Reports indicate a delay may be involved. Amount of delay not determined.

Completed Dec. 4, 1937.

Delivered Nov. 30, 1937; commissioned Dec. 1, 1937.

SHIPS BEGUN UNDER APPROPRIATIONS PRIOR TO FISCAL YEAR 1939

Admiral Du BOSE. As previously stated, the appropriations requested cover ships under several categories. Category A includes ships that were started by appropriations prior to the fiscal year 1939. Of ships in this category those started prior to 1934 are shown in the following table:

Prior to fiscal year 1934, ships initially appropriated for under increase of the Nar,

category A

REASONS FOR ADDITIONAL COSTS IN CONSTRUCTING SHIPS AND POLICY

OF DEPARTMENT, RE "TRIAL BOARD ITEMS"

Mr. UMSTEAD. Admiral, with reference to the item of $4,760,000, under "Armor, armanent and ammunition," listed on the table jus inserted, what is the reason for the higher total cost figure than the one supplied to the Committee last year?

Admiral Du BOSE. I will ask Admiral Furlong to answer that. Admiral FURLONG. Each year, as we go along, and have to purchase materials or order materials or let contracts for them, the cost of what the materials is going to be is estimated on the basis of what we think the costs will be, and the increases here would be due to the increase in cost of materials, or the increase in prices of certain articles since first estimated. We have had as much as 25 to 30 percent increase on some of our materials in the last year.

Mr. UMSTEAD. Admiral, you are requesting under "Construction and machinery", as shown in the table just inserted, the sum of $399,484 for the year 1939 for the Quincy. The Quincy does not appear in the progress of work sheet. When was the Quincy commissioned?

Admiral Du BoSE. The Quincy was commissioned June 9, 1936. Mr. UMSTEAD. Admiral, since the Quincy was commissioned on June 9, 1936, why do we now have a request for $399,484 under the head of "Construction and machinery" for the Quincy during 1939?

Admiral Du BOSE. A ship, when commissioned or delivered from a shipyard, or when completed in accordance with the definition of thst term for a navy yard ship is not 100 percent completed as regards the work covered by the original plans and specifications. In addition to that, the trial board recommends certain changes and alterations that were not covered by the original plans or specifications in the nature of alterations or improvements which are chargeable to the building appropriation. The vessel is not made available immediately for the undertaking of that work. The general policy of the Navy Depart

ment is to hold the account open until a certain definite period after the delivery of the ship in order to permit undertaking the various items of work which were known at the time of the final trials, but which could not be completed at that time.

In other words, instead of delaying the ship's joining the fleet by waiting to get certain materials which, at that time, are not on hand, or to undertake all items of work, we wait until the ship comes into a navy yard for her regular scheduled overhauling, which may be some 18 months or so later, and we undertake the work at that time. It is unfinished work properly chargeable to the appropriation RNV which this money is intended to handle.

Mr. UMSTEAD. Admiral, I think in the estimates and tables which we are now considering, items of this kind appear in several instances for vessels which have been completed and have been commissioned and have joined the fleet. I understood you to say a moment ago that this particular vessel was built by a private concern?

Admiral Du BOSE. Yes, sir.

Mr. UMSTEAD. Under contract?

Admiral Du BOSE. Yes, sir.

Mr. UMSTEAD. If after a vessel is finished and commissioned and has joined the fleet there are a series of construction items yet to be added to the cost of the vessel, there is no way, under that system, for this committee ever to know what a ship is going to cost, is there?

Admiral Du BOSE. There is no way for you to know what sums of money finally have been charged by the Navy Department to a particular ship until after the expiration of the period fixed by the Navy Department for making all charges.

Mr. UMSTEAD. What is that period?

Admiral Du BOSE. The limiting period now fixed by the Navy Department's policy is 27 months after the delivery of the ship by a private contractor or the so-called date of completion if a Navy Yard built the ship. That 27 months is intended to embrace a 6 months guarantee period, the 18 months' period until the regular scheduled overhauling of that ship, and a period of some 3 months for the overhauling itself.

Mr. DITTER. Admiral, the major portion of that time is made necessary so that a ship may be thoroughly tested, is it not?

Admiral Du BOSE. No, sir; that is partly the reason; but a certain specific item of work is known to be required and is authorized, but not undertaken until the regular overhaul period.

Mr. UMSTEAD. After a vessel is commissioned is there anything further which the Navy Department can require of the manufacturer under its contract?

Admiral Du BOSE. In the case of a privately built ship, the contract requires guaranties of the contractor for a period of 6 months, during which any defects or deficiencies which come to light are to be made good at the expense of the contractor.

Mr. UMSTEAD. Do I understand from your statement that items such as this, required for a vessel after it is commissioned and after it has been in the service for any number of months up to 27, is because of improvements and things that you deem necessary on the vessel that you did not include in the contract at the time it was let?

Admiral Du BOSE. Yes, sir. During the life of the contract. changes are proposed. Some of them are approved and authorized.

Those changes, as far as practicable, are undertaken during the building period. Some of those changes are authorized to be undertaken after delivery. We do not want to delay the actual completion of the vessel by the contractor.

Then, after the delivery of the vessel, she is tried by the Navy Board of Inspection and Survey. They recommend additional items of work which are considered by them as required to improve the vessel. Those items of this kind which are approved of by the various bureaus of the Navy Department are known as "trial board items." Mr. PLUMLEY. Known as what, please?

Admiral DU BOSE. Known as "trial board items." They are not covered by the original plans and specifications but are recommended by the trial board, and to whatever extent may be considered necessary and desirable are approved by the bureaus of the Navy Department.

In general we do not authorize any trial board items after the expiration of the 6 months' guaranty period, but anything that may come to light during that period, we could, in accordance with our policy, authorize to have charged against the building appropriation, but in general we authorize items only as the result of the inspection by the Board of Inspection and Survey.

Mr. UMSTEAD. Admiral, was the Quincy satisfactory from a construction standpoint?

Admiral Du BOSE. There were a number of items of work, defects and deficiencies, as they are called, that were brought to light during the 6 months' guaranty period, not to any greater extent than has occurred in other ships, and all of the work in question has now been corrected.

Mr. UMSTEAD. Admiral, when these contracts are let, so far as the Navy Department then knows and can ascertain, the contract includes, does it not, not only all necessary features but in most cases all desirable features?

Admiral Du BOSE. That is correct; yes, sir.

LIMITATION ON COST OF SHIPS

(See p. 521)

Mr. UMSTEAD. What would be your opinion with reference to a limitation on the cost of ships in the various categories?

Admiral Du BOSE. It would be highly undesirable from the Navy Department's point of view to have a definite limit fixed for the construction of a vessel, unless that limit was sufficiently high to take care of all of the probable and possible work that might be required on the vessel.

We know at the time of placing a contract for a vessel in the case of a privately built ship the cost of the ship in accordance with the plans and specifications then adopted. We do not know then how many changes will come up and be authorized, nor what will be the cost of those changes. So that in fixing any limit of cost there must be s reasonable allowance for changes. In addition to that there should be a reasonable limit for these trial board items that I have previously referred to. It is very difficult to state just what those sums should be, but a limit on an individual ship would undoubtedly in many cases handicap the Navy Department by preventing the undertaking

of desirable work, because there would not be sums available for necessary changes or trial board items.

Mr. UMSTEAD. Admiral, generally speaking, in most matters involving construction, for whatever purpose a vessel may be used, there is a line of distinction between necessary items and desirable items. In the construction of these vessels, does the Navy Department seek to obtain on the vessels built in navy yards and under private contract all of the things desirable, whether they are necessary or not?

Admiral Du BOSE. No, sir. It would be entirely impracticable to obtain all the desirable items of work. We cannot, in many cases, even undertake those that we consider necessary. We do not want to delay the completion of the ship, and we do not want to increase the cost. We do not want to delay the time when the vessel is available for unrestricted use in the fleet. All of those considerations affect the Navy Department in reaching a decision as to undertaking or not. undertaking certain items of work.

SHIPS INITIALLY APPROPRIATED FOR IN FISCAL YEAR 1934

The next table shows ships initially appropriated for in the fiscal year 1934, under Increase of the Navy, in category A.

Fiscal year 1934-Ships initially appropriated for under increase of the Navy

Category A