On September 12, 1972, the Defense Property Disposal Service (the forerunner to DLA Disposition Services) was established under the Defense Supply Agency (now DLA). Defense property disposal offices were established worldwide on or near major military installations. DLA Disposition Services is responsible for property reuse (including the disposal and sale of surplus and excess defense equipment and supplies), precious metal recovery, recycling, hazardous property disposal, and the demilitarization of military equipment. Over the past four years, according to DLA's website, over $2.2 billion of property was reutilized. DLA Disposition Services provides support at major U.S. military installations worldwide. Headquartered in Battle Creek, MI, the DLA Disposition Services personnel serve in 16 foreign countries (including the Middle East and Southwestern Asia), 2 U.S. territories (Guam and Puerto Rico), and 41 states. DLA Disposition Services are provided in field offices in Afghanistan, Iraq, and Kuwait with teams deploying out to forward operating bases to assist combat units. With over 90 field offices, DLA Disposition Services employs about 1,500 people. The Reutilization/Transfer/Donation Program establishes a process for inventory considered no longer needed by the Department of Defense (DOD) to be redistributed among various groups. Property disposal means redistributing, transferring, donating, selling, demilitarizing, destroying, or other "end of life cycle" activities. Disposal is the final stage before the property leaves DOD's control. In some cases, the act of demilitarization—destroying the item's military offensive and defensive capability—accomplishes the intent of disposal. Property is considered excess when one particular federal agency determines it is not needed for its particular use, while property is considered surplus when it is no longer needed by the federal government. Most property turned in to DLA Disposition Services by the military services is offered for use in other DOD activities and to other federal agencies. Property considered surplus can be reused, transferred, donated, or sold; potential recipients may include law enforcement agencies, school systems, medical institutions, civic and community organizations, libraries, homeless assistance providers, state and local government agencies, and the public. During FY2008, about 56,000 military organizations and components turned in over 3.5 million items to DLA Disposition Services. About half of all surplus items are designated for the foreign military sales program, and about half are made available to other government agencies, eligible donees, or sold to the public. On July 31, 2008, DLA awarded Liquidity Services, Inc. a contract to be the primary manager for the receipt, storage, marketing, and disposition of virtually all usable defense surplus property approved by DOD for sale to the public. The contract had a base term of three years with two one-year renewal options. The contract was later extended through February 15, 2013. On September 13, 2012, Liquidity Services announced that DLA had exercised the second of (potentially) two 12-month extension periods, under its "Surplus Useable Property Sales Contract" to sell DOD surplus property. The surplus contract's performance period was extended through February 13, 2014. Some Members of Congress have expressed concern over the 1033 Program and the types of military equipment made available to state and local law enforcement agencies, particularly in the in the aftermath of clashes between protesters and police. The concerns of these Members were elevated in the aftermath of the August 2014 shooting death incident in Ferguson, MO, and the widely circulated photographs of heavily armed police using equipment believed to be transferred from the federal government through the 1033 Law Enforcement Support Program, as well as from other sources. (See section on the Law Enforcement Support Office) On September 9, 2014, the U.S. Senate Homeland Security and Governmental Affairs Committee will hold a hearing titled "Oversight of Federal Programs Equipping State and Law Enforcement." In May 2014, DLA reportedly began investigating the potential transfer and/or sale of soft skinned Humvees. In the process of researching any potential challenges or restrictions, the U.S. Army informed DLA that the engines in these vehicles were not allowed to be "entered into commerce" as they were not specifically approved as meeting Environmental Protection Agency (EPA) Clear Air Act standards. These vehicles were instead granted a National Security Exemption (NSE) by EPA for military tactical use only dating back to 1988. The NSE is founded in both statute and regulation. DLA Disposition Services was unaware of this arrangement between the Army and the EPA. At the time, DLA was made aware that other vehicles/engines that DLA had previously donated, transferred or entered into law-enforcement and fire-fighter support programs (1033 programs) were also not necessarily Clean Air Act compliant, but had received the NSE. Transfer, donation, and sale could all possibly trigger the statutory prohibition on "entry into commerce" of the NSE vehicles and engines. On June 30, 2014, DLA notified the Law Enforcement Support Office (LESO) State Coordinators and the U.S. Forestry Service of the decision to temporarily suspend release of all vehicles and equipment with diesel engines pending resolution with EPA. Consequently, release of all vehicles and equipment with diesel engines was temporarily suspended by DLA Disposition based on the statutory and regulatory language. Requisitions for other property and equipment continued to be released. On June 30, 2014, DLA notified the Law Enforcement Support Office (LESO) State Coordinators and the U.S. Forestry Service of a decision to temporarily suspend release of all vehicles and equipment with diesel engines, pending resolution of issues with the Environmental Protection Agency (EPA). According to several press reports, DOD announced that DLA would end the sale, donation, and/or transfer of surplus military vehicles to state and local agencies. These vehicles were historically used for law enforcement support and rural firefighting programs. However, on July 9, 2014, DLA Disposition Services announced that it would continue to make these military vehicles available to authorized law enforcement and fire-fighting program recipients. DLA Disposition Services posted the following notice on its website: Following discussions with the EPA, DLA will immediately resume issuing military vehicles and equipment with an associated national security exemption (NSE) to authorized law enforcement agencies and to DOD Fire Fighter Program recipients. EPA has confirmed that equipment transferred to law enforcement and fire-fighting agencies through these programs will continue to be covered by any National Security Exemption (NSE) previously issued by EPA, with the understanding that DLA retains title to the vehicles and appropriate inventory and other management controls remain in effect. We are amending our Memoranda of Understanding to reflect this agreement. The following is a Memorandum of Agreement, provided to CRS by DLA officials during August 2014, on the agreement reached between DLA and EPA on the national security exemption issue. XXI. ADDENDUM A. As of July 1, 2014, the DLA LESO has implemented policy and procedural changes which place additional controls on certain excess DOD property with Demilitarization codes of A and Q (with an Integrity Code of 6). These items will be subsequently referred to as "National Security Exemption (NSE) restricted DEMIL A and Q6 items. "Section III-General Terms and Conditions, § G-H, has been amended via Section XXI-Addendum, to reflect the additional controls placed on these items. 1. The DLA LESO will maintain a list of National Security Exemption (NSE) restricted DEMIL A and Q6 items, by National Stock Numbers (NSN), which will be treated as controlled property. 2. All items falling into this category that were acquired with an MRO/Ship date after July 1, 2013, will be treated as controlled property, and will not be systematically archived from the DLA LESO inventory. Law Enforcement Agencies (LEA) are not authorized to sell NSE restricted A and Q6 items. 3. When an NSE restricted DEMIL A and Q6 item is no longer needed by a Law Enforcement Agency, the item must be turned back into a DLA Disposition Services location or transferred to another participating Law Enforcement Agency within the DLA LESO. 4. For Annual Inventory purposes, Law Enforcement Agencies who obtain or have obtained NSE restricted DEMIL A and Q6 items after July 1, 2013, must now provide Serial numbers for these items. In addition, photographs of these items may also be required, if the item falls into a Federal Supply Group (FSG) of 10, 15, 19 or 23. 5. Law Enforcement Agencies may request to sell items with a DEMIL Code of Q (with an Integrity Code of 6), which do not fall into the category of NSE restricted items, but must gain State Coordinator and DLA LESO approval, prior to the actual sale of such items. These items will not be systematically archived from the DLA LESO inventory. 6. Only excess property with a DEMIL Code of A, which does not fall into the category of NSE restricted items, will continue to be systematically archived from the DLA LESO inventory one year from MRO/Ship date. Title for items in this category will continue to pass to the LEA. Authority for the disposal of surplus defense property can be found in P.L. 94-519 , 10 U.S.C. 381, which amends the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 484), P.L.