For instance, over here at Belvoir, right outside of the city of Washington, and Fort Meade, and all those pieces of property, of course they are expensive pieces of property.

You want to sell that and then locate it somewhere else where it is not too expensive. Well, if you do that, you better be sure that you are going to get enough for the property that you sell to rebuild in some new place, because otherwise you will just be dumping on the market valuable military installations with the hope that you can go out and buy other property and build.

And here, along with the increased cost of building, I doubt very seriously whether you could build any of them.

Take the Presidio, and take all these other great places. If you dispose of those, and go out in the wide open spaces-you better look very carefully into that, Mr. Bryant.

Secretary BRYANT. I realize, Mr. Chairman, there are a lot of problems involved. Of course, in the final analysis, we would present our thoughts to the committee when we formalized them, but I can, and I am sure that others here can recall instances where, for example, a storage area has been acquired, and due to the expansion of development of the city or community it finally is surrounded and becomes very valuable high-priced property.

At the time it was selected, we will say it was out in the suburbs someplace. But that would not be tantamount to abandoning a highly improved property where the cost of construction to replace it might. as you say, offset any gain.

But we could move such a storage facility and still have it reasonably accessible and a considerable gain might well be made. Now, these things will have to be specific.

The CHAIRMAN. That is right.

Well, be very careful in looking them over.
Mr. DOYLE. Mr. Chairman--

The CHAIRMAN. Mr. Doyle, now, please, sir.

Mr. DOYLE. Mr. Secretary, on the last 5 lines on page 28 and the first 4 lines on page 29, you refer to your competitive bidding in France.

I want to ask two questions there: How many teams of competitive bidders were there involved in this transaction?

And whereas you say the winning competitor was notified and that final negotiations were not complete, I want to ask, secondly, does that bid which you have accepted permit you to raise by negotiation or lower the price of the contract, or is it a firm bid?

Secretary BRYANT. Mr. Arrington will answer, please.

Mr. ARRINGTON. Bids were taken from about a dozen teams last October. The bid opening was on the 10th. And a very careful evaluation was made by the joint construction agency over a period of about 6 weeks before they came up with the winning proposal which was submitted by the Rainaut group, which was the cheapest and best from the standpoint of the United States. He gave us substantially the best house and the lowest price.

Mr. DOYLE. Well, under your bidding terms, are you permitted by negotiation to raise that bid?

Mr. ARRINGTON. We have made a number of adjustments. For example, we eliminated carports, at a cost of about $1,000 a unit, within the house. We have changed the locations for a number of

the Air Force installations. A number of variations have been made for the convenience of the United States Government since last October.

Mr. DOYLE. Then, the bid did permit you to raise the final contract price?

Mr. ARRINGTON. Yes.

Mr. DOYLE. Do you give notice of that final contract price to the losing bidders? Do you give them a chance to re-bid?

Mr. ARRINGTON. No. Because the final terms with Rainaut will still, for the value received, be less than the other bids which were involved.

Mr. DOYLE. How do you know that, if there are other factors that enter into it when you negotiate a contract that were not included in your competitive bid originally?

Mr. ARRINGTON. This, of course, is an extremely complex transaction, and I am sure that JCA feels that if it reopened negotiations with all of the original bidders the negotiations would be protracted. Mr. DOYLE. Then, in effect, it is not final competitive bidding, is it, if you vary the terms of the bid without notice to the other bidders and include new factors of which they had no notice in advance? How do you justify that policy?

Mr. MAYER. I am Mr. Mayer, Office of the General Counsel, Office of the Secretary of Defense.

In the last analysis, that is substantially correct. This is not competition in the strictest sense. We consider these proposals actually and there are alternate proposals which may be considered.

The practice which we followed in this French case where we did enter into a modification of the contract which was to the benefit of the United States Government is in conformance with contracting practices in this area.

We do not feel that essentially this is governed by the Armed Services Procurement Act, and therefore is not subject to the kind of competitive requirements set forth in that statute.

The CHAIRMAN. I think, Mr. Doyle, the Department has made a pretty good showing that 93 percent of it is by competitive bidding, and 7 percent is by some form of competitive bid or negotiated contract.

Mr. DOYLE. Mr. Chairman, the witness just now stated, however, that in truth this was not competitive bidding, and that was my point. The CHAIRMAN. Well, the 93 percent of it is competitive bidding, because we have examined that a long time ago in the Hébert committee, and it is strictly competitive bidding in public works.

Mr. ARRINGTON. Mr. Chairman, I would like to point out in this particular case that the land is provided by the builder. At the time. we took the bids, we did not have the land. We did not have standard plans and specifications.

The CHAIRMAN. That is on the particular details. I am talking about the general picture.

Mr. GAVIN. Mr. Chairman

The CHAIRMAN. Mr. Gavin.

Mr. GAVIN. In your statement this morning, you cited the amount of money that was authorized but unexpended, but was still flexible to be transferred to some other particular project. What was the

amount

The CHAIRMAN. Well, there is a practice in the Department known as reprograming. Most all of that is outside the United States. We will go into that.

Mr. GAVIN. What is the amount of money you mentioned this morning?

The CHAIRMAN. I didn't mention any amount on that at all.
Mr. Miller.

Mr. MILLER. Mr. Secretary, adverting to the statement on page 20 relative to the sale of high-priced properties and purchase of lower priced properties, before any such program will be undertaken, will consideration be given to the fact that where there has been a longestablished military installation the civilian employees that are a part of these things have purchased their own homes in the vicinity, and in making one of these trades in the interest of the Government, we dislocate them, and cause a great deal of harm, will consideration be given to that fact or before a decision is arrived at?

Secretary BRYANT. Yes, Mr. Congressman, certainly.

Mr. MILLER. That would be one of the factors considered?

Secretary BRYANT. There will be many factors that will have to be considered. I share the concern of the chairman as to the delicacy of this matter.

The CHAIRMAN. That is right. And then another thing, members of the committee, it must be cleared by the two committees. We will look into all this.

Now, members of the committee

Mr. BROOKS. Mr. Chairman, before we adjourn, can I ask one question?

The CHAIRMAN. Yes, sir.

Mr. BROOKS. I want to ask you this. Coming back to the bill-because a lot of these questions have had very little relevancy to the bill.

The Strategic Air Command: percentagewise, how much was it cut? Secretary BRYANT. I beg your pardon, will you repeat that?

Mr. BROOKS. Strategic Air Command-SAC

Secretary BRYANT. Yes?

Mr. BROOKS. How much was SAC cut from the original demands? Secretary BRYANT. I am afraid I couldn't answer that in detail. I had hoped that the details of the Departments would be provided by them.

Mr. BROOKS. I just mean across the board, and not any detail.
Secretary BRYANT. Oh.

Mr. BROOKS. Was it reduced percentagewise with the rest of the bill or

Secretary BRYANT. I would not think so, sir.

In determining the reductions within the Air Force, I am satisfied that the Air Force put first things first.

Mr. BROOKS. I have been sold on the thought that SAC was really first things, there, in the event of any wars.

Secretary BRYANT. That is correct, sir.

Mr. BROOKS. And I just wondered how much its request was reduced percentagewise. Is it possible to get those figures?

Secretary BRYANT. I can say this, that proportionately it was cut considerably less than other areas of Air Force original requirements.

86066-57-No. 36

Mr. BROOKS. Well, you wouldn't want to hazard a guess, as to what you mean by considerably less?

Secretary BRYANT. Well, no, I wouldn't want to hazard a guess. The CHAIRMAN. I suggest, Mr. Brooks

Secretary BRYANT. That the Air Force

Mr. BROOKS. Can we get those figures later on?

Secretary BRYANT. Yes, sir.

The CHAIRMAN. Now, members of the committee

Mr. BATES. Mr. Chairman, are you going to get down to the end of the table this week?

Mr. PHILBIN. I have one question.

The CHAIRMAN. All right.

Mr. PHILBIN. When you are abandoning an installation and putting it up for sale, do you have a policy whereby you give consideration to the original sellers who may want to reacquire their property?

Secretary BRYANT. I think there should be. That is just another factor. I believe you are right.

The CHAIRMAN. Mr. Bates?

Mr. BATES. Yes, I have a lot of questions. See you tomorrow morning.

I

Mr. PHILBIN. They have to come in as general bidders?

Secretary BRYANT. I think they should be given consideration, and propose it.

The CHAIRMAN. Now, members of the committee, Mr. Bryant must appear before the Senate committee, I understand, tomorrow morning.

Tomorrow morning, we will have the Assistant Secretary of the Army, Mr. Short. And immediately thereafter, we will read the bill, line by line, and consider the bill and pass on the projects.

Mr. HARDY. When is Mr. Bryant coming back for the questions that we didn't get around to?

The CHAIRMAN. Well, we are through with Mr. Bryant for the time being.

Mr. Bryant must go to the Senate.

We will take a recess until tomorrow morning at 10 o'clock. Secretary BRYANT. Thank you, Mr. Chairman and members of the committee.

(Whereupon, at 11:51 a. m., a recess was taken until the following day at 10 a. m., Wednesday, May 15, 1957.)

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, Washington, D. C., Wednesday, May 15, 1957. The committee met, pursuant to adjournment, at 10 a. m., Hon. Carl Vinson (chairman) presiding.

The CHAIRMAN. Members of the committee, this is a continuation of the hearing on H. R. 7130. We have this morning our former distinguished chairman and our former distinguished colleague, the Honorable Dewey Short, the Assistant Secretary of the Army, who desires and who we respectfully request to submit observations with reference to the Army's phase of the public works bill. Mr. Secretary, will you please come around.

Mr. Secretary, I know that I voice the sentiment of each and every member of the committee when I say that we are indeed fortunate to continue to have your advice and mature judgment and cooperation on legislative matters that are before this committee. It is a pleasure to have you here with us this morning, and if you have any prepared statement the committee will be pleased to hear you, without interruption, and later on we will afford the members of the committee the opportunity to examine our former distinguished chairman of the Armed Services Commitee.

Secretary SHORT. Mr. Chairman, if those kind, sweet words had been recorded and broadcast in my district before last November, I might be sitting at your side today. [Laughter.]

The CHAIRMAN. I want to say

Secretary SHORT. I hasten to say, however, because I am not there is no fault of the distinguished chairman of this committee, because he has been kind, gracious, and generous to me throughout the years.

I do miss you boys a great deal, but I have discovered in 2 monthsbecause I was sworn in on March 15-that the Pentagon is inhabited by human beings. They don't all grow horns. All the headaches in Washington are not on this Hill. We have our share over there. So I am finding the work a bit different, but quite interesting, though I am having to look at that pancake from the other side across the river.

It is a distinct pleasure, sir, and a privilege for me to appear before this distinguished and powerful committee today to open the Army's presentation of the fiscal year 1958 military public works bill.

The total estimated cost of the work described in the Army titleconsiderably less than that in the other two titles-is $323,325,000, divided into $259.6 million for the continental United States, and $63.8 million overseas-about one-fourth overseas as compared to the money to be spent in continental United States. The Army feels that this program is both modest and minimal, and that it is commensurate with national economy.

The Army, in order to insure proper balance in funding its diverse missions, employs a system of three primary programs which are carefully reviewed annually under the direction of the Secretary of the Army. These primary programs cover the three basic activities of the Army: troops, materiel, and installations.

Other programs support the three primary programs. One of these contributing programs is the military construction program, that we now have under consideration.

It must provide the construction needed to make the others effective. By comparison and analysis of program development and execution, we are able to maintain balance between the programs or to identify imbalances readily.

The Army bases the planning of its construction program upon requirements for the current and the long-range Army, evaluation of the relative priority of our requirements, and assessment of our existing assets. As the committee is aware, construction master planning of Army installation has been in effect for over 10 years. Standards of space or other physical units have long been in use in the Army so that planners at all levels of command have common, uniform yardsticks. The Army has based its permanent construction target on a comprehensive stationing plan, at our permanent stations.