CHAPTER 13.4 SUMMARY The foregoing chronicle of procurement operations develops, it is believed, the value of establishing procedures that: (1) are in full accordance with all governing regulations, (2) are adapted to the available facilities, and (3) are of sufficient flexibility to operate under the abnormal conditions to be expected on a project of this nature. It follows that the personnel operating under these procedures should be thoroughly familiar with their provisions, and that the procedures should embody a means of checking for compliance therewith. In this connection note should be taken of the fact that, under date of March 22, 1950, an Inspection Report prepared by the Controller's Investigation Staff of AEC was issued, in which current procurement practices of H & N were re- viewed. The Report covered the period of August 1, 1949 to January 31, 1950, from which period a total of 200 purchase orders, selected at random, were chosen for detailed investigation. The findings of the Inspection Report were generalized under three headings as follows: 1. That although the company procedure provided for written justification of awards made on the basis of less than three bids, the files for approximately 20 per cent of the awards thus made did not contain such justifications; in addition, it was indicated that in some instances improper justifications had been utilized. 2. That although overseas shipments were made from Oakland, California, a majority of the purchases were made in los Angeles for delivery to Los Angeles. 3. That no enidence was developed indicating favoritism, collusion or other irregularities in the making of purchases. The result of this investigation revealed that, while it was not indicated that the Procurement Department was under-staffed, there were definite peaks of activity during which procurement personnel were pressed for time in order to keep abreast of the requisition load. During such periods there was a tendency to short-cut company procedmres or to leave to a later time the accomplishment of certain of the detailed paper work involved. As a consequence awards had been made based on expediency rather than approved procedure, and in some instances where apparent deviations were justified the justification had not been reduced to the form of a written record. In the few remaining instances, the deviations from procedures were indicated as being the result of carelessness on the part of Procurement Department personnel. Among the remedial steps taken was the establishment of a pre-audit unit to check completed purchase order files against procedures. A 13-23