on these services were always heavy and were subject to radical variations, As a result, it was necessary that both MATS and MSTS allocate ail space on a monthly basis. In the case of MATS, such allocations were prorated on a daily basis which could not be carried over or accumulated. On both facilities, varying priority assignments were initiated, which meant that the shipper was never quite sure whether or not his cargo or personnel would be carried until it was actually loaded on board, There were frequent instances in which scheduled H & N cargo and personnel had to be deferred to a later carrier. CHANGES IN SCO Large changes in the scope of the Project, such as the introduction of the Bio-Medical Program, the Military Structures Program, and the in- creased scope of the Scientific Structures Program, occasioned complete revisions in personnel estimates and cargo estimates, which in turn created additional demands upon the established military transportation services. These upward revisions in requirements were particularly difficult to meet when they occurred at about the beginning of the Korean wa", when the transportation services were already heavily overloaded. There were numerous specific changes in design or in construction requirements which frequently required new equipment. Many of these changes involved the highest priority of shipment in order to avoid un-= necessary delay for construction. WAREHOUSING At the beginning of fiscal year 1949-50, with the certainty of ayaiiable funds with which to prosecute procurement and supply to the #obsite, careful consideration was given to the physical storage and handling of materials. It was considered desirable that a central warehouse be established in the Los Angeles area because due to the security classification then existing, vendors were not to be advised of the Project location. Such a central warehouse would provide an innocuous distinction for deliveries from all parts of the United States. At such a warehouse, deliveries from a variety of vendors could be consolidated ani grouped into export lots which related to a given unit of construction, export packed, assigned priorities and shipping sequence in accordance with the construction schedule, and consigned to the Navy for overseas shipping in an orderly manner, according to Project requireBents. Because of major policy considerations, this desirable objective was not achieved. Foremost among these considerations was the techni- cality that to direct vendors to ship to such a warehouse would constitute a California destination, and, as such, make all materials sub- ject to state sales tax, inasmuch as Holmes & Narver was technically the ultimate consumer. No source existed for allowable funds for such a tex, and it would possibly have amounted to a half million dollars. ft $ fr was thus desirable to design a modified procedure. It