SANDIA, N. MEX.

Sandia constitutes a small AEC community of 1,500 residents located within Sandia Base at Albuquerque, N. Mex. Sandia Corp., an AEC prime contractor, operates and maintains the community. Water, electricity and gas are supplied through the facilities of the Department of Defense. Total program costs and revenues are expected to remain at the current year level.

The fiscal year 1961 cost estimate provides for operating rental housing at Monticello, Utah, and Grants, N. Mex.

The housing at Monticello was provided for employees connected with the processing mill which was closed on January 15, 1960. Based on current planning, it is anticipated that the housing at Monticello will be put up for disposal during the latter part of fiscal year 1960. The fiscal year 1961 estimates provide for maintaining the houses until disposal. Revenues in fiscal year 1961 decrease because of reduced occupancy due to the closing of the mill.

Mr. RABAUT. Briefly review this program, particularly with reference to the disposition of Oak Ridge and Richland and the cost increases in Los Alamos.

General LUEDECKE. Mr. Chairman, Mr. Quinn, of the Production Division will handle this.

Mr. QUINN. So far as community disposal is concerned, Mr. Chairman, as the committee knows, we are in the final stages of disposition of the Government-owned property in the community and the assumption by the cities of self-government. As of the end of March, of the properties to be sold, 96 percent in Richland have been sold and 92 percent at Oak Ridge. We anticipate that by the end of fiscal year 1961 all such property will be sold.

Mr. RABAUT. What is included in the remaining percentage to be sold?

Mr. QUINN. At Oak Ridge the only remaining items to be sold are residential lots. At Hanford there are a number of items: some commercial property, some residential lots, some industrial property. Most of the Government-owned housing has been sold.

Mr. RABAUT. What is the situation with the public utilities?

Mr. QUINN. As far as the utilities are concerned, at Richland all of the utilities have been transferred to the community. At Oak Ridge they will have been transferred by the end of this fiscal year. Mr. RABAUT. What about Los Alamos?

General LUEDECKE. General Starbird will speak to that.

General STARBIRD. We have an advance in the operating cost at Los Alamos of $240,000 during this coming year over the prior year. At the same time, there is an increase of revenues expected of about $80,000. However, to go back to the increase in cost, they come about in two categories. In the first place, the schools go up by about $85,000 of the $240,000. That is brought about primarily because of the increased number of children up there. The number of children attending school has gone up something over 200 during the coming year. As far as the remainder of this increase, that is primarily in the cost of operating the housing. Specifically, it is primarily in the added maintenance and repair of the housing that is there. We are having to paint a few more houses each year than we had to paint earlier. Also, we have some roofing problems that are on the increase. So, basically, they are just a series of small increases.

Mr. RABAUT. You don't think these items will keep on increasing? General STARBIRD. I hope not, sir; but, after all, prices are going up a little bit.

Mr. RABAUT. Yes. Please furnish a comparison of your costs for the past 5 years.

Community program-Comparison of congressional submission with actual cost

experience

PROGRAM DIRECTION AND ADMINISTRATION

Mr. RABAUT. Program direction and administration, $54.9 million. (The justification is as follows:)

PROGRAM DIRECTION AND ADMINISTRATION-OPERATING COSTS

General direction of Commission programs is executed by Commission employees budgeted under "Program direction and administration." These employees are responsible for (1) arranging for the work to be accomplished, and negotiating and administering production, research and development, construction, and related contracts; (2) maintaining necessary liaison with contractors to assure protection of the Government's interests in contract performance; (3) developing standards and control measures for internal security and protection of Government funds and property; (4) encouraging private civilian applications of atomic energy, granting licenses for peaceful uses of atomic energy, and conducting compliance inspections of licensees; (5) conducting a program of cooperation with other nations, regional groups such as the European Atomic Energy Community, and the International Atomic Energy Agency; and (6) providing normal administrative and management services required within the Agency.

Program direction and administration activities are conducted through the headquarters and 12 operations offices and their subordinate area and branch offices.

The costs of program direction and administration include the costs of personal services, travel, supporting costs for office operation and maintenance, certain activities conducted directly by the Commission, contribution to civil service retirement fund, cost of administrative equipment, and for the first time, costs of the Federal Employees Health Benefits Act. The estimates are based on progressive recruitment in fiscal year 1961 to reach by June 30, 1961, a strength of 4,970 full-time permanent employees, which represents an increase of 100 over the estimated strength of 4,870 employees on June 30, 1960.

JUSTIFICATION OF CATEGORIES

1. Personal services, $40,085,000

This budget provides for an average employment in fiscal year 1961 of 4,920 permanent full-time employees, plus a small number of professional and scientific consultants whose services are utilized intermittently for limited periods, and a small number of employees in temporary positions to meet special situations. A breakdown of total personal services costs under this program follows:

(a) Net cost of permanent full-time employees, including terminal

leave costs:

Fiscal year 1959.

Fiscal year 1960_

Fiscal year 1961_-_

$36, 568, 512 37, 781, 000

39, 096, 000

The estimates provide for employment at the beginning and end of the fiscal year as follows:

The man-year equivalent for terminal leave payments covering estimated separations from Government employment is based on current experience. The average permanent full-time man-year cost reflects an increase of $92 in fiscal year 1961. This increase results primarily from estimated automatic ingrade advancements.

JUSTIFICATION FOR INCREASE OF PERMANENT FULL-TIME EMPLOYEES

The estimates for personal services under this program would provide for an increase of 100 permanent full-time employees in fiscal year 1961 over the estimated strength of 4,870 on June 30, 1960, to reach a total of 4,970 by June 30, 1961. The need for additional staff stems chiefly from greater workloads associated with research and development programs which continue to reflect increases in dollar volume, number of contracts, diversification, and complexity.

It is and has been the policy of the Commission to operate with the minimum level of staff for program direction and administration consistent with responsibilities and changing programs and workloads. Although in the past few years large increases have been experienced in workload and in the level of operating costs, the level of staffing for program direction and administration functions reflects only relatively minor increases. For example, over a period of 6 years ending June 30, 1961, it is estimated that total operating costs will show an increase of 74 percent, costs of major research and development programs (reactor development, physical research, and biology and medicine) will show an increase of 161 percent, while the level of staffing for program direction and administration will show an increase of only about 14 percent.

The proposed utilization of the 100 positions requested in fiscal year 1961 is as follows:

(a) Reactor development, +84

During fiscal year 1960, the administration of most of the projects included in the reactor development program has been assigned to the field offices. This has been done to permit a more adequate review of contractor effort closer to the site of actual operations. Previously, contract administration was performed largely within the headquarters. With the increasing scope and magnitude of this program, it has become necessary to redistribute the workload among the field offices and provide additional staff. Operations offices in Chicago, New York, Idaho, and San Francisco have been assigned the administration of virtually all new projects being initiated in both fiscal years 1960 and 1961. Within the headquarters, considerable effort will be directed toward increased planning, coordination, and reporting to enable top management to effectively administer the AEC effort.

(b) Plowshare, +5

During fiscal year 1961 there will be an increase in the diversity of field activities relating to application of nuclear explosives for peaceful uses. This will require additional program direction and liaison duties for the San Francisco operations office which has been assigned responsibility for the administration of this project. Present activity of San Francisco includes the evaluation of feasibility studies, negotiating contracts for area surveys and site preparation, and liaison with laboratories and industrial firms with a view toward the possible application of nuclear explosives to particular problems. As studies and surveys are completed and move to succeeding stages, field experiments will increase requiring additional staff to provide program direction for these experiments.

(c) Licensing and regulation, +5

This area of AEC effort has continued to increase since its inauguration by the Atomic Energy Act of 1954. Applications for licenses of all kinds are being received in greater numbers each year. As part of the review and processing of license applications, the AEC must insure that adequate measures are taken to protect the health and safety of the public including all individuals concerned with the operation of nuclear reactors and utilization of source, special nuclear and byproduct materials. Additional personnel in this area are required for more expeditious handling of the work as well as to meet increasing requirements. A further impact in this area will come from the need for providing orientation through on-the-job training to State employees in implementation of Public Law 86-373.

(d) Other programs, +6

Six additional positions are required to meet increasing requirements of the Headquarters Divisions of Inspection, Intelligence and Research, and the Office of Health and Safety.