The 14 Staff Agencies indicated in the organization chart formulate and direct execution of plans, policies, and procedures as they relate to their respective functions.

Inasmuch as this discussion deals primarily with procurement functions within Services of Supply, the accompanying supplemental chart shows no divisional structures unrelated to procurement policy making or services. Thus it may be seen that the Assistant Chief of Staff for Matériel, assisted by the Director of Procurement, supervises the following staff divisions:

(a) Requirements Division.
(b) Resources Division.
(c) International Division.
(d) Purchases Division.

(e) Production Division.

Supply Services which are responsible for actual procurement of equipment and supplies consist of the following:

(a) Office of the Quartermaster General.

(b) Office of the Chief of Chemical Warefare Services.
(c) Office of the Chief Signal Officer.

(d) Office of the Chief of Engineers.
(e) Office of the Chief of Ordnance.
(f) Officer of the Surgeon General.
(g) Transportation Corps.

Inasmuch as the five major Staff Divisions under direction of the Assistant Chief of Staff for Matériel evolve all broad phases of procurement, supply policies, and programs, they may be termed the Army's purchase planning division. Each Staff Division is headed by a Director under whom range the various branches and sections responsible for specific phases of the over-all divisional function.

No attempt has been made to explore details of the organizational structure below division levels. An abstract of the functions of each Staff Division, however, is offered.

The Assistant Chief of Staff for Matériel and Director of Procurement share equal responsibility in representing the Commanding General, Services of Supply, on matters relating to procurement, production and the determination of Army requirements. With the exception of aircraft problems, it is their duty to prepare and maintain the supply program and supervise procurement and production

activities.

The Requirements Division acquires and consolidates current information on finished supply and equipment needs of the Army, and initiates action necessary to realize these needs.

The Resources Division renders assistance on material allocation and distribution to the War Production Board which rules on the

former's raw and basic industrial material requirements of the Army. This division also determines supplies of critical materials that are available. The Production and Requirements Divisions are advised of potential shortages against the possibility of substitutions and necessary supply program adjustment.

The International Division develops and presents to the Resources Division, and to others interested, data on United Nations' requirements of munitions. Thus, provisions may be made for procurement of assignment of munitions to them.

In conjunction with the Supply Services, the Purchases Division develops policies and procedures relative to placing supply contracts with manufacturers. By following actual procurement operations, it assures swift placement of contracts according to established practice. Policies and procedures necessary for obtaining supplies and equipment from the time contracts are placed until finished products are accepted and developed by the Production Division. Production operations are surveyed to guarantee execution of established policies and procedures, and to allocate materials and facilities in a manner that will promote completed production in quantities and at the time. required.

Supply Services perform dual functions. They procure supplies and equipment and train men. Each Service trains officers and troops and furnishes or assigns them to appropriate Service Commands and field forces of the Army. In connection with actual purchasing, each Service must see that quantities required are on hand when and where required by the Army.

Listed below is each Supply Service together with the general categories of commodities it purchases:

The Office of the Quartermaster General purchases food, clothing, furnishings, equipage, and other items of a general nature used by two or more of the Supply Services.

The Office of the Chief of Chemical Warfare Services purchases smoke and incendiary materials, toxic gases, chemical weapons, protective equipment, tools, equipment, and machinery for chemical warfare manufacturing activities. The Office of the Chief Signal Officer purchases radio communication equipment, telephone, telegraph and meteorological equipment, photographic equipment, pigeon equipment, coding and cipher devices, including secret inks. The Office of the Chief of Engineers purchases floating and fixed bridges, heavy construction equipment of all kinds, surveying and map reproduction equipment, camouflage materials, searchlights, barrage balloons, demolition equipment, railway equipment, firefighting equipment, gasoline and fuel oil distributing equipment.

The Office of the Chief of Ordnance purchases tanks, trucks, artillery, small arms, ammunition, bombs, grenades, ordnance material and raw materials and facilities including machine tools for production of ordnance items. The Office of the Surgeon General purchases biologicals, drugs, chemicals, medical, dental, and laboratory supplies, surgical appliances and dress

ings, veterinary equipment, mess equipment, X-ray machines, physiotherapy equipment.

The Transportation Corps does not concern itself with actual purchase, but is responsible for securing transportation for troops, equipment, and supplies whenever and wherever needed, and for arrival at destination at the time required.

Each Supply Service has procurement districts within the United States set up on the basis of location of manufacturing centers and supply sources for materials under its jurisdiction. Supply depots are maintained for storage, distribution, repair, and salvage of items procured. Supply Services relate requirements to a quarterly supply program, subject to adjustment to varying demands during the period. A typical example of this procedure is procurement of a quarterly requirement for gas masks by the Office of Chemical Warfare Services. After the requirement is established, certain quantities of the estimated total are decentralized to the various procurement districts, and the quotas purchased from various manufacturers.

Normal requirements for the Army are secured by advertising for competitive bids and awarding to the lowest qualified bidder. Other than normal needs are procured on a negotiated basis pursuant to emergency wartime legislation and Executive order of the President. In negotiating contracts for articles not ordinarily in commercial production, consideration is given to time of delivery, manufacturer's facility to produce, and avoidance of concentrating contracts in any one specific area. Cost-plus-a-fixed-fee contracts are employed whenever it is important to rush work otherwise delayed by development of designs and plans necessary for lump sum proposals. Purchases of not more than $500 for emergency requirements may be made without invoking competition and written contract agreement. A purchase order is used in this type of transaction. Of items readily available in an immediate vicinity and where no special advantage can be gained by consolidation and procurement by a Supply Depot, local purchases are made at the numerous Army posts and stations throughout the United States. Generally, these purchases consist of perishable subsistence requirements, maintenance and repair materials, and other special items not procured at central purchasing sources.

First War Powers Act, sec. II, title 201, December 18, 1941; Executive Order No. 9001, December 27, 1941.

Chapter XI

NAVY DEPARTMENT

1

Magnitude and diversity of requirements distinguish the Navy Department as one of the major procurement agencies of the Government. So enormous has the task become that an Order 1 was recently issued by the Secretary of the Navy establishing an Office of the Chief of Procurement and Materials to coordinate all procurement activities of the Department, and supervise programs for the procurement of ships and materials.

The Bureau of Supplies and Accounts is the over-all procurement authority of the Department of the Navy. Sharing certain of its purchasing functions are Bureau of Aeronautics,2 Bureau of Medicine and Surgery, Bureau of Yards and Docks,3 Bureau of Ordnance,* Judge Advocate General's Office, Bureau of Ships, Headquarters United States Marine Corps, and Navigation," now Bureau of Naval Personnel (see functional chart of Navy organization).

The Bureau of Supplies and Accounts under direction of the Paymaster General of the Navy is responsible, with a few exceptions, for all purchases of materials, their receipt, custody, warehousing and issuance. The exceptions are stated elsewhere herein. Procurement, however, is not the exclusive function of the Bureau of Supplies and Accounts. Hardly the least of its duties are: preparation and submission of estimates for freight, fuel, clothing, and subsistence requirements; disbursement of funds for naval and civilian pay rolls and all purchases made by the Navy; maintenance of accounts and property records of the various naval establishments; audit reports; organization of details to duty of the Supply Corps. This study devotes itself only to that part of the functions relating to procurement.

It would be difficult to imagine anything within the range of existing materials that the Navy may not be required to purchase. In this respect naval requirements may be likened to the common needs of urban society; to which add technical and professional requirements such as ships, guns, precision instruments, ammunition, and those requirements originating in the several large shipbuilding and manufacturing establishments which the Navy maintains.

1 General Order 166, dated January 30, 1942.

'Act of July 12, 1921 (42 Stat. 140; 5 U. S. C. 439).

* Act of July 5, 1862 (12 Stat. 510; 5 U. S. C. 429). 4 Ibid.

'Act of July 5, 1862 (12 Stat. 510; 5 U. S. C. 429).