Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 2

765.5 MSP/1–2453: Telegram

No. 737
The Secretary of State to the Embassy in Italy¹

secret

Washington, January 24, 1953.

Cotel 3003. This is joint Def/State/DMS/MSA msg. Ref: Rome to Dept 2202 rptd info Paris 274, Nov. 14, 1952.²

1. Assure you that all here fully appreciate political importance of sizeable OSP program in Italy and, in view imminence of Italian elections, need for early contract placement if maximum political benefits to be derived from program. Action taken here includes fullest agreement Washington agencies on urgency of prompt and effective action in placement maximum possible OSP contracts in Italy; (see letter Harriman to Foster of December 22 [23]³ setting OSP targets and Foster to Harriman reply dated 19 January 53 following cable.⁴); agreement Harriman, Draper, Foster at Munitions Allocation Council Meeting January 8 on modifications target date and on specific courses of action to be followed;⁵ and continuing action taken by Defense and Services over last few weeks.

2. Without prejudice to total amount OSP contracts to be placed Italy FY 53, targets have been agreed, exclusive of completed aircraft procurement, as follows: Navy $52 million by March 1; Air Force $8 to $10 million by March 1; Army $88 million (mostly ammunition) by April 1. Directives are being sent through appropriate military channels.

3. As separate measure, Def has instructed Army procurement officers to give OSP in Italy administrative priority in handling of contracts. Def believes this will save 30 to 60 days in letting of contracts since acceptable bids submitted by Italian sources will be processed first. Italy will of course share with other countries in possibilities for further procurement on competitive basis above $150 million goal mentioned above, and administrative priority will continue be given OSP in Italy throughout election period.

4. Procurement action to date includes the following:

a. Army—Procurement directives have been issued for $611 million of Army OSP program for Eur. Procurement officers have been instructed to proceed with this procurement and to give adminstrative priority to OSP in Italy. Bids on Army items are being sought initially on competitive basis. Bids due first week in February. Italy expected secure perhaps $10 million contracts this basis. Army expects offer to Italian firms opportunities meet most acceptable bid on enough of remainder of program to bring total Army OSP to $88 million target figure and prepared direct procurement if this necessary achieve goal.

b. Navy—As you aware, Navy BUSHIPS Team signed contract in Italy for approximately $42 million of small naval vessels in December. To meet its goal, Navy will attempt to place $10 million of further contracts by March 1.

c. Air Force—Air Force taking steps to see that placement of aeronautical spares and equipment contracts in Italy amounting $8 to $10 million will be awarded by March 1. Completed aircraft procurement not included above $150 million target.

4. [sic] It is our view that there will be little new employment by date of elections directly resulting from placement of OSP contracts in amount of above targets. However, we support your view that maximum feasible OSP constitutes one of actions, of which cumulative effect may be indeed significant, which need be taken meet exigencies Italian situation.

5. In interests of program consider it undesirable to inform Italians of prospective steps regarding implementing OSP Italy. In discussion with Italian officials you should indicate only that U.S. is energetically pursuing OSP contract placement Italy and Eur, and they may expect results near future. However, believe Embassy and/or Italian Government should give extensive publicity to contracts when let.

Dulles

1. Drafted by Adams and cleared with Ridgway B. Knight, Collins, and Levy-Hauss of State, Kiernan of Defense, Lippincott of MSA, and Arth of DMS, and repeated to the Embassy in Paris, USCINCEUR, USAFE, and to NPO London and USAREUR.
2. See footnote 1, Document 733.
3. Supra.
4. In telegram Cotel 3004 to Rome, Jan. 24, Foster’s letter to Harriman of Jan. 19 was quoted in full. In the letter Foster summarized the action taken by the Department of Defense on Harriman’s request regarding the placement of OSP contracts in Italy by Mar. 1, 1953. The substance of the letter was essentially the same as the discussion in telegram Cotel 3003 regarding the decisions reached by the Department of Defense. (765.5 MSP/1–2453)
5. Not found in Department of State files.