GSA exercises both supervisory and operating responsibility for personal property sales of surplus and exchangesale items. It directs and supervises the sale of personal property by the executive agencies, and conducts sales of such property of its own and of other civil agencies.

Sales of usable surplus personal property of all executive agencies totaled $1.0 billion at acquisition cost in fiscal year 1962. This quantity is $533 million, or 37 percent less than comparable personal property sold during 1961.

Just as the quantity of personal property determined excess to the needs of executive agencies declined over the last 2 years, there was a related decrease also in the quantity of usable personal property sold and the proceeds from such sales.

One significant development during the 4-year period was a modest increase in the percentage of proceeds from such personal property sales in

relation to the acquisition cost of usable property sold. From a low of 4.7 percent in 1959, the ratio improved to 5.1 percent in 1960; to 5.7 percent in 1961; and to a high of 6.7 percent in

1962.

In the sale of its own surplus and exchange-sale personal property and that of other civil agencies during the year, GSA regional offices conducted 1,641 sales involving property items originally acquired at a cost of $39.8 million. This represented an increase of more than 100 percent in the number of sales and more than 60 percent in the volume of property sold in 1961. During the same period, GSA costs for selling declined materially, from $17.37 to $14.94 per $100 of proceeds obtained.

Proceeds from sales conducted by GSA increased from the $4.1 million obtained in 1961 to $6.4 million in 1962. The percentage of proceeds related to the acquisition cost of usable. property sold by GSA remained stable at 15 percent in both years.

Further progress was made in the progressive program initiated in 1961 under which GSA proposed to assume operational responsibility for the sale of personal property of the civil agencies by conducting the sales. Memoranda of Understanding were executed with the Department of the Interior and Treasury, bringing to 10 the number of civil agencies for which GSA has assumed sales responsibility. The sales volume of these agencies, including that of GSA, represents 70 percent of the total volume of surplus and exchange-sale property being sold by civil executive agencies under the Federal Property and Administrative Services Act of 1949. Plans were developed for a further extension of this program to other executive agencies.

A study was initiated by GSA, in collaboration with the Department of Defense and the Bureau of the Budget, of personal property sales being made

by DOD pursuant to authority delegated by the Administrator. The study, not completed at the end of the fiscal year, was directed to the feasibility of GSA assuming more control over DOD personal property sales.

Property Rehabilitation

Continued emphasis was placed on the development of administrative and contractual arrangements for the economic rehabilitation of specific items of Government-owned personal property. This program is designed to further the useful life of property already owned, and thus minimize the procurement of new items.

During the year, 232,601 items of furniture, office machines, and household appliances were rehabilitated, with estimated economies to the Government of $16 million. From the standpoint of program growth, this represents a 48 percent increase over

the prior fiscal year. Costs for rehabilitating the substantial quantity of property involved totalled some $4.2 million.

By July 1, 1962, nearly 100 commercial repair facilities, all small businesses, were serving the program under contract, as were 8 Federal penal institutions. The latter are participating under an informal arrangement between the Department of Justice and GSA, which provides for increased use in property rehabilitation work of the Federal Prison Industries, Inc. The rehabilitation work of FPI for the Federal Government with respect to these items is monitored by GSA in the interest of a fully coordinated program. For the program as a whole, GSA processes agency orders; schedules rehabilitation; assures quality of workmanship; pays contractors' invoices; and bills agencies for services furnished.

Program services were extended to the States of Hawaii and Alaska dur

ing the year. Use of the services available under the program was given renewed emphasis by a recent revision to GSA Regulation 1-VIII-201.00, which states that where rehabilitation requirements exceed the capabilities of an activity or installation, the rehabilitation services provided by this GSA program will be used as a primary source, unless delivery requirements cannot be met. This action makes it possible for the Federal Government to obtain quality workmanship at an economical price. The Department of Defense has implemented this revision to the Regulations of GSA Title 1 by a recent change to the Armed Services Procurement Regulations.

DOD is the largest customer of this program, having used available services last fiscal year to rehabilitate over 150,000 items, acquired at a cost of $12 million. Costs for rehabilitation were less than $2.5 million.

OEP also issues policy direction for the elephant machine tool program and the machine tool pool order program, which are administered by GSA in accordance with provisions of the Defense Production Act.

The Department of Defense has the responsibility for the policy determinations to be followed by GSA in the administration of the National Industrial Equipment Reserve which was authorized by the National Industrial Reserve Act of 1948.

There are 76 materials on the list of Strategic and Critical Materials for Stockpiling. As of the end of June, basic objectives (materials on hand) have been met for 62 of these materials in the national stockpile and maximum objectives have been met for 49 of them. The materials on hand in all Government inventories equal or exceed the basic objectives for 69 and the maximum objectives for 65 materials. Materials in all inventories and on order will meet the basic objectives for 69 commodities and the maximum objectives for 65. The materials on hand in the various inventories have an acquisition value of almost $8.8 billion.

National Stockpile

Under the procurement directive for fiscal year 1962, purchases of materials were limited to chrysotile asbestos and jewel bearings, the latter to be produced at the Governmentowned, contractor-operated plant at Rolla, N. Dak. GSA has executed a lease with the producer of the jewel bearings which permits it to accept orders from Department of Defense contractors and commercial customers.

Because of the difficulty in having domestic suppliers meet contract delivery schedules for domestically produced chrysotile asbestos, authorized under a previous directive, GSA arranged with the Department of Agriculture to procure the current requirement for this material from foreign sources through its barter program, administered by the Commodity Credit Corporation.

Contracts have been made for the upgrading of raw materials in inventory to the higher use forms of oxygenfree copper, columbium carbide powder, tantalum carbide powder, and ferrovanadium.

Barter

GSA provides pricing, transportation, and other information and advice to CCC in connection with the barter or exchange of surplus agricultural commodities for strategic and other materials. These raw materials are held in the supplemental stockpile and GSA provides the same services in the inspection, transportation, and storage of barter materials as are applied to commodities acquired by GSA under

the prior fiscal year. Costs for rehabilitating the substantial quantity of property involved totalled some $4.2 million.

By July 1, 1962, nearly 100 commercial repair facilities, all small businesses, were serving the program under contract, as were 8 Federal penal institutions. The latter are participating under an informal arrangement between the Department of Justice and GSA, which provides for increased use in property rehabilitation work of the Federal Prison Industries, Inc. The rehabilitation work of FPI for the Federal Government with respect to these items is monitored by GSA in the interest of a fully coordinated program. For the program as a whole, GSA processes agency orders; schedules rehabilitation; assures quality of workmanship; pays contractors' invoices; and bills agencies for services furnished.

Program services were extended to the States of Hawaii and Alaska dur

ing the year. Use of the services available under the program was given renewed emphasis by a recent revision to GSA Regulation 1-VIII-201.00, which states that where rehabilitation requirements exceed the capabilities of an activity or installation, the rehabilitation services provided by this GSA program will be used as a primary source, unless delivery requirements cannot be met. This action makes it possible for the Federal Government to obtain quality workmanship at an economical price. The Department of Defense has implemented this revision to the Regulations of GSA Title 1 by a recent change to the Armed Services Procurement Regulations.

DOD is the largest customer of this program, having used available serv ices last fiscal year to rehabilitate over 150,000 items, acquired at a cost of $12 million. Costs for rehabilitation were less than $2.5 million.