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Senator CASE. I wish you would put in for these fields or bases that are mentioned in this report, the cost index, if you have one, for that particular locality, as against the general cost index, to find out whether or not in these places where these large overruns were found to exist, if that was due to any specially favorable local building situations.
General MINTON. May we also look at those figures and put in the record our analysis of how they might have been derived and what we think they properly should be, because I feel very strongly that it is one man's opinion that may or may not be quite correct.
Senator CASE. The clerk advises me that the entire report is in the hands of the Department of Defense for comment at this time.
General MINTON. We have it. I just do not recall those particular bases.
Senator CASE. These all deal with the Air Force.
There is no objection, so far as I am concerned, in having your comment on these individual projects; in fact, I think it would be desirable to have them. But I think the figures themselves, having been presented by the General Accounting Office, have to be regarded by the committee with considerable—as based upon some sort of accurate estimate. I do not see how they could give such specific figures as this without giving a reason for using it.
(The following information was subsequently submitted :)
The Dow building cost calculator is published quarterly by the F. W. Dodge Corp. of New York City. This calculator is used for estimating the cost of typical units of construction in any area. The system is based on the cost per cubic foot of typical houses which have been adjusted to the average costs in 150 metropolitan areas. It covers only basic construction costs and does not include costs of excavation foundations and subfoundation work, design fee and builder's overhead and profit.
The Dow calculator gives the cubic-foot cost of various type houses. The cost modifier is then applied and the cost per cubic foot of this typical house is found for the location involved.
The cost multiplier for the same house on the following Air Force bases follows:
Dow cost multipliers
Multiplier Forbes AFB, Topeka, Kans--
1. 180 L. G. Hanscom, Boston, Mass--------
1. 203 Charleston AFB, S.C------
.980 Kingsley AFB, Redding, Calif.-Klamath Falls, Oreg
217 Laughlin AFB, Del Rio, Tex_---
101 Westover AFB, Springfield, Mass_-
1. 187 The Air Force has not considered that the statutory limits on housing contained in Public Law 852 apply to Capehart housing ; however, Air Force policy has dictated that the quality of all housing would be uniform. Officer housing has been designed in all cases within statutory area limitations, compliance with all Department of Defense instructions has been maintained, and all houses designed and built in accordance with due concern for economy. In no cases have luxurious or unusually expensive amenities been incorporated in officer housing at the expense of airmen housing; in all cases materials and equipment have been of equal quality consistent with the design and size of the quarters.
In view of the fact that all Capehart projects are bid on a lump-sum basis, there is no way that the Air Force (or any other service or agency) may determine exactly what each of the individual houses cost. Therefore, only an estimated evaluation may be made; i.e., comparison between the architect-engineer
estimates, the FHA estimate of replacement costs and the actual low bid. The Air Force analysis of costs of the houses cited in the report, indicates very little variance with the limitations imposed by Public Law 852. The costs cited in the GAO report have evidently not included consideration of the fact that appurtenances, utilities, and site improvements beyond the 5-foot line of the house as well as certain equipment such as ranges, refrigerators, washers, and dryers, are not chargeable to the cost of a house under the requirements of Public Law 852. The cited costs also do not take into consideration the fact that the contract awards on these projects were from 2 to 14 percent lower than the estimated costs of the FHA and the architect-engineers. Therefore, the cost of the cited houses may be assumed to be of a lesser amount than estimated, by the total percentage that each contract was lower. It should also be established that the architect-engineer cost estimates prepared for the cited houses are at considerable variance with the GAO costs attributed to these houses.
Air Force review of the estimated costs of the houses cited, plus information relating to the actual cost estimating by the project architects, indicates that in many cases the cost breakdowns were based on individual unit pricing rather than on an overall project basis. Thus, many of these estimates do not reflect the lower costs that resulted from the contractors extraordinary buying power on a project with a large number of units.
The Air Force check of the estimated costs of the houses cited, taking into consideration the architects estimate, the FHA replacement cost, the actual low bid and items not chargeable to the cost of a house under the requirements of Public Law 852, has resulted in the following comparison :
NOTE.-In line with the congressional cost limitations and common military practice for appropriated fund construction, the Air Force estimated costs listed above do not include the cost of ranges, refrigerators, washers, and dryers; nor do they include construction costs of appurtenances, utilities, and site improvements beyond the 5-foot line.
Senator CASE. I would like to ask you this question: Is there any reason known to you why this commitee should not establish a cost limitation with respect to officer housing constructed under the Capehart Act comparable to the limitations provided in existing law for appropriated fund housing?
General MINTON. It would make it difficult for us to prepare a proposal and get a bid. We have to get five bids. I think, perhaps, for five types of houses, let us say, for general officers, field grade and company grade, just as an example, we have to have some means, but I don't know how we could do to so bid that we would not have five contractors working in the same area on the same group of houses.
Senator CASE. I think the plan on which the proposers of the Capehart project would submit their proposals could incorporate so many houses for general grade, so many for colonels, and so forth.
General MINTON. We do that now.
Obviously, in this one field if you overran the appropriated fund limitations by some $220,000, that either might have resulted in a lower rental charge for units or an improvement in the quality of the general housing.
General MINTON. Well, we do substantially what you are suggesting now, I believe. We ask our architect engineer, we give him certain criteria. The first criteria, of course, are the legal requirements that it must not exceed so much per square foot for individual who was going to occupy the houses, if it is a general officer's house, and so forth.
The second criteria we give them, we want to be certain we get real good substantial housing.
We do not want something that is going to ruin us to try to maintain and operate it for the next 15 or 20 years. We ask him to spread it across the board.
We want to get just as much as we possibly can for the airmen within the square footage limitation we have established by law for him that we possibly can, and with all these limitations we have been giving our architect engineer or average bid has still been substantially less than the maximum let me rephrase that.
The average amount we spend on our housing with any changes that have been made during the course of construction, has been substantially less than the law allows. It has been less than $16,000.
Senator CASE. Obviously, in a committee hearing without some accountants and engineers or architects, you and I are not going to be able to analyze these figures and determine where the responsibility rests for these figures.
But, by the same—but confining ourselves to the general principle involved, obviously with appropriated funds buying just a few officer houses, if you are able to stay within the statutory limits, you ought to be able to do that with Capehart houses where the contractor is building several hundred houses, as you say.
General CURTIN. May I make one distinction, Senator. The Capehart programs differ from the average appropriated fund program in this respect, at least the appropriated fund programs of recent years; the Capehart programs include types of housing across the board for the junior officers, senior officers, and airmen, and the various rank structures that are broken out in the statutes.
As a general rule, as I recall, the appropriated fund housing that has been provided in past years, by either the authorization or appropriation language, a maximum square footage and dollar amount has been set. In other words, it has been a standard plan as opposed to a Capehart project which would involve several plans.
Therefore, if dollar limitations were placed on the Capehart program for each individual type of house, getting back to General Minton's first point, some special type of bookkeeping or bidding procedure, detailed bookkeeping and bidding procedure, would have
Geling several hthat with Capeithin the stat
to be set up so that we would be assured that we are following your desires in that regard.
Senator CASE. Well, I think you had better analyze these figures and come up with something pretty concrete, because the Congress finds itself in a difficult position.
If we should say to the country that Congress is permitting a situation whereby if we appropriate funds direct there is a limitation cost of $22,000 on a general's house or $19,800 for a base commanders', and if we appropriate funds for, that is as much as can be spent; but if you work it into a Capehart project you can go up to $35,000, then we have set up sort of a double standard of officer housing here that is indefensible from a legislative standpoint.
General CURTIN. Well, I certainly see your point, sir, if you assume that the $35,000 is a valid figure, and one that should be identified within the Capehart program.
Senator CASE. Now, it is entirely possible that you may have put your figure on one point in which there is some comparison of apples and oranges here. If in the one figure you include utilities, and if in the other figure you do not include utilities up to the 5-foot line, but whatever it may be, this should be taken apart and we should have some clear understanding, otherwise I do not see how Congress could avoid saying that there should be one standard that would be applicable to all types of officer housing.
General CURTIN. In which case, Senator, it would probably be appropriate to also look at the present statutory limits for the appropriated fund housing to see if by actual analysis of jobs that have been accomplished, whether the dollar figures are actually in consonance of today's prices with the square-footage figures.
Senator CASE. Are you asking for any officer housing with appropriated funds in this bill ?
General CURTIN. We have appropirated funds for Clark Air Force Base in the Philippine Islands, Senator.
Senator CASE. Do these limitations apply to Clark?
General CURTIN. The statutory limitations? Yes, sir. Space limi. tations also.
Senator CASE. Another question arises. If you can live within those limitations at Clark, why couldn't you at other places?
General MINTON. I am not real sure what our configuration of houses at Clark is. I have been there, of course, several times but, as I recall, we now have a pretty good inventory of some pretty fair houses there.
I think the requirement for the type of houses you are talking about, general officers' houses and colonels' houses, at Clark is not as great as the requirement for airmen houses, noncoms, and junior grade officers and, if so, we would have no problem at all.
Senator CASE. Supposing you find out and put in the record what your cost index is for housing in the Philippines and Hawaii and in the Z.I.
(The following information was submitted :)
The cost index factors for housing are: Zone of Interior, 1.0; Philippines, 1.3; Hawaii, 1.2.
General MINTON. There is one point you touched on that should be considered. These cost limitations that we have for military con. structing housing were established several years ago, and since then our overall nationwide construction cost index, as you know, has increased considerably.
Senator CASE. I recognize that, and that is why I was asking if you were requesting any houses with appropriated funds this year.
General MINTON. I had not considered that, but, as you know, we have a limitation of $22,000 for appropriated funds, general officers, for 2,100 square feet, that is just over $10 per square foot.
If you are going to pay for utilities and everything of that sort, it is almost impossible to do that regardless of where we might build. Senator CASE. All right.
Turning to another aspect of the housing program, section 508 of the general provisions of the bill would extend the date for the destruction or repair of inadequate housing to January 1, 1962.
It is understood that the Defense Department would prefer to have this date extended at least an additional 6 monhs until July 1, 1962, and it is understood this is agreeable to the Budget Bureau.
Would you care to express your views on this matter? General MINTON. Yes, sir; I would like to. I feel very strongly about that, Senator.
First, of course, we have not been able to fund for the repair of those so-called inadequate quarters as fast as we would like to because of the press of other requirements that we have.
I personally feel very strongly, and the Air Staff does, that the most foolish thing to do would be to tear down these houses and require airmen now living in those houses to move in on the economy of the town there where the housing is already extremely tight.
So, to more or less cut off our nose to spite our face to get rid of those houses where we do not have the money replace them or money to put them into adequate quarters, it does not seem to me to be the thing we should do at this time.
It seems to me, and this is the Air Force's position, that at the present time we cannot furnish housing for airmen below the grade of noncommissioned officers, as you know, and there may be a requirement for some of these quarters to be used by airmen first class and airmen second class, people who do not have the rental allowance to enable them to go out and get community housing; I think, perhaps, we pushed this program just a little faster than we should have in behalf of a program which is not good economy.
Senator CASE. The committee the other day received pictures from one of the services which illustrate the point you make where Lanham housing was about to be torn down, but housing available in the local community was much less adequate than that which was to be torn down.
Personally, I think we ought not to tear down housing if you merely force the airmen into less desirable housing on the local economy.
General MINTON. At greater rent.
General CURTIN. There is another aspect, Senator, as well as the one General Minton has touched on, and you have elaborated on, sir. That is in the overseas areas where we have inadequate housing that is actually the property of the local or host nation. Certainly we can