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I have discussed with some of the people in the Department of Agriculture who are concerned with the Commodity Credit side of this, the possibility of having an expediter or some official, but an expediter suggests what I have in mind as much as anything, whose job it would be to try to market these counterpart funds to acquire things which the United States can use.
I thought we could make better use of those funds, and I have in mind the illustration, with which I am sure you are familiar, where Austrian schillings were used to provide housing in a third country. General CURTIN. Right, sir.
Senator CASE. It seems to me more of that could be done. We have been thinking in terms of two-way trade, so to speak, using currency within the country where it is generated.
But where we have a housing requirement that runs into terms of $26 million or whatever the figure is, $26 million was in the Secretary's figure—is that all oversea housing ?
General CURTIN. Yes, sir. That is a residual amount that we feel is urgent and valid. It is out of a program that was not completed, of the order of around $70 million, Senator, if I recall the figure correctly.
I would like to clarify my previous response, if I may, to this extent: that in certain of the countries there were currencies being generated during this time period. We had hopes that these currencies could be applied to the housing that we are now talking about or to some of this housing.
However, the recent requirement that when the currencies are drawn and applied to the program, we put appropriated funds against them immediately, is also a reason for including these for authorization.
Previously these items were authorized specifically for the Public Law 480 application of funds. I think it is, perhaps, a technicality, but nevertheless if we are to put appropriated funds against these we do need a different type of authorization for that.
Senator CASE. It may be, although I was thinking that in the 1954 Military Construction Act, when we first made the authorization, we used language broad enough to take care of the situation you mentioned.
However, I see no objection to putting an authorization in this bill to cover the dollar sign; it is as long as it is broad, as far as that is concerned, provided we get the housing.
But I have felt that maybe if we had an expediter, who could be on the job to see where these counterpart funds could be used to purchase this housing and to expedite the clearance of it, that it would save time and get the housing that much more quickly.
General CURTAIN. Well, I think your point is well taken, sir.
Our experience has been that in trying to develop these projects in the past, there are several agencies involved. In trying to get a program formulated and approved, involving all of these agencies, it has been a trying job at times.
If there were a central office or agency that could expedite the generation of the funds and could allocate them to these programs in a clear-cut way, it certainly would be helpful to the services.
Senator CASE. I think your testimony on that may be useful.
When we first started this in 1954, in the spring of 1954, this committee held a hearing, and we had a representative of the Bureau of Yards and Docks, and from the State Department, and from Agriculture here to discuss the program in Spain. That was the time we were starting the bases there, and there was a little attitude on the part of each representative concerned that it is too much of a bother, it is much easier to get an appropriation and write a check.
But the fact remains we do have several hundred millions, if not billions, of dollars worth of counterpart funds being generated around the world in one way or another. If we had an expediter with some authority from the White House to make this available and also to try to use that money in seeing where he could use it in the market to buy housing nearest the country, or to buy it in that country, and work out the three or even four-way exchange that might be necessary in some places, it would be very helpful.
Mr. FERRY. Senator Case, if I can comment on that in the case of Austrian schillings that were utilized for housing in Turkey, we have been fighting that battle for over a year trying to get moneys available by which we could utilize Austrian currency and Israeli pounds in Turkey.
Senator CASE. And to get the housing in Trieste. Mr. FERRY. The housing now is in storage in Trieste. Senator CASE. And we have been paying for storage on it. Mr. FERRY. Yes, sir; we have been over a year fighting this battle. It seems to be a very complex and slow process.
Senator CASE. Well, hasn't that particular transaction been cleared ?
Mr. FERRY. That has been completed, sir, but we have not yet got the bids for the actual construction which are due some time this month.
Senator Case. But that illustrates all the possibilities, if you just have the lines clear so that you could work quickly. Mr. FERRY. Something should be done, sir, I agree, to clarify it.
Senator CASE. I would like to discuss that with you a little more informally some time if you are free. Mr. FERRY. I would be very happy to do that, sir.
Senator CASE. Because I am sure the President would be glad to put the weight of the Executive Office behind it to expedite this.
Mr. FERRY. We would be very happy to have an off-the-record discussion.
Senator CASE. When I was in India, he had a representative who was out there trying to study ways in which the disposal of surplus commodities could be expedited and, at the same time, achieve a maximum utilization of the resulting counterpart funds without disturbing the economy of the country from which they were being received.
I know that he has an interest in it, and if the Commodity Credit people and the different services or the different potential customers for the funds could be brought together more quickly, it seems to me, a lot of time could be saved for everybody, and we would get more value received.
Mr. FERRY. We surely would like to be able to utilize surplus commodity funds.
Senator Case. Now then, there is another aspect of this housing program that the committee has already discussed with the Army, and I think it ought to be brought into the Air Force hearing, and that is, that in places the Air Force, and other services, too, have been building Capehart housing for officers which averaged 30 percent more than the amounts authorized by Congress for housing built with appropriated funds.
What do you have to say about this?
General CURTIN. I am aware of the general nature of this statement, Senator Case.
First of all, I think we should take a Capehart project, perhaps, and develop the philosophy under which the project is planned and constructed.
The Air Force has made a very definite attempt to gear its requirements in terms of numbers of houses, officers versus airmen, as well as bedroom types, numbers of bedrooms, to the foreseeable requirements at a given base. We also reflect any housing that is on the base.
Senator CASE. General, let us be specific on this. I have here some pages from the GAO report. Let us take Hanscomb Field, for example.
If the housing had been built with appropriated funds, the limitation for a general's house would have been $22,000.
Under the Capehart program, and by trimming the amount presumably that went into the average houses, the cost for the general's house was $35,642, which is an overrun of $13,642, with two of those houses built, for a total difference in cost of $27,284.
If the base commander had a house built under appropriated funds, the house would have had a limitation of $19,800. Utilizing the Capehart program by holding down the average cost of the noncommissioned officers' units, presumably, and lower officers, the base commander's houses, two of them, were built there at a cost of $35,349, a difference of $15,549; total on the two of $31,000.
Seven colonels' homes, were built at an average cost of $30,175 against a congressional limitation, if appropriated funds had been used, of $19,800.
Thirty-six houses were built for majors and lieutenant colonels at an average cost of $22,057, whereas the congressional cost limitation for appropriated funds would have been $17,600, making a total difference of $160,000.
That would mean that on Hanscom Field alone you have items of $160,000, $103,000, $31,000, and $27,000—a total of about $321,000 of overruns put into houses for majors to general, picked up presumably by lowering the average made available for the captains and lieutenants and noncommissioned officers.
General CURTIN. General Minton, would you want to comment on that?
General MINTON. Yes. Of course I am familiar with that report, and I read it all.
. I do not recall the figures on that particular base, Senator. I do not quite understand how they can get the figures in that detail because, as I am sure you know, we have a lump-sum bid for the entire block of houses, and to break that down for an individual house is extremely difficult.
Now, to make one point, for appropriated fund housing, of course, the authorization limitation that we have is for the building itself.
When we built the Capehart housing, of course, we have to include all the offsite utilities, the road, the sewage systems, and so forth, which is not part of the $22,000 that is authorized in the military construction program.
Our entire Capehart program, we have averaged less than $16,000 per house that we have built.
I think that if we had been intending to cut down too much, it would have been quite possible for us to increase substantially the houses that we were going to give or that we were giving to the lower grade people. But, as a general rule, we have given them all that the law allows from the standpoint of the scope, the square footage that we have been authorized for the houses.
Senator CASE. Well, I do not know, of course, how the General Accounting Office got the figures on the individual houses. But since this is a report submitted to Congress, and it is down to such odd amounts as the $35,642, the last three figures are coming down to 642, 349, 175, 57, 904, and so forth, they must have had some specific figures to come out with these.
General MINTON. That would have to be an individual's estimate, Senator.
Senator CASE. They would have to be individual estimates; yes.
General CURTIN. The point, I think, Senator Case, is that in developing our programs, we have used the space limitations set out in the statutes for the sizes, for the various grades; we have adhered to that across the board in the Capehart program.
We have felt that the average of $16,500 limitation was the dollar or price control.
Now, as General Minton has pointed out, we have stayed well within that, and our bids are lump sum bids.
There is no way, and we have not attempted to try, to break out the bid cost of an individual house.
These costs could be arrived at for the sake of a tabulation such as you have in some mechanical method.
We are not aware, at least I am not aware, of how the General Accounting Office developed those figures, sir.
Senator CASE. The entire table here in this report dealing with
Charleston, I think, should be inserted in the record, and without objection it will be put in the record. The clerk will bring that to the chairman's attention.
NOTE.-These estimates of costs were prepared by the military departments and do not include the costs of refrigerators, ranges and certain on site utility lines which are excluded in the congressional cost limitation when funds are appropriated.
Senator CASE. I might say that, without seeing any figures, I visited one base a little over a year ago, and I was struck by the plush character of the houses built for officers on that base as compared with that available on other bases, and I asked how does this come about? I was told
Well, that is what the Capehart program is doing for us. We only have to stay within an average cost on overall, and we can save enough on the general run of houses to build officers' quarters like this.
It was cited to me there by the person who was escorting me that that was a virtue of the Capehart program.
But I am sure it was never intended by Congress that the Capehart program should provide an escape from the limitations that existed if appropriated funds were used.
General CURTIN. In terms of the physical size of the house and the net space limitations set down in the law, this is true, Senator.
I would like to comment on the possible inference that the Air Force has used the overall average as an escape. We have secured under the Capehart program some very fine houses and, I think, as a general rule, we are very proud of them.
We have some real good houses for the money we put into them. I think one has to consider that this has been a result of very good designs, we feel, in most cases, but largely of the mass buying practices. These accrue great price advantages to a 400- or a 500-unit housing project as opposed to the prices that you or I would have to pay were we building an individual house.
We have been able to get some very good houses, I would not want to classify them as luxury. We have been attempting to secure hjuses that we can live with over a long period of time, and houses that we can maintain. These are houses that will be homes, if you will, over the next several years.