b. Organizational statements for the following scientific contractors: Los Alamos Scientific Laboratory, Appendix B, Exhibit 2 University of California Radiation Laboratory, Appendix B, Exhibit 3 Edgerton, Germeshausen & Grier, Appendix B, Exhibit 4 Naval Research Laboratory, Appendix B, Exhibit 5 Sandia Corporation, Appendix B, Exhibit 6 c. Organizational statement for the logistical services contractor, Holmes & Narver, Inc., Appendix C, Exhibit 1. Explanatory remarks have also been made on the foregoing statements where deemed appropriate. It will be noted that budget estimates are not included on the scientific cost statements. This omission is due to the AEC budget policy for the Lab- oratories under which funds are budgeted by fiscal year without reference to specific test operations. 6.2 COMMENTS At various times in the past the SFOO has been subjected to criticism of the inventory balances at the proving ground, The problem from an accounting and budgeting standpoint is fully described in a memorandum from Director of Finance, SFOO,to the Controller, AEC, Washington, dated 6 March 1953, subject "Accounting for Inventories of Construction Materials Related to Expendable Construction Projects." Apart from the unrealistic accounting procedures which SFOO has been required to adhere to, there are a number of valid reasons why inventories at the PPG appear to continue inordinately high. Some of these reasons are briefly described in the paragraphs which follow: Very soon after receipt of initial criteria for a test program, the Contractor must schedule procurement of materials and equipment in a manner governed by availability and date required. Experience has shown that allowances must be made in excess of known demands for certain items such as portable generators, distillation units, and submarine cable to be adequately prepared for late program modifications and other emergencies. Situations requiring full utilization of the extra equipment may very well not materialize but, nevertheless, it should be easily recognized that the success of a multi-million dollar program should not be jeopardized by the lack of a few thousand dollars worth of parts. Isolation of the PPG from sources of supply is, of course, a pronounced factor in arriving at decisions involving procurementof adequate equipment and supplies. Not infrequently, as preparations for a test program become appreciably advanced, major modifications are made which entirely eliminate a need for equipment procured for a specific purpose. The unique application of the 73