What do you know about that, Admiral Du Bose?

Admiral Du BOSE. That comes under the same general heading as all of the other items you are bringing up. The Navy Department did not specify any features of this ferryboat except the paint, insofar as the Bureau of C. and R. was concerned.

Mr. THOм. Did you ever see this ferryboat?
Admiral Du BOSE. No, sir.

Mr. TнOм. Another criticism is [reading]:

The sides inside of the cabin and deck overhead likewise sheathed, to comfort passengers who will be about 5 to 10 minutes.

What do you say about that?

Admiral Du BOSE. This was required by the Navy as during the cold weather cabins are heated at all times, as a matter of health and comfort of the passengers.

Mг. THOм. Then, as I understand it, you asked to have a ferryboat built along general lines, and this company, the Bath Iron Works, submitted specifications together with a bid, and that being the low bid you accepted the bid without reference to, without any individual on the part of the Navy Department passing upon these things that are criticized by the naval architect, Mr. Johnson?

Admiral DU BOSE. That, in general, is correct. The Navy Department, before accepting the bid of the Bath Iron Works satisfied itself that we would get a ferryboat built of the general requirements stated, and we verified the fact that the ferryboat met these requirements by the tests that were conducted by the Trial Board on the completion of the vessel.

Mг. THOM. In conclusion, the Navy Department did not disapprove of these items which are thus specifically criticized by the naval architect as being unnecessary in this ship?

Admiral Du BOSE. We neither approved nor disapproved. We did not pay any attention to them. Such detailed features were not covered by the circular of requirements on which the accepted specifications were based.

Mr. THOM. How do you expect to keep down the costs of ships. then, unless your Department exercises its supervisory capacity to eliminate the things which in good practice are not necessary for a ship?

Admiral Du BOSE. We got a very favorable bid price for th ferryboat. I happen to know from information that I have, that the contractor lost money on this ferryboat. The Navy Department was very well satisfied. We estimated the cost of a ferryboat for $390, and got it for $339,000. Now, that ferryboat cost the shipbuilder a good deal more than $339,000.

Mr. TнOм. On the other hand, you could have bought a ferryboat cheaper if you would have eliminated some of these so-called ...necessary things.

Admiral Du BOSE. I think not, because we threw the bidding wid. open in the general circular of requirements, which was sent to number of prospective bidders, and the Bath Iron Works bid w

the low bid.

Mr. UMSTEAD. Admiral, when your general specifications were issued, you were seeking to obtain a ferryboat to accomplish cert :. purposes, were you not?

Admiral Du BOSE. Yes, sir; and at the minimum cost to the Navy. Mr. UMSTEAD. When the specifications and bids were sent in by the contractor, you examined, of course, the plans and specifications to determine whether or not they met the requirements, the minimum requirements of the Navy Department for a ferryboat?

Admiral Du BOSE. Yes, sir.

Mr. UMSTEAD. Then, as I understand, from your answers made to Mr. Thom, you accepted the lowest of the bids after satisfying yourself that you would obtain from the contractor a ferryboat which would meet your requirements?

Admiral Du BosE. Yes, sir.

Mr. UMSTEAD. Was it not the duty of some bureau in the Navy, before accepting the bid and letting the contract, to examine in detail the plans and specifications submitted by the contractor, which plans and specifications called for a certain price, to determine whether or not you could obtain your minimum requirements and eliminate many of the things contained in the plans and specifications submitted?

Admiral Du BOSE. If the plans and specifications had included a teak deck, unquestionably a pine deck could have been provided at less expense, but if the Navy Department got a teak deck for the bid price, we did not care so long as we had a deck. In general, that applied to the other things. The detailed features of this particular vessel were not looked into by the Navy Department.

Mr. UMSTEAD. Yes, Admiral; but the detailed features of any vessel have something to do with determining its proper cost, do they

not?

Admiral Du BOSE. Absolutely, sir.

Mr. UMSTEAD. Then you do not mean to leave the impression on this committee that in letting contracts for ships to meet the minimum requirements, whatever those requirements may be, that the Navy Department does not concern itself with the details of construction which enter into the cost of vessels?

Admiral Du BOSE. The Navy Department would not definitely provide for a certain feature involving an increased cost except with our eyes wide open. If there was an increased cost and for good and sufficient reasons we wanted it, we might do so, but in the case of this particular vessel we wanted a ferryboat of a certain size to a do a certain thing, a commercial type of ferryboat.

Mr. UMSTEAD. The point I am making, Admiral, is that the mere fact that you required a ferryboat to render certain service to the Navy, a boat of a certain size and of a certain durability, did not justify you, did it, in approving a contract for any amount to obtain what you desired?

Admiral Du BOSE. Not unless we were satisfied that the low bid which we accepted was a reasonable bid.

Mr. UMSTEAD. Admiral, if you had taken the detailed plans of the concern to which this contract was let, and if you had gone over those plans, would you not have known then that many of the things itemized in those plans, as proposed to be included in the construction of that ferryboat, were uncessary?

Admiral Du BOSE. Perhaps.

Mr. UMSTEAD. Then, if they could have been eliminated, would it not have been your duty to have rejected the bids and called for Simpler plans and specifications and thereby obtained a lower price?

Admiral Du Bose. No, sir; because, as I say, our circular of requirements was general in its nature. The various bidders proposed their own detailed plans and specifications, and if their proposal and their plans resulted in higher costs to them, it was not the concern of the Navy Department. Our concern was that we were going to get a ferryboat for $390,000 or less.

As a result of competitive bidding, we got a bid of $339.000, and it was deemed to be reasonable. It was the lowest bid received, and the Navy Department got a ferryboat which met our general requirements.

Mr. UMSTEAD. Admiral, that does not relieve you of the responsi bility of passing upon what they submit to you, does it?

Admiral Du BOSE. The general plans were approved by the American Bureau of Shipping and the detail plans were prepared by the shipbuilder in accordance with those approved plans.

Mr. UMSTEAD. Unless you examined what they did submit, how did you know you were not being overcharged for the type of ferryboat which you required?

Admiral Du BOSE. That charge of $339.000 is a fixed-price bid. Whatever the shipbuilder saw fit to put into that vessel, whether it was necessary or unnecessary, was covered by the $339,000.

Mr. UMSTEAD. Yes; I understand that, Admiral, but regardless of what amount was submitted and regardless of whether you obtained a bargain in the construction of this ferryboat, as it was constructed. is beside the point, as I see it. Was it not the duty of the Navy Department not to leave the details to the shipbuilding concern and permit it to make a bid for what it thought met the requirements of the Navy, at any price, but, on the contrary, was it not your plar duty before letting the contract to examine closely the estimates to see what they were based upon so as to determine what could be eliminated and thereby reduce the cost, rejecting the bid if you found it too high?

Admiral Du Bose. I do not think so, sir, because it was no part of the Navy Department's duty to determine anything in connection with this ferryboat except that we were going to get a ferryboat that would meet these general characteristics based on our needs and at a price which was reasonable, right, and proper. We satisfied ourselves that the bid price was reasonable. It was the lowest bid and obtained as a result of competitive bidding. The Bath Iron Works is a reputable concern. They have done business with the Navy for many years. We felt sure that the plans and specifications under which they proposed to build that vessel with the detailed inspection of the plans by the American Bureau of Shipping representatives. with their stamp of approval on those plans, would result in giving us a ferryboat that would be strongly and properly built. We verifie the fact that we got such a boat by the Navy Department trial on completion of the vessel. During the construction period of the re-sel the Navy Department representatives at the Bath Iron Works exercised only general supervision, primarily in connection with prog ress payments and inspection, because she was built in accordance with the American Bureau of Shipping's rules and requirements.

Mr. UMSTEAD. Then, Admiral, you do not know now whether or not you could have obtained a ferryboat which would have met your requirements for less money than the contract was let for?

Admiral Du Bose. I do not know it, but I am positive in my own mind that we could not. The price of $339,000 was an exceedingly low price. The only way to have determined that definitely would have been to do just what you say, reject all bids and readvertise.

Mr. UMSTEAD. That is what you should have done unless you are intimately acquainted with the details of what you are paying for. Admiral Du BOSE. I think, Mr. Chairman, you are losing sight of one very important difference in the case of this vessel and the ordinary Navy contracts. This was a vessel which, for all practical purposes, was a commercial vessel. She was not inspected in accordance with Navy practice, and not built in accordance with Navy practice. We definitely set forth that the American Bureau of Shipping rules and regulations were to apply. All that we were concerned with was getting a ferryboat that was sufficiently strong and that had the speed and size we required.

Mr. UMSTEAD. I can appreciate the fact that that makes some distinction as between the construction of this vessel and the ordinary contracts for vessels placed by the Navy Department, but, at the same time, I doubt if it explains away all of the matters which have here been discussed.

Mr. DITTER. Admiral DuBose, in what justification was this ferryboat included, the justification for what year?

Admiral DuBOSE. 1936.

Mr. DITTER. How much was set forth in the justification as the amount that you thought would be necessary to build this ferryboat? Admiral DuBOSE. This ferryboat comes under the general heading of "District craft," and it was not specifically authorized by Congress as in the case of any combatant vessels.

Mr. DITTER. Would it not be part of the same general construction scheme, and, therefore, be embodied in and part of your appropriation?

Admiral DuBose. Well, undoubtedly. We have an item in the 1939 appropriation, under the heading "District craft," and this particular ferryboat's money was included in 1936 or 1935.

Mr. DITTER. Making up a lump-sum total of these craft that you are now speaking of. They were particularized, but this one was included in that particularization, was it not?

Admiral DUBOSE. It happens that the money for this ferryboat was added to the naval appropriation bill by a Senate provision. Mr. DITTER. So that this committee never had any opportunity to pass upon what the contemplated cost of this ferryboat was to be, other than through the conferees' meeting, is that it?

Admiral DuBOSE. I presume that is the case, because the fact is the Senate put the money in the bill.

Mr. DITTER. Do you know how much you suggested to the Senate would be necessary for the building of this ferryboat?

Admiral DuBOSE. The Navy Department was communicated with by somebody from the Senate committee, and an estimate under "C. and R.," and an estimate under "Engineering" was given to the Senate committee, and the additional funds were put in the bill.

Mr. DITTER. You have no knowledge, then, as to whether the $390,000 that you say was a splendid bid exceeded the amount that was originally suggested as the cost of this ferry boat?

36929-38-36

Admiral Du BOSE. I will have to look that up and give you a definite answer, but I think it was not. I think the bid was within the estimate that we had given the Senate committee.

Mr. DITTER. How much, in your opinion, would have been saved the Government if these unnecessary items that have been detailed by my colleague here had been eliminated from this ferry boat! Admiral Du BOSE. Nothing, Mr. Ditter, because the bid price was $339,000.

Mr. DITTER. Now, Admiral, that does not answer my question Assume that this boat were built without these items in it, would it have cost less or cost the same to have built it, irrespective of what the profit or loss to the shipbuilder might have been?

Admiral Du BOSE. Unquestionably the omission of any unnecessary item would cost less than if the item were included.

Mr. DITTER. Can you estimate for us how much less it would have cost to build it, not what the Navy would have saved, but how much less it would have cost to build it if these unnecessary items had been omitted?

Admiral Du BOSE. No, sir; I am not in a position to estimate what the Bath Iron Works costs were. Only they can make an estimate on that.

Mr. DITTER. You do not mean to say that your professional skill does not enable you to pass on the specifications and the basis of cust of those items going into a vessel, do you?

Admiral Du BOSE. I do not know what those items actually cost the Bath Iron Works.

Mr. DITTER. I mean an estimate of what you think a reasonable cost of those items would be, not to the Bath Iron Works, but to the general shipbuilding industry.

Admiral Du BOSE. I can make an estimate of the cost of four stays to support a smokestack, or four stays

Mr. DITTER. I mean all of these details that my colleague, Mr. Thom, has given us.

Admiral Du BOSE. I am trying to answer your question, sir.

I could make an estimate of the cost of four stays of a certain size. as compared with four stays of another size, and tell you what the savings would probably be, but as for giving you any figure which represents the cost or the savings in cost to the Bath Iron Works by the omission of those allegedly unnecessary items, I cannot do it.

Mr. DITTER. Would it be possible, after studying these criticism for you and Admiral Bowen to suggest to the committee what the savings in cost of construction would have been if these unnecessary items had been omitted?

Admiral DU BOSE. If the committee seriously wants that information, I would suggest that the best way to get it would be to have a letter written to the Bath Iron Works asking them for that informa tion. If the committee really would like to have that information. Admiral Bowen and I would be glad to do it. That is the only way in which I think the information could be obtained.

Mr. DITTER. Does this mode of procedure, this carte blanche confidence that you have evidenced in connection with this ship, charac terize the building of our ships generally?

Admiral Du BOSE. I have tried to bring out very definitely ti.s: this particular ship was built at variance with the Navy Department's