RELATION OF FUND AVAILABILITY AND OBLIGATION RATE TO

EXECUTION OF CONSTRUCTION PROGRAM

This chart [indicating] indicates our available funds beginning back in the fiscal year 1951 and 1952. This line shows the funds that we received. Back in the fiscal year 1951 you can see that we had about $1,400,000,000, and it jumped here [indicating], and this was the fourth supplemental program. Then we came along and we got the fiscal year 1952 program to a total of $3,823,000,000 through the basic 1951 up to the 1952 program. That actually, however, does include a small amount of money in the 1950 program, which is shown here [indicating].

This line shows the way that the funds were released to us. Those are the funds which were released by the Bureau of the Budget and actually apportioned and sent to the construction agent.

This time cycle here, and this line is actually the furnishing of funds to the Corps of Engineers, the construction agent.

You will note this sharp rise here in the obligation rate that occurred in July of 1951.

Then there is a level off. Again that sharp rise was due to the same cause that I have been telling you about-the urgency of getting the program under way and expediting it; getting the bases built as fast as possible.

It is shown over here, which shows the actual obligations in the various months, and it shows as of the 1st of July that we went up to nearly $40,000,000. We were pushing just as hard as we could from January, only having obtained the funds then, to get this program under way as rapidly as possible.

I think it is also fair to say that another reason for that was that we were coming up with our next construction program, and unless we could show that we were able to obligate the funds, we were not going to be able to get any next construction program. That was the tenor in the reviewing agency, so, frankly, we were doing everything we could at that time, due to the international situation, and due to the pressures being put upon us, to show that we could obligate the money. We were doing everything that we could to obligate it. It was not necessary to obligate it by the end of that particular fiscal year, but it was to get it done as fast as we could.

Normally such procedure is highly undesirable. It is highly uneconomical. It does not result in well-planned work. Neither the Army nor the Air Force advocates such a procedure.

The normal procedure is that we should get our money in the early fall, or August or September of the year, plan for it, and get the contracts ready and award them in the spring or in the early summer so that our peak obligations would occur then, depending upon where the_construction was, in the months of April and May, rather than in July, so that you can take maximum advantage of your construction season.

Mr. DAVIS. May I interrupt you right there?

IMPORTANCE OF PLANNING TO NORMAL CONSTRUCTION CYCLE

If the Congress clears the appropriation bill during the month of July, which is contemplated by the new reorganization act, then would you actually have the money available to you in August or September, or would there be a lag while it sifted down through the Defense Department of several weeks that would make you later than that?

General MYERS. There would be a lag, in actually getting the money, of around 2 or 21⁄2 months, but if the job is properly planned that, I think, would not make a whole lot of difference. If we had advance planning money and could plan the work ahead, it would not make any difference.

Do you agree with that, General Hardin?

General HARDIN. Yes. That is the key to it, to have the planning money in advance of the appropriation.

General MYERS. We are trying to plan our programs, our 1952 program and our 1953 program, so that we will follow that normal construction cycle. I know that you cannot see it from here, but in 1952 we think we are going to peak in May for the 1952 construction program, and then in the 1953 program we think that we will peak, having a little better start on it, in April and May. Some of it will be in June, of course. You will get a peak in the early summer, and that is normal and the way that it should be.

Mr. DAVIS. We all have to ask these questions on the basis of personal experiences we have had, but with respect to the recapture of the Truax Air Force Base at Madison there was a lengthy negotiation there with the city of Madison, and I was told not once but several times the representatives of the Air Force had very strangely said that it was their purpose that they were very anxious to get that straightened out so that the money could be obligated before the end of the fiscal year. They did not make any bones about that. That is not quite in conformance with what you just told us with respect to that chart.

General MYERS. By the end of the last fiscal year?

Mr. DAVIS. Yes. That would have been July.

General MYERS. I do not contend a bit with you on that. That is right. We had a program to get everything obligated by the end of that fiscal year. We were trying to get the work done as fast as possible. We were trying to get it done as fast as possible and we were trying to show before we went up with the next bill that we could obligate the money. Pressure was being put on us from all angles to get the money obligated with a goal of the end of the fiscal year, because that is the normal time for our other programs, for the year-end money, though construction money is not year-end money. We were trying to make a good showing that we could obligate the money. That is so, sir.

Mr. DAVIS. I was not being critical, although the wrong impression was created among the people out there who thought-well, they just want to get the money spent before it is gone. I understand perfectly, those being no-year funds, they did not enter into the picture at all.

Mr. DONNELLY. To round out this picture of obligation of funds, as I understand the chart that is there on the mantle, that is for the fiscal years 1951-53?

General MYERS. Yes.

OBLIGATION OF AIR FORCE CONSTRUCTION FUNDS BY CORPS OF ENGINEERS, 1949 AND 1950

Mr. DONNELLY. Mr. Riley requested when the Navy was here that there be a chart prepared for obligations of funds for the fiscal years prior to the fiscal year 1951, for the Air Force, which I would like to put into the record at this point.

Mr. FURCOLO. It may go into the record at this point. (The chart referred to is as follows:)

96640-52-pt. 2-2

part of Sheppard Air Force Base of around 6,000, which limited our intake of personnel. We could not properly house and train them. Therefore, the most urgent part of the Air Force, since the equipment contracts had been let at this time to the manufacturers, was to get personnel in the Air Force and train them to use this equipment as it came out. Under those circumstances we put as much pressure as we possibly could from my point of view to get Sampson Air Force Base ready, expand Lackland Air Force Base, and open up Parks Air Force Base, to take in this intake of personnel and train them in the indoctrination.

Further than that, we had to expand our present technical bases to take care of the increased loads. At 72 square feet we had a capacity on these bases of around 37,000 students. Our planned program would have taken us to a load in our technical training bases, Air Force, around 85,000 from 37,000, so we had to expand Warren Air Force Base, Lowry, Sheppard, Keesler, Scott, Chanute, and build Amarillo to handle the load.

That program stayed fairly constant until November of this past year when, as General Myers has mentioned, the program was slipped. As a result, instead of ending up the fiscal year 1952 with 1,061,000 men, we are going to end up with approximately 973,000, so a lot of construction has been started to take care of this very rapid build-up.

In November at the time that occurred, I went over all the bases with General Myers, and we canceled all the construction that we could and stay within the then program load, which was around 67,000. It dropped from 85,000 down to about 67,000 with a proposed level-off in 1953 of 55,000. That is broadly the story and the reason why we put as much acceleration on these bases as we could.

I believe now, if it pleases the committee, we can take the situation base by base, and I can tell you exactly what the problem was at that base and why we had to build it as we did.

TYPES OF CONTRACTS, ZONE OF INTERIOR

Mr. DONNELLY. Mr. Chairman, before taking up any specific Air Force projects, I think it would be helpful to print at this point in the record, schedules showing contracts for Air Force construction in the zone of the interior for the 14-month period ended August 31, 1951, broken down into cost-plus-fixed-fee, negotiated, and competitive-bid

contracts.

Mr. RILEY. Without objection, the schedules will be printed here. (The schedules face this page:)