by Colonel Jack F. Hudson, QMC
The Quartermaster Review – November/December 1954
Short background on the QM Market Center System
IN PAST years at the Quartermaster Association conventions you have heard several dissertations on the organization and mission of the Market Center System, which has its headquarters in Chicago. The Market Center system was first organized in 1941 as a procurement system for fresh fruits and vegetables for the Army. As you know, other commodities were added until the System covered the entire field of subsistence. The mission of the Market Center System is to purchase and arrange for the inspection of subsistence for the Armed Forces and such other consumers as may be directed by the Office of The Quartermaster General. As far as we know at this date, the mission of the System will remain the same and will continue along subsistence lines as its primary operation. I will present to you some of the current activities of the System and the changes that have occurred since the last convention, which include the complete integration of non-perishables, negotiation authority for non-perishables, the abandonment of set-aside for canned goods, and the discontinuance of the Walsh-Healey exemption for canned goods.
A short time ago The Quartermaster General’s Office directed an experimental direct delivery system of six non-perishable items which had been recommended by the Market Center System in January of this year. These six items consist of flour, milk, sugar, applebutter, salt, and salad oil. The Market Center System will accomplish this new experimental mission by a method very similar to that used for delivery of perishable subsistence utilizing carlots direct to posts, camps, and stations when possible. On less than carlots, local procurement will be accomplished by local Market Center. At the present time, the direct delivery system is operating in Columbus, Atlanta and Schenectady Depot areas, and the Market Centers in those areas receive the requisitions from the posts, camps, and stations concerned.
An interesting sidelight on direct delivery method is carried on by the Seattle Market Center for the supply of perishables to Alaska. At the present time, refrigerated vans are loaded by our Seattle office for individual destinations in Alaska. These vans are moved to shipside as a regular truck movement. At shipside, the vans are loaded on barges without the vans’ running gears. When these vans arrive in Alaska they are again placed on running gears and pulled direct to the using station, and the perishable subsistence is actually a direct delivery by refrigerated van from Seattle to the using installations in Alaska. Time consumed is usually less than a week. Also, this type of shipping eliminates the use of export packaging for Alaska, which is an additional saving.
A further step forward has been made in the use of charge accounts in certain areas.
The integration of non-perishables into the Market Center System has worked very successfully. Much of the procurement has been decentralized into the producing areas, and the Market Center in that. area has been designated as the Control Market Center for the procurement of that particular item. For example, canned tomatoes are procured in our Richmond Market Center, Chicago Market Division, and Oakland Market Center. In the case of many of the annual pack items, the control Market Center carries on the procurement on a national basis and handles all the details up to the final award of the contract. Contracts are then transferred for administration to the Market Center nearest the vendor.
As you know, an exemption to the Walsh-Healey Contracts Act was not granted to the Quartermaster Corps this year, and consequently our procurements of canned fruits and vegetables are being accomplished without the benefit of this exemption. While the set-aside program for canned goods was not used this year, we have found so far, that offerings under the NIP procedure (Notice of Intent to Purchase) have been in many instances adequate to fill requirements. From a competitive viewpoint, canners have bid on our requirements since there appears to be a sufficient supply of most items of canned goods which we require.
Since October of 1953, procurement of all non-perishables has been authorized on the basis of competitive negotiation in a manner similar to perishable subsistence. The integration of items and procurement methods has resulted in actual savings of dollars. A case at hand is that of a procurement of canned bacon. Our office requested offers on canned bacon. At the time the bids were closed it appeared that some of the offers were entirely too high; therefore, under our authority of negotiation, each bidder was given an opportunity to revise his offer. This is not possible under formal advertising. The net result of this particular action was an approximate savings of $151,000.
As you know, negotiation results in flexibility in the procurement operation. It gives each and every vendor who has had an interest in bidding an opportunity to do so on an informal basis, which follows good commercial practice. It further permits the Market Center to make last minute adjustments in quantity and still affords each vendor an opportunity to bid on all requirements. Competitive negotiation actually opens the field of competitive bidding since there are many small businessmen who are in a position to offer products but do not have the facilities nor the desire to go through the time-consuming processes of presenting formal bids. Again we are following good commercial practice, and at the present time our negotiation authority has been extended to all subsistence.