Senator YARBOROUGH. Does counsel for the committee have any questions?

Mr. KERLIN. Only to provide Senator Clark with a little fuller information.

I think it might properly be said that the Cordiner report would not be as broad in coverage, perhaps, as S. 1326. Certainly not with all the proposed amendments.

Senator CLARK. But that the pay scales would be comparable?
Mr. KERLIN. Pretty close.

Senator CLARK. Thank you.

Senator YARBOROUGH. Any questions?

Mr. PASCHAL. No questions.

Senator YARBOROUGH. Thank you, Mr. Bowen, for this concise statement and your statement will appear as part of the record together with the other materials that you have offered to be included as part your statement.

of

Mr. BOWEN. Thank you, sir; we appreciate this opportunity.

PREPARED STATEMENT OF J. HARTLEY BOWEN, JR., NATIONAL SECRETARy, Naval CIVILIAN ADMINISTRATORS ASSOCIATION

1. The Naval Civilian Administrators Association is composed of several hundred key civilians who exercise professional and administrative supervision within many field activities and shore establishments of the Department of the Navy. In these shore establishments and field activities, the Navy develops equipment and then either procures or builds it. These activities include naval shipyards, naval supply depots, naval air stations, and the various experimental shops and research and development laboratories required to fulfill the technical needs of the Navy. All but a very few of our members belong to the so-called classified force and the vast majority are in rates of GS-11 and above, including GS-15 and PL-313.

2. While we strongly endorse the provisions of S. 1326, relative to the restoration of professional status to many civilian occupations, we are also convinced that the status of employees, other than those of a purely scientific, engineering, or professional standing, should also be critically examined and proper adjustment should be made such as provided for in S. 734.

3. The overall background of the entire personnel problem within the Department of the Navy is that unless it is able, within its own organization, to continue to carry out the various phases of research, development, and technological improvements required in the next 10 years, our entire defense effort will be very seriously impaired. There appears to be essentially no issue or competition with private industry since the technological developments under discussion are peculiar to the Navy in the final analysis and have no general commercial application. For example, the aircraft launching and recovery equipment as used on aircraft carriers has no counterpart in other areas of national defense or in the commercial field. The Naval Civilian Administrators Association recognizes the very strong possibility that we are entering upon an era of comparative peace which may well give the American people an opportunity to solidify their position as a military power. On the other hand, remembering the lessons of recent history, we may at any moment be plunged into the catastrophe of a major war which the best authorities today recognize would be essentially a sudden attack, followed by an immediate, sharp, counterattack which would result in widespread destruction over the entire planet. At this point the war would either be over or it would become a longdrawn-out war of attrition. Regardless of whether we anticipate a long period of peace or prepare for an emergency, it is essential that the technological development and research programs of the Navy be advanced at the most rapid possible rate. Since the Navy is, and must remain, primarily self-sufficient in its development efforts, it follows that the Navy must obtain and retain the best qualified scientific, technical, management, and administrative personnel. That is, the Navy must prepare for a long haul toward the technical goals it must achieve. It is the opinion of this writer, based on his own experience and his immediate contact with many contemporaries in related technical fields, that the technical and scientific problems to be faced within the next decade will

be manyfold more difficult to solve than were any of the problems faced during the past half century of naval development. Research findings evolved under the direct control of the Navy immediately become available to all other Government departments and all of industry. Such findings, generated under contract by private industry, always leave a residue which remains proprietary to the particular contractor.

4. Although it would be possible to slow down or delay major portions of the technological programs now contemplated, such an action would be properly regarded as a form of either stupidity or insanity. The essential completion dates on our programs are not fixed by our own desires or capacities, but by the capabilities of our potential enemies. The nature of the research and development work underway is such that it encompasses all fields of scientific and technical endeavor and requires the most advanced techniques of administration and management to coordinate the work. We must concentrate on all fields of scientific development at the same time, and yet hold each type of work in proper perspective in relation to other areas of development. We cannot overdevelop some areas and underdevelop others if we are to retain a balanced program.

5. Under these circumstances, the Naval Civilian Administrators Association strongly urges that the Senate Post Office and Civil Service Committee report favorably on the proposed legislation which will make it possible for the Navy to obtain and retain within its ranks the necessary civilian experts having professional, executive, and administrative skills essential to effectively advance the Navy's entire program. This association does not hold any adamant views that any of the bills under consideration should be passed precisely as written. We feel that our opinions should be carefully weighed against those of others and action which becomes appropriate as a result of all the testimony should be taken without delay. We are arguing for nothing more than a fair approximation of the salaries, fringe benefits, and professional recognition accorded our counterparts in private industry, so that we may be able to hire and retain people with the skills we need.

6. It is our understanding that the bills under consideration were prepared after a very comprehensive study by the sponsors of the legislation and the same is true of similar legislation which has been introduced in the House of Representatives. We earnestly recommend your favorable consideration of whichever legislation appears as a result of these hearings to be most desirable. Senator YARBOROUGH. Mr. W. L. Clearwaters.

While Mr. Clearwaters is coming around to the witness chair I will again remind witnesses of the request of your chairman both yesterday and today for your condensed statement in order to give everyone an opportunity to be heard at the hearing and in order not to delay the others.

Proceed, Mr. Clearwaters.

STATEMENT OF W. L. CLEARWATERS, UNITED STATES NAVAL UNDERWATER SOUND LABORATORY, NEW LONDON, CONN.

Mr. CLEARWATERS. Mr. Chairman, gentleman, I am Mr. Clearwaters and on my left here is Mr. Saars. I would like to read a summary of the Navy laboratories' problems of loss of experienced personnel without corresponding replacements and to give a more complete statement for the record.

As representatives of a group of senior staff members of the United States Navy Underwater Sound Laboratory, Mr. Saars and I am presenting this material concerning the very serious situation facing Government laboratories in general and our laboratory in partcular if the present rate of loss of experienced scientific and engineering staff members continues. In the brief time available we will summarize the problem as outlined in the more complete statement herewith submitted for the record.

The problem is simply that the loss of experienced personnel has reached a critical stage for Government activities employing scientific and engineering personnel. If further losses occur, the effectiveness of the laboratory's research and development program will be seriously reduced, and even an immediate reversal of the loss trend will only serve to put us on the road to recovery of the scientific and engineering potential existing a few years ago.

There are four questions which seem to highlight the problem and its solution. These are: (1) Just how large in quantity and quality are the losses compared with the recruitment of new staff members? (2) Is the situation resulting from a net loss in experienced professional personnel a serious one? (3) What are the reasons for the losses and the lack of success on recruiting? And (4) What can be done to solve the problem?

With regard to the first question concerning the net loss in quantity and quality of Government scientific and engineering personnel, the thorough studies made by various groups and committees all show that there is now an average loss rate of about 20 percent per year and that 1 in 3 of the men lost are in grade GS-12 or above as compared to 1 in 10 lost in these grades for the period before 1954. Since the men in the higher grades have more experience and training, usually acquired at Government expense in fields peculiar to Government activities, their loss, even if recruitment were on a 1-1 basis, would represent a continual reduction in research and development capability. Since, on the average, fewer relatively inexperienced men are recruited to replace the experienced men lost, the reduction in technical capability is very rapid. Promotions within an activity are a partial answer, but here again there is a definite reduction in capability for there will now be only 1 man of experience where formerly there were 2.

The second question posed deals with just how serious the basic problem really is or, phrased in another way: If no steps are taken now to solve the problem, what will result? First the Government activities will continue to lose more professional personnel than canbe replaced until eventually a stable second-rate organization results or until the activity ceases to exist because it cannot fulfill its mission. There is no doubt in the mind of any member of the senior staff at the United States Navy Underwater Sound Laboratory that this would be a serious blow to the overall national-defense effort because, although Government activities such as our laboratory are small in number of professional personnel, the influence of the work accomplished by this group with unique experience and unique facilities serves to bridge the gap between military requirements and industrial production facilities. This is accomplished by nationwide correlation and distribution of research and development results and through the continuity of concepts and investigations only possible over long periods of time. It is believed that the transfer of the work now done by Government laboratories to industrial organization would not only result in a serious impairment of its effectiveness but would also result in increasing the cost of even this reduced return. Such transfer could not be effected without the loss of the capabilities now offered by the existing organizations. Not only are these organizations made up of men having major experience and training, but they also represent an integration of this experience into effective working units. Atrans-

fer of work would not serve the overall Defense Department purpose so well as an unbiased Government activity because attempting to make such experience and facilities available to all industrial organizations conflicts with the competitive principles on which business operates. It therefore seems imperative that a balance be maintained between direct Government defense activity and Government-supported industrial defense work; and for this balance to be effective, experienced first-rate scientific and engineering personnel are required in the Government laboratories.

The answer to the third question as to why experienced men are leaving the Government service and recruitment of replacemnts is seldom successful is simply that the Government service does not compete with industry in terms of the combination of salary, fringe benefits, and promotional opportunity. The primary reason for leaving the Government service is given by over two-thirds of the professional personnel lost as simply the low standard of pay. Again, large amounts of statistical data have been compiled to point up the fact that Government starting salaries are about $1,000 below industry rates, and the differential for equal degrees of responsibility increases to about $3,000 at grade GS-15. Fringe benefits are no longer significantly better than those in industry, and promotional opportunities are not very attractive in the face of higher and higher salary differentials as compared with industry. While the basic problem concerns the loss of personnel without successful replacement recruiting, it certainly appears that the key and the only feasible solution to the problem lies in a more nearly competitive scale of pay for professional personnel of all grades.

The fourth and last question concerns the solution to the basic problem. If the loss of experienced professional personnel is to be stopped before the point of no return, some immediate action must be taken. Several bills and proposals are under consideration; and while some would be better than others, the urgency of the problem requires most of all that a proposal which provides an interim pay increase of effective magnitude be adopted promptly. A long-range study of the Government's overall pay problem should be undertaken, but such a study could well require 2 or 3 years; and unless interim measures are adopted now, the value of such a study will be largely lost to Government activities employing scientific and engineering personnel.

Naturally any pay proposal poses a potential conflict with the administration's hold-the-line policy, but as long as the Department of Defense is responsible for research and development programs vital to the national defense, the cost of doing the job adequately must be accepted. A higher salary scale for professionals has become one of the costs that must be met if we are stay in the research business. However, some compensating economies are possible if we can get and keep really capable people. It can certainly be said that operating with mediocre staff is the poorest way to economize, since it involves high overhead and the likelihood of second rate research results. The cost of higher salaries can be met in part by compensating economies; in part by the higher productivity to be expected; and in part by readjustment of other costs. Repeated "blue collar" raises have been absorbed without the question of how to meet the cost ever being asked. "Blue collar" raises and increasing costs of materials are considered to be part of the cost of doing business

today. Professional salaries adequate to get and keep our share of capable people should be considered in the same light.

That is the end of the summary and I would like to thank you for the opportunity of presenting this information.

Senator YARBOROUGH. Thank you, Mr. Clearwaters. You have stated that the primary reason personnel leaving Government service in these categories is given by over two-thirds of the professional personnel loss as the low standard of pay.

Now do you have a survey of that? Do you have that in statistical form where it could be filed with your statement showing what

Mr. CLEARWATERS (interposing). I do have the information here among some of these papers; it would take a little looking, but I can certainly leave it. Yes.

Senator YARBOROUGH. If that shows what area that

Mr. CLEARWATERS (interposing). Yes; I can find that and we will provide it.

Senator YARBOROUGH. We would like to have that. I think that would be beneficial if it were added to your statement.

(The information indicated was not received.)

Senator YARBOROUGH. There was some testimony earlier that indicated that some people contended that there should be a governmental survey of this problem before general pay increases are undertaken. I note your testimony there that if this survey which would probably take 2 or 3 years were made that in the meantime the loss to the Government in scientific and engineering personnel would be so great as to be practically irreparable. Is that the effect of your testimony?

Mr. CLEARWATERS. That is right. We feel today that we have suffered heavy losses already, that people are staying with the activities such as ours because there is evidence, at least, that something is likely to happen and soon. If we go very much longer without something concrete being done I feel that we will see a rise again in the loss of personnel. And having had one round and compensated for this to some extent by promotion of people who are held in reserve, we are not in a position to meet such a situation again effectively anyway.

Senator YARBOROUGH. Is it your opinion, then, that many of your present qualified personnel are staying on in the hopes that some legislation might be passed and if it were not your rate of separations: would increase markedly due to low compensation by the Government.. Is that your opinion?

Mr. CLEARWATERS. That is our opinion; yes.

Senator YARBOROUGH. Any questions by counsel ?

Mr. KERLIN. When you lose an experienced person who has been there long enough to hit his stride, if you are able to get a replacement, how long does it take before that replacement hits his stride? Mr. CLEARWATERS. Well, in a business like ours or research laboratory like ours which is dealing with a specialized field we seldom can get a replacement with particular experience where we desire. It takes a new graduate, let us say we bring a new graduate in, it takes him 6 months to a year to become familiar with the particular aspects of our work. Unless we get somebody from another Government laboratory engaged in similar work it takes almost any professional at least this long to get