Legally, I presume you are right. But I am just thinking of where we lose some money. It is going to cost us $48,000 more, first because this little guy—if he threw out the bids, which maybe he wanted to, somebody would say to him, "We had $500,000 to do this job, and now we lost it, and now I have to get it again." So the heat is on the little guy. Secretary JOHNSON. No, sir; I don't believe that would be the motivation. Mr. MILLER. You don't believe it; we have had some cases like that. Secretary JOHNSON. Was this a sealed, fixed-price bid? Mr. MILLER. A sealed, fixed-price bid; yes. Secretary JOHNSON. Of course, that is governed by very strict regulations. The bid must be responsive. In this case, as you say, it was not. Mr. MILLER. I say a minor item that was covered fairly successfully in other items. That is why it wasn't filled in. An item that had to do with painting some trim around doors. But other items also called for this painting. I don't want to go into the merits of the case specifically. I am citing this as a hypothetical case and not as a specific case. Secretary JOHNSON. I am not familiar at the moment with this specific case, but my viewpoint would be that we can't place in the hand of anybody, no matter what level, the opportunity to say, "Well, I don't like this bid." If you say you can accept a bid without specifics, to what extent can he accept them without specifics, that is, without their meeting the specifications? I would not like to be in the position of having to do that myself and to ask a vast number of people around the country to exercise that kind of judgment. That would not be in the interest of the Government, in my opinion. Now, in this case the specification might have been a slight one, as you state. On the other hand, who makes the judgment as to whether the deviation is slight or great? Mr. MILLER. Well, I appreciate that. I appreciate in this particular case there is an increment of $48,000. That is pretty good. But on the other hand, again comes the factor that enters into it, that you were trying to beat a deadline of the end of the fiscal year. Now, no one in authority-you are going to deny, right down the line in the Pentagon they are going to deny it, but unfortunately some of the little guys talking in the field don't deny that the heat is on them to "get this contract in before we lose the money." I have been an administrator in State office. I know how we used to go out and spend our money in a hurry because it went back to the legislature and if you showed a surplus you were going to have your budget cut that year. It was wrong. And it is still wrong. I point that out as one of the things that I think we have to take a look at in this whole procurement system, that we are spending money and spending money unnecessarily quite frequently to beat the fiscal year. That is what took place in this case, because the man 29137 0-59 was told to get the contract and to enter into a contract by June 30. Now, I have the thing before GAO. I am not afraid of that. We are going to take a look at it. Secretary JOHNSON. Yes; I was going to mention that. Mr. MILLER. To see what has happened. Secretary JOHNSON. No one-I wouldn't at least, and I am sure no one else would deny that when Congress appropriated money to be used and approves a program for using it, we do our best to accomplish that within the time limit set. Mr. MILLER. That is right. We also have reversions and we know we never like to lose money once it has been appropriated, although money may be appropriated against contingencies, but we must never save money through allowing money to revert back at the end of a fiscal year. Mr. HÉBERT. Mr. Courtney, have you any further questions? Mr. COURTNEY. I have no further questions of Mr. Johnson at this time, Mr. Chairman. General, you have a short statement? General ENGLER. Yes, sir. Mr. COURTNEY. First, identify yourself for the record, General, please. General ENGLER. Mr. Chairman and members of the committee, I am Brig. Gen. Jean E. Engler, the Director of Procurement, Office of the Deputy Chief of Staff for Logistics. As part of my duties I am responsible for the development and issuance of such procedural directives as are necessary to implement the Armed Services Procurement Regulations at the Department of the Army level. In carrying out this responsibility our goal has been first to keep such implementation to the minimum and to only implement to the extent required to maintain effective control and guidance over our procurement operations in the Army, and secondly to insure that the directives which we do issue conform to the requirements set forth in the Armed Services Procurement Regulations. Now, realizing that we have a twofold responsibility here, I have within my organization assigned an individual the dual responsibility of serving as a member of the Armed Services Procurement Regulation Committee and also as the supervisor, having supervisory responsibility, over the preparation of the Army procurement procedure. In this way I feel that we are better able to insure that our implementing instructions are consistent with the purpose and intent of the basic Armed Services Procurement Regulations. As Secretary Johnson has indicated, the Army has prepared a presentation which we believe will give the committee a complete picture as to how our procurement regulations are developed and issued and also as to the types of training programs which we maintain for the purpose of training our procurement personnel. In the preparation of this presentation to the committee, and in order to make the presentation more meaningful, we have arranged it so as to first touch on the organization and operations of the Armed Services Procurement Regulation Committee, since most of our im plementing instructions stem from the Armed Services Procurement Regulations. We then plan to follow this by a discussion of the method employed by the Army to develop and issue its implementing instructions and other regulatory material in the field of procurement. Then we propose to follow this with a presentation of the various training programs which we have established to provide for the education of our procurement personnel. The presentation on the procurement regulations and regulatory material will be made by Mr. Emanuel Kintisch of my staff, who is the individual I previously mentioned as the Army policy member of the Armed Services Procurement Regulation Committee and who also is in charge of the review and release of material for publication in the Army procurement procedure. I also have here Col. Bernard S. Waterman, the commandant of the Army Logistics Management Center at Fort Lee, Va., who will discuss the Army procurement training programs. In Mr. Johnson's opening statement he mentioned the procurement panel. I also would like to briefly touch on this panel for, with the exception of Secretary Higgins who is out of the country, the members of the panel are here at the front table this morning. Colonel Thybony, on my right, is a member of the panel. Mr. Kintisch, on my left, supports the panel. And Mr. Lazure, on my far left, is a member of this procurement panel. The panel has now been in existence for 3 years and I have been on the panel for the past 2 years. The purpose of this panel has been to go around the country and to set up regular meetings with the actual contracting and procurement people who do the job in the field. Our purpose has been to discuss the problems of procurement with these individuals and to give them broad and ample opportunity to discuss their problems with us. Basically, what we want to do is find out wherein lie the areas of confusion or misinterpretation or difficulty with the instructions that have been promulgated to the field, and based on our discussions with our contracting people to attempt to better the situation, insofar as such instructions are concerned. We do feel that these sessions have been very helpful to us, and we hope that they have been helpful to the people who actually do the procurement. The indications are that they have been. Mr. Chairman, the presentations which we have established first on the ASPR and the regulatory material which we publish and then that on training consume approximately 35 minutes. Mr. Kintisch is prepared to lead off with a presentation covering the Armed Services Procurement Regulations, to give you a brief picture of this area, and then follow with a discussion of our implementing instructions. If the chairman will permit, I will introduce Mr. Kintisch and allow him to proceed with his part of the presentation, provided there are no questions, Mr. Chairman. Mr. HÉBERT. I just want to ask one question, General. I had intended to ask Mr. Johnson this. Is there any unified purchasing in the Army area as related to the other services? General ENGLER. Yes, sir. Mr. HÉBERT. They are all combined in central purchasing. In which area are they, or will that be developed later? I think it is important to know. General ENGLER. I can answer the question now, Mr. Chairman. Mr. HÉBERT. Fine. General ENGLER. We do have, of course, a single-managership operation in both the clothing and textile area and in the subsistence area. This means the Army has a single-managership responsibility and this means the Army does all the procurement of clothing and textiles for all 3 services as well as doing the procurement of the food or subsistence of all 3 services. In like fashion, the Department of the Navy has a responsibility in single managership in the medical area. Now, in addition to this single-managership responsibility we also have certain single-service purchase assignment responsibilities. As an example, we in the Army do all of the procurement of automotive items for all three services. This is an example of the type of single-service purchase assignment responsibilities. Mr. HÉBERT. That is what I had in mind. General ENGLER. Yes. Mr. HÉBERT. In those areas the Army then purchases textiles, clothing, food, and automotive equipment or supplies. General ENGLER. Yes, sir. I have given in the single purchase assignment area only the automotive items as an example. There are many items which are assigned for single service purchase responsibility to the various services. Mr. HÉBERT. I would like the record to show-if you don't have it now, supply it for the record-every single purchase which the Army is responsible for, and we will ask the other services (The information is as follows:) Includes: Those compounds which contain Ethylene Gly- Excludes: Ethylene Glycol in pure form for use as a cool ant in aircraft. 4230 P 4240 P Decontaminating and Impregnating Equipment..... Army Army 6630 P Includes: Military Respiratory Protective Equipment Army 6640 P Includes: Instruments peculiar to Chemical Warfare, only. Army 6665 P Includes: Chemical Laboratories (Assembled Outfits). Army 6810 P Includes: Military Gas Detection Devices. CW; and La- Army Includes: Agents Decontaminating; and Calcium Hypo- 6820 P Dyes.... Army Includes: Dyes peculiar to Chemical Warfare Equipment Includes. Training Aids related to Chemical Warfare Includes: Components peculiar to Construction, Excavat- 2530 P Vehicular Brake. Steering Axle. Wheel and Track Com ponents... Includes: Components peculiar to Construction, Excavat- Army |