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APPENDIX V

INTERNATIONAL ORGANIZATIONS PROCUREMENT ACT OF 1947, H.R. 3891 AND H.R. 4010, 80TH CONGRESS, 1ST SESSION 1

Text of H.R. 40101

(As introduced by Mr. Smith on June 27, 1947, and referred to the
Committee on Foreign Affairs)

A BILL To authorize any agency of the United States Government to furnish or to procure and furnish materials, supplies, and equipment to public international organizations on a reimbursable basis

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "International Organizations Procurement Act of 1947".

SEC. 2. When used in this Act

(1) The term "Government agency" means any department, independent establishment, or other agency of the Government of the United States, or any corporation wholly owned by the Government of the United States.

(2) The term "international organization" means any public international organization entitled to enjoy, in whole or in part, the privileges, exemptions, and immunities authorized by and in accordance with the International Organizations Immunities Act (59 Stat. 669).

SEC. 3. Until the expiration of four years from the date of enactment hereof, any Government agency may, upon the request of any international organization and its agreement to pay the cost and expenses thereof by advancement of funds or reimbursement, furnish or may procure and furnish materials, supplies, and equipment to such international organizations: Provided, That, to the extent deemed necessary and appropriate by the Government agency concerned, such international organization indicates its actual needs for and intended use of such materials, supplies, and equipment: Provided further, That when reimbursement is made, it shall be credited either to the appropriation, fund, or account utilized in incurring the obligation, or to the appropriate appropriation, fund, or account which is current at the time of such reimbursement.

1 Legislative history of H.R. 3891 and H.R. 4010, 80th Cong., 1st sess.: H.R. 3891 was introduced by Mr. Smith of Wisconsin on June 18, 1947; it was considered by Subcommittee No. 6 and reported favorably to the full committee on June 26-27, 1947. It was superseded by H.R. 4010, which Mr. Smith of Wisconsin introduced on June 27, 1947, and which was also referred to the Committee on Foreign Affairs. The new bill was considered by Subcommittee No. 6 in executive session on July 14, 1947, and reported favorably to the full committee, which then reported the bill to the House of Representatives (House Report No. 952) on July 16, 1947. The bill passed the House on July 21, 1947, and was forwarded to the Senate, where it was referred to the Committee on Foreign Relations, which reported it favorably to the Senate without amendment. The bill passed the Senate on July 26, 1947, and it was approved by the President and became Public Law 354, the International Organizations Procurement Act of 1947, 80th Congress, on Aug. 4, 1947.

2 As mentioned above, H.R. 4010 superseded an earlier bill introduced by Mr. Smith (H.R. 3891). An important difference in the two bills was the addition of the words "on a reimbursable basis" to the title. See also footnote 9, p. 219.

(310)

House Report

HOUSE REPORT ON H.R. 4010

[House Report 952, 80th Cong., 1st Sess.]

INTERNATIONAL ORGANIZATIONS PROCUREMENT ACT OF 1947

JULY 16, 1947.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. SMITH of Wisconsin, from the Committee on Foreign Affairs,
submitted the following

REPORT

[To accompany H.R. 4010]

The Committee on Foreign Affairs, to whom was referred the bill (H.R. 4010) to authorize any agency of the United States Government to furnish or to procure and furnish materials, supplies, and equipment to public international organizations on a reimbursable basis, having considered the same, report favorably thereon with amendments and recommend that the bill as amended do pass.

The amendments are as follows:

Page 1, strike out the title and substitute in lieu thereof the following:

"A bill to authorize the Treasury Department and the United States Government Printing Office to furnish, or to procure and furnish, administrative materials, supplies, and equipment to public international organizations on a reimbursable basis."

Page 1, line 6, strike out paragraph (1), section 2, and substitute in lieu thereof the following:

"(1) The term 'international organization' means any public international organization having its headquarters in the United States and entitled to enjoy, in whole or in part, the privileges, exemptions, and immunities authorized by and in accordance with the International Organizations Immunities Act (59 Stat. 669)."

Page 2, line 1, strike out paragraph (2), section 2, and substitute in lieu thereof the following:

"(2) The term 'administrative supplies' means materials, supplies, and equipment used in housekeeping, maintenance, and office operations."

Page 2, line 6, strike out section 3 and substitute in lieu thereof the following:

"SEC. 3. Until July 1, 1948, the Treasury Department and the United States Government Printing Office, may, upon the request of any international organization and upon its agreement to pay the costs and expenses thereof by advancement of funds or by reimbursement, or by both, furnish, or procure and furnish to such international organization administrative supplies: Provided, That to the extent found by the Treasury Department or the United States Government Printing Office respectively to be necessary and appropriate in order to protect the interests of the United States Government in having access to sufficient supplies for its own needs, such international organization shall be required to indicate its needs and the intended use of such administrative supplies before they shall be furnished, or procured and furnished, to such international organization: Provided further, That when reimbursement is made, it shall be credited either to the appropriation, fund, or account utilized in incurring the obligation, or to the appropriation, fund, or account utilized in incurring the obligation, or to the appropriate appropriation, fund, or account which is current at the time of such reimbursement."

PURPOSE OF THE LEGISLATION

This bill would enable the United States Government to assist international organizations in which it is a participant by furnishing or procuring operating

supplies and equipment on a reimbursable basis. Such power was temporarily exercised in behalf of the United Nations under authority of a provision of the Second Deficiency Appropriations Act of 1946 (Public Law 384, 79th Cong.). This power expired December 31, 1946. The Secretary of State, in a letter to the Speaker dated June 4, 1947, urged renewal of the authorization and extension of its benefits to other international organizations in addition to the United Nations. The Secretary of State's letter follows:

The Honorable JOSEPH W. MARTIN, Jr.,
Speaker of the House of Representatives.

JUNE 4, 1947.

MY DEAR MR. SPEAKER: There is transmitted herewith a draft of ȧ proposed ll, authorizing any agency of this Government to furnish or procure and furnish supplies, equipment, and materials to public international organizations on an advancement or reimbursable basis.

It will be recalled that the Second Deficiency Appropriation Act of 1946 (Public Law 384, 79th Cong., 2d sess.) contained similar procurement provision with relation to the United Nations only. This authority expired on December 31, 1946, under the terms of the provision contained in Public Law 384.

In a letter dated January 7, 1947, addressed to the Secretary of State, the Secretary-General of the United Nations, Mr. Trygve Lie, emphasized the adverse affect of the expiration of the period provided for in Public Law 384 upon the procurement activities of the United Nations and solicited the assistance of this Department in securing the enactment of similar legislation. Further communications from the United Nations serve to reenforce the indication by Mr. Lie of the pressing need for the proposed legislation. With the impact of the General Assembly last fall, it would have been virtually impossible for the United Nations to obtain adequate paper supplies, had the Organization been unable to buy from the Government Printing Office under Public Law 384. The Comptroller of the Government Printing Office has given the information that the amount of business done by the United Nations with the Government Printing Office under the authority which ended December 31, 1946, was $348,758.37. Out of this amount $347,663.48 was for blank paper. The Comptroller further indicated, "*** the Government Printing Office is in a better position to obtain paper and better service than the United Nations and at more reasonable prices." In this connection the United Nations is presently faced with a serious procurement crisis, particularly with regard to paper. With no paper available from private sources, and with priorities already established in favor of other groups, the United Nations can look only to the Government Printing Office for a resumption of the splendid cooperation formerly received from that governmental agency. In addition to paper, many items were bought, again at considerable savings, through the Procurement Division (designated Bureau of Federal Supply, effective January 1, 1947) of the Treasury Department, such as typewriters, office machines and equipment, office furniture, photographic equipment and supplies (both for still and motion pictures), photostat equipment and supplies, blue-print equipment and supplies, mimeograph machines and stencils, electric-light bulbs, and food, such as canned goods for cafeteria and delegates' dining room. Further, it is pointed out that the procurement authority derived from Public Law 384 made it possible, through prior agreement with United States agencies, for manufacturers to accord United Nations orders first priority on their order books, when emergency conditions existed which would justify such action.

Likewise, other public international organizations in which this Government participates have indicated their needs in connection with the proposed bill. The Food and Agriculture Organization of the United Nations, for example, is at present encountering difficulty in obtaining quick deliveries of office machines, such as typewriters and adding machines, although it has been able to buy used furniture from foreign missions and international agencies that are closing out. This source of supply, however, will soon be closed, so that the enactment of the proposed bill into law will assist this Organization immeasurably.

The main features of the proposed bill are (1) a time limit of 4 years; (2) it is limited to international organizations in which the United States participates and which are considered of sufficient importance to be designated by the President as entitled to enjoy privileges and immunities, in accordance with the International Organizations Immunities Act (Public Law 291, 79th Cong., 1st sess.);

(3) discretion is vested in the particular governmental agency involved to ask the requesting international organization for particulars—that is, to furnish evidence as to its needs and to supply information with regard to its intended use of the items desired; (4) the international organization is to pay the costs and expenses either by payment in advance or reimbursement (this provision of the proposed bill is substantially the same as that contained in Public Law 384).

With the assistance of examiners of the Bureau of the Budget, informal opinion in various executive agencies was solicited with regard to this procurement problem. Favorable opinions were encountered to the effect that the United States Government should assist public international organizations in their procurement problems and the agencies evinced a desire to cooperate.

Thus, the coverage of the proposed bill is sufficiently broad to fulfill not only the needs of the United Nations, particularly in connection with its permanent headquarters requirements, but also the needs of those other public international organizations looking to the United States, their host, for guidance and cooperation. Moreover, if enacted into law, the proposed bill will result in substantial savings by the international organizations assisted, at no additional expense to the United States. On the contrary, it will increase the purchasing power of the money contributed to these organizations by the member nations and, hence, the purchasing power of the contributions made by the United States, the largest contributor of all.

A similar letter is being dispatched to the President pro tempore of the United States Senate.

The Department has been informed by the Bureau of the Budget that there is no objection to the submission of this proposal.

Faithfully yours,

AMENDMENTS RESULTING FROM HEARINGS

G. C. MARSHALL.

The draft bill included in the Secretary of State's letter was introduced as H.R. 4010, with minor changes, on June 27, 1947. Subsequently Subcommittee No. 6, on International Organizations and Law, of the Committee on Foreign Affairs of the House of Representatives, held hearings at which the principal witness was Mr. Harry M. Kurth, Director of the Office of Budget and Planning, Department of State. Auxiliary witnesses were Mr. Fred M. Witt, of the Bureau of Federal Supply, Treasury Department; Mr. Philip Nichols, Jr., General Counsel of the Bureau of Federal Supply; and Mr. Sheldon Z. Kaplan, assistant to the legal adviser, Department of State.

As a result of the information adduced in the hearings, the above amendments were formulated to meet the actual needs of the organizations concerned and to avoid implications of authority beyond those actual needs, and at the same time to safeguard the interests of the United States Government. In brief, the effect of the amendments will be

(a) To limit the Federal agencies concerned to those actually procuring administrative supplies and materials for United States Government agencies and collaterally for the international organizations;

(b) To specify that the items to be procured shall be only those required in housekeeping, maintenance, and office operations-thus excluding, and reserving for further consideration by the Congress, the application of an equivalent principle to the procurement of construction materials which may at some time in the future be required by the United Nations in the erection of the proposed United Nations Headquarters;

(c) To limit the term of the authority granted to the fiscal year 1948with the intention that Congress will reexamine the whole policy before approving further extension; and

(d) To insure that items in short supply shall not be furnished to international organizations in derogation of the United States Government's prior interest in supplying its own agencies.

ARGUMENTS FOR LEGISLATION

The arguments for the legislation are two:

(a) It will save the American taxpayer money. The large-scale buying in which the United States Government engages enables it to purchase under favorable terms. The United States' contributions to these organizations vary from one to

another, but represent invariably a substantial portion of their budgets, running in one case to more than three-quarters. The American taxpayer is thus an indirect and substantial beneficiary of the savings made possible by this legislation.

(b) It will enable the United States Government in international comity, to assist, at no cost to itself, organizations which have made their headquarters in the United States and in whose success this Government and the American public share a continual concern.

SCOPE OF LEGISLATION

The international organizations included in the President's proclamations issued under the International Organizations Immunities Act and having their headquarters in the United States and therefore qualifying under this act are the following (percent of United States' contribution is shown in parentheses after the name of each organization):

The Food and Agriculture Organization (25 percent).

The Pan American Union (52 percent).

The United Nations (39.89 percent).

Inter-American Coffee Board (33.3 percent).

Inter-American Institute of Agricultural Sciences (76.5 percent).

Inter-American Statistical Institute (56 percent).

International Bank for Reconstruction and Development (33 percent).

International Monetary Fund (37 percent).

Pan-American Sanitary Bureau (52 percent).

International Wheat Advisory Committee (International Wheat Council) (4 percent).

The United Nations is, of course, the principal organization of the above list and is the one entitled to enjoy privileges under the legislation which was in effect the latter half of 1946. During that period the United Nations procured $348,758.37 worth of paper from the United States Government Printing Office and $261,545.99 worth of miscellaneous office supplies and furniture. It is anticipated that for the approximate year covered by the proposed legislation the United Nations will need a quarter of a million dollars' worth of paper and a quarter of a million dollars' worth of miscellaneous office supplies, office furniture, and photographic equipment. It is estimated that the needs of all other international organizations concerned will not exceed $150,000.

PROTECTION OF AMERICAN INTERESTS

It was brought out of the hearings that the Federal procurement agencies charge other Federal agencies for which they procure a surcharge of 3 percent over cost. This surcharge reverts to the revolving funds of the procuring agencies and has proved ample to cover all administrative expenses incident to procurement. A similar charge will be placed against international organizations doing business with the procurement agencies under this act. The hearings brought out reassurance that this, in view of the requirement for advancement of or reimbursement of funds to cover costs and expenses, will amply protect the United States against loss on the transactions.

Public Laws

EXCERPTS FROM SECOND DEFICIENCY APPROPRIATION ACT, 1946, APPROVED MAY 18, 1946 (PUBLIC LAW 384, 79th Congress)

AN ACT Making appropriations to supply deficiencies in certain appropriations for the fiscal year ending June 30, 1946, and for prior fiscal years, to provide supplemental appropriations for the fiscal year ending June 30, 1946, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the following sums are appropriated, out of money in the Treasury not otherwise appropriated, to supply deficiencies in certain appropriations for the fiscal year ending June 30, 1946, and for prior fiscal years, to provide supplemental appropriations for the fiscal year ending June 30, 1946, and for other purposes, namely:

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