general practice. It was built under the American Bureau of Shipping rules, and did not require the same detailed inspection which combatant ships require. Unquestionably, that particular method resulted in obtaining a cheaper ferry boat than if we had built it in accordance with the usual standard Navy practice. Mr. PLUMLEY. I should like to ask if the Navy Department has taken any official notice with respect to the criticism appearing in that article? Mr. DITTER. Admiral, may I refer to the record of the 1936 bill in which you said this justification appeared for this ferry boat. My examination of the changes made by the Senate in the House bill indicate that you submitted an estimate of $238,000 for C. and R., and $112,000 for engineering, or a lump sum justification of $350,000 for this ferry boat. I direct your attention to page 10268 of the Congressional Record of June 21, 1935, and to this colloquy between the late distinguished chairman of this committee, Mr. Cary, and Mr. McFarlane of the House, in which this colloquy took place: The House provided a lump sum for the reopening of the naval training station and the Department indicated to the Senate a number of additional things that would need to be provided for, and these required an additional appropriation of $442,940. One of the items in there is "new ferry boat for use at Newport, $350.000." Now, where did the additional $40,000 come from? Admiral Du BOSE. The actual contract price was $339,000, and the appropriation "Construction and repair," and the appropriation "Engineering." jointly paid $339,000 for the ferryboat which, when we asked for bids was estimated to cost $390,000. Mr. DITTER. I mean, where was it authorized by the Congress, or justified by the Department to the committee? Admiral Du BOSE. The specific additional sum-actually not needed-was at no time justified or authorized by the committee. because the practice has been to authorize or provide money toward the accomplishment of a certain object and the Navy Department has exercised a certain freedom of action as is clearly indicated in the statements that have been made before this committee showing the committee allocation, and the final bureau allocation. We do not exceed the total amount given us by Congress, but we do, necessarily, have to make certain variations in the contemplated expenditure of funds under the various headings to take care of situations such as this, where a certain thing was estimated to Congress to cost $350,000, which was an estimate, and when we actually came to asking for bids we thought it might cost a little more. Mr. DITTER. When did your Department change its opinion as ro the reasonableness of the price of a ferryboat from $350,000 to $390.000! Admiral Du BOSE. When the $350.000 estimate was prepared it was based on costs of various boats constructed by or for the Navy in the past, and was an estimate prepared before any detailed circulars of requirements had been actually prepared, and my recollection is that the $350,000 covered a somewhat smaller boat than was actually built. Mr. DITTER. May I further direct your attention to the colloquy that I think is rather pointed, and that is that Mr. McFarlane asked this pointed question: "Is that not," referring to the figure of $350,000, "a little high for that ferry?" Still you feel that the Department was justified in exceeding its own estimate by $40,000 for the construction of this ship in the light of the searching inquiry and criticism that has been directed by my colleague, Mr. Thom? Admiral Du BOSE. I would feel so because $350,000 was a figure more or less out of the air, before we knew in particular just what we wanted to do; $350,000 was for a ferryboat. When we got out our circular of requirements and it specified more in detail the length, beam, and draft and speed of the vessel, we could give a more accurate approximate estimate, which was $390,000, but the accepted low bid was $339,000, or $51,000 less than our estimate. Mr. DITTER. Now, Admiral, would you say that all of the estimates and all of the statements and justifications by Departments to the committee are to be taken in the same light of certainty tha prevailed in this case? Admiral DU BOSE. In considering any estimate of cost for a ship the time and conditions existing at the time must be taken into consideration. We are asked by the General Board of the Navy what a certain type of vessel will cost. We give them the best estimate we can. Later on the General Board states the characteristic of the vessel. The bureaus are then in a position to get a more accurate cost figure. When we come before Congress we may be asked. "What did you estimate this vessel would cost?" The answer to that, if we gave the complete story, would be: We originally estimated so much, and we now estimate so much, and when the time comes to actually get bids from the navy yards or costs from the shipbuilders, our estimate may or may not be correct. That is brought about by various conditions that have occurred between the times of the several estimates, such as increased labor costs, increased material costs, and so forth, so that the estimates are approximate. Mr. DITTER. Or unnecessary trimmings, such as were included in this case. Admiral Dr BOSE. That might be true in the case of combatant ships, where the Navy Department does specify in detail what we want, but it would not be true in the case of a vessel which was built in accordance with the American Bureau of Shipping requirements, because we do not specify the details. Mr. DITTER. Mr. Chairman, if it is not too much of a task, I fee! this committee would be justified in asking the Department to submit the figure as to what it feels this ship could have been built for if these unnecessary trimmings had been omitted. I do not care whether it goes into the record or not, but I should like to know how much all of these things total up. SATURDAY, DECEMBER 18, 1937. BUREAU OF YARDS AND DOCKS STATEMENTS OF REAR ADMIRAL BEN MOREELL, CHIEF OF CIVIL ENGINEERS AND CHIEF OF BUREAU; CAPT. C. M. AUSTIN, OFFICE OF NAVAL OPERATIONS; CAPT. RALPH WHITMAN (CIVIL ENGINEER CORPS), COMDR. E. L. MARSHALL (CIVIL ENGINEER CORPS) DUTIES OF THE BUREAU Mr. UMSTEAD. We will take up at this time the appropriation items of the Bureau of Yards and Docks. Admiral Moreell, you may proceed. . Admiral MOREELL.. The duties of the Bureau of Yards and Docks comprise all that relates to the design and construction of Navy and Marine Corps public works and public utilities, such as drydocks, marine railways, building ways, harbor works, quay walls, piers, wharves, slips, dredging, landings, floating and stationary cranes, power plants, coaling plants, heating, lighting, telephone, water, sewer, and railroad systems; roads, walks, and grounds; bridges, radio towers, and all buildings, for whatever purpose needed; it is charged with the annual inspection and all major repairs of such public works and public utilities and provides for their general maintenance, except at ordnance stations, radio stations, air stations, training stations, hospitals, marine posts, and the Naval Academy; it designs and makes the estimates for all naval public works, after consulting as to their operating features with the bureau or office for whose use they are primarily intended; it provides the fixtures and furniture for all buildings, and has charge of the operation of power plants and of all means of weight handling and of ground transportation, such as locomotives, locomotive cranes, cars, derricks, shearlegs, passenger automobiles, motortrucks, and other vehicles, and horses and mules; motor-vehicle operators and teamsters, at all navy yards and naval stations, except those above mentioned. It provides certain clerical personnel for the offices of the commandant and captain of each navy yard, and all professional and clerical personnel for the public works offices. It has custody of naval real estate not in active use. In general, the work of the Bureau is carried on by commissioned officers of the Corps of Civil Engineers, United States Navy, whose major duties comprises the design, construction, and maintenance of the public works of the Navy. PURPOSE OF THE APPROPRIATION "MAINTENANCE, BUREAU OF YARDS AND DOCKS" This appropriation provides for the general maintenance of activities and properties under the cognizance of the Bureau of Yards and Docks. The properties include approximately $400,000,000 worth of public works and extensive public utilities located at the various navy yards and naval stations throughout the world. Properties located at stations maintained for special purposes, such as training stations, air stations, radio stations, the Naval Academy, naval hospitals, and similar activities are excluded, being maintained out of appropriations under other bureaus whose activities are involved. For certain activities not under the direct cognizance of the Bureau it, however, provides from this appropriation for certain items which have been placed under its cognizance as follows: (a) Purchase of all passenger automobiles, except for the Marine Corps. (b) The maintenance, operation, and repair of passenger automobiles at the Navy Department garage under the cognizance of the Office of the Secretary; at activities under the cognizance of the Bureau of Navigation (except one car at the Naval Home, Philadelphia); cars assigned to fleets and squadrons and to offices of naval attachés and inspectors of materials; at activities under the cognizance of the Bureau of Engineering, the Bureau of Aeronautics, and the Bureau of Medicine and Surgery (except three cars at the Naval Dispensary, Washington, and one car for the medical officer at Annapolis). (c) Household furniture for training stations and replacementand repair of such furniture at air stations. (d) Office furniture for offices of naval attachés, naval district offices, and buildings assigned for purposes of other bureaus and offices at the navy yards and stations maintained by the Bureau of Yards and Docks. (e) Motor trucks for training stations, recruiting stations, air stations (except special body equipment), fleets and squadrons, ordnance stations, radio stations, supply and fuel depots. MAINTENANCE, BUREAU OF YARDS AND DOCKS DISTRIBUTION OF ESTIMATE FOR 1939 Mr. UMSTEAD. The table that you have submitted, on page 7 of the justifications may be inserted at this point. Admiral MOREELL. Very well, sir. (The table referred to is as follows:) 1. Administration, including cierical, technical, and drafting forces, telephone operators, janitor service, guards, incidental labor, office supplies, etc.. 2. Grounds and ground struc- 3. Buildings and accessories. 5. Dredging.... 6. Power, refrigeration, heating, 7. Distributing systems, fire pro- 9. Transportation (railroad roll- Total... $1,575, 000 $1,650, 000 +$75, 000 $1,650, 000 $1,627, 515 $1,752, 184 JUSTIFICATION OF DIFFERENCES BETWEEN COMMITTEE ALLOCATIONS 1938 AND 1939 ESTIMATES Admiral MOREELL. For the purposes of this statement the committee allocations for 1938 are assumed to be those carried in the 1938 Budget, page 526, revised to conform to decreases reported by the committee ($62,042) and the Senate increase accepted in conference ($3,000). It is not the practice of the Bureau to set up annual allocations or to make allotments to the field under this appropriation independently for each of the 11 projects which constitute the Budget break-down of the total appropriation. Allotments on such basis would involve a very considerable amount of additional administrative work and would unduly hamper the practical application of the funds. METHOD OF ALLOTTING AND ACCOUNTING FOR FUNDS The funds under this appropriation are allotted to the various navy yards and stations and other activities by quarterly allotments known as regular allotments to cover operating and administration expenses and minor repairs in the nature of upkeep; also by special allotments, made quarterly, for sizable individual repair jobs, special purchases of equipment, and major projects. The yards and stations submit to the Bureau what are termed "quarterly budgets" covering both the regular and the special requirements. These budgets are in very considerable detail, forms being used so that the requests |