Arthur S. Flemming

James Forrestal

George H. Mead

George D. Aiken

Joseph P. Kennedy

John L. McClellan

James K. Pollock

Clarence J. Brown

Carter Manasco

James H. Rowe, Jr.

Washington, D. C.,        
                        12 February 1949.      

Dear Sirs:  In accordance with Public Law 162, Eightieth Congress, approved July 7, 1947, the Commission on Organization of the Executive Branch of the Government submits herewith its report on the "Organization and Management of Federal Supply Activities", and separately, as Appendix B, the task force report, "The Federal Supply System."
    The Commission wishes to express its appreciation for the work of its task forces and for the cooperation of officials of departments and agencies concerned with this report.

Respectfully,

/s/ 

Chairman.

The Honorable

The President of the Senate

The Honorable

The Speaker of The House of Representatives

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   The Federal government runs one of the greatest supply businesses in the world.  It is spending more than 6 billion dollars a year for new material, supplies, and equipment 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 the 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 billion dollars.  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 billion dollars.  The Government also pays out more than 1 billion dollars yearly for transportation of property, and 440 million dollars in salaries of the nearly 150,000 employees working in supply operations.
   While most of this supply activity is military, the Federal Government has important civilian supply functions in fields as diverse as the procurement of supplies used in building power dams, conducting research in atomic energy, and operating hospitals.  it is the largest single user of office supplies.

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Total purchases by civilian agencies amount to 900 million dollars a year.
   As used in this report, the term "supply" refers to the task of providing personal property (supplies, materials, and equipment) required for the operation of the Federal Government.  There are seven primary phases of the supply operation, which are as follows:

1.   Specification or the task of establishing standards for property to be purchased.
2.   Purchasing or the acquisition of property.
3.   Traffic management or the transporting of property from the point of purchase or storage to the point of need.
4.   Inspection or insuring adherence of property to purchase specifications.
5.  Property identification or the task of cataloging property under a standard system so as to facilitate identification.
6.   Storage and issue or the storing of necessary reserves of property and their distribution when needed.
7.  Property utilization or the task of seeing that property is efficiently used and is suitably disposed of when no longer needed.

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