My division handled all the offshore construction work for the Bureau of Yards and Docks--with the exception of that which came under the district public works office of the 17th Naval District and the 14th Naval District, throughout the Territory of Alaska and of the Pacific-and which included not only construction but also the funding of the work to be performed by the Seabees. Mr. DAVIS. All of your engineering experience has been in connection with work as a naval officer, has it? Admiral PERRY. Yes. UNOBLIGATED FUNDS Mr. DAVIS. Of the previous appropriations that have been made, for which funds have not been obligated as of this date, has that, on the records of your Bureau, all been tied to special line items at specific installations? Admiral PERRY. Yes, sir. Mr. Davis. You do not have under you what you might call floating funds anywhere with respect to the overall public-works program? Admiral PERRY. No, sir; we do not, other than advance planning money which I think was mentioned in Admiral Baker's statement. There was some $3 million we got last year that was for the planning for this program. Mr. DAVIS. In making up this $108 million which you spoke of, you can, I assume, trace the money which you have accumulated for the 1954 program to deleted special-line items? Admiral PERRY. Not entirely; no. As you will see, I said $51 million was cash. In other words, from a previous appropriation, let us say, we had $1 million that had been appropriated for a certain line item. It might be in the final analysis that the item would cost $950,000. We would then have a $50,000 balance. In reviewing our entire program for some years past, we find that we have this $51 million of cash available from previous appropriations savings. I might explain that we also had $10 million from Yards and Docks Administration reserves. In other words, if your committee gave us an appropriation for public works of $100 million, the Bureau automatically reserved $5 million of that $100 million for administrative expenses. We must employ civil-service personnel to man the posts in the field, and we must also employ civil-service personnel within the Bureau in connection with public-works programs. So, of the $100 million that we mentioned, there is an accumulation from the 5 percent that has not been used. Thus where I say we had $51 million in cash, you can add $10 million to that, and come out with the $61 million. Mr. DAVIS. Then you can say with respect to the $47 million that you can pretty well trace those deletions-they are line items; is that correct? Admiral PERRY. That is correct. We have two groups. One group of items Admiral Baker mentioned, and they have been certified as nonessential. That amounts to $22 million. Then we have another group of items which has been deferred-they are essential, but they have been deferred by the Secretary of Defense. This totals $19,900,000. Then there is another $7 million to be added to the $19 million. That will make up a total of deferred projects of $26 million. We have a statement on that. (The statement referred to follows:) Department of the Navy, public works construction program, fiscal year 1954, public works projects not certified as essential [Includes only those authorizations for which appropriations have been made] Change in requirements necessitates differ- Project reduced in scope by retention in Existing facilities have been rehabilitated Rehabilitation of existing facilities has met Engine test workload has been reallocated Change in personnel deployment has Existing facilities are adequate to meet Reduction in immediate requirements. Change in requirements has necessitated restudy of location. Existing facilities will suffice to meet present needs. 22, 126, 539 Naval shipyard, Philadelphia, Pa.. Electrical jib crane. 666 P. L. 254, 82d Cong.. 105,000 Naval air station, San Diego, Calif.. Public works department bldg. 562 .do.. 2, 156, 377 Antisubmarine warfare aircraft overhaul bldg. 851 P. L. 547, 82d Cong.. 3,676, 300 Naval air station, Sangley Point, P. I. Link trainer. 746 P. L. 254, 82d Cong... 448, 685 Naval auxiliary air station, Saufley Field, Fla. Airfield pavements.. Total. Department of the Navy, public works construction program, fiscal year 1954, public works projects certified as essential, released by Secretary of Defense, now deferred Essential but funds required for more Project has been reduced in scope to provide Existing facilities are being continued in Navy's reduced program necessitated to No base rights at present. Must be phased with other facilities for Reduction of Navy's program permitted Existing facilities will meet requirements Existing facilities are being continued in use at some sacrifice of efficiency. Department of the Navy, public works construction program, fiscal year 1954, public works projects certified as essential, released by CONTINGENCY ESTIMATE Mr. DAVIS. If I recall correctly-and this goes back to the hearings of some years ago, but if I am correct in my recollection that there was at least 2 years ago what you call a 10-percent contingency estimate added to the estimated cost of construction? Admiral PERRY. Not necessarily; no. That has been done in the past, but I think the prices as of today listed in our cost-data book are such that we seldom find it necessary to use the 10 percent. If there are any unknown quantities we may, for example, assume that there is a 10- to 20-percent unknown quantity with respect to a given project. But that would have to be a project about which we did not have all given factors. As a general practice, I would say "No." FACTORS REPRESENTING REDUCTION Mr. DAVIS. Would you say that as of now, under the general proposition, that the $51 million of saving represents a reduction in the nature of requirements on favorable bids, or decline in construction costs since the time the estimates were made, or what would be your best explanation as to that $51 million? Admiral PERRY. I think that is a combination of many factors. It is certainly not due to a decrease in the cost of construction. I think a part of it is due to the fact that as time has gone on, let us say, from 1948 to the present time, we have got better bids, particularly in the past 2 years. I know that the construction industry has been faced with problems; it needs business, and when it needs business it will sharpen its pencils and as a consequence we will get better bids. But a part of that saving no doubt has been due to the fact that we have improved our designs. The austerity program has played a large part in savings which is presently represented in the two figures which we have here. It is a combination of many factors. OBLIGATIONS AND EXPENDITURES Mr. DAVIS. What do you consider to be your normal ability to obligate construction funds, that is, at what rate will your present organization enable you to efficiently handle your obligations? Admiral PERRY. Just as a rough figure, and you mentioned normaland I underline the word "normal"-$200 million a year. I am giving you a rough figure that I believe to be the normal. Mr. DAVIS. You expect to do better than normal during 1955? Admiral PERRY. Yes, because in many cases we already have the plans prepared and are "ready to go to press," so to speak. If we had to start from scratch we could not equal that rate. Under normal conditions that would be the rate. Mr. DAVIS. It appears from your statement, Admiral Perry, that you are contemplating a very small 1955 program and you are going to step up your rate of obligation at a very rapid rate. Admiral PERRY. As I explained, that would be the normal rate, assuming we start from scratch. Bear in mind, we have our plans well along in the course of preparation, and I think I can give you a set-up which will show you exactly what we have forecast for both obligation and expenditure for the fiscal years. Do you have that, Mr. Patterson? |