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Chapter 10

SUPPLYING AND EQUIPPING THE ARMY;

PURCHASES AND SALES

NATURE AND SCALE OF THE PROBLEM

The United States Army, with an active strength of less than a million men, is the most widely deployed military force on earth. To maintain it in being today, and to ensure its future success in either a limited or a general war, it must be supplied with a staggering amount and variety of equipment and expendable goods ranging from shoestrings to guided missiles and from axehandles to atomic cannon. These come from practically every productive activity in the nation and from numerous sources abroad. Their annual cost, even in peacetime, runs into billions of dollars. The current inventory of Army equipment and supplies is valued at nearly twenty billion dollars-a sum greater than the combined assets of several of our largest American corporations.

In World War II the number of different items in the Army supply system attained a total of 1,750,000. Atpresent there are around a million. The difference reflects the continuing effort of the Department of the Army to reduce the variety of items, by standardization and other means. Currently, some 125,000 items are being screened out of the system every year. This gross reduction, however, is largely offset by the fact that about the same number of new items become necessary annually, as new equipment is introduced or existing equipment modernized. The growing complexity and specialized quality of modern military materiel is

thus a bar to reducing the number of supply items below a certain level. For example-to take a few categories at random-the Army finds it necessary to carry, in its supply catalogs, 111 types of railroad cars; 958 types of trailers; 24,248 types of bearings; 2,985 sizes and types of male footwear; 2,978 separate garments for outer wear; and 102 types of religious equipment and supplies.

The military supply system has a wide variety of customers. They inIclude the active Army in the continental United States and overseas; the National Guard, Army Reserve, and Reserve Officer Training Corps; other military departments; other government agencies; our allies in the Mutual Assistance Program; and the general public upon occasions of disaster such as floods, hurricanes, and earthquakes.

The problem is further complicated by the sudden and violent fluctuations which have occurred in recent years in the Army's workload. From fiscal year 1940, on the eve of World War II, to the peak of our war effort in 1945, annual Army expenditures increased over seventy-fold (from $668,000,000 to $49,689,000,000). When the war ended, the supply "pipelines" (meaning the complex of storage yards, depots, dumps, and supply-laden ships, trains, and trucks which intervened between the centers of production and the points of consumption) were full, and American factories were still producing

1 These were total expenditures; but the portion spent for supplies and equipment increased correspondingly.

war goods on a large scale. This was unavoidable. No one could have predicted the precise date when German resistance would collapse in Europe. Still less could it have been predicted, with any assurance, that the two atomic bombs dropped on Hiroshima and Nagasaki would put an abrupt end to a war that otherwise would have gone on for many months and cost hundreds of thousands of American and Japanese lives. We had to keep up our military effort to the last moment. But when victory did come, the Army was promptly reduced to a few scattered divisions, and was left with an immense surplus on its hands. Before this had been fully disposed of, the growing tension with the Communist powers developed into the "cold war"; shortly thereafter the Korean conflict started; the surplus became a shortage, and once again the Army had to enter the national market on a large scale.

Extreme flexibility is therefore essential to the success of our military supply

system. This will continue to be the case, for it is the logical outcome of America's basic international policy. A country dedicated to aggression and conquest can decide, far in advance, where and against whom it will make its next attack; it can make its preparations systematically, and strike when it is ready. But our basic strategy is defensive, which means that the time and place of any outbreak of military activity affecting our interests is to a large extent in our opponent's hands. This statement refers not only to fullscale wars, but to developments that can occur in a period of what is technically peace. No longer ago than the autumn of 1957, Russia's launching of her earth satellites, and the implications behind that event, resulted in publicly-announced modifications in our research and development program which no doubt have already had their impact on the Army's supply system, and made further demands on its efficiency, versatility, and flexibility.

SUPPLY AGENCIES

Overall supervision of the Army supply system heads up to the Secretaries of Defense and of the Army, and to certain Assistant Secretaries and other officials on their civilian staffs. (For details see chapters 3 and 22.) Subject thereto, responsibility lies with the Deputy Chief of Staff for Logistics ("DCSLOG"), and with the technical services under his supervision.

THE DEPUTY CHIEF OF STAFF FOR LOGISTICS. The position of DCSLOG was established in 1954. He is a senior officer reporting directly to the Chief of Staff, U. S. Army. His job is to supervise the procurement, storage, transportation, distribution, and maintenance of the weapons, ammunition, vehicles, and the multitude of other items needed by our Army in the continental United States and overseas; and also, except for maintenance, of those which go to the more than fifty nations associated with us in the Mutual Assistance Program. (In addition he has other important logistic functions.) DCSLOG functions both as a staff officer and as a commander. As a

staff officer he is responsible for logistics planning, programming and budgeting; for the formulation of logistics policy, procedures, and systems; and for supervising the development of logistic doctrine and organization, and the conduct of logistics training. In addition, however, he directs and controls the activities of the chiefs of the technical services, including their missions, functions, organizations, precedures, channels of communication, manpower, and money; and reviews and analyzes their performance. This measure of direction and control is tantamount to command.

THE TECHNICAL SERVICES. There are seven such services (see chapter 2). One of them, the Chemical Corps, has primarily a research and development mission. Four of them have important logistic missions other than supply, as follows

The Corps of Engineers: construction, mapping, and other technical tasks. The Army Medical Service: hospitalization. The Signal Corps: signal communications and associated activities.

The Transportation Corps: transportation.

The remaining two, the Ordnance Corps and the Quartermaster Corps, are essentially supply services. All seven, however, have important supply functions, and all seven operate active research and development programs (see chapter 18).

Subject to the direction and control of DCSLOG, the chiefs of these services retain their Army-wide technical staff status, and exercise, in varying degrees, control or supervision of the agencies, activities, and troop units pertaining to their respective services.

CATEGORIES OF SUPPLY

Items entering into Army supply may be classified on two different bases: by "classes" and by procuring agencies.

CLASSES OF SUPPLY. This is the fundamental Army classification. There are five such classes, as follows

Class I (Subsistence). Items consumed by personnel at an approximately uniform rate, irrespective of local changes in combat or terrain conditions. Example: rations.

Class II. Supplies and equipment for which allowances are established by Tables of Organization and Equipment, Tables of Allowances or other allowance lists. Example: clothing, weapons, and mechanic's tools.

Class III. Fuels and lubricants for all purposes except for operating aircraft, for medicinal products, or for use in weapons such as flame throwers. Examples: gasoline, kerosene, diesel oil, fuel oil, lubricating oil, greases, and solid fuels such as coal, coke and wood.

Class IV. Supplies and equipment for which allowances are not prescribed, or which are not otherwise classified. Examples: construction and fortification materials, resupply of Class II items, fuel for aircraft.

Class V. Ammunition. CHARACTERISTICS OF CLASSES. classes have certain typical characteristics, including the follow

These

ing

Expendability. Items of Classes I, III, and V are expendable. Items of classes II and IV may or may not be expendable. Most nonexpendable items are in Class II.

Basis of Issue. Class I: per man (or animal) per unit of time. Class II: per man, per unit, or per machine. Class III: per vehicle per unit of distance, or on some other reasonable basis. Class IV: per project, per mission, or on some other reasonable basis. Class V: per

weapon; per unit or user; per area or mission; or on some other reasonable basis.

Consumption. Items of classes I, III, and V are normally consumed soon after their issue to using troops; reissue is frequent and follows promptly on consumption. Nonexpendable items of classes II and IV normally have rather long useful lives, and reissue is intermittent. Expendable items of classes II and IV (for example, repair parts, road material) are usually consumed soon after issue, but reissue depends upon circumstances.

PROCURING AGENCIES. Items of Army supply may also be classified on the basis of which service procures them. The principal characteristic fields of procurement of the technical services, omitting minor or special items, are given below. (See also chapter 2.)

The Quartermaster Corps. Subsistence, petroleum products, clothing, individual equipment and supplies, furniture and office supplies, laundry and kitchen equipment, materials handling equipment.

The Army Medical Service. All items of medical equipment and medical supplies, drugs, and medicinal chemicals.

The Corps of Engineers. Equipment and materials pertaining to construction, fortifications, camouflage, demolition, mapping and surveying, and allied activities.

The Chemical Corps. Chemical munitions and protective devices.

The Ordnance Corps. Ammunition, weapons, armored vehicles, tactical and general purpose vehicles, fire control instruments.

The Signal Corps. Communications and electronic equipment and related supplies, meteorological equipment, photographic equipment and supplies.

The Transportation Corps. Army

watercraft, railroad equipment, light aircraft, and helicopters.

There is some correlation between classes of supply and procuring services. For example, class V supplies per

tain to the Ordnance Corps; Engineer supplies, in terms of bulk, are largely class IV; and most of class I and class III items are Quartermaster.

PURCHASE OF SUPPLIES AND SERVICES

The Army buys supplies and services through a network of some 450 purchasing offices. They include both the major procurement centers which buy on a national or area basis, and the posts, camps, and stations which buy to meet their varying day-to-day needs. These procurement offices, located throughout the country, deal with any responsible firm that can meet the Army's requirements when and where needed, at a price that will mean getting the most for the taxpayer's dollar.

Two alternative methods are used: procurement by formal advertising and negotiated procurement.

PROCUREMENT BY FORMAL ADVERTISING. This system has enjoyed preference by the Government since 1861. As the name implies, it entails advertising for bids. It is especially effective in buying standard and commonly used items such as clothing, building materials, and the like; or, in general, items that can be adequately and accurately described in specifications. It is especially effective when time is available for the several processes involved.

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In buying under this system, the purchasing office concerned prepares form called "Invitation for Bids." The form contains data on the item or items to be purchased; on the date, hour, and location of bid openings; standard contract clauses, drawn to protect the interests of both parties to the procurment transaction; and other pertinent information. Copies are normally sent only to suppliers whose names appear on the office's "bidders' mailing list" (see below), but any interested supplier may obtain a copy of the invitation, if one is available, by written request to the purchasing office. Bidders must submit sealed bids, in accordance with instructions contained in the invitation. At the announced time and place the bids are publicly opened. A contract is then awarded on the basis

of the bid most advantageous to the Government, price and other factors being taken into account. However, the purchasing office may reject all bids and readvertise, if this is found to be to the Government's best interest.

NEGOTIATED PROCUREMENT. Although formal advertising is the preferred method, it cannot always be used effectively. An example is the case of an item which is experimental in nature, or for other reasons cannot be adequately described in specifications. Again, if the item desired is of a seasonal nature, or is one whose market value fluctuates so rapidly that it cannot be forecast by vendors many days into the future, or is to meet an unforeseen need that has suddenly arisen, the delay involved in formal advertising, and the letting of a contract based thereon, would often be disadvantageous to the Government. In such cases a more flexible procedure, known as negotiated procurement, is used. This type of procurement is authorized in Title 10, United States Code, and is closely controlled by regulations to prevent abuses.

The procedure resembles formal advertising in that requests for proposals on the item to be purchased are sent out in the same way as in an Invitation for Bids. However, the mechanics of awarding the contract are different. Offers which are submitted in response to a proposal request are subject, after receipt, to negotiation on the terms and conditions of the proposed contract. Care and diligence by the contracting officer, after he has received and reviewed initial proposals, permits the fair and impartial conduct of negotiation with suppliers who submitted reasonably competitive offers. Such negotiations usually result in a revised proposal which meets the requirements of the Government and is satisfactory to both parties.

BIDDERS' MAILING LISTS. The Army does not maintain a central mailing list for bidders. Instead, to insure a ready and current source of suppliers and to secure the advantages of widespread competition, each purchasing office is required to keep its own list, or lists, of prospective bidders for the types of supplies or services which it procures. Any supplier who wants his name placed on such a list should apply to the purchasing office with which he wishes to deal. Standard application forms may be obtained from any military purchasing office. The applicant's qualifications and eligibility are determined from the information which he submits on the form. If he is found to be eligible, his name is placed on the list. No distinction is made between firms on the basis of size or number of employees. Small and large businesses are equally acceptable, provided they can "deliver the goods."

A firm may be removed from a bid

ders' mailing list if it fails repeatedly to respond to invitations to bid, or commits some act whereby it becomes ineligible or is debarred.

INFORMATION PAMPHLETS. Prospective Army suppliers would do well to obtain and study two pamphlets put out by the Department of Defense, entitled "How to Sell to the Department of Defense" and "Purchased Items and Purchasing Locations of the Department of Defense." The former contains, in brief form, items of general information to those wishing to sell their products to the Armed Services. It also lists the major purchasing activities of the Department, and the general categories of items purchased by each such activity. The second publication mentioned gives more specific information on the sorts of items purchased and the locations of the corresponding purchasing offices. The pamphlets can be obtained at any of the major purchasing offices of the Department of the Army.

LOCATIONS OF ARMY PURCHASING ACTIVITIES

Below are listed the names and locations of the Army's major purchasing activities. They are classified by the branches of the Army under whose supervision they operate. The lists do not include the hundreds of offices at which local or regional purchases are

The Adjutant General's Corps

made, but information on these can be readily obtained. Correspondence with any of the activities listed should be addressed, by title, to the head of the activity, whose title is given below in each case.

Contracting Officer, Publications Branch, TAGO, Washington 25, D. C.

Chief, Special Services Division, TAGO, Washington 25, D. C. ATTN: AGAM-RC

The Army and Air Force Exchange Service

Chief, Army and Air Force Exchange Service, 25 West 43d St., New York, N. Y.
Chief, San Francisco Purchasing Office, Army and Air Force Exchange Service, 563
Market St., San Francisco 5, California

The Chemical Corps

Commanding Officer, U. S. Army Chemical Center Procurement Agency, Army Chemical Center, Edgewood, Maryland

Commanding Officer, U. S. Army Biological Warfare Laboratories, Fort Detrick, Frederick, Maryland

Commanding Officer, U. S. Army Chemical Procurement District, New York, 290 Broadway, New York 7, N. Y.

Commanding Officer, U. S. Army Chemical Procurement District, San Francisco, 1515 Clay St., Oakland 12, California

The Corps of Engineers

Chief, U. S. Army Engineer Procurement Office, Chicago, 226 West Jackson Blvd., Chicago 6, Illinois

District Engineer, U. S. Army Engineer District, St. Louis, 420 Locust St., St. Louis 2,

Missouri

2 These pamphlets are also applicable to purchases by the Navy or Air Force. Suppliers should remember that, under the "single manager concept" (see below) the Army buys some things (e.g., food) for the other Armed Services as well as for itself; and they buy some things for the Army.

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