Representative CURTIS. Just so that we will have in the record what we are talking about, and I have had these before and I have made some speeches on the floor of the House. This is a document that is 234 pages, and that is about what they are each month, and I have just roughed out roughly 120 items on each page and if you multiply that out you have about 30,000 items. Then you take a look at some of these items; some of them in there are worth a million dollars each. I will grant you not too many, but there are some like that. There are others that may be only worth a couple of cents each, but they are in terms of million quantities. Just a review of this list, and asking the question how did that ever get in the garbage pail, makes one wonder or certainly makes me wonder about our procurement practices. I am a little bit concerned of calling too much attention to the garbage pail method of judging procurement. Having served in the military for 4 years in World War II, I found one way of disposing of surplus property, and that is to chop a hole in the bottom and put it under the water. I have seen it done. I have seen holes dug where surplus property is buried. I do not want to encourage the military to dispose of surplus property in that fashion, so that it will not show up in the garbage pail and questions will be asked. I am anxious to improve our surplus property disposition methods, and I think we can improve them considerably. I hope a way to correct the contents of the garbage pail is to go over this kind of list and then dig into the procurement practices which created it. I know that top ranking generals and admirals come before the committees of Congress and defend this system, in the light of this glaring evidence that it is not working efficiently. They make a constant defense of each little thing, saying this is right and that is right and make constant resistance to the actual edicts of Congress, the laws of the land which have been passed to correct these inefficiencies. They avoid trying to carry out some of these things that Congress has looked into time and time again, and says this must be stopped. They have been ordered to stop and as soon as whoever has issued the order goes out of the Defense Department as a civilian Secretary or Assistant Secretary, they start up all over again. I have been in it now for 10 years. Enforcement of discipline at the high level in my judgment probably is the answer. There may be good to be attained in a court-martial of a top ranking admiral or general who has been subverting this. Maybe that would be the best way to stop it right down the line. I am hopeful that in these studies we will be able to pinpoint the thwarting of the will of Congress a little more. INTEREST OF JOINT ECONOMIC COMMITTEE If I may, Mr. Chairman, because I was not here this morning, I did want to get my views in why it has become necessary for the Joint Economic Committee to get into this area. In our special studies under the special staff into the problem of economic growth, employment, and price stability, time and again in the committee hearings and the papers prepared for us, it was pointed out that military procurement being so large affected the economy in our recessions and certainly affected the orderly growth of the economy of this country. IMPACT ON SMALL BUSINESS We see its impact in the small business sector. I have always argued that the basic reason for the Small Business Administration is because when the Federal Government must go into the market heavily in military procurement. By nature-and this is not said in adverse criticism the military procurement officers will deal with the larger companies in preference to small concerns. They are more sure and there is no criticism if a contract with General Motors might go wrong. But when something in a contract with a good, small company in St. Louis, Mo., whose name is not widely known, goes wrong, they say "Why did you ever deal with the company?" I think it is necessary in these periods of big Federal procurement to try to maintain the orderly balance that normally exists in our economy between the big companies and the small companies. The small companies are our growth companies, the new companies, the ones that are trying to show through their efficiency and right ideas that they are entitled to become larger. So it becomes important there, to keep that balance. Offshore procurement is another very big factor. I doubt if we will have time to touch it. But it is a very important thing in the Federal Government's expenditure picture from the standpoint of the objectives of both our defense and building the economies of friendly countries abroad. This question of "buy American," the exception to the Reciprocal Trade Act where we get into considerations of defense. Procurement practices, are altered even to the extent that depressed areas are granted in many instances special consideration, which well might be a good thing. This whole subject is so large in our economy that it becomes necessary, I believe, for a committee such as ours, which is not legislative, to look into it, to try to get the bigger picture. SYSTEMS, NOT INDIVIDUALS, AT FAULT I want to say as these hearings go on, at this time, that although my remarks and I have already made some which are adverse criticism towards some of the practices of some of our military leaders-I do not want to have my remarks really in that context. I am not criticizing individuals as much as I am criticizing systems. I think the very men that I might criticize as individuals are splendid people. But I look for errors in the system. I am convinced that the system is not right and that much can be done to improve it. As these hearings go on, if I am critical, and I will be, I do not want it to be taken in any personal sense at all. I was introduced to this subject during the 4 years when I was in the Navy in World War II. It is a most difficult job. The ablest men that we have in our country would be making mistakes and will constantly make mistakes. I do not object to mistakes being made. NEED TO PREVENT REPETITIVE MISTAKES What I object to is this infernal insistence that mistakes do not occur and then covering up and hiding them and a refusal to see the mistakes and learn by them so that we can improve this system. Senator O'MAHONEY. Will the Congressman yield? Representative CURTIS. Yes. I have just finished, Senator. Senator O'MAHONEY. Congressman Curtis, I would like to ask you with respect to that garbage pail you have been talking about, what the definition of it is as it stands there before you? Is it signed by anybody? Representative CURTIS. Yes. This garbage pail inventory, no. This is the Department of Defense, excess property, and it has their seal on it, and it has a cancellation date on this one which I am just using as a sample. The April 1958 has a cancellation date of August 1, 1958. This other one, a more recent one, apparently they have changed the format, January 1960, is actually signed by Herman C. Hangen, director of Armed Forces supply support center. That has a cancellation date of May 1, 1960. Senator O'MAHONEY. Is he still in the Government? Representative CURTIS. I presume he is. This is 265 pages as opposed to 234 pages. Senator O'MAHONEY. Will the Congressman read the first paragraph on the front page? Representative CURTIS. "This index of DOD excess personal property is issued by the Utilization Division, Armed Forces Supply Support Center, Washington 25, D.C., under authority contained in Department of Defense Directive 5154.14 and Department of Defense Instruction 4160.9." (The material referred to follows:) June 23, 1958 ASD(S&L) Department of Defense Directive SUBJECT Establishment of the Armed Forces Supply Support Center (a) DOD Directive 4000. 8, Basic Regulations for the (b) DOD Directive 5126. 1, Assistant Secretary of (c) DOD Directive 4130. 2, Development and (d) DOD Directive 4120. 3, Defense Standardization (e) DOD Instruction 4140. 12, Utilization of Depart- (f) DOD Directive 5126. 14, Department of Defense AUTHORITY, PURPOSE AND INTENT A. Pursuant to the authority contained in the National II. III. B. C. The purposes and objectives of the AFSS Center are: 1. 2. 3. To provide the most effective and economical administration of certain common supply functions of the military services. To promote and coordinate integrated supply management among the military services concerned with common materiel. To develop means for the elimination of any undesirable inconsistency, duplication and overlapping among supply operations of the military services, and for the elimination of any unnecessary administrative procedures. The AFSS Center will not engage in the determination of materiel requirements, or in procurement, inventory control, storage or distribution operations. MODIFICATION OF DIRECTIVES This directive modifies the provisions of references (c), (d) and (e), which will be changed accordingly. DEFINITIONS A. B. Commercial items of materiel - those items required by the military services, which are generally used throughout the civilian economy and which are available through normal commercial distribution channels (frequently referred to as "off-the-shelf" items). Non-commercial common items of materiel - those items |