This chart [pointing] presents a comparison between the cost of doing operations in commercial enterprises for certain types of commodities as compared to our general-stores system. In 1950 our average cost of operations ran around 18.7 percent. By increasing our volume in 1951 it was 14 percent, because the volume was still low. By increasing our volume, we hope to bring that down to 8.7 percent. In the case of commercial retail trade the average of these items here is 23.7 percent. The commercial wholesale average for these items in commercial channels is 13.7 percent. So our cost of operation now is at about the average of the wholesale costs of commercial operations. By increasing the volume of business we will bring it down, if we are permitted to get this $5 million restoration so that we can get more space and have additional people to fill these orders as they come in. We believe that will bring the cost of operations in handling supplies down to 8.7 percent of the cost of the supplies. I might say that these commercial costs were stripped of taxes, insurance, interest, and so forth, to make them comparable to the Government's costs. Senator SALTONSTALL. Let me ask you this: Have you overinventoried anything? I will not go into that now because we did go into it last year. There was then the matter of desks. Have you overinventoried on anything now? Mr. LARSON. The answer is "No." We did not overinventory desks last year. We just did not have storage space to put those desks at the rate they were being delivered. They have all been utilized and at a price which was under the price that desks eventually got to. Senator SALTONSTALL. Off the record. (Discussion off the record.) CONTROL OF INVENTORY LEVELS Mr. LARSON. On the record, General Services Administration has as one of its primary justifications for existence the control of inventory levels. Now, that is why we are asking for the restoration of funds in what we call our supply management operation. We will then have people available to go in and examine an agency's inventories to see whether they have too many oyster forks or too many mattresses and too many pillows, and that sort of thing, which take up bulky, expensive storage space. The Administrator of GSA has the authority, under Public Law 152, to issue a directive which will freeze an inventory at a certain level. In that connection inventories in 21 agencies were reduced over $24,000,000 during the year ending December 31, 1951. We are bringing in gradually excess inventories from other agencies. We propose to bring them in and put them into this general stores system and to distribute them from there, eliminating the necessity of keeping anything but a small working level in the operating agencies. That is the whole theory behind the central supply system. Our inventory in general stores will be turned over three times in 1952, about three times. We hope to get that up to close to four times in 1953 if the restoration is granted. Senator MAYBANK. Are there any further questions? ARCHIVAL DRAWINGS, EXECUTIVE MANSION Senator SALTONSTALL. I would just like to ask why, Mr. Chairman, they want the full amount requested for the archival drawings of $40,000. Mr. LARSON. I would like to have Mr. Reynolds speak on that. Mr. REYNOLDS. That is an estimate that was prepared for us by the architect of the White House. We have reviewed it recently, and we feel that through some little savings that we can make, and some work that we have aiready done, that item can be reduced to $20,000. Senator SALTONSTALL. That is, you are asking for $20,000 instead of $40,000! Mr. REYNOLDS. That is what I was going to bring up in case I had the opportunity. Senator SALTONSTALL. Can you persuade Senator Ferguson on that? Mr. REYNOLDS. I question that very much. Senator SALTONSTALL. Mr. Reynolds, what you are saying is that these are special drawings-I have heard this discussion before-to preserve the White House drawings in a form that can be put in the Archives as a historical set of documents? Mr. REYNOLDS. It is primarily for another purpose. We found when we started to examine the White House, when there seemed to be trouble with it, that there were no drawings available to tell where the piping was or anything else. In a building of that character, most of the piping is concealed. It is back of the plaster and so forth. These drawings are intended to show the exact location of every hidden pipe in the structure, and then in the event of trouble you do not have to tear out a lot of plaster. Instead you can go exactly to the point where the trouble is. These are what we normally call record drawings. It is not only a Government practice, but it is commercial practice to prepare what we call record drawings on linen which are pretty expensive. The practice is to take all of the shop drawings and measurements on the job and put those down on linen so that they are permanent. Senator SALTONSTALL. Do you have those, for instance, for the Capitol, or the Treasury, or the Navy Department Building? Mr. REYNOLDS. Yes; we have those fairly completely because preparing those was a part of our normal operation. Senator SALTONSTALL. And those are special drawings on linen? Mr. REYNOLDS. Yes; they are all on linen. We have linen drawings of practically every building that has been built even though it has been built for 75 years. Senator SALTONSTALL. And you have none of those at the present time for the White House? Mr. REYNOLDS. We have none for the White House except that we do have some on linen for certain portions of the work. We think we can reduce this to $20,000. We have made a recent survey and I am personally convinced that that is sufficient to do the job. I think it is a minimum to do it, but I think it can be done for that. Senator MAYBANK. Go ahead, Mr. Larson. AMENDMENTS REQUESTED Mr. LARSON. Well, I do not know how much time there is available. I have sort of been hitting this and missing it, missing perhaps some of the high points that would be of interest to the committee. I would like to point out that we have offered, in addition to the amendments that you have included in the record, and the justification for them, on the yellow sheets alternate amendments which are presented at the suggestion of the committee staff. I do not think we could use our limited time too much to advantage by going into those. I appreciate the attentiveness of the committee to what I have had to say. I feel as a responsible public official that primary responsibility is on me to get over to you gentlemen in the Congress what we are doing in such a manner that you can promptly evaluate it. I definitely feel that in the House I failed to fulfill that responsibility properly. I think that the program of GSA is important. As a matter of fact, I think it is basically one of the most important programs to bring about greater economy in the Government than can be achieved through any other source in the day-to-day operation. I only regret that there is not a committee of the Congress to pass on appropriations and otherwise that could look into our day-to-day operations and advise with us and assist us and inform your colleagues in the Congress as to what we are doing. As we push into long existing organizational structures within the other agencies of the Government, we run into resistance which is perfectly human and the normal thing to do. We make some mistakes ourselves. But in the over all, I think, as I have indicated, such as on the chart where we have broken it down to show what it costs to furnish space for one employee of the Government, the advantages of consolidation such as in GSA are at once apparent. CENTRAL PROPERTY MANAGEMENT I hope that you will see fit to restore the traditional appropriations structure because I am convinced that through a central coordinating and integrating head, as the Administrator's office is assumed to be, we can organize and be flexible enough to meet the requirements of central administrative services in the Government in the best possible manner, to plan ahead to make savings that can occur as a result of sound property management, and to report every segment of the operation to the Congress in any manner or detail which it may desire. And when I say property management, I mean personal property as well as real property as well as records management. You can recognize the similarity of the operation of being the custodian of the national reserve industrial plants, for instance, and the custodian of all general purpose real property in the Government, and how that experience and how central technical staffs can perform services necessary to bring about economies and to bring about common policies and economical standards within the Government. |