HEARINGS

BEFORE THE

SUBCOMMITTEE ON FEDERAL PROCUREMENT

AND REGULATION

OF THE

JOINT ECONOMIC COMMITTEE CONGRESS OF THE UNITED STATES

EIGHTY-NINTH CONGRESS

For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C., 20402 Price $1.25

JOINT ECONOMIC COMMITTEE

(Created pursuant to sec. 5(a) of Public Law 304, 79th Cong.)

WRIGHT PATMAN, Texas, Chairman
PAUL H. DOUGLAS, Illinois, Vice Chairman

CONTENTS

CHRONOLOGICAL LIST OF WITNESSES

Hon. Robert S. McNamara, Secretary of Defense. -

Hon. Paul R. Ignatius, Assistant Secretary of Defense (Installations and

Logistics); accompanied by Paul H. Riley, Deputy for Supply and

Services; John M. Malloy, Deputy for Procurement; and Brig. Gen.

Allen T. Stanwix-Hay, Director of the Office of Technical Data and

Standardization Policy.

Hon. Charles S. Gubser, Representative from California

Vice Adm. Joseph M. Lyle, U.S. Navy, Director, Defense Supply Agency;

accompanied by Dr. Wilfred Garvin, Comptroller_

Hon. Joseph Campbell, Comptroller General of the United States; accom-

panied by Robert F. Keller, General Counsel; William A Newman, Jr.,

Director of Defense Accounting and Auditing Division; Harold H. Rubin,

Associate Director of Defense Accounting and Auditing Division; and

Edward J. Mahoney, Associate Director of the Accounting and Auditing

Policy Staff, General Accounting Office----

Lawson B. Knott, Jr., Acting Administrator, General Services Adminis-

tration; accompanied by H. A. Abersfeller, Commissioner, Federal

Supply Service; Maurice J. Connell, Commissioner, Defense Materials

Service; Howard Greenberg, Commissioner, Utilization and Disposal

Service; Edmund D. Dwyer, Director, Data Processing Coordination

Staff; and Charles W. Gasque, Jr., Deputy General Counsel...

Elmer B. Staats, Deputy Director of the Bureau of the Budget; accom-

panied by Roger Jones, Special Assistant to the Director; George G.

Mullins, Chief, Property and Supply Management Branch, Office of

Management and Organization; Harold Seidman, Assistant Director,

Management and Organization; William Gill, Automatic Data Process-

ing Program; and Cliff Miller, Military Division.............

WITNESSES' STATEMENTS AND EXHIBITS

McNamara, Hon. Robert S., Secretary of Defense.

Letter from Senator Paul H. Douglas to Secretary McNamara, dated

April 8, 1965___

Prepared statement..

Chart: Progress of Department of Defense cost reduction pro-

gram: Recurring annual savings..

10

Buying only what we need........

11

Buying at the lowest sound price.

12

Chart: Contracts awarded on basis of competition as a percent of

total contract awards_

13

Chart: Cost-plus-fixed-fee contracts as a percent of total contract

awards...

14

Reducing operating costs..

15

Table: Department of Defense cost-reduction program..

20

Testimony..

21

Requests reduced by $24 billion_

30

Use of excess on surplus stock..

31

Ten billion four hundred million dollars in excess of surplus

inventory..