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is rather concerned about the high taxes which are necessary to pay for the defense program. The people want adequate defense, but ther want to know that they are getting full salue received for every dollar spent.

We have the responsibility of selling your program to the Congress :) and to the citizens of the country, and for that reason we have to be thoroughly conversant with it, and be in position to defend you, if you need io be defe ded, and criticize you, if you need to be criticized.

I believe br working together we can establish a program that will be beneficial both to the service and to the public at large. We are going into this matter in a very open-minded manner in an effort to ascertain the facts without any attempt to achieve publicity. We simply want to arrive at a proper and constructive basic policy to achieve the best results.

As you gentlemen are well aware, all branches of the service have been subjected to rather severe criticism. If that criticism is warranted, we want to eliminate the basis for it; if it is not warranted, we want to show that it is not warranted.

I am going to ask Mr. Donnelly to outline to you the plan that we have adopted, and as I stated in the beginning, he is the head of our investigative staff which tried to go into this matter in an analytical and open-minded way to achieve the facts, and the facts only.

MODUS OPERANDI AND PURPOSE OF THE INVESTIGATION Mr. DondeLLY. As the gentlemen on the other side of the table know through Mr. Fred Korth, deputy counselor of the Army, with whom I have been in close contact for a period of 2 months, and Mr. Arvin ('pton, associate general counsel of the Department of the Air Force, with whom I have also been in close touch, the evidence that has come into our possession relates to the physical construction operations of Air Force and Army installations. During the calendar year 1951 the investigators from the committee staff, comprised of teams of professional engineers and accountants and investigators, visited a large number of the projects under construction and the field offices of the services supervising approximately 65 percent in dollars of the total construction program of the three services in the zone of the interior during calendar year 1951.

Out of the large number of projects visited and studied by the teams of the investigative staff, we have culled from the reports that we received the projects and operations which seem to be of the type of construction or policy or practice which would aid the subcommittee in evaluating the efficiency and economy of the construction services last year.

The Department of the Navy was here in February as part I of these hearings on military public works for last year, the calendar year 1951, and this morning it is our purpose to proceed with the Department of the Air Force.

Through our liaison, Mr. Korth is here with General Hardin of the Corps of Engineers, who is in charge of military construction for both Army and the Air Force.

Evaluating the report made by the investigators to the committee there have occurred throughout several points which will be demon strated to the committee in the course of the presentation of indi vidual projects for the Air Force.

By way of assistance to the committee I prepared a check list of the points which the project will tend to develop and illustrate. I would like to put the check list in the record at this point.

CHECK LIST OF POINTS APPLICABLE IN THE STUDY OF VARIOUS CON

STRUCTION PROJECTS

Mr. Riley. Without objection, it will be inserted at this point. (The check list referred to is as follows:

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CHECKLIST OF POINTS
1. Deficient planning.-The delays, indecisions and frequent changes caused by
deficient planning have been costly.
2. Peaking of obligation of funds.-A study for the past 3 years has shown
that the bulk of military construction moneys have been obligated in June of
each year. This concentration in 1 month is an uneconomical and undesirable
practice.

3. Vegotiated contracts. The use of this type of contract is limited by the Armed
Services Procurement Act of 1947 to specific circumstances. The negotiated
contract is not as likely to produce the lowest price, and the evidence will show
that its use has been costly on many projects.
4. Cost-plus-fired-fee contracts. These contracts are justified only in two types
of situations:

(a) Where the need for construction is so urgently acute that there is no
time for the preparation of plans and specifications; or

(6) Rehabilitation work where it is unfeasible and inefficient to draw
plans and specifications.
The Military Public Works Appropriation Act of 1952 severely limited the use
in the United States of CPFF contracts for funds appropriated therein, and this
limitation may well be incorporated in future acts.

The evidence will show that this type of contract is costly unless efficiently
administered.
5. Bid periods.—These should be of such length to encourage the submission
of bids Greater competition also results from splitting large contracts, where
feasible, into two or more smaller contracts.

6. Buying construction time. This is an expensive practice. It, likewise, is
Kharply curtailed by the Military Public Works Appropriations Act of 1952. The
Government pays dearly for unrealistic completion schedules and high liquidated
damages.
7. Overdesign and ornamental construction.-Strenuous efforts have been made
by the services to eliminate overdesign and to enforce the conservation of mate-
riak and money. Instances of unaustere construction early in the austerity pro-
gun have been detected. A continuing problem exists in the design work done
by outside architect-engineers because of their inherent disinclination to observe

& Barracks construction. Considerable economies are being effected both in
GTOS Square foot area and type of construction materials. This matter warrants
continuing attention.

Mr. Donnelly. I may say that I have covered the subject matter
of this check list with both Mr. Korth, representing the Army, and
Mr. C'pton, representing the Air Force.
In addition, I would like to advise the members of the committee
that representatives of the Air Force and the Corps of Engineers have
sat down with us in informal conferences in an endeavor to facilitate
the committee's consideration of the subject matter and to resolve
the evidence down to the bare minimum that is necessary or desirable
to indicate the areas of criticism and at the same time to give a fair
picture. If there are any areas of criticism on our part, we intend
to be solely objective in constructive criticism, and in no sense have
We encountered anything but full cooperation on the part of both
the Air Force and the Army in our preparation for these hearings.

Bateriiy.

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Now, General Myers at the outset this morning indicated to me that he would like to make some opening remarks to the committee, to be followed, as I understand, by General Disosway.

GENERAL STATEMENT

General MYERS. If it pleases the committee, I would like to give a little background, or have some of the people here give a little background, that will help the committee correlate programs and construction methods to meet those programs.

Then, if it also pleases the committee, perhaps we could, after we give that little background, take the training bases first, if that is in accordance with your procedure, so that General Disosway can be excused.

First I would like to call on Colonel Orr, who is in the office of the Assistant for Programing, Deputy Chief of Operations, in the Air Force, and that office is preparing the Air Force program in accordance with the directives received from the Joint Chiefs of Staff and other high authorities. Much of the information that he has is secret, or top secret, and will have to be off the record.

Colonel ORR. This will have to be off the record. (Discussion off the record.)

DISRUPTION OF CONSTRUCTION SCHEDULES BY DELAYED AND

INDECISIVE PLANNING

Mr. DONNELLY. General Myers, the investigation of the construction program last year disclosed that the construction schedules that have been established by the Corps of Engineers, as the construction service, were frequently disrupted at tremendous expense to the Government as a result of delays in planning, and indecisive planning upon the part of the Air Force.

I believe that I can fairly state that from the evidence which we have here.

REASON FOR INDECISIVE PLANNING

Would you like to comment on whether the indecisive planning was the result of action within the Air Force or a result of some other consideration in the Government.

General MYERS. I think that is a very fair statement, Mr. Donnelly, and it was due primarily, in the first instance, to indecision at the national level, or planning at the national level.

During the year 1950 there were many programs proposed and prepared as the result of decisions to be made at the highest level in our Government.

Mr. Riley. These changes in decision were brought about by changing world conditions ?

General MYERS. Yes; due to changes in world conditions, and we had programs that we made up and were appropriated for by the Congress for implementation, and those changing world conditions necessitated constant changes in those programs which resulted in stops and starts in our construction program.

IMPROVEMENT IN COORDINATION WITH CORPS OF ENGINEERS THROUGH

INSTALLATION OF REPRESENTATIVE OFFICER SYSTEM

Mr. DONNELLY. Would it be fair to state that the coordination between the Air Force and the Corps of Engineers, as the construction service

, a year ago, or 18 months ago, had not been worked out as efficiently as occurred later on when the Air Force installation representative officer system was set up as a means of coordinating between the Air Force and the Corps of Engineers?

General MYERS. I think that is absolutely true. We did, though, 18 months ago, and before that, have an Air Force installation representative set-up. It acted primarily, however, as a liaison office from Headquarters, United States Air Force, Director of Installations, to the bases and major commands of the Air Force in the field. Their primary job was not in connection with the construction work being done on a very small scale then by the Corps of Engineers for the Air Force.

When these large programs came into being we immediately conceived of that organization as being a very necessary link in the execution of our construction programs, and as a direct link with the representatives of the Air Force in the field with the Corps of Engineers districts and divisions.

ESTABLISHMENT OF REGIONAL MEETINGS BETWEEN DEPARTMENTAL

TEAMS AND REGIONAL CONSTRUCTION GROUPS

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Mr. DONNELLY. General, would you also care to comment on the program of establishing regional meetings between teams from Washington, Corps of Engineers and the Air Force here, going around the muntry and meeting with the regional construction groups for the purpose of ironing out problems in construction operations?

General MYERS. Well, we found that that was something we had to do. Mr. Donnelly. When did you inaugurate that practice? General Myers. That was about a year ago. We have had several such meetings since then because the people in the field needed decisions that could only be made at the Air Force headquarters level to Iron out differences between the major commands; to iron out differences between the Engineers and our representatives in the field, and in order to save time in making those decisions rather than trying to handle it by correspondence or telephone.

Mr. DONNELLY. Another factor, as I understand it, in addition to saving time is the effectuation of economies and conservation in the construction operations; is that correct?

General Myers. Yes, that was certainly a part of it. Perhaps primarily to get our programs lined up as to what we would build and where it would be built.

Mr. DONNELLY. I understand from Mr. McCloud, who is one of the top civilian engineers in the Office of the Director of Installations of the Air Force, that these task-force groups from Washington can cover the country in the regional meetings in a period of 30 days, and that the Air Force has found that has been greatly productive of coordination and liaison between the Air Force and the Engineers; is that correct, General?

General MYERS. That is correct.
Mr. McCloud. The last meeting we had, we went to visit them.
The first two, they visited us.

General MYERS. That is right. We have had several meetings.
Mr. CLOUD. Three in all,

General MYERS. The installation representatives in the Corps of Engineers, district and division people, came in. Then we had a series of meetings with our people going out there. I personally went out and conducted one meeting on some training bases that were very urgent.

More recently, we have sent individuals from our headquarters out to each of the Air Force installations representative offices to get the programs lined up.

Mr. DONNELLY. As I understand, General Myers, these steps have been taken to coordinate more closely the construction operations and the disruption of them by changes that occur from time to time by virtue of world conditions, or the national situation; is that correct?

General MYERS. That is correct, sir. If we did not have all these changes there would not be a need for those meetings. If we had a clean program we would not have to try to straighten out all these things.

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BUYING OF CONSTRUCTION TIME AND USE OF COST-Plus-FIXED-FEE

CONTRACTS

Mr. DONNELLY. Further, by way of prefatory statement, and in line with the testimony given us, as I understand, the practice of buying construction time is uneconomical and costly. Do you agree with that?

General MYERS. I certainly do.

LEGAL RESTRICTION ON BUYING OF CONSTRUCTION TIME

Mr. DONNELLY. I would like to invite the committee's attention to the provision in the Second Supplemental Appropriation Act of 1952, enacted November 1, 1951, in section 603, which provides that construction time may not be bought unless the using service, as for example, the Air Force, has cleared that matter with the Secretary of Defense and that the amount of additional cost be stated with clarity so the Secretary of Defense can decide whether to spend that additional money.

COST-PLUS-FIXED-FEE CONTRACT AT TULLAHOMA, TENN. General, can you tell us whether, since the enactment of this act, any construction time has been bought by the Air Force?

General MYERS. Yes. At Tullahoma we have made so far one cost-plus-fixed-fee contract which was in the way of buying construction time. Actually it was merely a cost-plus-&-fixed-fee contract instead of a lump sum advertised due primarily to the conflict that exists between trying to build a structure in which you have to, at the same time, put in a lot of complicated equipment, some of it furnished by the Government and some of it by other agencies, and it is practically impossible to write a contract that would provide for that without coming up with a constant bunch of stoppages and claims

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