CONTROL AND USE OF EXCESS PROPERTY AND RELATED FOREIGN ASSISTANCE PROBLEMS FOLLOWING U.S. MILITARY EXCLUSION FROM FRANCE1966-67 TUESDAY, MAY 30, 1967 HOUSE OF REPRESENTATIVES, SPECIAL SUBCOMMITTEE ON DONABLE PROPERTY OF THE COMMITTEE ON GOVERNMENT OPERATIONS, Nancy, France. The subcommittee arrived at Nancy, France, at 9:50 a.m. and made an inspection, tour of the Nancy Depot, followed by a tour of the Jeanne d'Arc Hospital (between Nancy and Toul), which inspection tours were concluded at 12:30 p.m..' Subcommittee members present: Hon. John S. Monagan (chairman), and Hon. Margaret M. Heckler. Subcommittee staff members present: Miles Q. Romney, counsel; Peter S. Barash, legal assistant. Also present: Brig. Gen. Charles C. Case, U.S. Army, Chief, Supply and Maintenance Agency, European Command; Col. John J. Kiely, Jr., U.S. Army, Headquarters, France Support Group, Orleans, France; Col. H. R. Jones, commanding officer, France Support Group, Verdun, France; Lt. Col. Barney Lawrence, deputy commanding officer, France Support Group, Verdun, France; Mr. George Handy, administrative assistant, Military Liquidation Section, Verdun, France; Mr. Robert M. Gilroy, audit manager, European Branch of International Division, General Accounting Office, Frankfurt, Germany; Mr. Jack K. Woll, Director, Government Property Resources Division, Office of Procurement, Agency for International Development, Washington, D.C., and Col. James F. Dunn, Jr., USEUCOM (J-4), escort officer. Casteau, Belgium. The subcommittee arrived at Chieves, Belgium, at 2:15 p.m. and proceeded by car to the Supreme Headquarters Allied Powers Europe, Casteau, Belgium, where Hon. John S. Monagan (subcommittee chairman) and Hon. Margaret M. Heckler conferred informally with Gen. Lyman L. Lemnitzer, Supreme Commander, SHAPE, until departure at 4:10 p.m. for Brussels. WEDNESDAY, MAY 31, 1967 HOUSE OF REPRESENTATIVES, SPECIAL SUBCOMMITTEE ON DONABLE PROPERTY OF THE COMMITTEE ON GOVERNMENT OPERATIONS, Antwerp, Belgium. The subcommittee met at 9:50 a.m. at the Hoboken/Antwerp Plant No. 1 of J. & M. Adriaenssens N.V./AID, Hon. John S. Monagan (subcommittee chairman) presiding. Subcommittee members present: Hon. John S. Monagan (chairman), and Hon. Margaret M. Heckler. Subcommittee staff members present: Miles Q. Romney, counsel; Peter S. Barash, legal assistant. Also present: Jack K. Woll, Director, Government Property Resources Division, Office of Procurement, Agency for International Development, Washington, D.C.; Paul Scordas, officer in charge, European Office of Government Property Resources Division, Office of Procurement, Agency for International Development; James A. Gibson, Hoboken/Antwerp marshaling site superintendent, Agency for International Development; Frank M. Mikus, audit manager, European Branch of International Division, General Accounting Office, Frankfurt, Germany; Joseph L. Adriaenssens, president, J. & M. Adriaenssens Ñ.V., Antwerp Belgium; Hon. Charles Thomas, U.S. consul general, Antwerp, Belgium; and Col. James F. Dunn, Jr., USEUCOM (J-4), escort officer. Mr. MONAGAN. The hearing will come to order. Mr. Woll, I think what you want to do is explain briefly what your agency is doing here. You may proceed. STATEMENT OF JACK K. WOLL, DIRECTOR, GOVERNMENT PROPERTY RESOURCES DIVISION, OFFICE OF PROCUREMENT, AGENCY FOR INTERNATIONAL DEVELOPMENT, WASHINGTON, D.C.; ACCOMPANIED BY PAUL SCORDAS, OFFICER IN CHARGE, EUROPEAN OFFICE OF GOVERNMENT PROPERTY RESOURCES DIVISION, OFFICE OF PROCUREMENT, AGENCY FOR INTERNATIONAL DEVELOPMENT; AND JAMES A. GIBSON, HOBOKEN/ANTWERP MARSHALING SITE SUPERINTENDENT, AGENCY FOR INTERNATIONAL DEVELOPMENT Mr. WOLL. Mr. Chairman and members of the committee, it is an honor and a pleasure to have you visit the Agency for International Development's Antwerp marshaling site. This is where we rehabilitate U.S. Government-owned excess property that we have acquired primarily from military sources for reutilization by the U.S. Government in our foreign aid program. We started this operation in November of 1964, when we were unable to obtain rehabilitation capacity from the U.S. military. This contract went into operation in November of 1964 and through March of this year this installation has received $28,756,000 in acquisition cost, of which $18,887,000 has been rehabilitated. Of this $18.8 million we have outshipped for use in AID's projects and program around the world $17,776,000. Mr. MONAGAN. Where is the other $10 million? Mr. WOLL. Yes, that is right. (Subsequently, AID furnished the following information :) Fiscal year 1966: 698,000 per month; 7,703,000 per annum. Fiscal year 1967: 894,000 per month; 8,047,000, 9 months. Shipments: Fiscal year 1966: 598,000 per month; 7.174,000 per annum. Fiscal year 1967: 1,030,000 per month; 9,272,000, 9 months. Cost per hour: 3.32 skilled; 2.82 semiskilled. 7, 255, 000 $10, 841,000 28,756, 000 17, 776, 000 18, 887, 000 Payments to AID contractor, Antwerp, Belgium-Continued Mr. WOLL. Originally, when we signed our first contract here, the skilled labor rate was $2.85 an hour. From November of 1964 costs have risen so that we now have a skilled labor rate of $3.32 an hour. We are getting to the point actually of-well, we just can't go very much higher and still maintain the integrity of our revolving fund. When I say that I am referring to the 15-percent average surcharge. Mr. MONAGAN. Does this wage rate include fringe benefits? Mr. WOLL. This is the direct wage rate. Mr. MONAGAN. And there are fringe benefits on top of that? Mr. SCORDAS. Not on top of that. It is included. Mr. WOLL. It is included. Mr. MONAGAN. I mean things like their Blue Cross, paid vacations and so on, the fringe benefits. Mr. WOLL. It is included in the average hourly rate. Mrs. HECKLER. How does that compare with the domestic labor rate? Mr. WOLL. It is considerably lower. In our domestic operations the Army is our agent and we use their contractors and our average rate in the States runs from $5 to $10 an hour. This includes overhead, management and everything. Mrs. HECKLER. Why did you choose to have a rehabilitation center in Belgium? Mr. WOLL. For various reasons. No. 1, this city is a port city and it is extremely advantageous to be able to rehabilitate the property and not have to pay for long hauls to another port. No. 2, there is a sufficiency in this country of skilled mechanics, which we need. And No. 3, this country is susceptible to barter. This contract is under the barter arrangement to preclude the outflow of gold and assist the balance-ofpayments situation. We found through the Commodity Credit Corporation that the countries of Germany and France were not susceptible to barter. So our only eligible places in Europe would have been Spain, Italy, or the Benelux countries, and as far as Spain and Italy were concerned we already had an operation going in Spain and very little property is generated there; so if we had to take property from Germany and take it to Spain it actually would have cost quite a bit. This, generally, is why we settled on this country and this city. As of March 31 our weekly hourly total was approximately 6,200 hours a week. Our program goal for this operation here will be 9,000 hours per week. We hope with this goal of 9,000 hours per week that our average monthly production will run $2.5 million acquisition cost. This will give us a total output yearly of $30 million, which we feel is a very sizable operation. We have been in the past very well satisfied with the quality of work performed here. The contractor has gone out of his way to do everything he could to make this a successful contract, and I feel he has taken a good deal of pride in being a contractor for the U.S. Government. This particular plant here we call plant No. 1, and the type of work that we do in this plant is the rehabilitation of gasoline-engine-driven equipment. Plant No. 2, which I hope you will see later on today, is located down by the docks, and this is where we do the heavier equipment, diesel-engine-driven equipment and roadbuilding equipment, tractors, graders, and so forth. Right at the present time we obtained approximately 1,100 jeeps. The chairman and members of the committee saw a good many jeeps at Germersheim. We obtained 1,100 jeeps from there not long ago and we have a production line running at our plant No. 2. Rather than doing the work here and pulling all these jeeps up here, we felt it would be cheaper to do it at one installation and thereby cut down on the cost involved. Is that right, Paul? Mr. SCORDAS. Right. Mr. WOLL. Mr. Chairman, I think this is a brief general rundown. I will be glad to answer any questions. Mr. ROMNEY. Do you have a copy of the Adriaenssens contract that AID has entered into? Mr. WOLL. This is the contract [handing document to Mr. Romney]. Mr. ROMNEY. Is this the entire contract? Mr. WOLL. Are all the amendments in it, Paul? Mr. SCORDAS. Yes. Mr. ROMNEY. Can we have a copy of that? Mr. MONAGAN. We will receive a copy for the file and such portions as may be pertinent may be made a part of the record at the appropriate point.1 Mr. WOLL. Very good, sir. May I supply this contract and the amendments when we return to Washington? Mr. MONAGAN. Of course. Mr. ROMNEY. Do you have a copy of the latest catalog of excess property? Mr. SCORDAS. I have them in Frankfurt. 2 Mr. ROMNEY. Does the catalog indicate the location of the property so that the property in this plant would show up in the catalog? Mr. SCORDAS. Yes, sir. Mr. ROMNEY. Do you have a copy of a recent work order that has been completed? Mr. WOLL. Yes, we have old and new ones. Mr. ROMNEY. Mr. Chairman, I would like to suggest that we might take some examples from the work orders and then ask to see individual pieces of equipment that are to be shipped out, and pick out two or three of different categories and then have an opportunity to look at them physically. 1 The contract with amendments is printed as app. 3, infra. A copy of Foreign Excess Property Catalog No. 6, Mar. 31, 1967, from EPRO 4 (Frankfurt, Germany), was received for the files. |