumstances, the Veterans' Administration would interpose no objection to the proposed study contemplated by subdivision (b) of this recommendation.

RECOMMENDATION NO. 5

"That all bills of lading used in connection with Government shipments be audited by the General Accounting Office."

Comments of Veterans' Administration

Government shipments are made on both Government and commercial bills of lading. The General Accounting Office only audits Government bills of lading. Since the Veterans' Administration uses very few commercial bills of lading, the adoption of this recommendation would have little effect on our activities. In any event, the recommendation is sound and the type or form of the bill of lading should not determine whether it should be audited. The Veterans'

Administration concurs in this recommendation, assuming that any question of practicability from the standpoint of the General Accounting Office can be resolved.

RECOMMENDATION NO. 15

"(a) That the President direct the Civil Service Commission to revise classification standards for the traffic management series to the end that salaries may be made more nearly competitive with those paid by private industry, and the Government thus enabled to employ personnel of greater competence.

"(b) That to the maximum possible extent, the duplication of military and civilian personnel performing like functions be eliminated."

Comment of Veterans' Administration

The disparities in salaries for transportation personnel which exist as between private industry and the Federal Government have long been recognized by this agency. Along with other agencies, the Veterans' Administration has had difficulty in obtaining and holding qualified transportation personnel due, in large part, to this problem, It would appear that a reappraisal of the classification standards for the traffic management series is appropriate in connection with this very practical problem.

Recommendation No. 15 (b) is addressed to the question of the assignment of military personnel to traffic management positions which are regarded by the Commission as involving essentially civiliantype activities which should be handled, to the extent possible, by civilian rather than military personnel. This part of recommendation No. 15 has no bearing on the operations of the Veterans' Administration.

RECOMMENDATION NO. 20

"(a) That existing laws be modified to provide that civilian agencies now exempted from central traffic management by the General Services Administration be no longer so exempted, except for the movement of the mails or for the movement of security-classified goods.

66

"(b) That the Administrator take the necessary steps to improve the quality of traffic management throughout his organization.

"(c) That the Administrator advise the President as to which agencies should maintain tariff files and where these files should be located."

Comments of Veterans' Administration

This recommendation is applicable to the Veterans' Administration, as it is to the activities of the other Government agencies and departments. The following comments are directed to the alphabetical subdivisions of the recommendation, severally:

(a) The Veterans' Administration is not exempted from the General Services Administration central traffic control. This agency avails itself, to the maximum extent practicable, of the services available from that agency. In the text preceding this recommendation it is stated that the Veterans' Administration employs 12 traffic officials in

its central office and it is implied that this is unwarranted because of the availability of General Services Administration traffic management services. The task force report more nearly approaches accuracy in stating that 12 people charged with traffic responsibilities are employed in Washington and in the field.

It is important that the facts bearing on this matter be correctly understood, since it is indicated in both the task force report and in the report of the Commission that greater utilization of the trafficmanagement program of the General Services Administration would permit the use of these employees in the field where they are needed. It should be pointed out that 6 of these employees are physically located in the field at the 3 supply depots and are responsible for the proper shipment and receipt of goods in and out of those distribution points. Of the 6 remaining positions,which are located in Washington, D. C., 1 has been vacant since July 1954; 4 actually handle all traffic responsibilities in central office and provide procedural advice to the field and technical advice to purchasing agents where transportation is a factor in the award of contracts; and 1 is a staff-distribution specialist with overall staff-distribution responsibilities of which transportation is only a part. It is believed that these employees have contributed materially to the solution of transportation problems in the Veterans' Administration and that this agency has been amply justified in utilizing them for this purpose at the places indicated.

(b) The Veterans' Administration believes that this recommendation merits consideration.

(c) It is believed that General Services Administration should carefully consider the requirements of the various agencies before advising the President as to the maintenance of tariff files by the individual Government agencies. The Veterans' Administration requires a comparatively small, specialized file of tariffs at its three supply depots where there is considerable shipping activity and in its central office where centralized contracts are made. In order to effect shipments in the most economical manner, there are many rules and regulations on the tariffs which must be readily available, as well as rates and routings.

RECOMMENDATION NO. 21

"(a) That the national transportation policy, as set forth in the Interstate Commerce Act, the Civil Aeronautics Act, and the Merchant Marine Act, be studied and revised by the Congress to make it more definite and detailed. When this is done the Government in its capacity as a user of transportation should conform to that policy with respect to its commercial-type traffic.

"(b) That after negotiated rates for Government traffic have been fixed, they immediately be made public except to the extent precluded by national security considerations.

"(c) That the regulatory agencies as necessary, make proper rules and regulations pertaining to movement of classified Government property.

"d) That regulatory agencies dealing with transportation be authorized to request the Department of Defense and the General Services Administration, and these agencies be required to furnish, unclassified facts and statistics to assist them in the performance of their functions."

Comments of Veterans' Administration

Subdivisions (a) and (b) of this recommendation are applicable to the Veterans' Administration, as they are to the other agencies and departments of the Government. Subdivisions (c) and (d) apply only to the regulatory agencies and are therefore not applicable to the Veterans' Administration.

The policies and practices of the Veterans' Administration have, it is believed, been consistent with the national transportation policy. However, this agency would have no objection to a thorough review of that policy by the Congress and such revisions as may be indicated for purposes of definiteness and clarity, in accordance with subdivision (a) of this recommendation.

With respect to subdivision (b), it may be stated that the Veterans' Administration has followed the general practice of making its negotiated rates immediately available to the public. The text preceding the recommendation seems to indicate that its purpose is to terminate any practice of keeping tendered reduced rates pursuant to section 22 of the Interstate Commerce Act secret until actual movement of shipments under the rates commence. The Veterans' Administration is not prepared to go this far in its endorsement of this recommendation, since administrative difficulties and confusion could easily result from making immediately available to all carriers the amount of a reduced rate which has been tendered and acceptance of which is contemplated with reference to a particular onetime shipment. This latter type of situation arises only rarely in the operations of the Veterans' Administration.

General comment

In connection with a general discussion of the volume and cost of Government transportation, the Commission cites certain cases as examples of the need for better traffic management. On pages 7 and 8 of the Commission report appears the following:

An example of unnecessary crosshauling was found in the Veterans' Administration which maintains three depots-Somerville, N. J., Hines, Ill., and Wilmington, Calif. These depots provide storage and issue functions for 235 hospitals, domiciliaries, homes, and offices. About 70 percent of the volume of shipments consists of nonperishable food, and 30 percent medical and general supplies. Nonperishable supplies are purchased from vendors throughout the country, f. o. b. Veterans' Administration depots. These supplies are then reshipped as required to its installations located in each of the 48 States; yet the General Services Administration has 12 stores depots located throughout the country, many of which are considerably closer to the Veterans' Administration consuming centers. Furthermore, the military has 30 subsistence warehouses located throughout the country, many of which are also closer to consuming activities than those of the Veterans' Administration.

It is not to be assumed that such examples are the result of negligence, but as clear evidence that our existing system has not provided for an integration of inventory control, procurement, warehousing, and management direction of transportation so as to avoid substantial wastage of transportation and storage dollars. Someone is paying the cost. It is hard to visualize this someone not being the taxpayer.

The report apparently places a premium on nearness of distribution points to point of use. It has been the Veterans' Administration position that the end objective is to achieve the lowest laid-down cost at point of use, considering all elements of distribution costs. Unquestionably, no matter where redistribution points are located, there is

bound to be some crosshauling since neither agricultural nor manufactured products are produced uniformly throughout the country. It stands to reason that the greater the number of redistribution points the less crosshauling is necessary. At the same time, however, the increased administrative, operating, and purchase costs resulting from the utilization of a greater number of redistribution points may well outweigh the added cost of crosshaul. Obviously, transportation is reduced to a minium when we live off the land. Transportation costs are only one factor in the problem of balance and compromise in achieving the lowest cost and most effective distribution of supplies. It is believed that, at least by implication, the quoted comment from the Commission's report unduly emphasizes the factor of crosshauling costs, without giving sufficient weight to other equally important cost factors.

REPORT ON PAPERWORK MANAGEMENT, PART I

RECOMMENDATION NO. 1

"We recommend that: (a) the President establish by Executive order and direct his top officials to give their support to a Governmentwide paperwork management program; (b) the General Services Administration be given responsibility for general supervision over all phases of paperwork management throughout the executive branch of the Government with a view to simplifying and improving the quality of forms, correspondence, reports, and other documents, eliminating nonessential copies of material, reducing the volume and cost of paperwork that is currently required to be produced, issued, filed, and stored, and standardizing the procedures and practices relating to paperwork management; (c) such staff functions of paperwork management as now exist in the National Archives and Records Service be consolidated into the organization established in the General Services Administration to implement our recommendation."

Comments of Veterans' Administration

This recommendation is, in general, applicable to activities of the Veterans' Administration, as it is to the activities of other agencies and departments of the Federal Government. The following comments are directed to the alphabetical subdivisions of the recommendation, severally:

(a) The principle of a Governmentwide paperwork management program is sound and should be accomplished in the most effective possible way without interference with the proper discharge of agency responsibilities. It has already been recognized, by statute and otherwise, that efficient overall management must include an active program of paperwork management in each agency. For example, section 506 (b) of Public Law 754, 81st Congress, approved September 5, 1950, specifically directs each Federal agency to establish and maintain an active, continuing program for the economical and efficient management of the records of the agency and specifies the basic elements of such a program.

Fundamentally, the objective should be that of insuring that all officials will recognize the importance of this matter and stimulating, through them, a genuine and sustained desire by all concerned to make the paperwork management programs effective and productive of