FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949

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• Document Number (FOIA) /ESDN (CREST): CIA-RDP57-00384R001000040007-2
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• Document Creation Date: December 9, 2016
• Document Release Date: November 28, 2000
• Sequence Number: 7
• Publication Date: May 9, 1949
• Content Type: REGULATION

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alen ar No.
81sT CONGRESS SENATE I REPORT
1st Session i No. 338
FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES
ACT OF 1949
MAY 9 (legislative day, AP111L 11), 1949.-Ordered to be printed
Mr. MCCLELLAN, from the Committee on Expenditures in the
Executive Departments, submitted the following
REPORT
[To accompany S. 1809]
The Committee on Expenditures in the Executive Departments,
having had under consideration the matter of Government property
management and the reorganization of certain Government agencies
in connection therewith, report the following bill (S. 1809) to sim-
plify the procurement, utilization, and disposal of Government prop-
erty, to reorganize certain agencies of the Government, and for other
purposes, and recommend that it do pass.
I. HISTORICAL BACKGROUND
The need for an efficient, businesslike system of property manage-
ment has long been recognized. In 1943 the House passed, and this
committee reported favorably, a bill (H. R. 2795) designed to fulfill
that need. While being considered that bill was overtaken by the
more immediate and special problem of disposing of our war surplus
without dislocating our national economy. In the end, the Con-
gress deferred action on long-range property management and, in-
stead, adopted the Surplus Property Act of 1944 limited in objective
to dealing with war-generated surplus and limited in life to 3 years
after the date of cessation of hostilities. That date will occur on
December 31, 1949.
In a special message dated March 5, 1948, the President recom-
mended that the Congress renew consideration of Government prop-
erty management and directed the Federal Works Administrator to
submit a draft bill. Following the general pattern of that draft, this
committee unanimously reported out a bill termed the Federal Prop-
erty Act of 1948 (5..2754, 80th Cong.) which would have provided a
S. Rept. 338, 81-1-1
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2 FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
uniform system for property management. Due to the press of other
work, the Senate did not take up this bill before adjournment.
In the middle of February of this year the Federal Works Adminis-
trator, with the approval of the Director of the Bureau of the Budget,
acting on behalf of the President, presented again a draft bill for a
uniform property management system. That draft was substantially
the same as the prior bill-S. 2754, Eightieth Congress-and was in-
troduced in this Congress as S. 990. Simultaneously there was in-
troduced S. 991. designed to carry out the recommendations of the
Commission on Organization of the Executive Branch of the Govern-
ment for an Office of General Services-supply activities. In these
two bills most provisions are common, the important differences being
(a) the designation of the central housekeeping agency; (b) the treat-
ment of military procurement; (c) the inclusion in S. 991 of records
management, which was omitted from S. 990; and (d) the more de-
tailed and specific coverage of substantive matters in S. 990.
In the bill as introduced and reported herewith the committee has
retained the common features of both S. 990 and S. 991. In the main,
the committee has adopted the substantive provisions of S. 990 and
the organizational structure provided for in S. 991, with modifications
and additions designed to make the resulting legislation more workable.
In the opinion of the committee, the bill here introduced is both
stronger and more flexible than either of the other bills.
II. GENERAL STATEMENT
Six years ago the confused state of legislation dealing with Govern-
ment property management was described as follows:
Efficient executive management of the Government's great and growing invest-
merit in equipment, materials, and supplies, and the control of the Congress over
the use and disposition of such property are seriously handicapped by the lack of
comprehensive. legislation. The essential foundation of management standards
in determining what and what quantities should be bought, and similar standards
to govern utilization are conspicuous by their absence. Although the accrual of
surpluses is an inevitable feature of the active operations of Government, the
determination and release of such surpluses is entirely within the discretion of
thousands of widely scattered executives * * * Even under normal con-
ditions the results of such a situation are apparent in excessive stocks, unneces-
sary duplication, lack of maximum utilization, unauthorized augmentation of
congressional appropriations by free transfer of cash equivalents from one to
another, heavy direct losses to the Treasury, and waste in other forms. (1943
report of the House Committee on Expenditures in the Executive Departments
on H. R. 2795, quoted with approval in 1944 in the report of this committee on
the same bill.)
Leading off its report on an Office of General Services, the Com-
mission on Organization of the Executive Branch of the Government
has this to say on the subject:
Three major internal activities of the Federal Government now suffer from a
lack of central direction. These are supply, records management, and the opera-
tion and maintenance of public buildings. These activities are carried on in
several places within the executive branch with varying degrees of adequacy.
While, as a general rule, centralized direction is lacking, there are some instances
of the exact reverse of this situation in which operations are centrally controlled
down to the smallest detail.
To the general public, the "housekeeping" activities listed above are little
known, but unless they are properly administered, the executive branch cannot be
effectively managed.
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FEDERAL PROPERTY AND' ADMINISTRATIVE SERVICES ACT, 1949 3
In the second part of the same report, relating to Federal supply
activities, the Commission starts by saying:
The Federal Government runs one of the greatest supply businesses in the world.
It is spending more than $6,000,000,000 a year for new material, supplies, and equip-
ment for the regular activities of the civilian and military agencies. In addition,
since 1941, the Federal Government has been engaged in enormous purchases for
export in connection with lend-lease and foreign-aid programs. It makes huge
purchases of strategic and critical materials from foreign sources, and imports
them-for the national stock pile.
The Federal Government also has in storage, in the continental United States,
military and civilian inventories valued at $27,000,000,000. No one knows
.accurately the total worth of Government personal property currently being
used, but its million or more motor vehicles, for example, have a value of at least
$2,000,000,000. The Government also pays out more than $1,000,000,000 yearly
for transportation of property, and $440,000,000 in salaries of the newly 150,000
?employcos working in supply operations.
As recommended by the Commission on Government Organization,
the bill here reported establishes a General Services Agency, headed
by an Administrator directly and personally responsible to the Presi-
dent, who, in turn, is authorized to issue policies and directives which
Shall govern the Administrator and all executive agencies. Also as
recommended by the Commission, there are lodged in the new agency
(a) the Bureau of Federal Supply of the Treasury Department, which
now has limited over-all responsibility for the procurement of personal
property and for the cataloging, supply, and utilization of such prop-
erty; (b) the National Archives Establishment, which now has limited
responsibility in the field of records management, mainly having to do
with the maintenance and preservation of historical records; and (c)
the Public Buildings Administration of the Federal Works Agency,
which provides and manages most office and warehouse facilities for
the Government. To round out this organizational structure, the
bill also transfers to the General Services Agency (a) the War Assets
Administration which, under present law, would be liquidated on
June 30 of this year and its functions scattered among several agencies;
and (b) all other functions of the Federal Works Agency. These
other functions of the Federal Works Agency likewise are of a service
character and the committee feels that they logically belong in any
General Services Agency. These service functions consist generally
of the design and construction of public buildings, the disposal of
surplus real property, the conduct (in the Public Roads Administra-
tion) of the Federal-aid road program and the provisior of roads for
other agencies, the custody and maintenance, on behalf of the National
Military Establishment, of plants and machine tools in the National
Industrial Reserve, disaster relief, the administration of certain
functions of the water-pollution-control program, etc. Management
of the general services of the Government cannot be conducted effi-
ciently unless these responsible units are brought under a common
leadership and direction. In so doing, and recognizing that this is
a relatively new field for the Government, the bill authorizes the
Administrator to transfer, regroup, and distribute functions within the
.agency.
In conformity with recommendations of the Commission on Organ-
ization of the Executive Branch on uniform nomenclature (No. 21,
Rept. No. 1, on general management originally proposed by this
.committee in S. Rept. No. 243, June 6, 1947), the committee has
;hanged the Public Buildings Administration to the Bureau of
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4 FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
Public Buildings, and the Public Roads Administration to the Bureau
of Public Roads.
The Commission, in its report on the Department of Commerce,
has also recommended that the Bureau of Public Roads be transferred
to that Department as an important component of a new alinement of
transportation services (recommendation No. 7). The committee
has, however, withheld action on such transfer until some determina-
tion is made relative to the over-all program to be accepted by Congress
on the reorganization of the Department of Commerce, and on the
proposed consolidation of transportation agencies.
Likewise, the bill also transfers the Bureau of Community Facilities
to the new General Services Agency. The Hoover Commission has
recommended (recommendation No. 4, on the Department of the
Interior) that community services be centralized in general building
construction services. In the bill, the President is given authority to
continue the Bureau of Community Facilities within the new agency
for such time as he may determine, and the Congress should consider
this problem further in connection with related reorganizations.
While fixing management responsibility, the bill provides operating
machinery flexible enough to cope with the needs for specialized
service. For instance, the Secretary of Defense is authorized, unless
the President otherwise directs, to exempt the National Military
Establishment from uniform procurement whenever he deems such
exemption required in the interest of national security. Similarly
exempted from central control are the purchase and disposal of farm
products under programs conducted by the Department of Agriculture
for purposes of price support or stabilization. In other respects, the
bill provides, generally, for uniform policies and methods of procure,
ment, supply, and related functions. This is expected to stop the
great losses previously incurred by the Government through com-
petition of executive agencies for the same articles in the same
markets, unnecessary buying, lack of quantity purchases, and other
inefficiencies.
Equally great losses have been suffered by the Government through
purchasing of new articles by one agency when serviceable articles of
the same type are available in. the inventories of other agencies and
excess to their needs. The bill is expected to stop these losses. It
provides a uniform system for the identification and classification of
property, and for the standardization of contract forms, specifications
and procedures. It requires executive agencies to maintain reasonable,
inventory levels and to establish adequate inventory controls. The
Comptroller General is authorized to prescribe principles and standards
for property accounting. The bill requires continuing surveillance by
every executive agency of the property under its control and it
authorizes the Administrator to make surveys of such property and
of property-management practices. Through these measures, the
committee believes that there can be, and, if efficiently administered,
that thorn gill be maximum utilization of property already owned by
the Government and minimum purchasing of new property.
Again in line with the recommendation of the Commission on
Government Organization, the bill provides a central system relating
to traffic management, transportation, and other public-utility services
for the use of executive agencies.
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FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949 5
As most of the,objectives of the Surplus Property Act of 1944 have
largely been attained, the bill, in harmony with existing law, dispenses
with all priorities and preferences on personal property. The commit-
tee believes, however, that, from time to time, there will become
surplus to the Government books, equipment, or other supplies the
sale of which would realize little monetary return but which would be
usable by and. of great benefit to our schools and colleges. The bill
therefore authorizes the Administrator, in his discretion, to donate
such surplus property for educational purposes upon the recommen-
dation of the Federal Security Administrator. The committee
believes that the authority vested in the Federal Security Adminis-
trator is broad enough to authorize him to redelegate his authority to
some other person designated by him, and that the appropriate
designee in this specific instance would be the Commissioner of
Education.
Surplus real property generated by World War II is in a different
situation.. Accordingly, the committee has retained existing priorities
and preferences with respect to the disposition of surplus real property,
including public benefit allowances for education, health, municipal
airports, public parks, and recreational purposes.
Title.III extends to the General Services Agency the principles of
the Armed Services Procurement Act of 1947, with appropriate modi-
fications principally designed to eliminate provisions applicable
primarily to the military. The Administrator of General Services
under certain circumstances is also permitted to delegate to any
other executive agency, not named in the Armed Services Procurement
Act, authority, under certain circumstances, to make purchases and
contracts pursuant to the provisions of title 111. This title provides for
the modernization of procurement methods and procedures. It
clarifies and preserves the formal advertising method of procurement,
but at the same time, under proper control, authorizes negotiation in
certain classes of cases. This title is designed to cope with future as
well as presently existing situations, and to constitute a comprehensive
code of procurement methods and procedures.
The committee believes that title III is substantially in accord. with
the recommendation made by the Commission on Organization of the
Executive Branch of the Government in its Report on the Organization
~/_ and Management of Federal Supply Activities, that legislation be
enacted to apply the principles of the Armed Services Procurement
Act of 1947 .to buying by all agencies, this authority, however, to be
lodged in the President (recommendation No. 2 p. 40, of the Combined
Report on Office of General Services, and Supply Activities). Title
III is substantially in accord with the report unanimously adopted by
the Procurement Policy Board of the War Production Board in the
fall of 1945 and, in accord with legislation drafted by a special committee
of the Procurement Policy Board.
Under the administration of the Department of State, most of the
surplus property generated in foreign areas as a result of World War II
has either been sold or has been committed for sale. The remaining
smell inventory is widely dispersed and of specialized or technical
character; in most cases the cost of transportation back to this country
probably would exceed either the use value to the Government or the
sales return in the commercial market. Title IV of the bill deals with
this problem and provides that the agencies responsible for such prop-
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6 FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
erty shall dispose of it where located abroad, taking into consideration
the foreign policy of the United States. As a practical matter, this.
means that the armed services will dispose of surplus property located
in foreign countries pursuant to policies established by the Secretary
of State.
As stated above, existing authority of the National Archives Estab-
lishment with. respect to records management is considerably limited-
The committee feels, however, that even this limited authority will
enable the Administrator of General Services to make at least a start
in this field. Later, when this problem has been more thoroughly
studied, the Congress might enact new and broader legislation for
records management in line with the recommendation of the Commis-
Sion on Organization of the executive branch of the Government.
The committee feels very strongly that the economies resulting-
directly 'from consolidation of agencies are and should be only a begin-
ning to the savings which will accrue to the Federal Treasury under
the bill. Many millions more can be and must be shaved from oft
expenditures for property management through merger of common
services and the resultant reduction of overhead and elimination of
duplicatory activities. Further, as previously noted, the maximum
use of Federal property by the Federal Government will, with efficient
administration, reduce procurement requirements to a minimum.
SECTION-BY-SECTION ANALYSIS
The bill commences with a short title styled the "Federal Property
and Administrative Services Act of 1949," following which is a table
of contents.
Section 2. Declaration of policy
This is very brief and states the intent of the Congress to provide
for the Government an economic and efficient system for (a) the pro-
curement and supply of personal property and nonpersonal services
and performance of related functions; (b) the utilization of available
property; (c) the disposal of surplus property; and (d) records manage-
ment. Other sections of the bill implement items (a), (b), and (c)
by consolidating the present scattered property functions and by
providing it new uniform charter for property management. Item
(d) is implemented only by the transfer of the National Archives
Establishment to the General Services Agency. Additional legisla-
tion will be necessary to establish an effective system of records
management. Such a system, however, should be built around the
National Archives Establishment, and should be administered in the.,
General Services Agency, so that this transfer is a logical first step
toward its creation.
Section 3. Definitions
Several definitions require special note. "Property" includes all
interests in property except the public domain and the major classes
of naval vessels. "Excess property" means any property under the
control of any Federal agency not required for its needs and responsi-
bilities as determined by the head thereof. "Surplus property"
means any property which has been declared excess by a particuhr
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FEDERAL PRQPERTY AND ADMINISTRATIVE SERVICES ACT, 1949 7
Federal agency and which, after a survey of the needs of other Fed-
eral agencies, is determined by the Administrator of General Services
no longer to be required by the Federal Government as a whole.
Section 101. General Services Agency
(a) Establishment of General Services Agency. -This subsection
provides for the establishment in the executive branch of the Govern-
ment of a new agency to be known as the General Services Agency.
(b) Administrator of General Services.--This subsection provides
that the new agency shall be headed by a new officer of the Govern-
ment, entitled "Administrator of General Services," to be appointed,
after the enactment of this legislation, by the President by and with
the advice and consent of the Senate and to receive compensation at
a level to be established by Congress under pending legislation, which
would be uniform and apply to all like positions of, the same level,
the determined amount to be included in the bill by committee
amendment.
(c) Deputy Administrator.-This subsection provides, for a Deputy
Administrator to be appointed by the Administrator. The Deputy
Administrator will perform such functions as the Administrator may
designate and be Acting Administrator during the absence or disability
of the Administrator and (unless the President designates another
officer to serve as Administrator) in the event of a vacancy in that
office. The salary of the Deputy Administrator is to be determined in
the same manner as provided under subsection (b).
(d) Performance of functions pending first appointment.-This sub-
section provides that, pending the first appointment of an Administra-
tor, his functions shall be performed, temporarily, by such officer as
the President shall designate.
Section 102. Transfer of the Bureau of Federal Supply and contract-
settlement functions to the General Services Agency.
(a) Transfer of the Bureau of Federal Supply.-This subsection pro-
vides for transferring to the General Services Agency the functions,
records, and personnel of the Bureau of Federal Supply, now in the,
Department of the Treasury, and for vesting in the Administrator of
General Services the functions of Treasury personnel relating to the
Bureau of Federal Supply. The Bureau of Federal Supply has been
in the Department of the Treasury since 1933 and exercises central
procurement functions for the executive branch of the Government.
Its functions are not essentially related to the primary fiscal and tax
functions of the Department of the Treasury so that the Bureau may
readily be severed from that Department without impairment of the
Department's efficiency. In the General Services Agency the Bureau
v'ill su -plerrcnt the property-service functions of that Agency and
will facilitate more economical property management in the Govern-
ment. Functions of the Secretary of the Treasury, referred to in
clause (3), include all functions vested in him by law, but performed
by the Bureau for him under appropriate delegation: For example,
stock piling under Strategic and Critical Materials Stock Piling Act
(60 Stat. 596) and functions of over-all supervision and review of the
performance of Bureau functions,,incideptal to his position ;as head of
the Department.
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S FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
(b) Transfer of contract-settlement functions .-This subsection pro-
vides for transfer to the Administrator of General Services of the
functions, transferred to the Secretary of the Treasury a little over
2 years ago, of the Director of Contract Settlement and the Office
of Contract Settlement created by the Contract Settlement Act of
1944 (58 Stat. 649; 41 U. S. C. 101-125). These functions relate to
the establishment of uniform policies and procedures for the settle-
ment of terminated war contracts by Government contracting agencies
and, because of the almost complete liquidation of the contract termi-
nation program, are now routine and insignificant. Such little work
as has been recently required[ in connection with this program has
been carried on in the Treasury primarily by the Bureau of Federal
Su
l
It
ld
pp
y.
wou
be in the interest of good management to have this
Bureau continue to wind up that program. This subsection likewise
transfers from. the Treasury to the General Services Agency the Appeal
Board and the Contract Settlement Advisory Board also created by
the Contract Settlement Act of 1944. This transfer is for housekeep-
ing purposes only. The Secretary of the Treasury does not, nor will
the .Administrator of General Services, review decisions of the Appeal
Board which will perform its functions under conditions and limita-
tions prescribed by law.
(c) Functions retained in the Treasury.-This subsection permits
the Bureau. of the Budget to retain in the Treasury Department
certain minor functions of the Bureau of Federal Supply, for example,
as to printing, which properly pertain to the Treasury Department.
Section 103. Transfer of affairs of the Federal Works Agency
(a) Transfer of constituents and functions of the Federal Works
Agency.-This subsection transfers to the General Services Agency
the functions, records, and personnel of (1) the Public Buildings Ad-
ministration (to be known as the Bureau of Public Buildings) and (2)
the Public Roads Administration (to be known as the Bureau of Public
Roads), and all other functions, records, and personnel of (3) the Fed-
eral Works Agency. The functions of the Federal Works Administra-
tor, the Commissioner of Public Buildings, and the Commissioner of
Public Roads are transferred to the Admini
t
t
f
s
ra
or o
General Services.
(b) Abortion of Federal Works Agency.-This subsection abolishes
the Federal Works Agency and the offices of Federal Works Adminis-
trator and Assistant Federal Works Administrator.
(c) Continuation of Bureau of Community Facilities.-This subsec-
tion provides that the President may continue the Bureau of Com-
munity Facilities of the Federal Works Agency as a constituent of the
General Services Agency for such time as he may determine.
(d) Compensation of Commissioner of Public Buildings.-This sub-
section provides for the compensation of the Commissioners of Public
Buildings and of Public Roads, at salaries to be determined by
Congress.
Section 104. Transfer of the National Archives
(a) Transfer of the National Archives Establishment.-This sub-
section transfers to the General Services Agency the functions, records,
and personnel of the National Archives Establishment, and to the
Administrator of General Services the functions of the Archivist of the
United States (except his functions with respect to the disposal of
records and his membership in the bodies specified in subsection (b)),
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FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
and of the Director of the Division of the Federal Register. The
Archivist is to be appointed by the Administrator and receive com-
pensation at an appropriate rate to be established by Congress.
(b) Transfer of National Archives Council and other bodies.-This
subsection transfers to the General Services Agency the National
Archives Council, the National Historical Publications Committee,
the National Archives Trust Fund Board, the Board of Trustees of
the Franklin D. Roosevelt Memorial Library, and the Administration
Committee of the Federal Register, and provides that the authority
of the Administrator of General Services shall not extend to those
bodies or their functions.
Section 105. Transfer for liquidation of the affairs of the War Assets
Administration
This section provides for the liquidation of the affairs of the War
Assets Administration as an agency and transfers its remaining func-
tions, and its records, property, personnel, obligations, and commit-
ments to the General Services Agency. It also permits the retention
of certain special assistants and other experts now holding appoint-
ments without regard to the provisions of the civil-service laws and
the Classification Act of 1923, as amended, and their appointment to
similar positions.
The retention in employment and the status of other personnel
transferred from War Assets Administration to the General Services
Agency will be governed by applicable provisions of.existing law.
Section 106. Redistribution of functions
Under this section the Administrator of General Services, in order
effectively to perform the functions vested in him under the terms of
this bill, is authorized to regroup and distribute within the Agency,
functions transferred to or vested in him by the bill, and, with ap-
proval of the Director of the Bureau of the Budget, to make appro-
priate transfers of funds in connection therewith. Approval of the
Director is required in order to assure that funds are expended for
the purpose for which they were appropriated, but it is not intended
to give him a veto power over the Administrator so far as the organ-
ization of the Agency is concerned.
Section 107. Transfer of funds
This section transfers to the General Services Agency for activities
under the bill the appropriations, allocations, or other funds available
to the Department of the Treasury, the War Assets Administration,
the Federal Works Agency, and the National Archives Establishment
for the functions transferred.
Section 108. Status of transferred employees
This section provides that, subject to other provisions of this title
relating to personnel, employees transferred shall be deemed to be
employees of the General Services Agency so as not to require reap-
pointment.
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10 FEDERAL PROPERTY AND .ADMINISTRATIVE SERVICES ACT, 1949
This deals with the subject of property management within the
United States.
Section 201. Procurement, warehousing, and related activities
(a) Centralized control.-This subsection authorizes the Administra-
tor of General Services, where it is advantageous to the Government,
to regulate the policies and methods of executive agencies with respect
to the procurement and supply of personal property and nonpersonal
services, including related functions such as contracting, inspection,
storage, issue, specifications, property identification and classification,
transportation and traffic management, management of public-
utility services, repairing and converting, and estabishment of forms
and procedures. The Administrator may himself procure such
personal property and nonpersonal services and perform. such related
functions, may consolidate and operate or arrange for the operation
of suitable warehouses, repair shops, and similar facilities, and may
represent executive agencies in negotiations with, and in proceedings
before, regulatory. bodies involving carriers and other public utilities.
The provisions with respect to traffic management and management
of public-utility services, and representation are not intended to
abrogate any authority of the Department of Justice with respect to
'
legal proceedings.
Ibis authority over procurement matters vested
in the Administrator is a restatement of authority currently exercised
by the Bureau of Federal Supply, except that the control over the
purchases of wholly owned Government corporations is new, and that
the relationship with the National Military Establishment is some-
what changed. The Sec- reta;ryof Defense is authorized unless the
President shall o hierwise direct, to_ exdlude procurement for the.
National Military Establishment from control of the Administrator
where the Secretary deems exclusion in the best interest of national
ss ctxrity. Combat equipment and other items of peculiar importance
t-Q ie arrmod forces could thusreadily be excluded by the Secretary
of Defense. At the same time, 'the Administrator would be in a
better position to serve the armed forces more fully in meeting their
4 other supply requirements, and he can appeal to the President if he
thinks the Secretary of Defense has wrongly excluded him from any
field.
(b) Services to the legislative and judicial branches, and mixed-
ownership corporations.-This subsection authorizes the Administrator
upon the request of any agency in the legislative or judicial branches
of the Government, or of any mixed-ownership Government corpora-
tion, or of the District of Columbia, to purchase, warehouse, and dis-
tribute personal property and nonpersonal services to meet their needs.
Government economy will be furthered by allowing these organiza-
tions, supported in whole or in part by the Federal Government, to
take advantage of savings in procuring supplies which the Adminis-
trator can provide through the operation of a central procurement
system.
It is believed that with the exceptions provided in the bill, the system
of centralized procurement, strengthened by the statutory support
which the bill provides, will prove its efficiency and economy in the
years to come. This does not mean. that every item must be procured
by a central agency, but only that such an agency must be responsible
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FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACCT, 1949
for determining how every item shall be procured, and for prescribing
the manner of procurement which is best under the circumstances.
(c) Application of trade-in allowances.-This subsection authorizes
executive agencies to exchange or sell personal property and apply the
trade-in allowance or proceeds of sale in whole or part payment for
L property acquired where such exchange is the common commercial
practice. This is an expansion of authority given under a number of
existing statutes to specific agencies or with respect to specific types
of property.
Section 202. Property utilization
This section deals with the most important phase of property
management, which is continuing use by the Government of the
Government's property.
(a) Over-all direction Q f Administrator of General Services.-This
subsection fixes upon the Administrator of General Serves' es the over-
all jes onsibiliy_._to. prescribe the policies and methods to promote
the greatest use in the entire executive establishment of property
which is excess to the needs of one particular establishment and also
to provide for the transfer of such property among Federal agencies.
(b) Responsibility of executive agencies to survey property.-This
subsection imposes upon each executive agency the responsibility,
in the first instance, (t) to maintain adequate inventory controls and
accountability systems for its property (see also Sec. 205 (b)) (2)
to survey its property continuously to determine which is excess to
its needs and promptly report excess property to the Administrator,
(3) to care for such excess property, and (4) transfer or dispose of
such property in accordance with authority delegated and regulations
prescribed by the Administrator.
(c) Responsibility of executive agencies to use property.-This sub-
section similarly imposes upon each executive agency the responsibility,
in the first instance, to reassign property among activities within such
agency, to transfer its excess property to other agencies, and to obtain
for its use property which is excess to the needs of other agencies.
(d) Transfer of property within National Military Establishment.-
This subsection permits the free transfer of excess property among the
Departments of the National Military Establishment under existing
provisions of law and procedures defined by the Secretary of Defense.
(e) Terms.for transfer of excess property.-This subsection generally
requires that transfers of excess property between Federal agencies
shall be at the fair value thereof, as determined by the Administrator
of General Services. Exceptions are made in the case of a transfer
for general distribution among Federal agencies or for disposal as
surplus property or where such transfer without reimbursement is
otherwise authorized by recent legislation. "Transfers for redistribu-
tion to other Federal agencies" refers to instances where property is
turned over to the Bureau of Federal Supply for redistribution rather
than transferred direct for the use of another agency. When the re-
distribution occurs the transfer should be at fair value.
(f) Transfer of property within an agency.--Under this subsection
transfers of property among activities financed by different appro-
priations to the same agency must be reported to the Director of
the Bureau of the Budget and, in turn, reported to the Congress.
(g) Assignment of office and warehouse space.--This subsection
clarifies and strengthens existing law by authorizing the Administrator
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12 FEDERAI, PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
of General Services to assign and reassign space in excess real property
to any Federal agency for office, storage, or related facilities. He
may obtain reimbursement for such assignment in the absence of an
appropriation available to him therefor. It is expected that operations
under this subsection can and should materially lessen the present
leasing of space for Government use in private office buildings.
(h) Abandonment or donation of property.-This subsection author-
izes the abandonment, destruction, or donation to public bodies, of
property having no commercial value, or the estimated proceeds from
its sale.
Section 203. Disposal of surplus property
(a) Responsibility of General Services Administrator.-This sub-
section provides that the General Services Administrator shall have
supervision and direction over the disposition of property surplus
to the needs of the entire Government.
(b) Care and handling of surplus property.-This subsection pro-
vides that the care and handling of surplus property pending its
disposition, and the disposal of surplus porperty, may be performed by
the General Services Agency or any executive agency designated by
the Administrator. An agency other than the one in possession,
however, cannot be designated to perform care and handling or dis-
posal without its consent.
(c) Terms of disposal.-This subsection provides that any agency
disposing of surplus property may do so by sale, exchange, lease,
permit, or transfer, for cash, credit, or other property, with or without
warranty, and may execute such documents for the transfer of the
property as may be necessary.
(d) Title of transferees.-This subsection is designed to protect the
interest of bona fide grantees or transferees. It makes instruments
purporting to transfer title or other interest in surplus pro
ert
under
p
y
this act, which are executed by an executive agency, conclusive evi-
dence of compliance with the provisions of the act in the absence of
notice of defects.
(e) Advertising for bids.-This subsection provides that surplus
property disposals may be :made without regard to provisions of
existing law for advertising, unless otherwise determined by the
Administrator, until December 31, 1950. Thereafter, advertising
and competitive bids will be required in disposing of such amount
of surplus real property generated by World War II as is not sold by
that date.
(f) Adjustments for contractor inventories.-This subsection provides
that contractors or subcontractors with executive agencies may be
authorized to retain or dispose of their contractor inventories.
(g) Consultation with Secretary of Agriculture.-This subsection
requires the Administrator to consult with the Secretary of Agriculture
in formulating policies for the disposal of surplus agricultural com-
modities, surplus food processed from agricultural commodities, and
surplus cotton and woolen goods, and further requires that such
policies shall be formulated to prevent surplus agricultural commodi-
ties or surplus food products from being dumped on the market in
such manner as to disrupt the market prices for agricultural com-
modities.
(h) Disposal of agricultural commodities.-This subsection requires
the Administrator to transfer to the Department of Agriculture with-
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out charge, any surplus agricultural commodities, foods, or cotton or
woolen goods, whenever the Secretary determines it necessary in
carrying out his responsibilities with respect to price support or
stabilization, and further requires that the receipts from disposals
by the Department of Agriculture shall be deposited pursuant to
authority available to the Secretary of Agriculture and the net proceeds
of sales of property so transferred shall be credited pursuant to the
provisions relating to proceeds in section 105 (b). It also provides
that, except when sold for export, surplus farm commodities so trans-
ferred may not be sold in quantities in excess of or at prices less than
those relating to such commodities when sold by the Commodity
Credit Corporation.
(i) Disposal of vessels for merchant use.-This subsection establishes
the United States Maritime Commission as the statutory disposal
agency for surplus vessels of 1,500 gross tons or more, which it deter-
mines to be merchant vessels or capable of conversion to merchant
use. Such vessels are to be disposed of in accordance with the Mer-
chant Marine Act of 1936 and other laws relating to the sale of such
vessels.
(j) Donations for educational purposes.-This subsection authorizes
the Administrator of General Services, in his discretion, to donate
surplus personal property usable for educational purposes as deter-
minea by the Federal Security Administrator, who shall allocate such
property on the basis of needs and utilization for transfer by the Ad-
ministrator of General Services, either direct or through State depart-
ments of education, to tax-supported and nonprofit school systems,
schools, colleges, and universities. Provision is also made for allo-
cation by the Secretary of Defense, for transfer by the Administrator
to educational activities of special interest to the armed services,
such as maritime academies or military or naval preparatory schools,
of surplus property of the National Military Establishment which the
Secretary determines to be usable for such activities. It is expected
that the Federal Security Administrator will delegate to the United
States Commissioner of Education authority to make determinations
and allocations under his general supervision, and that the Secretary
of Defense will similarly delegate to an appropriate official his au-
thority under this subsection.
(k) Conditions of transfer of surplus property.-Under the Surplus
Property Act of 1944, as amended, surplus property has been trans-
ferred to States and political subdivisions thereof, and to tax-supported
or nonprofit educational and medical institutions for specified uses,
subject to various conditions and reservations. This section would
permit the head of the interested Government agency, subject to
disapproval by the General Services Administrator, to enforce com-
pliance with such conditions or reservations, to reform or correct
the instruments of transfer by which such conditions or reservations
are imposed, and to grant releases (including conveyances by quit-
claim deed, in the case of real estate) from such conditions and reser-
vations. Such releases are to be conditioned upon findings that the
property no longer serves the purpose for which the transfer was
made, or that release will not prevent accomplishment of the purpose
of such transfer, and upon such other conditions as may be necessary
to protect or advance the interests of the United States.
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14 FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
(1) Abandoned property.-Authorizes the Administrator to take
possession of abandoned and other unclaimed property on Govern-
ment premises to determine when title thereto vested in the United
States, and to utilize transfer or otherwise dispose of such property.
Former owners of such property will have three 3 from the date of
vesting of title in the United States to file claim and if such claim
is found proper are to be paid the proceeds realized from the disposi-
tion of the property, or, if the property is used or transferred, its fair
value as of.the time title vested in the United States as determined by
the Administrator less in either case the costs incident to the care and
handling of such property as determined by the Administrator. It is
contemplated that if such property is utilized or transferred its fair
value will be paid by the receiving agency in line with the provisions of
section 202 (e) and that such amounts and proceeds realized from
dispositions will be covered into the Treasury as miscellaneous receipts
pursuant to section 204 (a). Under other authority in the bill
appropriations may be made for payment of any claims presented by
the rightful owners.
Section 204. Proceeds from transfer or disposition of property
(a) Deposit of proceeds into miscellaneous receipts.-This subsection
requires all proceeds from the transfer of excess property to a Federal
agency or from the sale, lease, or other disposition of surplus propperty
to be covered into the Treasury as miscellaneous receipts, with the
exceptions noted in subsections (b), (c), and (d).
(b) Crediting of reimbursable funds.-This subsection provides that
in cases where the property was acquired by funds either not appro-
priated from the general fund of the Treasury, or appropriated there-
from and by law reimbursable from assessments, taxes, or other
revenues, the net proceeds of the disposition or transfer of such
property shall be credited to the reimbursable fund or appropriation
or paid to the Federal agency declaring such property excess. It
further provides that the proceeds shall be credited to miscellaneous
receipts if the agency declaring the property excess shall deem it
uneconomical. or impracticable to ascertain the amount of net
proceeds.
(c) Refunds to purchasers.-This subsection provides that Federal
agencies disposing of surplus property may deposit in a special
account with the Treasury whatever amounts they deem necessary
to permit refunds to purchasers when any disposition is rescinded, or
for breaches of warranty, and to withdraw the amounts so to be
refunded or paid.
(d) Proceeds .from contractors' sales.-This subsection recognizes
that the contractual provisions authorizing the proceeds of sales of
property to be credited to price or cost of the work covered by the
contract, are controlling and are not subject to the requirements of
the act relating to covering proceeds into the Treasury as miscellaneous
receipts.
(e) Preservation of security.--This subsection authorizes the Ad-
ministrator to preserve and manage any mortgage, lien, or other
interest retained as security in the disposition of surplus property,
and authorizes him to enforce and settle the rights of the Government
with respect thereto.
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FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
Section 205. Policies, regulations, and delegations
(a) Presidential policies.-By reason of the impact of this legisla-
tionupon all agencies in the executive establishment, this subsection
authorizes the President, if he deems it advisable, to prescribe o.uer-all
policies and directives to govern the Administrator of General Services
and executive agencies in operations under this act.
(b) Property accounting systems.-This subsection requires the
Comptroller General, after considering the needs and requirements
of executive agencies, to prescribe principles and standards of account-
ing for property, to cooperate with the Administrator of General
Services and the executive agencies in developing property accounting
systems, to approve satisfactory systems, to examine agency systems
to determine the. extent of compliance with principles, standards, and
approved systems, and to report to the Congress cases of failure to
comply therewith or adequately to account for property.
This is more flexible and vests more authority in the operating
agencies than the recent independent offices appropriations acts, which
**moo' prohibit the several agencies there named from installing or main-
taining any property accounting system not prescribed or approved
by the Comptroller General. The committee urges cooperation
between the Comptroller General and other agencies in order that
operating needs and costs may be fully considered. This section
applies to all executive departments and agencies, with the exception,
as provided in section 502 (c), of corporations and agencies subject
to the Government Corporation Control Act.
(c) Regulations of the Administrator.-This subsection requires the
Administrator to prescribe regulations for the effectuation of his
functions under the act, and also requires the head of each executive
agency to issue such orders and directives as are necessary to carry out
such regulations.
(d) Delegations of authority.-Under this subsection. the Adminis-
trator may redelegate his authority excepting, however, the authority
to issue policy regulations and the authority to make reorganizations
within the General Services Agency.
(e) Designation of other agencies.-So as to provide the greatest use
of existing personnel and facilities within established agencies, this
subsection authorizes the Administrator to designate other executive
agencies to perform various procurement, utilization, or disposal
functions with the proviso that any such designation shall be made
only with the consent of the agency concerned or upon direction of the
President.
This proviso would not apply to the authority of the Administrator
to prescribe regulations and the duty of agency heads to implement
them under subsection (c).
(f) Transfer of personnel and funds.-When any designation is made
under subsection (d) the Administrator may, under this subsection,
transfer funds and personnel to the affected executive agency.
(g) Advisory committees,-This subsection authorizes the Adminis-
trator to establish advisory committees to advise with him in carrying
out his functions. Experience has demonstrated the value of such
committees to Government officers where Government programs affect
closely business and industry. Specific statutory authorization is
necessary because of the prohibitions against unauthorized boards and
commissions in title 31, United States Code, section 673, volume 35,
Statutes at Large, page 1027. Compare also title .5, United States
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16 FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
Code, section 83, volume 37, Statutes at Large, page 124, and title 31,
United States Code, section 55 1., volume 49, Statutes at Large, page 19.
Because of the better control over the membership and activities of
industry committees which is possible when they are established
pursuant to statute, it would be advisable to provide specifically for
such committees even apart from these laws.
(h) Consultation with other agencies.-This subsection makes it
mandatory for the Administrator to advise and consult with affected
Federal agencies.
Section 206. Surveys and standardization
(a) Surveys, supply catalog, and contract forms.-This subsection
authorizes the Administrator to survey Government property and
management practices, to cooperate with executive agencies in the
establishment of reasonable inventory levels and to report -excessive
stocking to the Congress and. the Budget Bureau, to establish and
maintain a uniform Federal supply catalog system, and to prescribe
standardized purchases and contract forms, procedures, and specifi-
cations. Making surveys, requiring reports concerning Government
property, and establishing inventory levels, with due regard for the
requirements of agencies concerned, will obviously promote better
supply practices, and indeed are indispensable if the powers under
sections 201 and 202 are to be effectively exercised. The Adminis-
trator's reports on excessive stocking will enable the Appropriations
Committees and Budget Bureau examiners to make suitable reduc-
tions in appropriations and estimates. The authority to standardize
Government purchase and contract forms, procedures, and specifica-
tions has been in effect and in use for many years and is demanded by
industry to make its relations with Government easier. It is confus-
ing and costly, for example, to have a contract for a supply item, with
one agency, different in meaning and effect from one for the same
kind of item with another agency. Existing control over the stand-
ardization of the Government construction contract forms and leases
is continued in effect by provision in section 502 (b).
A uniform,Federal supply catalog system, which identifies and
classifies personal property under the control of Federal agencies., is
essential for a well-managed Federal supply system so that there may
be a common supply language among all parties to a transaction.
The catalog will ultimately mean large savings to the Government
through reducing inventories of parts and supplies. Without such a
catalog, identical items are carried in stock under different designa-
tions, swelling inventories to needless size. This cannot be avoided
until each item is described, classified, and given a number for identifi-
cation, so that duplications can be spotted at once. The disposal of
surplus Government personal property will thus likewise be speeded.
Provision is made for coordinating catalog activities with those of the
National Military Establishment.
This subsection makes it clear that the National Military Establish-
ment and the Bureau of Federal Supply will continue to cooperate
toward the development of a Federal catalog system, as requested by
the President, in accordance with the agreement (appendix A) signed
by them.'
(b) Catalog and specifications mandatory.-Due to the savings result-
ing from common use of the uniform supply catalog system and of
standard purchase specifications, this subsection requires executive
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FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949 17
agencies to use them as far as practicable when prescribed by the
Administrator. It is contemplated that questions of practicability,'
where dispute arises, will be settled by the Administrator.
(c) Audit of property accounts.-This subsection requires the General
Accounting Office to audit all types of property accounts and trans-
actions, such audit to be conducted at the site when practicable of
the property or records and to include an evaluation of the effective-
ness of internal controls and audits and a general audit of the discharge
of the duty to account for property.
Section 207. Applicability of antitrust laws
This section requires any executive agency in beginning negotiations
for the disposal of any plant or other property costing $1,000,000 or
more, to seek advice of the Attorney General, and it shall be the duty
of the Attorney General to advise the executive agency whether the
proposed disposition of the property would tend to create or maintain
a situation inconsistent with the antitrust laws. The executive agency
must assist the Attorney General by furnishing him any requisite
information it may possess essential to the Attorney General's
determination. This section also provides that nothing in the act
shall modify or limit the applicability of the antitrust laws to persons
who acquire property under the provisions of the act.
In one respect the section is broader than a similar provision in the
Surplus Property Act of 1944. It requires a determination by the
Attorney General as to whether the proposed disposal would tend to
create or maintain a situation inconsistent with the antitrust laws,
while under existing law the determination is whether the proposed
disposition will violate the antitrust laws.
Section 208. Employment of personnel
(a) Civil-service laws.-Employment of personnel is required by
this subsection to be subject to the civil-service and classification laws.
(b) Consultants.-As an exception to the foregoing, this subsection
grants to the Administrator limited authority to procure the temporary
service of experts and consultants.
(c) Officers of other agencies.-The principal purpose of this sub-
section is to authorize the Administrator to utilize commissioned
officers in the armed services with the consent of the head of the
agency concerned.
Section 209. Civil remedies and penalties
(a) Liability of Government employees.-This subsection exempts
officers and employees of the Government disposing of property under
this act from liability with respect to such disposition, except for
their own fraud, and from liability for the collection of any purchase
price determined to be uncollectible. This provision is necessary
because of the wide discretion which must be permitted persons
charged with disposition under circumstances calling for swift action,
and the tremendous volume of property covered by the act.
(b) Civil penalties for fraud.-This subsection deals with the civil
liability of persons who engage in false, fraudulent, or fictitious activi-
ties or conceal or misrepresent material facts or act with intent to
defraud the United States, or who enter into an agreement or con-
spiracy, or cause other persons to do any of the foregoing. The
S. Rept. 338,81-1-3
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18 FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
United States is given the option of selecting among three different
? measures of damages-
1. Any person engaged in such activities can be sued for the
sum of $2,000, for each such act, plus twice the amount of the
damage sustained by the United States, plus the cost of suit.
2. The United States may recover from such person the amount
of consideration paid by it to such person, or twice the amount
of consideration which such person agreed to give the United
States.
3. The United States may keep the property acquired by
reason of the above-described fraud, plus the consideration given
to it f
th
or
at property.
Section 210. Reports to Congress
This section requires the Administrator to submit to Congress in
January of each year and at such other times as he may deem it
desirable, a report regarding the administration of his functions
under the act, together with any recommendations for amendments
which lie may deem appropriate.
TITLE III-PROCUREMENT PROCEDURE
This title follows in structure, and is identical in language, with the
Armed Services Procurement Act with a few appropriate changes and
omissions.
Section 301'. Declaration of purpose
This section states that the purpose of title III is to facilitate the
procurement of supplies and services.
Section 302. Application and procurement methods
(a) This subsection makes the provisions of title III applicable to
purchases and contracts for supplies or services made by the General
Services Agency either for its own use or otherwise, including cen-
tralized procurement. By delegation the Administrator may au-
thorize any other civilian executive agency to use the procedure set
forth in title III when such agency is designated to perform a t 1
procurement function. In addition, authority to use the procedures
set forth in title III may be delegated by the Administrator to another
civilian executive agency in other cases where the Administrator
determines that such delegation is advantageous to the Government
in terms of economy, efficiency, or national security. It is required
that the Administrator's determination in such other cases set forth
the circumstances upon which the determination is based. Time
terms "economy" and "efficiency" will be broad enough to cover
cases where authority is delegated to negotiate contracts under 302
(c) (5) and 302 ~e) (10), of this title. This title does not confer upon
any civilian executive agency any vested right to receive such delega-
tion. It is expected that such power of delegation will not be exercised
indiscriminately but rather will be used with care and discretion. It
is also expected that the Administrator will make periodic reviews to
determine whether the authority so delegated has been properly used,
and that he will either take such action as may be necessary to correct
any misuse or will withdraw the delegation
After t
Ad
i
i
.
m
n
strator
he.
has made such delegation he shall give notice thereof to the General
Accounting Office.
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FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
(b) This subsection states the policy that a fair proportion of the
total purchases and contracts shall be placed with small business con-
cerns and. further provides that notice of intent to negotiate shall be
published in certain cases.
(c) Initially, this subsection reaffirms the basic principle that pur-
chases and contracts shall be made by advertising. Negotiation is
made permissible in certain excepted cases, however, to provide flexi-
bility in Government procurement.
(1) This paragraph would permit automatic and immediate transi-
tion, from more rigid peacetime advertising procedures to a completely
flexible system if the President or the Congress declares the existence
of a national emergency.
(2) This provision is an adaptation of a portion of section 3709 of
the Revised Statutes as amended by section 9 (a) of the act of August
2, 1946 (60 Stat. 1109; 41 U. S. C. 5). Whenever urgency requires an
immediate purchase this exception would be available irrespective of
whether the emergency could or should have been foreseen.
(3) Tlris paragraph extends to the General Services Agency the
power to negotiate if the aggregate amount involved does not exceed
$1,000. However, no delegation of such authority may be made to
other executive agencies under this paragraph for purchases or con-
tracts for supplies or services in excess of $500 unless such purchasing
or contracting is for centralized procurement.
(4) This provision permitting negotiation for personal or profes-
sional services is an adaptation of the exception from advertising pro-
vided by section 3709 of the Revised Statutes, as amended, herein-
above referred to.
(5) This paragraph would permit negotiation of contracts for tech-
nical assistance, expert study and the application of specialized knowl-
edge to be performed by any university, college, or other educational
institution. This would cover matters which might not clearly
qualify as experimental, developmental, or research work under para-
graph (10) of this section.
(6) Under this paragraph if supplies or services are to be procured
and used outside the limits of the United States and its possessions the
contracts or purchases may be negotiated. In such cases it is fre-
quently impracticable or uneconomical to advertise.
(7) Due to the technical nature, special characteristics, and differing
qualities of medicines and medical supplies it is sometimes extremely
difficult if not impossible to describe adequately in detailed specifica-
tions the exact characteristics of qualities needed. In such cases the
need for negotiation is clear.
(8) Where supplies are purchased for authorized resale, the pur-
chasing agency must accommodate the brand preference or the quality
preference of the organization requesting the purchase. This para-
graph therefore provides authority to negotiate such purchases.
(9) This paragraph provides for negotiation where it is impractica-
ble to secure competition and places upon the agency concerned the
maximum responsibility for decisions as to when it is impracticable.
It is intended that this paragraph should be construed liberally.
(10) The very nature of a research and development contract does
not ordinarily lend itself to formal advertising. This paragraph
therefore provides that contracts for experimental, developmental,
or research work or for the manufacture of furnishing of supplies for
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ttAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
experimentation, development, research, or test may be negotiated
and provides also for periodic reports to the Congress of action taken
under this paragraph.
(1l) It is provided that in cases where the purchase or contract
should not be publicly disclosed negotiation may be employed. In
In such cases public disclosure through advertising would clearly be
adverse to the interests of the Government.
(12) This paragraph permits negotiation of contracts for technical
equipment in order to assure standardization of equipment and inter-
changeability of parts when such standardization and interchange-
ability is necessary in the public interest. It is intended that this
authority should be used in special situations or in particular localities
and such provision has been therefore added to the language as it
appears in section 2 (c) (13) of the Armed Services Procurement Act
of 1947. The paragraph would protect in every way possible the
principles of competition and antimonopoly consistent with the.
/occasional need for such
t
d
di
s
an
ar
zation, and section 307 (b) of this
v title provides that the agency head may not delegate his responsibility
for making any of the determinations required under this paragraph,
(13) Permits negotiation for supplies or services when it is deter-
mined that bid prices after advertising are not reasonable either as to
all or some part of the requirements or have not been independently
arrived at in open competition. It is designed to cope with cases in-
cluding those where all bids received are too high, although not actually
identical or apparently collusive. The committee believes that this
paragraph will be most useful. to break collusive bidding, follow-the-
leader pricing, rotated low bids, identical bids requiring drawing of
lots, uniform estimating systems, refusal to classify the Government as
other than. a retail buyer regardless of the quantity purchased, and
similar other practices. Notification of the intention to negotiate
after such advertising and reasonable opportunity to negotiate must
be given to each responsible bidder and also the negotiated price must
be the lowest negotiated price offered by any responsible supplier.
This paragraph is a modification of paragraph 2 (c) (15) of the Armed
Services Procurement Act of 1947
The modifi
ti
.
ca
on will remove a
restriction which in cases such as sudden upward market fluctuations
mi
ht m
k
it i
g
a
e
mpossible to secure the needed supplies.
(14) This provision would preserve the authority to negotiate
contracts conferred by other permanent legislation, for example, the
Strategic and Critical Materials Stock Piling Act (60 Stat. 596; 50
U. S. C. 98-98h). This paragraph also has the effect of permitting
negotiation under any relevant law which may be subsequently
enacted whether said law is general or special legislation.
(d) The immediate furnishing of evidence of possible violations of
the antitrust laws to the Department of Justice as required by this
subsection will facilitate appropriate action where violations exist
and will have a valuable moral effect on bidders. Compliance with
this paragraph is not to be construed, however, as a condition pre-
cedent before exercise of the authority conferred by this title.
(e) For clarity this subsection provides that section 302 does not
authorize or change the existing requirements for authorization for
the erection or repair of buildings, roads, sidewalks, or similar items.
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Section 303. Advertising requirements
(a) This section would establish broad standards for advertising,
reserving appropriate discretion in the agency. It is considered both
unnecessary and unwise to prescribe detailed and restrictive require-
ments, and it is believed that such matters should be left to be dealt
with by regulation. The section provides that advertising shall be
so conducted as to secure such full and free competition as is consistent
with the procurement of types of supplies and services needed.
(b) This subsection provides for the public opening of bids and
reaffirms the principles that the award shall be made to the responsible
bidder whose bid is most advantageous to the Government, price and
other factors considered, and that the Government may reject all
bids when such action is deemed advisable. The question as to
whether a particular bidder is a "responsible bidder" requires sound
business judgment and involves evaluation of the bidder's experience,
facilities, technical organization, reputation, financial resources and
other factors and a broad discretion is accordingly reserved to the
agency with respect to the making of such determination.
Section 304. Requirements of negotiated contracts
(a) The right to use the most suitable type of contract is a necessary
and inseparable adjunct to the right to negotiate and this subsection
therefore permits negotiated contracts to be of any type which in the
opinion of the agency head will promote the best interests of the
Government, except as provided in subsection (b). Authority to
negotiate contracts in the first instance carries with it equal authority
to negotiate subsequent changes in the terms of negotiated contracts
and such amendments may also be of such type as the agency head
believes will promote the best interests of the Government. Tliis
subsection also provides that every negotiated contract shall contain':
a suitable warranty against contingent fees.
(b) This subsection prohibits the cost-plus-a-percentage-of-cost
system of contracting and prescribes maximum fees in connection with
cost, plus-a-fixed-fee contracts. Neither a cost nor a cost-plus-a-
fixed-fee contract nor an incentive-type contract may be used unless
it is determined that such method is likely to be less costly than other
methods or that it is impracticable to secure supplies or services of the
kind or quality without the use of such type of contract.
Section 305. Advance Payments
(a) This permits the agency head to make advance payments under
negotiated contracts upon adequate security if the agency head is
determines such payments to be in the public interest or in the interest
of the national defense and necessary and appropriate in order to
procure the required supplies or services. This authority is essential
in periods of emergency and in peacetime it is often the only way in
which it can be made possible for a small business concern to handle
Government contracts. Often institutions of learning, research
laboratories, inventors, and similar contractors who perform most
of the experimental, research and developmental contracts need ad-
vance payments because they do not have sufficient funds to finance
or are unwilling to finance such contracts completely out of their
own resources. The power to make advance payments is permissive
only, and under section 307 (b) of this title may not be delegated by
the agency head.
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22 FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1940
(b) The additional form of security by way of lien which is provided
for by this subsection is a permissive feature which may be very useful,
especially in the event that a joint bank account, a controlled account,
or a special bank account is established in connection with an advance
payment.
Section 306. Waiver of liquidated damages
This section permits the Comptroller General, in his discretion, upon
proper recommendation by the agency concerned, to remit sums due
the Government under contract terms providing for the assessment of
liquidated damages for a delay in performance. This will permit the
Comptroller General to meet those situations in which the strict appli-
cation of the liquidated damages provisions would be inequitable either
in whole or in part and regardless of whether timely notice is given with
respect to the delay.
Section 307. Administrative determinations and delegations
(a) This subsection provides that the determinations and decisions
to be made by the Administrator or other agency head may be made
with respect to individual purchases and contracts or with respect
to classes of purchases or contracts and that such determinations and
decisions shall be final. It allows delegation by the agency head
except in those cases designated in subsection (b) of this section. The
determinations and decisions so made will not be made subject to
invalidation or challenge by the Comptroller General or the courts.
However, the broader the power or the more important the decision or
determination, the higher the level at which the decision or determin-
ation will be made.
(b) This subsection prohibits the agency head from delegating the
power to make the determinations or decisions specified in paragraphs
11 and. 12 of section 302 (c), which concern respectively contracts
which should not be publicly disclosed and standardization of tech-
nical equipment and in section 305 (a), concerning the making of
advance payments. This subsection also restricts the power of the
agency head to make the decision or determinations specified in para-
graph (10) of section 302 (c) which concerns experimental, develop-
mental, or research contracts. Furthermore, under this subsection
the Administrator's power to delegate to another civilian executive
agency the right to use the authority provided under title III can
be delegated by the Administrator only to the Deputy Administrator
of the General Services Agency or to the chief official of any principal
constituent agency of the General Services Agency. It is believed
that such power to confer authority upon another civilian agency
should be exercised only at a high level within the General Services
Agency.
(c) As a further safeguard this subsection requires that determina-
tions or decisions concerning research and development contracts; coii-
tracts which should not be publicly disclosed, standardization of tech-
nical equipment, and negotiation after advertising, the type of contract
p to be used and the making of advance payments shall be based upon
written findings, that these findings shall be final, and shall be avail-
able within the agency for at least 6 years after making such deter-
mination. Furthermore, it provides that a copy of the findings shall
be furnished to the General Accounting Office with the contract.
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FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
(d) Data with respect to negotiation is required to be preserved in
the agency for 6 years following final payment on the contract except
where negotiation is pursuant to public exigency, a dollar amount, for
personal or professional services, for services to be rendered by an
educational institution, or for supplies or services which are to be pur-
chased and used outside the limits of the United States or its pos-
sessions.
Section 308. Statutes continued in effect
This section provides that contracts executed under this title shall
not be exempt from the provisions of the Walsh-Healey Act, the Davis-
Bacon Act, or the 8-hour law by reason of their having been entered
into by negotiation.
Section 309. Definitions
(a) This subsection defines the term "agency head" as used in
title III to mean the head, or an assistant head of any executive
agency, and provides that the term may at the option of the Adminis-
trator include the chief official of any principal constituent agency of
the General Services Agency. This is deemed salutary in order to
reserve the power of determination and decision at an adequately
high level, and at the same time to designate the officials intended to
be covered.
(b) This subsection defines supplies to include all property except
land, and to include, by way of description and without limitation,
public works, buildings, facilities, ships, floating equipment, vessels,
aircraft, parts accessories, equipment, machine tools, and alteration
or installation thereof. These illustrations are intended only as
examples and the committee has attempted to meet present and
future contingencies.
Section 310. Statutes not applicable
This section provides that the following acts shall not be applicable
to the procurement of supplies or services by the General Services
Agency:
Revised Statutes, section 3709, as amended, which concerns
formal advertising;
Revised Statutes, section 3735, which prohibits the making of
contracts for "stationery or other supplies" for more than 1
year; and
Sections 1 and 2 of the act of October 10, 1940, which set forth
certain specific exemptions from Revised Statutes, section 3709,
which are not in harmony with this title.
These statutes would also be suspended for procurement made by
another civilian executive agency, under proper delegation of authority
made by the Administrator and solely within the scope of that
authority, and such suspension would be limited to the extent and
within the purview of the authority thus delegated.
TITLE IV. FOREIGN EXCESS PROPERTY
Section 401. Disposal of foreign excess property
This section generally provides that, except where commitments
exist under previous agreements, all excess property located in foreign
areas shall be disposed of by the owning agency. The head of the
agency in question is directed to conform to the foreign policy of the
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24 FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
United states in making such disposals. The section provides further
that the Secretary of State shall[ continue to administer existing agree-
ments with respect to the disposal of foreign excess property and
shall have authority to amend, modify, and renew such agreements
in order to carry on the foreign educational exchange program and
the purposes of the Foreign Service Buildings Act and to provide
local currencies under procedures established by the Secretary of the
Treasury for the payment of expenses of the United States in the
country in question.
Section 402. Methods and terms of disposal
This section authorizes disposals of foreign excess property under
terms similar to those in the Surplus Property Act of 1944, .as amended,
under which foreign disposals are currently being made. Foreign
excess property may be disposed of by sale, exchange, lease, or trans-
fer, for cash, credit, or other property, with or without warranty, and
upon such other terms and conditions as the head of the executive
agency concerned deems proper. Such property may be disposed of
for foreign currencies or credits, or substantial benefits or the dis-
charge of claims resulting from the compromise or settlement of such
claims by any executive agency in accordance with the law, whenever
the head of the executive agency concerned determines that it is in
the interest of the United States to do so. Disposals may be made
without advertising when the head of the executive agency finds such a
course to be most practicable and to be most advantageous to the
Government. Sales of agricultural commodities, food, or cotton or
woolen goods must include a condition forbidding importation into
the United States unless the Secretary of Agriculture determines that
such property is in short supply in' this country. The head of the
executive agency responsible for disposal. may execute the documents
necessary to transfer the interest of the United States in the property
and may authorize abandonment, destruction, or donation of foreign
excess property under his control which has no commercial value, or
the estimated costs of care and -handling of which. would exceed the
estimated proceeds of sale. -
Section 403. Proceeds; Foreign currencies
This section provides that the proceeds from sales of foreign excess A
property shall, if in the form of foreign currencies or credits, be ad-
ministered in accordance with procedures prescribed by the Secretary -
of the Treasury and shall, if in United States currency or when reduced
to United States currency, be covered into the Treasury as miscel-
laneous receipts. The provisions of section 204 (b) relating to reim-
bursable funds or appropriations shall apply to proceeds of foreign
excess property under this title. The section further provides that
any executive agency disposing of surplus property under this title
may establish a special account with the Treasurer of the United
States from which appropriate refunds to purchasers may be made.
Section 404.. Miscellaneous provisions
(a) Presidential policies.-The President is granted general author-
ity to prescribe policies deemed necessary to execute the provisions
of this title.
(b) Delegation of authority.-.Any authority conferred upon any
executive agency under this title may be delegated and successive
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FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949 25
redelegations authorized by the head of such agency to any official in
such agency or to the head of another executive agency.
(c) Employment of personnel.-The head of each executive agency
responsible for the disposal of excess property hereunder may, subject
to the civil-service and classification laws, appoint and fix the com-
pensation of necessary personnel and without regard to the civil-
service and classification laws appoint and fix the compensation of
personnel outside the continental limits of the United States as may
be necessary to carry out his functions.
(d) Reports to Congress.-Each. agency responsible. for foreign dis-
posal shall make annual reports to Congress relative to its activities
under this title.
(e) Transfer of personnel, funds, etc.-Such records, property, per-
sonnel obligations, commitments, and unexpended balances of appro-
priations, allocations, and other funds as are determined by the
Director of the Bureau of the Budget to relate to the functions trans-
ferred to another executive agency under this title shall be transferred
from the Department of State to that agency.
Section 501. Applicability of existing procedures
This section continues in effect all existing policies and procedures
until superseded or amended under authority of the act.
Section 502. Repeal and saving provisions
(a) Repeal of Surplus Property Act, certain exceptions.-This subsec-
tion repeals all the Surplus Property Act of 1944 .except (i) sections
13 (a), (g), and (h), relating to transfers for education and health,
the airport program, and parks, recreation, and historic monuments
and section 32 (b) (2) relating to the foreign scholarship program, all
of which are retained as permanent legislation; and (ii) section 28
suspending a statute of limitations. The priorities and preferences
provided for in that act are continued in effect with respect to the
disposal of surplus real estate. The provisions of the Supplemental
Independent Offices Appropriation Act, 1949 (Public Law 862, 80th
Cong.), as amended, abolishing the War Assets Administration as of
June 30, 1949, and assigning its property-disposal functions to several
different agencies, are likewise repealed, as are. two statutes authoriz-
ing the armed services to donate obsolete personal property for edu-
cational purposes. The latter statutes were superseded by Public
Law 889, Eightieth Congress, which is likewise repealed, since it will
be superseded by the donation provisions in. section 203 (j). This
subsection also repeals parts of some 23 statutes relating to use of
trade-in allowances which will be superseded by section 201 (c).
(b) Repeal of Executive Order 6166--This subsection supersedes
Executive Order 6166 so far as it relates to the Bureau of Federal
Supply.
(c) Declaration of additional authority.-By this subsection the au-
thority conferred by the act is declared supplemental and not subject
to other legislation.
(d) Special exemptions from the act.--This subsection exempts from
operations under the act a number of activities requiring special treat-
men ' chive among these are programs for price support, stabiliza-
tion, grants to farmers, and foreign aid; procurement procedures under
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26 FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
the Armed Services Procurement Act of 1947 (this statute is concerned
only with procedures and it is not intended by its inclusion in this sub-
section to grant any exemption from the substantive provisions of the
bill) ; the stock piling of critical materials; the national school-lunch
program; the Housing and Home Finance Agency with respect to the
disposal of residential property; and the Atomic Energy Commission.
(e) Limitation on open-market purchases.-This subsection amends
section 3709 of the Revised Statutes as amended by raising from $100
to $500 the limit on the amount that can be expended in an open-
market purchase without advertising or bidding.
(f) This-subsection from the standpoint of management should be-
come one of the important parts of the bill. The bill as written
specifically repeals 28 statutes. There are several hundred more stat-
utes which relate to the subject matter of this bill and this subsection
requires the Administrator to thoroughly study these and report to
the Congress those which are obsolete and should be repealed.
Section 503. Authorization for appropriations and transfer authority
(a) Authorization for appropriations.-This subsection authorizes
appropriations generally without specification as to amount.
(b) Transfer authority.-Under this subsection an executive agency
may use for care and handling of property funds heretofore appro-
priated to it for purposes contemplated by sections 201, 202, 203,
and 204 of the act.
Section 50.. Separability
Each provision of the act is declared separable so far as validity is
concerned.
Section 505. Effective date
The effective date of the act is established as July 1, 1949, except
that one clause relating to the War Assets Administration is made
effective June 30.
;STATEMENT OF AGREEMENT BETWEEN THE MUNITIONS BOARD, NATIONAL DE-
FENSE ESTABLISHMENT, AND THE BUREAU OF FEDERAL SUPPLY, DEPARTMENT
OF THE TREASURY, ON PROCEDURES FOR THE DEVELOPMENT OF A UNIFORM
FEDERAL CATALOG SYSTEM
The Munitions Board Cataloging Agency has embarked upon a comprehensive
3-year program to provide a uniform catalog system for all items of armed services
supply. This program was initiated in recognition of the urgent military need for
a common language for supply activities. The Bureau of Federal Supply has
been active in the planning for a Federal catalog system in compliance with
Presidential directives and its basic responsibility for the development and
maintenance of the Federal Standard Stock Catalog. This planning was partici-
pated in by the Military Establishment and several of the larger civil establish-
ments. There is now pending before the Congress a bill to reorganize and simplify
the procurement, utilization, and disposal of Government property, and for other
purposes, which provides, among other things, for the transfer of the Bureau of
Federal Supply to the Federal Works Agency and authorizes the Federal Works
Administrator "As he may deem necessary for the effectuation of his functions
under this title, and after adequate advance notice to the agencies affected, and
with due regard to the requirements of the National Military Establishment as
determined by the Secretary of Defense * * * to establish and maintain such
uniform Federal supply catalog system to identify and classify personal property
under the control of Federal agencies as may be appropriate * * *." Also
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FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949 27
"each executive agency shall utilize such uniform Federal supply catalog system
and standard purchase specifications as far as practicable, taking into considera-
tion efficiency, economy, and other interests of the Government."
Pending action of the Congress on the above bill, it is recognized that the inter-
ests of the Federal Government can best be served through continuing close
cooperation and working contacts between the cataloging activities of the civil
.and military establishments. To this end the following agreements have been
reached between the Munitions Board and the Bureau of Federal Supply:
(1) That the present plans and procedures of the Munitions Board Cataloging
Agency are satisfactory for initiating Federal catalog operations. It is under-
stood that the agency is further developing the elements of cataloging in accord-
ance with the basic principles developed under the sponsorship of the United
States Standard Commodity Catalog Board;
(2) That certain revisions and expansions in plans and procedures must be
made as work progresses to provide for the requirements of civilian agencies;
(3) That the question of classification will require close coordination with the
civilian agencies and the Munition Board Cataloging Agency in order to develop
a commodity supply classification system which will be practical and workable
for all organizations;
(4) That any civilian agency having major supply problems should be repre-
sented on the Technical Group of the Munitions Board Cataloging Agency.
The Bureau of Federal Supply will, with the concurrence of the Bureau of the
Budget, develop recommendations to the Cataloging Agency as to the agencies
which should be represented;
(5) That the Bureau of Federal Supply shall have one member and one alter-
nate on the Executive Group of the Munitions Board Cataloging Agency, for
representation of civilian agencies.
(6) That after completion of the current "3-year program" of the Munitions
Board Cataloging Agency, the respective future responsibilities of the agency and
the Bureau of Federal Supply would, in the absence of legislative direction, be
determined by agreement between the Secretary of Defense and the Secretary of
the Treasury;
(7) That the Bureau of Federal Supply will be responsible for such coordination
as will assure that cataloging developments initiated by the Munitions Board
Cataloging Agency are made available to interested civil establishments.
(Signed) CLIPTON E. MACK,
Bureau of Federal Supply, Treasury Department.
(Signed) Maj. Gen. PATRICK W. TIMBERLAKE,
Munitions Board.
THE WHITE Houses,
Washington, January 18, 1945.
lion. HAROLD D. SMITH,
Director, Bureau of the Budget, Washington, D. C.
My DEAR MR. SMITH: I think it important that the executive departments
and agencies develop more systematic records and procedures for use in all
transactions requiring a description of items of real and personal property.
The large number of actions relating to the acquisition, care, use, and disposal
of Federal property has greatly accentuated the need for this improvement in
governmental practices, both for the effective prosecution of the war and for the
more orderly conduct of peacetime affairs. Such records and procedures should
be developed by the several departments and agencies chiefly concerned in
accordance with a uniform central plan developed by you. This plan should in-
clude a uniform property classification and a uniform item identification system,
covering all commodities, which together might be known as the United States
standard commodity catalog.
Accordingly, it is my desire that you proceed without delay to secure the
preparation and maintenance of such a catalog, utilizing all relevant systems
and methods now in use by the Government to the extent that they conform with
the central plan, and utilizing also the facilities and services of the agencies
principally concerned. It is my wish, and I hereby request, that each department
.and agency shall assume such share of the work and responsibility as you may
determine. Any necessary costs to the several departments and agencies beyond
those they are now incurring for similar activities should be included in additional
estimates of appropriations.
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28 FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 1949
When the standard commodity catalog or any part of it is ready for use it
should be promulgated by you for use throughout the Government in all relevant
activities involving the procurement, storage, issue, disposal, or intra-Govern-
mont transfer of property, the listing or cataloging of property, and the collection
and tabulation of commodity information.
Pending the formalizing of these instructions in an Executive order, I wish you
would convey to all departments and agencies my instructions regarding this
matter and take whatever steps are necessary to develop and maintain the,
catalog.
Sincerely yours,
Tar. WHITE HOUSTP,
Washington, July 15, 1946.
Hon. PAUL H. APPLEBY,
Acting Director, Bureau of the Budget, Washington 25, D. C.
MY DEAR MR. APPLEBY: I have your memorandum with reference to the
general plan for the development and maintenance of a Federal catalog system
which would standardize for all agencies the classification and item numbering of
property purchased by the Federal Government. I agree with you that the
proposed unified system will result in significant improvements and economies in
supply operations of the Government.
lending further study of some features of the proposed plan, including the need
for legislation and the budget that should be sought, I desire that further develop-
ment of the Federal catalog system be continued through interdepartmental
cooperation and joint working arrangements. I concur in your recommendation
that the United States Standard Commodity Catalog Board, which has been
advising you on this matter, should continue its work, under your general super-
vision. The Board should complete the development of all phases of the uniform
plan and coordinate with this plan the cataloging activities of the agencies chiefly
concerned.
I request that you arrange with the Secretary of the Treasury for the Procure-
ment, Division to organize a central staff to assist the Board in developing the
details of the uniform system and. in the work required for the coordination of
agency cataloging activities with this system. I further request that you advise
the Secretary of War and the Secretary of the Navy, together with the heads of
such other departments and agencies as you may determine, of my desire that the
cataloging operations of these agencies be continued and that they be conducted in
conformity with the plans for the Federal catalog system. The services performed
by the central staff established in the Procurement Division will thereby be utilized
in the cataloging operations of these departments and agencies. Those depart-
ments and agencies utilizing such services should reimburse the Procurement
Division therefor from their regular appropriations.
Sincerely yours,
O
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