were directly between our Government and the Philippine Government. So this complexity, if you will, or this third party does not appear in the picture.

In that case, in the Philippines, we will be supplying teachers aids to serve in the school system of the Philippine Republic. The actual schools have been chosen, the actual principals know that teachers will be coming to help them in English language instruction. The superintendents of schools have all been alerted. The teachers' organization, or the teachers' union, in the Philippine Islands has agreed that this is all right, that it is not going to displace qualified Philippine

teachers.

The villages in which Peace Corps persons will be living have been selected. In large part, the homes, the houses, the buildings in which they will be living have been chosen.

Now, this agreement was reached between our Government and the Philippine Government. In the process of coming to this final agreement, the Peace Corps and the Philippine Minister of Education and the Foreign Office of the Philippine Government, worked together to draw up a document which was satisfactory to them and to us.

Before we ever got into it, of course, our participation from the beginning was cleared by the State Department. So that there would be no possibility of our doing something that was undesirable, in the opinion of the Secretary of State, it was cleared by the State Depart

ment.

Then that document worked its way right up to the foreign secretary level. At that time a letter, a diplomatic letter, was exchanged between the Foreign Secretary of the Philippine Government and our Ambassador in Manila.

All of these negotiations, of course, were carried on with the full knowledge and under the aegis of the American Ambassador in Manila.

When the letters were exchanged they were letters of intent, and following those letters, exchange of letters, a document was prepared by officials of the Philippine Government, working with officials of the Peace Corps in Manila, under the supervision of our Ambassador, and that document is the contract, if you will, between the Philippine Government and ourselves. Now, after that, as you know, the document goes up to the State Department; a so-called Circular 175 procedure is completed, and before an actual agreement can be finalized with the Philippine Government, that 175 form has to be signed by the Secretary of State. At that time our Ambassador there can make a formal agreement with the Government of that country, the Philippine Republic.

NEGOTIATION OF COLOMBIAN PROJECT

Senator GORE. Now, back to Colombia. From what you have said I take it that this was not handled by the U.S. Ambassador; that instead CARE entered into a contractual relationship which was accomplished, I believe you said, before your association with it.

Was the Peace Corps participation in this program approved by the Colombian Government and, if so, by what manner?

Mr. SHRIVER. The answer is, "Yes," it was approved by the Colombian Government, and I would like to make it clear, Senator, that our

part in any of these negotiations was carried on only with the approval of our State Department and with the American mission in Colombia. There was a change of Ambassador just after that time, and I am not absolutely certain that there was a man in Colombia with the rank of Ambassador just at the moment that these negotiations started, but our arrangements with the Colombian Government were approved by our Embassy there as well as by the State Department here.

The Colombian Government approved, and our Government approved of our entering into these negotiations; it approved of our participation in them; and it approved of our agreement to go ahead with them, and so did the Colombian Government.

Senator GORE. Well, was this agreement formalized?

Mr. SHRIVER. Yes, sir.

Senator GORE. Then I take it from what you say there was a different agreement between the Peace Corps and the Colombian Government, on the one hand, and CARE and the Colombian Government on the other?

Mr. SHRIVER. The only part, of course, that involved our Government and the Colombian Government was that part of the joint project in which we were involved. For example, we did not reserve to ourselves any right, or arrogate to ourselves any right, to pick the 65 Colombians who were going to participate in this program. But we did say that we had something to say about the 65 Americans who would be in the program.

COST OF COLOMBIAN PROJECT

Senator GORE. When the 65 Americans go to the various communities along with Colombians who have received simliar training, will they be under the supervision of CARE or of the Peace Corps?

Mr. SHRIVER. Joint supervision. It will be CARE authorities working there, men with experience in this work, in rural develop- . ment work, which will obviate the necessity for our sending down additional Americans who work for the Peace Corps, to do what this private voluntary agency will do.

Senator GORE. Will you pay the CARE supervisors or will the Peace Corps pay them and, if so, will it be on a salary or a per diem or a contract basis?

Mr. SHRIVER. This would be in the contract as to the exact amount we would pay or they would pay, and that specific question I do not have the answer to on the tip of my tongue.

But let me look here in this analysis of the budget. The Colombian budget is analyzed here on page 3 of our confidential appendix offered to you.

Mr. Wiggins, who is sitting here right next to me, says that under the heading here of assignment, development, and field operations, which is in this pamphlet that you have, we pay salary and per diem expenses to a program director for 26 months. Now, that is a CARE official. This is our portion of their expense. The unit headquarters' expense is provided in part by CARE. This is the headquarters of this operation in Colombia. We provide miscellaneous development expenses.

So that in each detail, as we go through this budget, Senator, there will be some items borne by CARE, totaling about 15 percent of total cost of this operation, and the remainder borne by us.

This has been the subject of a contract negotiation with CARE carried on, again with the approval of the State Department, and we can give you a complete copy of that contract with CARE if you would like to have it for study purposes.

COST REIMBURSEMENT BASIS OF CONTRACTUAL RELATIONSHIPS

Senator GORE. I think it would be well to furnish it to the committee, and the committee can decide later whether it will incorporate it in the record.

(The contract referred to, with accompanying papers, appears in app. I, pp. 195 et seq.)

Mr. SHRIVER. We have a large-I might just add that we have prepared a document of the cost reimbursement contract principles under which we operate, and this model, you might say, method of operating has been furnished to all universities in the United States, and to all the private voluntary agencies in the United States for their comment and criticism. Of course, it has been processed through our own Government, the General Accounting Office, and so on, and to date we have received a number of letters congratulating our Contract Division on the development of this particular document. That, too, of course, is available to the Senators.

Senator GORE. Does it follow in any respect the cost-plus-fixed-fee method?

Mr. SHRIVER. I am not sure on that, Senator. I am sorry to say I am not sure. Mr. Kelly is here. Would you like to have specific answers on the contract? I will be glad to get them.

Senator GORE. If there is someone here who can answer it.
Will you give your name?

Mr. SHRIVER. This is Mr. William Kelly, who is Director of our Contracts Division of the Peace Corps.

Mr. KELLY. I am W. P. Kelly, Director of Contracts and Logistics for the Peace Corps.

Senator Gore, I believe the last question that I heard was did our contract form follow a cost-reimbursement type of formula. It does. Senator GORE. My question was if it followed a cost-plus-fixedfee form?

Mr. KELLY. No, sir.

All of the contractual relationships we anticipate would be on a cost-reimbursement basis, which will be without fee or profit factor to the agency we are dealing with.

PAYMENT OF ALLOWANCES TO COLOMBIAN PROJECT VOLUNTEERS

Senator GORE. Now, will the Peace Corps participants in Colombia receive their monthly stipends from CARE or from the Peace Corps?

Mr. KELLY. During the period before we had authorizing legislation, Senator, we provided that CARE would reimburse them on the basis of the standards that we established.

We have an option in our contract arrangement with CARE whereby once a Peace Corps service is created, these people will be converted from the status that they now have with CARE and we will reimburse them directly.

Senator GORE. Reimburse them directly, or pay them directly?

Mr. KELLY. Pay them directly; a poor choice of terms, sir. Senator GORE. In either event, I take it the $75 a month set-aside would be unaffected?

Mr. KELLY. That is right, sir.

CONTEMPLATED CONTRACTS WITH RELIGIOUS ORGANIZATIONS

Senator GORE. Well, Mr. Shriver, do you contemplate a contractual relationship with the American Friends?

Mr. SHRIVER. We would be happy to discuss such a relationship with them, Senator Gore. I do not think that they have come to us yet. At least, no project with them has reached a point where we are discussing actual contractual relationships with the American Friends. Senator GORE. Well, I only named that group to serve as an instance of inquiry.

I have seen some of the very finest service contributed by these organizations sponsored by religious groups. American Friends is one of them.

Do you have a contract with any of these groups sponsored by church or denominational organizations which you could now discuss? Mr. SHRIVER. We do not have any completed as yet; no, sir. Senator GORE. Do you have some under negotiation?

Mr. SHRIVER. Yes. There have been a number of organizations with religious affiliations that have come and talked to us, and those proposals are in what we call our Division of Private Agency Relations, and they are, so to speak, working up through the staff work to a point where they would be ready for discussion of a contractual

nature.

We have one that is nearly finished, but I am loath to discuss it in a public session because it does involve another agency. I would be happy to talk about it to the Senators in an executive session simply because I do not want to get an agency that has not actually reached a final agreement with us publicly discussed without their prior approval.

GUIDELINES FOR PEACE CORPS CONTRACTS WITH VOLUNTARY AGENCIES AND UNIVERSITIES

Senator GORE. Well, aside from this instance, which is not completed, do you have any general rules of integration of the Peace Corps operation with the operations of members of denominational groups?

Mr. SHRIVER. Yes, sir. In our original documents that we put out indicating how we would conduct our business with, for example, private universities, as well as with private voluntary agencies, including religious ones, we stated that there were certain basic principles which all these groups would have to adhere to in order to enter into an arrangement with the Peace Corps.

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For example, one of them was that there could be no religious proselytizing or political propagandizing. Another one was what they would have to adhere to our high standards of selection of people.

We have a selection department headed up by a very distinguished American, Dr. Nicholas Hobbs, who has made a lifetime study in this particular area of work.

We do not want any group, whether it was a university or religious group or private voluntary agency, conducting business, carrying on projects, in cooperation with us which does not have the highest standards of selectivity that we could maintain.

So in any agreement with a private agency we reserve to ourselves the right to inspect their system of selection, and they have to adhere to our standards of selection in order to qualify for our approval. Similarly with recruitment.

Senator GORE. To be specific with respect to the high standards, do your regulations, or the conditions which you have set forth, permit a contract with an organization that confines its recruitment to members of the sponsoring denomination?

Mr. SHRIVER. No, sir. We specifically exclude that as a qualification for service in the Peace Corps or for recruitment.

Senator GORE. Are you saying then that, if you contracted with an independent group sponsored by some church or religious organization, you would require recruitment irrespective of religious affiliation?

Mr. SHRIVER. Yes, sir; that is exactly what we are saying or exactly what I am saying.

Senator GORE. That is one of the conditions?

Mr. SHRIVER. Yes, sir.

Senator GORE. Which has already been decided upon?

Mr. SHRIVER. Yes, sir. We call that open recruitment.

This has come up, leaving the religious issue aside for a minute, it has come up in connection with some colleges or universities. Some colleges or universities have said, "We would like to engage in a Peace Corps contract with you, but the only people that we would permit to serve on a project that we run are people who went to our university, graduates of our university."

Senator GORE. And you have rejected this?

Mr. SHRIVER. We have said, no. We say that every American has a right to participate in a Peace Corps program, provided he has got the qualifications, and that religious qualifications or having gone to a specific university are not relevant to his selection.

PRINCIPLES OF RECRUITMENT AND SUPERVISION

Senator GORE. Well, I interrupted your statement about the general conditions. I did so because I thought that it was important that there be a clear understanding on this point. I thought you intended to say that this morning, but I was not sure that you had done so, and I surely wanted that clarified.

Would you like to proceed now with additional principles of recruitment? You may proceed.

Mr. SHRIVER. Yes, sir; I would like to proceed.