prepared to say that all of them are wrong. We do know that some of them are good and we know that some of them are not. And we will develop those that are good and do away with those that are bad.

The amount expended each year for maintenance is very large. We cannot give you at this time the accurate figures, because the departments do not keep their records on any uniform basis, but it is a pretty good guess that it is around a billion dollars a year. It is a continuing obligation and actually is increasing all of the time. So if we can make any kind of a proportional reduction in that expense it will amount to a lot of money; even 10 percent would be a substantial

sum.

For that particular division we do not have a man at the head of it as yet I think I will have one before the day is over. He is just arriving in town this morning. But I think by getting new uniform accounting methods and by adopting proper maintenance procedure on some uniform basis that much can be accomplished there.

REAL PROPERTY CONSTRUCTION

In construction, that divides itself also naturally into three divisions which we designate as the Planning Division, the Technical Division, and the Analysis Division.

Admiral Jelley is Director of the Construction Division. I think, with his sound background, his education and experience, he can make a very definite contribution and certainly he will be of great assistance to me.

I have been a contractor in the past, and although I have been out of the business for some time, I have kept in touch with it. I had contracts for about 9 years doing heavy construction work largely on the Mississippi and the Missouri Rivers for the Government. We were one of the large companies that carried on work throughout the depression, which was a tough time to be in construction, or, for that matter, anything else.

Admiral Jelley will bring definite new knowledge. In addition, we are exploring the idea of putting in some sort of plan-we have not got it formulated yet-under which we will use civilian consultants, particularly on the analysis end, someone who is actually a working contractor. There are objections to that one may be that of getting a men who is not disinterested, but we believe that it would be advantageous to us if they could come to us with an opinion that is backed up by present civilian experience. We have been successful in getting three excellent men to head this up: Mr. Dowling of the Plans Division, Mr. Poorman of the Technical Division, and Mr. Sheridan of the Analysis Division. These are all very high grade men and each of them will have a small group of experienced men under him, not a big group, because we do not intend to have a big group. We want to have just a small compact unit, one that can do its work effectively.

Mr. DAVIS. Would you take just a little time to explain to us where the line would be drawn between these three groups.

Mr. FLOETE. Yes. Perhaps Admiral Jelley can best explain that.

ORGANIZATION AND FUNCTION OF CONSTRUCTION DIVISIONS

Admiral JELLEY. Mr. Chairman, our function falls into two types: one is the staff type of planning and devising standards in accordance with the reorganization bill; and the other is the function that has been delegated to us by the Secretary of Defense, for analysis and review of construction projects and formulation of annual programs. The Analysis Division of my organization has the primary job of analyzing construction projects. Of course, the first thing we have got to determine is the question of the necessity of the project, and, second, the cost and the engineering feasibility, and so forth.

We have three men: One has had about 25 years' experience in the Army; another about 15 years' experience in the Navy, and the third, altogether, about 8 years in the Air Force, plus previous experience with the Army engineers. They are graduate engineers, and all of them have had good engineering backgrounds. They are acquainted with the working level of the three departments, so that they can go right down to the bottom for information.

For example, in this 1954 program that you are about to hear, we have gotten informal advance information about the projects.

The Planning Section and the Technical Section are going to do basic work to improve the situation. For example, the Technical Section will set up various standards and criteria that will be used by the services, and the review of the analysts will be on that same basis. We intend to concentrate first what we call, for lack of a better term, the functional criteria. For example, how many warehouses should we have. We have found one way now being used of deciding the number of warehouses we should have. If we buy a million dollars' worth of material we say that it will take so many cubic feet of storage space, and we come up with so many square feet of warehousing. So we will buy 8 or 10 warehouse buildings that may last for several hundred years based on that demand. That is one way, but I don't think it is the only way of determining how much space we should provide.

We know of no rule, for instance, of saying how many hangars that we should have at an airbase or a naval air station. At the present time it seems to be just a matter of individual judgment. We want to make a study and come up with some standard to cover the needs, say, if we have 50 planes, how many hangars do we need to meet that requirement.

Of course we will depend on the information that can be obtained from commercial airlines and the services as to how many hangars are needed for such operations. We hope by the time the 1956 program arrives to have some definite guides, based on the missions of the individual stations or bases, that can be used uniformly by the services.

The Planning Section is starting off with an analysis of the planning systems of the three services as far as public works go. In the studies we are going right back to the inception of the project and following it right through the whole organization.

We all realize there must be effective planning before the three services can get firm and realistic public-works projects that adequately meet their requirements. We hope to be able to find out if there are weak spots in the planning systems of the three services and to turn

that information over to the Secretaries and have them correct them. If they will not, then we may have to go to the Secretary of Defense. We want to analyze the master plan program for the three services. They all have master plans but some of them do not go into much detail. We want to make sure that we have a sound master plan program. We also want to analyze the situation between the appropriation and getting work under contract. There have been long delays and we want to see if we can find means of improving that situation, after going into it and finding out what the reasons are.

We are trying to hold the organization down to a dozen engineers in the construction group. The Army engineers, Navy, and the Air Force have cooperated in making top men available to us. We have gotten men who were in responsible positions being transferred to us. I think that covers the situation pretty well.

REVIEW OF 1954 PROGRAM

Mr. DAVIS. Did I understand you to say, Admiral, that it was just a matter of a few days ago before some of the branches of the services submitted their programs to you?

Admiral JELLEY. Yes. But the analysis section, the section which handles that work, was not set up until the 2d of November.

Mr. FLOETE. We really did not get the program until last Friday. Admiral JELLEY. Yes. We had the Air Force overseas program at that time; but we did not get the program for the continental United States until Tuesday night. However, our people had had some familiarity with it in the individual services and it was not a case of having something brandnew; I do not have the figures here showing how many projects are involved in deferment.

Mr. FLOETE. In the 1954 program we have requested the Army to defer something like 11 projects, totaling $24,381,000 out of $66 million proposal. The Navy, $9,220,000 out of about $90 million.

For the Air Force, we have not completed the study on that, but we can do so before Monday and advise you as to that program.

Admiral JELLEY. In the time available they could not come up with the information required to clear up some of the points in our mind. We want to look into the cost of hangars, for example, and to analyze the requirements, which it seems to us has been something that may have been overlooked. We want to make sure, for example, when they analyze a project they include all of the costs and that we have the correct information. I spoke about the Army and the Navy program, which I think can be cleared up before you leave here. The information should be available in Washington or we can get it from the field.

Mr. FLOETE. Is your committee going to meet again? What are your plans as to any matters that are deferred?

Mr. DAVIS. We are planning to complete these hearings. We do not expect to meet again until after the first of the year.

Mr. FLOETE. Admiral, would there be any hardship on the services in deferring clearance to the end of the year?

Admiral JELLEY. There would be for the housing project at Okinawa. But the Army thinks they have the information available here and that they can clear that up pretty quickly. I feel that on some of the projects we may be able by next Monday to produce the

information that is satisfactory from the engineering cost point of view.

Mr. FLOETE. We are not entirely satisfied with the kind of review we have been able to make at this time, but we assure you that in the future it is going to be different, that we are going to start at the bottom and get it when they first come up. However, we have been on several of these projects and reviews are underway.

Admiral JELLEY. The 1955 program should be submitted to us next Monday. I understand that the Army and the Navy are ready to submit it. There are some indications that the Air Force will be 2 weeks late.

Mr. DAVIS. That is, submitted to the Office of the Secretary?

Admiral JELLEY. Yes, the Secretary of Defense and we will start the review of that immediately. We want to be ready for an authorization bill by the first of February. We do not want this June or July business any more.

OBLIGATIONS AND BALANCES

Mr. FLOETE. I would like to talk about a phase of it that does not involve the 1954 program except indirectly. I think you would want to have the balances on that.

Mr. DAVIS. Go right ahead.

Mr. FLOETE. We are very much concerned about the tremendous amounts of these funds that have been authorized. There have been some $11,400 million authorized since the fiscal year 1948.

There have been some $9,400 million appropriated. There is a $2 billion balance there. A large part of the $2 billion is in the Air Force. Some of that is 2 or 3 years old, and obviously there is a lot that they do not need any more. Of course, they will hang on to it if they can.

Of the $9.4 billion, approximately, $6 billion is obligated, that is, under contract.

Therefore $3 billion is not obligated, $2 billion of which is within the Air Force. In other words, the Air Force has got $2 billion in that category, and $1.6 billion in the other. They have $3.6 billion total and in the last 3 months they have obligated-what is the figure indicating their obligation during that period, Admiral Jelley? Admiral JELLEY. $192 million.

Mr. FLOETE. $192 million.

Mr. DAVIS. That is the total for the last 3 months?

Admiral JELLEY. Yes, the first quarter of fiscal 1954.

Mr. FLOETE. Yes. Last year they obligated about $1.2 billion, and they are running away behind; it did not get going, on the basis they are going now-their obligation this year will not be much more than $700 million, maybe $850 million, at present rate.

These figures here seem to bear that out. These represent huge amounts. There is some $2 billion authorized, but not appropriated. We would like advice on the subject, but our feeling is that we should make a study of that immediately before coming up under the 1955 authorization bill, and perhaps it should come up coincidentally with the new authorization.

Mr. DAVIS. Obviously we have been too generous in appropriating money, even this last year, where there was a very sharp reduction from what it has been in the past. Obviously their house must be put

in order if we are to know what use is going to be made of the money. Mr. FLOETE. We also feel that there is something wrong with the obligation method being used. That is another thing that we are going to get at; there is something wrong with that. I know that contractors are looking for work. It all seems to go back basically to the fact that they do not have proper planning and we intend to get into that matter also.

I think serious consideration should be given to the large amount of money that is lying around, and it would seem to me to be a proper study.

Admiral JELLEY. The thing that disturbs us in connection with the $2 billion in authorization is that when they come up for a new program, they do not use the old authorization, they need a new authorization.

Mr. FLOETE. The Air Force obligated $936 million in 1951; a billion dollars in 1952, and with an appropriation of $1.2 billion in 1953; their obligation has been much slower than the rate of appropriation.

UNOBLIGATED BALANCES

Mr. DAVIS. Have you included in the record a statement showing the unobligated amounts for the Air Force, Admiral?

Admiral JELLEY. If not I will be glad to include that. (The information is as follows:)

As of September 30, 1953, the total unobligated balance was $1,819 million. Mr. DAVIS. Mr. Floete, will you give us the figures you have now with respect to the unobligated balances for the other two branches of the armed services?

Admiral JELLEY. $951 million for the Army and $416 million for the Navy.

Admiral JELLEY. The Air Force is $1,819 million.

Mr. FLOETE. $1,819 million up to September 30.

REVIEW OF OUTSTANDING AUTHORIZATIONS AND APPROPRIATIONS

Mr. DAVIS. Do you expect that in the course of the next few months and prior to the time this spring when we will be holding hearings on the 1955 program, that you will have had a chance in your office to review some of those outstanding authorizations and appropriations?

Admiral JELLEY. Also obligations.

Mr. FLOETE. We will do both; but the procedure, of course, with authorizations is that we would come to the Congress for rescission, would we not?

Mr. DAVIS. Yes. Some of that was done last year; but obviously a great deal more remains to be done along that line.

Admiral JELLEY. We are asking the services to furnish us next month with a list by projects of authorizations which will not be used, which have not been used and will not be used, in the 1955 program.

Mr. DAVIS. What review do you plan to give with respect to outstanding appropriations?

Admiral JELLEY. That is in line with Mr. Taber's letter.