SDPA has given primary emphasis to its role as spokesman for small business in the development of materials policies, regulations, and orders. It has done so because this is the most effective means for helping the greatest possible number of small-business concerns in the shortest possible time and with the smallest possible staff. SDPA representatives serve on the Requirements Committee and the Program Adjustment Committee of the Defense Production Administration, and on the Order Clearance Committee and approximately 30 operating division requirements committees of the National Production Authority. This permits the closest possible cooperation between SDPA, on the one hand, and DPA and NPA on the other, and provides for the most effective representation of the interests of small-business concerns. A good example of the manner in which SDPA has acted to protect the interests of small firms is the assistance given to small single-line manufacturers of lowessentiality products. SDPA felt that the cut-back of controlled materials among plants in proportion to their base-period production of each individual product or product classification worked a great hardship upon small, single-product manufacturers. Other manufacturers who manufactured both low- and highessentiality products were able to operate at near capacity on their allotments for high-essentiality products. At the same time, they received materials for low-essentiality items on the same basis as the single-product manufacturers, many of whom were being forced to operate at below the break-even point. Accordingly, on January 2, 1952, SDPA recommended to NPA a number of changes in materials-allocations policies and methods. As a result of these recommendations- 1. In the second quarter of 1952, all manufacturers of consumer goods received the same proportion of the materials they had used during the base period, without regard to the degree of essentiality of their products. 2. To help small firms which still could not remain in operation without additional quantities of materials, NPA, in cooperation with SDPA, set up a special small-business "hardship" reserve of steel, copper, and aluminum. Small firms faced with unusual hardships because of low materials allotments could apply for additional quantities of materials from this reserve. (Still in operation, the "hardship reserve" has been used to date to help about 600 small manufacturers.) 3. NPA began releasing, to selected industries which could readily absorb them, certain types of controlled materials which were no longer in short supply. This planned release of materials was interrupted by the recent steel strike, but will be resumed, it is believed, as the lost production is made up. A more recent example of SDPA representation of small-business interests on the policy level is to be found in connection with the steel strike. With the imminence of a steel shortage as a result of the strike, SDPA recommended to NPA a revision of allocation policies, in order to assure small business a fair share of the sharply reduced supply. As a result, allotments to steel warehouses, which provide the bulk of small-business needs, were increased from 100 percent of the base period to 120 percent for the first 90 days of steel production after the end of the shut-down. As a further protection for small firms, SDPA also recommended to NPA measures designed to prevent large concerns from obtaining an undue proportion of steel from warehouses, including temporary curtailment of permitted inventory levels, avoidance of directive actions in the distribution of steel and continuation of existing levels in the flow of steel to further converters. These policies in the main were adopted by NPA. During the past year, SDPA also has assisted many hundreds of small firms in solving their particular materials problems. The problems have varied in type and in number with the changing materials picture. In the third and fourth quarters of 1951, small manufacturers came to SDPA chiefly for help in getting Controlled Materials Plan "tickets" cashed. In the first quarter of 1952 the small manufacturers were calling upon SDPA mainly for help in getting CMP tickets. As the materials supply situation has eased up, and the military program has been stretched out, the volume of requests for materials assistance has fallen off. SDPA now is looking toward the day when materials will be completely decontrolled. It is studying carefully the broad, general problems of decontrol-how, when, and in what manner-so that decontrol, when it comes, will not mean for the small business a wild scramble for materials. On the machinery and equipment side, SDPA has a twofold program: (1) To see to it that small firms which produce machine tools and other essential ma chinery items get the contracts and materials they need and are entitled to, and (2) to make sure that, in the distribution of machinery items in short supply, small firms are given equitable treatment. Currently, SDPA is helping machine-tool manufacturers, dealers, and rebuilders who are operating at less than full capacity to obtain additional work. SDPA has helped a number of small firms to obtain needed tools, and now is circularizing among small firms in defense-supporting industries lists of idle Government-owned machine tools and equipment. OTHER SDPA ACTIVITIES Technical and management assistance To assist small plants with their technical and management problems, as provided for in section 714 (b) (1) (D) of the Defense Production Act, SDPA is issuing four series of technical and management publications for small firms, and has established a small-business production advisory service. The series of publications are Management Aids for Small Business, Technical Aids for Small Business, Production Notes, and Management Booklets. Management Aids deal with such management problems as "How Small Plants Can Sell to the Federal Government" and "Reducing Accident Costs in Small Industrial Plants." Technical Aids deal with factory problems of smaller manufacturers, as, for example, "Proper Alignment of Machine Tools" and "Precision Measurement of Workpieces." Production Notes explain improved shop practices as applied to specific products, machines, tools, and processes. Examples are "Blast Cleaning" and "Resistance Welding of Aluminum." The Management Booklets published by SDPA are short, illustrated publications dealing with current management policies and practices, such as the recently published "An Employee Suggestion System for the Small Plant." SDPA has established a Production Advisory Service in its field offices to assist small plants with their technical problems. If a field office cannot help a manufacturer solve his particular problem, the problem is referred to the Washington office of SDPA for study and investigation. Tax amortization Sometime ago, SDPA research revealed that only 10 percent of the certificates of necessity for accelerated tax write-offs under the Government's industrialexpansion program had gone to small-business concerns, despite the fact that small business accounts for 42 percent of total employment in manufacturing. SDPA therefore proposed to the Defense Production Administration a plan for insuring for small business a fair share of each of the Government's industrialexpansion goals, in order to maintain for small business its pre-Korean position in the industry or segment of industry being expanded. DPA accepted SDPA's recommendations in part. Under the agreement reached, SDPA may propose for each unfilled expansion goal a share to be earmarked for small business, based on the pre-Korean proportion of small businesses in the particular industry. DPA then holds the small-business shares of the expansion goals open for not less than 30 days, during which time qualified small-business concerns may file applications. As of September 10, 1952, agreement had been reached on the small-business shares of 15 expansion goals. Additional agreements are now being negotiated. SDPA also has assisted a number of individual small-business concerns which had applied for accelerated tax amortization. In at least 75 percent of these cases applications have been granted. Significantly, a large number of the applications had been initially turned down before SDPA was called in for assistance. Participation in interagency policy committees SDPA is represented on the principal interagency committees concerned with mobilization policies. Its active participation in the work of these committees enables the Administration to keep the interests of small business constantly to the fore at the policy-making level. It also enables SDPA to maintain a continuing watch on mobilization policy developments and thus to foresee the effects which particular actions are likely to have on the Nation's small businesses. Major committees on which_SDPA is represented are the Production Policy Committee of the Office of Defense Mobilization, which advises the Director of Defense Mobilization on problems, policies, programs, and legislation relating to defense production; the Defense Procurement Policy Committee, which coordinates Federal policies and programs with respect to defense procurement and related matters; the Surplus Manpower Committee of the Office of Defense Mobilization, which carries out ODM Order No. 4 on defense manpower; the Regional Defense Mobilization Committees of the Defense Production Administration, which coordinate the defense activities of Federal agencies in each region, and the Regional Defense Mobilization Coordinating Committee, which coordinates the work of the regional committees; and the Small Business Committee, made up of representatives of the small-business specialists in various Government agencies. An SDPA representative is chairman of the Small Business Committee. SDPA's membership on the foregoing policy committees is in addition to its representation on various operating committees, such as DPA and NPA materialsrequirements committees. Ammunition program Upon learning recently that new sources of supply for various types of ammunition and component parts were needed, SDPA offered its services to the Department of Defense in obtaining such sources from among small-business concerns. The Department of Defense has accepted this offer; accordingly, SDPA is now sending letters to approximately 200 small steel forging plants and 3,000 small machine shops throughout the country, inviting them to notify SDPA's Office of Contract Procurement in Washington if they are interested in obtaining either prime or subcontracts to produce ammunition items. Such items as grenades, flares, rockets, fuzes, bomb fin assemblies, cartridge storage cases, etc., are particularly suitable for production by small plants. It is hoped that, as a result of this new SDPA program, a substantial contribution can be made to national defense while, at the same time, a number of small concerns will obtain a substantial volume of needed business. FIELD OPERATIONS A primary aim of SDPA has been to provide a "one stop" service for smallbusiness men in all parts of the country, where they can obtain assistance with procurement, financing, materials and equipment, and management and technical problems. SDPA has felt that it is unfair to small-business men to ask them to spend money and time journeying to Washington for help with their problems. Although its funds were severely limited, during fiscal 1952 SDPA established 13 regional offices, their locations conforming to the pattern prescribed for all defense agencies. These offices were not manned by full staffs, however. Since the start of fiscal 1953, through increased funds made available to the Administration by Congress, SDPA has been able to add five additional field offices and to staff all of its regional offices with the various specialists needed to serve small business in procurement, financing, materials, and other fields. SDPA's field organization has reached the point that a "one stop" service now is available to the small manufacturer regardless of where he is located and what type of assistance he needs. Obviously, with a very small field staff, SDPA cannot establish a field office in every industrial center where there are a large number of small businesses. However, in order to make the Administration's services readily available to the small manufacturer who does not live in a city where there is an SDPA field office, but perhaps instead lives at considerable distance from the nearest office, SDPA procurement, financial, and other specialists are making regularly scheduled visits to the various principal cities in their regions. The small manufacturers of these cities are advised when the SDPA specialists will be there and can call upon them for assistance at that time. This is another step in SDPA's plan to provide services to the small manufacturer in his own area and at minimum cost to both him and the Government. The small-business man's need for assistance with his problems, and the increasing extent to which SDPA is giving such assistance, through its field offices, is clearly shown by a recent analysis of field-office activities. This analysis showed that over a 3-month period SDPA regional offices had acted on requests for assistance in a total of 5,813 cases involving contracts, 3,270 cases involving loans, and 583 cases involving materials. Recent reports from the SDPA field offices indicate that the volume of requests for assistance is still growing. In its field operations, as well as in the development of its over-all policies and programs, SDPA has had the help and guidance of representative small-business men who have volunteered to serve as members of SDPA regional advisory boards.. A regional advisory board has been formed for each of the Administration's 13 regions, under authority vested in SDPA by section 714 (e) (11) of the Defense Production Act. Industry vice chairmen of the boards serve as members of SDPA's National Advisory Board. Thus, SDPA, both in Washington and in the field, receives counsel and assistance from the small-business man in developing and administering its programs of assistance to him with his problems. SDPA STAFF As of September 11, 1952, the Administration had 375 employees: 191 in the Washington office, 143 in the field offices, and 41 assigned to procurement centers of the Army, Navy, and Air Force to review their proposed procurements and initiate joint determinations. In addition, SDPA was processing papers of 19 additional employees. AIR COORDINATING COMMITTEE AIR COORDINATING COMMITTEE, Washington, D. C., September 22, 1952. Hon. BURNET R. MAYBANK, Chairman, Joint Committee on Defense Production, United States Senate, Washington, D. C. DEAR SENATOR MAYBANK: In response to a letter from your office of August 22, 1952, requesting a report on activities under the Defense Production Act, the following information is submitted: The Air Coordinating Committee, in furtherance of its policies, established in 1950 for the production of civil aircraft and component parts on an equal priority with that of similar military-type aircraft, has continued its coordination and development of one complete program to meet civil aviation requirements both foreign and domestic which were found to be essential to the civil economy and, in addition, to provide an airlift potential in support of the mobilization plans in safeguarding the Nation in the event of an emergency. The Air Coordinating Committee, established by Executive Order 9781, September 19, 1946, is authorized to "examine aviation problems and developments affecting more than one participating agency; develop and recommend integrated policies to be carried out and actions to be taken by the participating agencies or by any other Government agency charged with responsibility in the aviation filed; and, to the extent permitted by law, coordinate the aviation activities of such agencies except activities relating to the exercise of quasi-judicial functions." The Aircraft Claimant Division of the Air Coordinating Committee, composed of the several designated claimant agencies (the Civil Aeronautics Board, the Civil Aeronautics Administration, the Office of International Trade, and the Mutual Security Agency) and other Government agencies having a major interest in this subject-the Department of Defense (through the Army, Navy, and Air Force), the Department of State, the National Production Authority, and the Defense Production Administration-has assisted the Committee in coordinating the civil requirements as presented by the above agencies. Since our report to your office last year the Committee has approved four quarterly programs and recommended these programs to the Defense Production Administration for the allocation of controlled materials to the National Production Authority for the issuance of priorities to aircraft manufacturers and airlines to meet the civil requirements as established. To date the Committee has recommended a total of eight quarterly aircraft-production programs, the last of which recommends the allocation of controlled materials for the first quarter of 1953. This program is known as the C-S program, and recommends the start of production of 35 new carrier-type aircraft under firm contract with the manufacturers in the first quarter of 1953, of which 18 are for domestic and 17 for foreign airlines. In addition, the program recommends the allocation of controlled materials for 368 aircraft now under construction approved in prior programs, for a total of 403 aircraft to be manufactured and delivered over the next 30 months, from October 1952 through March 1955. The program also provides a recommendation for the construction of 11,541 noncarrier aircraft (industrial, business, and agri cultural) during the 30-month period from October 1952 through March 1955, as follows: Fourth quarter, 1952 4 quarters, 1954_. First quarter, 1955 811 4, 637 4, 924 1, 169 These production programs affect not only the large aircraft manufacturers and air carriers but also have a direct effect on approximately 14 smaller manufacturers with production rates varying from 3 aircraft per quarter to 560 aircraft per quarter. In addition, a multitude of subcontractors are also benefited. The recommendations of the Committee have been implemented by the Defense Production Administration issuance of program determinations for the allocation. of controlled materials to the National Production Authority, through the first quarter of 1953. I trust that this information is satisfactory for your purpose in preparing your report to the House of Representatives and the Senate. If there is any other material that you desire and that the Committee can supply, please let us know. Sincerely yours, DONALD W. NYROP, Chairman. LIST OF EXECUTIVE ORDERS Issued under the authority of the Defense Production Act of 1950, as amended, in whole or in part, during the period beginning Oct. 1, 1951, and ending Oct. 17, 1952 Executive 10301 10308 10323 10324 10359 10370 10373 10377 10390 Title of order Date of order Federal Regis- Date of Federal Register Amending Executive Order No. 10161, as Transferring certain functions and delegat- Amending Executive Order No. 10161 of Sept. Delegating certain authority of the President July Providing for the composition of the Wage Amending Executive Order No. 10161 of Sept. 24564-52-20 |