EXHIBIT No. 168 Since the outset of construction at Wolf Creek Ordnance Plant at Milan, Tennesse, there has been an inadequate record system and procedure for initiating motor vehicle control. For example: On September 13 there was submitted to the Tool and Equipment Department of the C. Q. M. a report entitled "Daily Motor Vehicle Report". This report is a recap of the operation of motor vehicles at the Milan Ordnance Depot of the Wolf Creek Ordnance Plant for the preceding twenty-four hour period of September 12. This report is absolutely inadequate, not correct, and not complete. It fails to show the operation of sixty-nine vehicles. These reports should show to whom the vehicle is assigned, the actual working hours, the hours the vehicle is down for repair, and the hours the vehicle is idle. From this report Tool and Equipment Divisions should be able to keep rental rolls for payment of rent. Due to the fact that sixty-nine of these vehicles were not listed, it would be utterly impossible to submit an accurate rental roll. Therefore this division is forced to put additional personnel in the field to secure an adequate record system. On September 13 the same report entitled "Daily Motor Vehicle Report" submitted by the Transportation Department of Ferguson-Oman Company failed to list seventy-five pieces of motorized vehicle. The laxity of this report is because there is no control over light equipment (Sedans, Station Wagons, and Pickup Trucks). If all motor vehicles were required to check through the established motor pools at least once every twenty-four hours, an accurate motor vehicle report could be obtained. This would not necessitate additional personnel because the organization is and has been established for months and regardless of whether two hundred vehicles check through the motor pool or whether all check through the pool, it will still require the same amount of personnel. Therefore, this record system could be established and could be submitted accurately without difficulty, without additional cost, without additional personnel, and without enlarging the present established motor pool. There exist today two divisions in the Transportation of Ferguson-Oman Company. One division is classified as the personnel and truck_division. This division handles the organization and supervising of the personnel transportation at Wolf Creek Ordnance Plant and Milan Ordnance Depot. Their duty is to supervise the system now operating within the gates of the reservation and the transportation of personnel from the various time clocks to the job locations. They are also in charge of the heavy truck division which handles vehicles of one and one-half ton and up, these vehicles serving the construction, roads, and railroad division in supplying materials, etc. The Light Transportation Division is that division which supervises the assignment and control over vehicles of one ton and less. At the present time these two divisions are operating as separate units. If these two division were consolidated and operate as one unit, it would eliminate the personnel and the operating cost of the Light Transportation Division and would not cause the Heavy Truck Division to add additional personnel nor would it require additional operating cost which we believe would create a savings for the United States Government of at least $100,000.00 per annum. This recommendation has been made previously but same has been ignored and no action has been taken to reduce the operating cost of the Transportation Department of Ferguson-Oman Company. This Division is in receipt of a letter dated May 26, 1941, from Lt. Nichelson to Major Paul M. Brewer carrying subject, “Elimination of Convoys". The convoy system that was established at Wolf Creek Ordnance Plant in the latter part of February or the first part of March was the transport the workmen from the various gates of the reservation to the job locations. Approximately eighty, one and one-half ton motor vehicles were utilized and all were equipped with tarpaulin racks and tarpaulin seats, etc. It was recommended by Lt. Nichelson that the convoy system be eliminated which in labor alone was costing approximately $4,314.10 per week. From mutual agreement with the contractors, convoy system was to be eliminated. The tarpaulin racks were removed from the motor vehicles and the operators of the vehicles which previously had been working nine hours per day should have been reduced to eight hours per day, thereby, eliminating the overtime which these truck drivers were drawing. It was recommended that temporary time buildings be constructed at or near the job site so that the workmen could check in directly at the job thereby eliminating the need for transportation. These time clocks were built and established and to date the convoy system is still in operation and the only difference in the system now in operation and the previous system is that the motor vehicles are not equipped with tarpaulin racks, benches, etc. Consequently, this system in labor alone is costing the Government approximately $224,333.20 per annum. There have been motor pools established in the city of Jackson, Tennessee, Humboldt, Tennessee, and Trenton, Tennessee. These pools are established for the primary reason of permitting authorized individuals to park their motor vehicles while same is not on official duty. These pools are costing the United States Government approximately $32,000.00 per year. It is the opinion of the Tool and Equipment Division that if an individual working on a defense project is indispensable and important to the point to where it is felt advisable to give them twenty-four hour motor vehicle service then this individual should be capable of being charged with the responsibility of the motor vehicle assigned to him when same is not on official duty. This would have a tendency to eliminate these established motor pools and as heretofore stated, would create a savings of $32,000.00 a year. On April 10, 1941, an inter-departmental letter in the form of a bulletin was distributed to all department heads. This letter read in part as follows: Quote"To All Department Heads: It is imperative that all pickup trucks report to the motor pool once every 24 hours, so they maybe charged to the correct department." End Quotation. This bulletin was signed by John Taylor, Superintendent of Transportation. As heretofore stated, this bulletin was issued on April 10, approximately five months ago, and yet there is still an average of seventy to seventy-five vehicles failing to report to the motor pool and this Department cannot determine how the coding department of Ferguson-Oman Company can accurately distribute the cost of light transportation when almost one-fourth of the motor vehicles are failing to report to the motor pool. The foregoing facts as set forth have a tendency to show where the operating cost of one department could be reduced approximately $356,333.20. This foregoing estimate in cost could be initiated without an increase in personnel and at the same time the system could be installed whereby an efficient, correct, and adequate record could be established without difficulty. As of August 31, the value of motor vehicles, Wolf Creek Ordnance Plant and Milan Ordnance Depot, was placed at a total of $1,158,943.89. The total cost of labor and parts to maintain these vehicles to date is $90,928.44. On September 8, 1941, a recommendation was made that the personnel of the Light Transportation Garage which is under the Supervision of the Transportation Department of Ferguson-Oman Company be reduced. Under this date on the first shift from 12 midnight to 8 a. m. there were 28 mechanics and 32 helpers. These mechanics drawing salary approximately $65 per week and the mechanic helpers drawing approximately $39 per week. It was recommended that this force be reduced to 18 mechanics and 18 helpers. From the second shift from 8 a. m. to 4 p. m. there were 34 mechanics and 35 helpers working. The recommendation was submitted that this force be reduced to 25 mechanics and 25 helpers. On the third shift from 4. p. m. to 12 midnight under this date there were 23 mechanics and 26 helpers. A recommendation was made that the personnel be reduced to 20 mechanics and 20 helpers. This total reduction would mean the elimination of 52 persons totaling approximately $135,200 per year which would raise the total savings and reduce the operating cost of the Transportation Department of Ferguson-Oman Company alone approximately $491,533.20. EXHIBIT No. 169 War Department Circular number 183, dated August 29, 1941, states: For the maintenance, upkeep, and repair (exclusive of garage rent, pay of operators, tires, fuel, and lubricants) on any one motor propelled vehicle except buses and ambulances in excess of one-third of the market price of the new vehicle of the same make and class, and in no case, in excess of $400. In other words, it is not permissible to expend money for labor and repair on any one motor vehicle in excess of one-third of the market price of the new vehicle and in no case, in excess of $400. in any one year. In paragraph "E," item 4, of War Department Circular number 183, specifically states that: Quote "Neither Civilian or Military personnel is authorized to use army vehicle except when required in the actual performance of their official Government duties" End of quote. It is the opinion of the Tool and Equipment Department of the C. Q. M. that any vehicle on rental agreement contract automatically comes under the control and jurisdiction of the United States Government and therefore, is classified as a Government owned vehicle. If the foregoing assumption is correct and the following motor vehicles have had money expended thereon in the form of labor and parts in excess of $400.00 in less than one year, consequently same is not authorized nor should same be reimbursable by the United States Government. Vehicle number 2314, GMC Trailer, rented at Wolf Creek Ordnance Plant on February 12, 1941, from Oman Construction Company of Nashville, Tennessee, was used model 1936. Valuation was listed at $8000.00, carrying a monthly rental of $342.50. As of July 1941 there had been expended for labor and parts on this vehicle $487.56. This figure does not include gasoline, oil, grease, etc. Verification of this amount, see statement of operating cost of trucks for month of July 1941, official record Transportation Department, Ferguson-Oman Company. As of July 30, 1941, Ferguson-Oman Company rented Chevrolet Trailer 1938 model, five tons, condition was used, same was rented from Paul Clancey of Memphis, Tennessee. Its value was given as $4000.00, carrying a monthly rental rate of $650.00. Records show that the C. Q. M. Inspector stated that this piece of equipment, when received, was in fair condition, had air brakes, dual ratio axle, two auxiliary gas tanks, set fuses, heater, one extra rear end, two axle boomers, one chain, double trans. fifth wheel split. According to official records of July 1941, thirty days later this vehicle received $661.68 in labor and parts cost for repair. If the interpretation of the War Department Circular is correct, the expenditures for labor and parts on this vehicle have exceeded in one month $261.68 over the authorized amount permitted. As of August 30, 1941, this vehicle, according to the service record of the Tool and Equipment Department of the C. Q. M. has actually worked 176 hours although same has been on the reservation 1464 hours. It is the opinion of this Department, due to the fact that this piece of equipment has only been utilized in actual work approximately 12% of the time on the reservation, the same was not needed at the time of rental and the same should be released from service on this job site. EXHIBIT No. 170 WAR DEPARTMENT, Memorandum. Subject: Request for transfer. WOLF CREEK ORDNANCE PLANT, To: T. D. Thomas, Field Auditor, Wolf Creek Ordnance Plant, Milan, Tennessee. 1. Initiation of steps necessary to effect a transfer of station assignment is requested. 2. Facts occasioning request are: a. Performance of prescribed audit functions impossible. General contractor refuses to record proper basic accounting information. b. Section personnel insufficient to operate as directed under Construction Division Letter No. 286. (Your attention is invited, further, to Construction Division Letters No. 249 and 285). 3. Recommendation that Zone Auditor conduct a physical inspection of conditions is considered advisable to determine that basic defense materials are receiving proper application. Accountability must accompany expediency to avoid undue waste. 4. Reflection on the administration of your office is neither intended_nor implied. Fullest cooperation within the limits of your local jurisdiction has been extended. 5. Consideration of present rating and responsibilities with view of compensatory adjustment is requested in this connection. A. W. B. WAR DEPARTMENT, EXHIBIT No. 171 WOLF CREEK ORDNANCE PLANT, Inter-Office Memo. From: A. W. Bouck, Chief Equipment and Tool Inspector. To: T. D. Thomas, Field Auditor. Subject: Rejection of Rental Equipment. 1. On May 12, 1941, the Oman Construction Company delivered five gasoline powered Euclid Trailer Wagons to this work site for rental under the provisions of Contract W 7011qm-2. 2. Inspection of these units indicated that an average of $1000.00 must be expended on each machine before it could be placed at work. 3. In rejecting this equipment consideration was given to the availability of similar dirt moving units. As at this date seven Kochring Trail Dumps, powered by Case Motors are available from the Tri-State Equipment Company, Memphis, Tennessee. ANTHONY W. BOUCK, Chief, Equipment and Tool Inspector. To: T. D. Thomas, Field Auditor, Wolf Creek Ordnance Plant, Milan, Tennessee. Shortly after the establishment of this section on March 1st, 1941, it was determined that no acceptable records had been established by the contractor for operations since starting the job as at January 20, 1941. Operating on the theory that since control by records was impossible, physical control at the source was imperative. Competent inspectors were installed at the heavy equipment barn, light equipment garage, and at the central tool house. Inspectors were also assigned to inspect all equipment turned over to the con tractor. Various methods of enforcing control of repair expenditures have been employed, chief among these being that no reimbursement would be made for transactions which appeared irregular to the government inspectors. The accounting and auditing portion of this section has been primarily concerned with getting accrued rentals paid to the owners at the earliest possible moment. Because no acceptable forms nor procedure had been effected by the contractor toward the payment of rentals, this department initiated and counseled the contractor's accounting department in matters pertaining thereto, to the end that reasonable records might be established. OBSTACLES It happens to be to the interest of the contractor that no routine records be kept, and therefore, constant vigilance must be kept on these departments to determine records are posted. With regard to the small and shop tool situation, no related records have ever been kept. Such records as this department have been able to uncover are fundamentally lacking in accounting value. On one occasion two of our inspectors were refused access to the contractor's records which were under the direct supervision of Mr. McCarran, the contractor's property man. Because this department is aware that irregularities existed in the small tool and property section of the contractor, the matter of inspecting their records was not pressed because such records as had already been inspected were worthless. Independent records, obtained from material receiving reports are being compiled, and a search for such tools and materials is under way. Items unaccounted for shall be set up in the records of this department as direct charge to the contractors fixed fee. There has been, in the matter of certifying to the valuation and condition of equipment sent to this work site, grave differences of opinion. This difference is confined not only to the contractor and the inspectors of this department but to certain personnel of the army who override our decisions to the benefit of the contractor and the detriment of the government. Such an instance can be illustrated in the case of 5 Euclid Trailer Wagons sent in for rental: This department valued the machines at $8500.00 each, such valuation being based on the actual age and condition of the equpiment. Capt. Carlton, Executive Officer thought we shouldn't be too hard on the owner and set the valuation at $9450.00 per unit. Capt. Carlton has also taken exception to the "intolerant" attitude of this section in the matter of repairs and replacements. In the presence of Stirton Oman and Quin Flowers of the Ferguson-Oman Company and myself, he pounded the desk with his fist and stated the the inspectors of this office (Tool & Equipment) had absolutely no authority at the heavy equipment barn or garage, and if anything appeared wrong, a letter should be written about it. Marked exception is taken to this particular statement because it conveyed the impression to Mr. Oman, who is a member of the general contractors Company, that this section could be ignored with the sanction of the Constructing Quartermaster. As a matter of fact, all irregularities that appear are charged directly to this department for the reason that we are the only section actively concerned with determining that the U. S. Government is getting what it pays for. The Ferguson-Oman Company has at various times and by various means sought to deplete this section of certain of its personnel. In March, 1941, H. F. Stanfiel, Senior Inspector, was approached by a member of the Ferguson-Oman Company Mechanical Division in this manner, "Show me your government check and I will double it if you will go to work for us." Mr. Pirtle, Mechanical Inspector at the light equipment garage had to say in this connection, "There isn't enough money in the mint to make me wear a Ferguson-Oman badge, now that I know how they operate." Probably one of the greatest sources of friction, and beyond doubt a contributing factor toward disrespect of government employees, both civilian and army was the induction of Gilbert Olson who has neither civilian government status nor army rank, into a position termed "coordinator" at $750.00 per month. Mr. Olson was employed through the normal personnel channels of the Ferguson-Oman Company but exercises the privileges and authority of a ranking army officer. On June 5, 1941, at a meeting attended by A. K. Ferguson, Wallace Faulk, Assistant Construction Supt. of Ferguson-Oman Company and others, I heard him remark while on the subject of necessary transportation facilities, "I have already sent Capt. Carlton, (Executive Officer) after some cars." The position Mr. Olson has assumed is tacit admission by Executive authority that neither the army, nor the Civilian Government employees are capable of performing the duties of "Coordinator." Because Mr. Olson is an employee of Ferguson-Oman Company, and because he, naturally, does not wish to stand in the way of the general contractor's wishes, he cannot render impartial decisions, nor is his judgement calculated to render the U. S. Government the fullest fealty. It should be noted, pointedly, that Mr. Olson has not been required to take the oath required of all U. S. employees, but yet exercises authority second only to the Constructing Quartermaster. Beyond all question of doubt there is a fatal weakness in any system that admits, as in the case of Mr. Olson, that its constituted personnel is unequal to the task at hand. France fell of a similar ailment. In the matter of accounting for equipment, the general contractor has steadfastly maintained the attitude that it was none of the business of the Equipment and Tool Section-and therefore the U. S. Government-what disposition was made of such units. As at this date no actual working hours have been furnished on cars, station wagons, and pickup trucks. While the act of transcribing daily basic information to the rental rolls is important in order to determine proper payment thereof, it is more important to keep a daily check on such vehicles to determine that their usage is diverted into the proper channels. Station wagon No. 2070 was missing for several days during the first part of June. No one knew its whereabouts until it was discovered in Humboldt, some 12 miles from the work area. It is reasonable to presume that such abuses are magnified many times if no control is kept on some 600 light vehicles. It would be interesting to determine also, if all these vehicles are necessary to the furtherance of this project. A daily check and control would establish this fact. 311932-42-pt. 9- -28 |