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Turning to the records problem, I would like to commend to you the task force report on records management inasmuch as it is the first significant treatment of this problem within the Government. It presents some startling revelations about record making and record keeping. For example, it states that Federal records now occupy more than 18,000,000 square feet of space which costs not less than $27,000,000 each year. This is equivalent to the area contained in six Pentagon buildings. This volume of records would require 3,000,000 standard four-drawer filing cabinets worth approximately $154,000,000 at current prices.

Expenditures for record making and record keeping apportioned over the departments and agencies represent a total cost of more than a billion dollars per year. A circumstance of this kind demands the adoption of stringent controls for:

1. The elimination of widespread and unessential duplication of files and filing.

2. The development, issue, and use of forms.

3. The requirements for submission of reports and other publications.

4. The periodic inventory and disposal of existing records.

The third element of the consolidation of services consists of the operation and maintenance of public buildings. This involves the management of over 54,000,000 square feet of Government-owned space and more than 6,000,000 square feet of leased space. It is essential that authority be expanded in a central agency:

1. To control standards of efficiency and management of public buildings.

2. To supervise space allotments in Government buildings in States where there are a number of agencies, excepting the National Military Establishment and the Post Office Department; but with an established cooperative arrangement.

3. To maintain and operate Government buildings.

4. To maintain standard lease and deed forms as well as a record of leases and buildings owned by the Government.

I would like to make one additional point. At the outset I mentioned that a great deal of research and deliberation has preceded the submission of this report to the Congress. The recommendations alone are of little value unless they are appropriately implemented. Bureau shuffling will not suffice. I firmly believe that the provisions of this particular report represent the very best solution of this problem. I feel that I would not be discharging my dual responsibility as both a Commissioner and a Member of Congress if I did not urge you to make a fresh start in providing the President with a newly devised organization for the administration of the housekeeping functions of the executive branch.

Now, if I might comment just a little further, as I understand the bill that we have before us, in it you are attempting to solve this one particular problem only. I am hoping that this bill may be changed; that is, in the wisdom of the committee and the Congress, so that it will fit into the over-all picture of the Office of General Services and Supply rather than to have an administrator and a separate office of supply or service of supply, the separate agency, as you attempt to establish it here, become a part of this general office which would

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report to the Administrator of the over-all Office of Supply and through him to the President.

Sometime ago I received from Congressman Anderson of California a copy of a bill that he had introduced, H. R. 321, to establish a single supply catalog system for the National Military Establishment. Congressman Anderson, as you know, is one of the veteran legislators of the House, and has long been a member of, first, the Naval Affairs Committee and then the Armed Services Committee. Mr. HOLIFIELD. I might say that he is here and is sitting just behind

We do intend to have him testify before the committee at his pleasure.

Mr. Brown. In his bill he certainly has some very good suggestions and recommendations and provisions to meet one angle of this overall supply problem.

Let me say further that our investigation and our study convinces all of us that there has been a great deal of waste and inefficiency in the handling of the supply problem in the various branches of the executive Government. Certainly no business organization would ever attempt to handle supply problems as they had been handled in our Government. I hope that every member of your committee will read and digest rather thoroughly this report of the task force which gives some very interesting information as to some of the things that have been found in the Government.

Mr. HOFFMAN. Which is that?

Mr. Brown. That is appendix B, the Federal Supply System, and it is Task Force Report, January 1949.

To make some extemporaneous comments on that whole supply problem, I would like to point out to the subcommittee that evidently it has been the policy of the Government to conduct all supply operations on the basis or theory that every public official that had anything to do with supply could not be trusted and was rather crooked or prone to be an embezzler or something of that sort. In other words, we have gone so far in our attempts to write regulations and to put into effect certain limitations, restrictions, or requirements on the purchase of Federal supply in order to prevent fraud, that we have actually cost the Government a great deal of money.

Now, for instance, more than 50 percent of the purchase orders or the purchases, let me say, made by the Federal Government are for less than $10 and it costs over $10 to process each purchase order. As I remember the figures it costs something more than $11 on the average purchase order to process that order. Someone will have to buy something for use of the Federal agency that costs $3 and will wind paying $14 for it which is not very good business.

Mr. HOLIFIELD. In other words, the emphasis of the present law, as the report says, is to prevent fraud?

Mr. BROWN. That is right, not to have efficiency of operation.

Mr. HOLIFIELD. What is the specific remedy for that particular point, Mr. Brown?

Mr. Brown. Well, it has been my experience in private life-as you know I operate a number of newspapers-in business where you have branches and divisions you do authorize certain people in charge under certain rules and regulations to meet an emergency and to buy that which may be needed up to a certain cost, perhaps without consultation with the central office and then the invoice, therefore, is checked

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before it is paid and if it is a legitimate purchase, why it is O. K.'d promptly and paid. Of course if the publisher in charge of that newspaper is not using good judgment then we get rid of him or if we find that he did not actually purchase and presented a bill for something that the company did not get, why, of course, he is discharged immediately and that is all there is to that.

The recommendation that we have in connection with that particular problem is to give a little more leeway to the various agencies of the Government and to order or get what they need and also to do away with the necessity for making many of these purchases. In other words, to have a central supply place where you can send quickly and get what you want.

Mr. HOLIFIELD. Where you can draw as a matter of requisition rather than purchasing in the open market?

Mr. BROWN. Yes.

I would like to read to you and it will not take but a minute or two, some of the recommendations we made in connection with supply operation. The recommendations are as follows:

Recommendation No. 1 is to enact legislation which will repeal the conglomeration of existing statutes, clear the books of present restricted and often conflicting decisions in regulations, and provide the basic principles for an effective supply system.

This legislation should be designed to provide a charter for the Bureau of Federal Supply in the Office of General Services and to permit the development of effective and economical Federal supply practices.

The second recommendation is to enact legislation to apply the principles of the Armed Services Procurement Act of 1947 to buying by all agencies.

That procurement act is a fairly good law. This act permits contracts to be negotiated under specified circumstances and conditions, and raises from $100 to $1,000 the ceiling for purchases without competitive bids. In other words, many times the competitive-bid requirement that we have had in the law has just cost so much that when you finally get the article or commodity you want to purchase you have id three or four times what any business concern would pay.

Mr. HOLIFIELD. It involves so much delay and expense?
Mr. BROWN. That is correct.

Such legislation is fundamental to achieving worth-while improvements in supply operations. This authority should be lodged in the President. And when you lodge it in the President, he lodges it in the Administrator, and then he lodges it down in the Bureau Chief, but you can immediately trace the responsibility to the man actually responsible for it.

Mr. HOLIFIELD. In case you did raise that ceiling from $100 to $1,000, is it not true that there would be a tremendous outcry of favoritism in purchasing?

Mr. Brown. That might possibly be one reaction and yet that reaction would be against those, if it was found to be true, that were responsible therefore and probably cure the situation rapidly.

Now, we did raise the limit some time ago, if you remember, for the settling of claims against the Government to $1,000 by each Department and the same argument was made at that time that it

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might result in favoritism but actually there has been practically no complaint of any kind as to that power being abused.

Mr. HOLIFIELD. The General Accounting Office's audit of particular accounts would show very soon a concentration of purchasing with one company?

Mr. Brown. Certainly.

Mr. HOLIFIELD. And it would also show by a matter of comparison as to whether the prices were higher than the current prices at that time?

Mr. Brown. That, of course, would show very quickly.

Recommendation No. 3 is to establish a Supply Policy Committee composed of representatives of the Bureau of Federal Supply and the National Military Establishment to cordinate civilian and military supply operations. You can understand that there are many supplies that are common-use items and are used by the Military Establishment as well as by the civilian branches of the Government, such as mimeograph paper and pencils and pens and all of the thousand and one things which are involved.

Of course, we do want to consolidate into this general supply system the purchase of common-use items but there are other things too that must be taken into consideration. We have had many illustrations during recent years, especially during the war years and at the time we were building national defense, that you would have not only one civilian agency of the Government bidding against another but also the armed services bidding against the civilian divisions of the Government. That should not be because it has a tendency to increase the cost to the Government. It ought to be worked out through some coordinating committee and could very easily be done.

For instance, the Task Force Report on Medical Services, and that is a separate report from this, but it still touches the supply problem because the supply problem does cross all lines in the Government and it applies almost to every division, this Task Force Report on Medical Services recommends strongly that a single agency be established within the medical service to purchase all medical supplies, military and civilian.

Incidentally, there we found that the packing or the bandages for the Army, Navy, and Veterans' Administration were just a little bit different. No doctor could tell the slight difference in size, they were used for the same purposes exactly and there was not any reason in the world for it.

Mr. HOLIFIELD. Of course the cataloging and standardization of these articles of common use is one of the important savings.

Mr. Brown. I want to speak on cataloging, and I think Mr. Anderson's bill has some especially good sections on that. I want to speak on that a little later if I may.

The Supply Policy Committee would try to develop policies and rules on supply operations which would be common to both the military and civilian agencies and to make Government-wide purchase, stores, inspection, testing, and other assignments. It would assign responsibility for special programs such as stock piling and would settle disputes which might arise in connection with the integration of civilian and military supply systems. In other words, to develop this whole program effectively.

Mr. HOLIFIELD. May I interrupt you there and ask you is it necessary for the legislation on this particular phase or could that be set up as an Executive order or a directive from the Administrator.

Mr. Brown. I think it should be authorized by statute, so that at least they would have behind them the authority they need and the power and support of the Congress.

This special committee would also assign responsibility for such programs as stock piling and would settle disputes which might arise in connection with the integration of the civilian and military supply systems. In other words, both agencies would be represented.

. Coordination between civilian and military agencies is particularly important in the development of a standard property identification system and in the development of standard specifications for items of common use, which I mentioned a moment ago, such as bandages, ink, or paper.

For example, in purchasing such items as medical supplies and equipment which are used in large quantity by both the military and civilian establishments, this committee could assign the task of purchasing such items for the Government as a whole to the agencies which are best suited to make the purchases. I think

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agree that some man who is an authority on office supplies might not be an authority on medical supplies and vice versa.

Recommendation No. 4 is to establish a Bureau of Federal Supply in the Office of General Services with competent personnel and clothed with adequate authority to provide the leadership necessary to achieve in the executive branch an efficient supply organization which would also coordinate with the National Military Establishment.

In other words, this Bureau of Federal Supply in the Office of Federal Services would, of course, be primarily this Civilian Procurement Agency.

Mr. HOLIFIELD. As you know, the bill H. R. 2781 does bring the Federal Supply out of the Treasury.

Mr. Brown. That is right.
Mr. HOLIFIELD. And into the Federal Works.

Mr. BROWN. Although I think the bill goes a little further and gives the Supply Division also the disposal of Government property.

Mr. HOLIFIELD. Yes; that is chiefly to take care of the dying War Assets Administration.

Mr. Brown. Mr. Manasco, a member of our committee, is here, and I think another of our reports recommends that the liquidation of these things go over to the agency at least for assignment.

Mr. MANASCO. That is your financial institution.

Mr. Brown. It does take War Assets, does it not. Of course, it is going out.

Mr. MANASCO. It was my understanding that we intended it for the Federal Supply Organization.

Mr. BROWN. To be assigned that duty.

Mr. HOLIFIELD. On that point, do you not think that the same agency that does the major procurement job should also get rid of the residue and distribute the residue to other government agencies before finally coming to the ultimate residue which has to be disposed of?

Mr. BROWN. I think there probably should be and I want to refresh my memory on it because frankly it is difficult to remember all of the details when you sit there for 18 months steadily.

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