Colonel HILL. Yes sir.

Mr. HÉBERT. On your fuel contracting, I presume that is competitive also, among the various oil companies?

Colonel HILL. Yes, sir. And we also take a cost comparison on this.

Mr. HÉBERT. All right.

Colonel HILL. Medical contracting is composed almost entirely of dependent medical care and a small amount for supplemental professional services. The decline in this category between fiscal year 1959 and 1960 was caused by the curtailment of free choice in the selection of medical facilities in favor of a system requiring the nonavailability of military facilities and services prior to the use of civilian medical services. Since this money is paid through the Army for such services and a great number of individual transactions were involved, we do not have a detailed breakdown available.

Mr. HÉBERT. That is only in medicare?
Colonel HILL. Only in medicare; yes, sir.

The training category includes factory and foreign language training. Factory training is conducted by manufacturers to indoctrinate Air Force personnel on new weapon systems and equipment. The foreign language training is to meet specific requirement of attachés, missions, and MAAG's. The decline in this category is due to the development of inservice training capabilities in the ballistic missile area. We have detailed data on individual contractors in this area for fiscal year 1961.

The next two categories-printing and charting-are reasonably self-explanatory. Printing is a carefully controlled program with much of the money involved going to the Government Printing Office. Charting work done on contract is for the Aeronautical Chart and Information Center. We have detailed information on both of these categories.

Mr. HÉBERT. Colonel, you said most of the money is going to the Government Printing Office. Is the committee to understand that the appropriated funds-X dollars to the Air Force-in the cost of printing is in cash transferred to the Government Printing Office? Colonel HILL. Yes, sir.

Secretary IMIRIE. A good share of it, sir.

Mr. HÉBERT. I mean there is actual transfer of funds?
Secretary IMIRIE. Yes.

Mr. HÉBERT. It is not a charge account, against an account?
Secretary IMIRIE. No.

Mr. HÉBERT. It is an actual fee.

Secretary IMIRIE. Actual transfer of funds.

Mr. HÉBERT. Actual?

Secretary IMIRIE. Yes.

Mr. HÉBERT. Ok. Fine.

Colonel HILL. Laundry and dry cleaning is an indirect support function where effective and economical use of contracting can be made, depending upon local circumstances and availability. Since the advisability of contracting must be determined at base level, central data on individual contracts is not maintained. We have, however, sampled the larger commands for fiscal year 1961 covering 64 percent of the total dollars, and have a list of more than 150 contractors for this portion.

Mr. HARDY. Could I just for clarification in connection with that: Now you are talking only about the laundry and dry cleaning that is in addition to such services provided by PX's?

Colonel HILL. Yes, sir.

Mr. HARDY. OK.

Colonel HILL. Yes, sir.

Mr. HARDY. Excuse me, the Post Air Exchanges.

Colonel HILL. The expert and consultant category includes only the contract services, not those expert and consultants appointed pursuant to civil service procedures. This area requires approval by the Assistant Secretary of the Air Force, and we have available the full details in this category.

All other includes a great variety of miscellaneous, small contracts such as custodial services, insect and rodent control, boiler inspections, reimbursements to other agencies for services performed for the Air Force, and the like. We have cataloged a list of the types of services found in this category to leave with the committee.

This chart provides a more detailed picture of the "Contract operated facilities" category. The first four items are the major facilities in support of the research, development, test, and evaluation area, while the fifth item is a grouping of some of our smaller facilities in this area. All of these operations involve, in part, highly technical skills, many of which are unique to the particular activity. Since these activities do not fall in the direct combat support area and require skills which are in short supply or nonexistent in-service, it has been to our best interest to use contract services. Further, contracting has produced effective operation at reasonable costs.

The contracts in Turkey and Saudi Arabia are for various support services such as vehicle maintenance, feeding, supply and civil engineering.

The next four items are associated with air defense; the operation and maintenance of the DEW line, the operation of the White Alice communication system in Alaska, reimbursement to the Canadian Government for the operation of five of the A.C. & W. sites in the Pine Tree line, and the operation of the new ballistic missile early warning system. DEW line and BMEWS being performed by contract relate directly to the skills shortages. With respect to BMEWS, we are also

faced with unique facilities located entirely overseas and previously untried equipment which has required the use of contracting at least for an initial period.

Moving down the list there are various support contracts in oversea locations. We also have industrial reserve plants and aviation fuel distribution stations, and the training bases. In fiscal years 1959 and 1960, the money in the training bases category went for the operation of primary pilot training schools. During fiscal year 1961, the Air Force has consolidated the primary and basic phase of pilot training and closed out the primary schools. There is contracting of selected support functions on the new consolidated bases.

Colonel HILL. This chart portrays the details of the air defense systems category. The first five contractors listed have been involved with the operation and maintenance of SAGE power and refrigeration equipment. The amounts here are being reduced. Initially, this work had to be contracted due to the lack of an in-service capability. Since this work is classified as direct combat support, we have developed our own capability and are taking over the work.

The Systems Development Corp. provides the Air Force with SAGE computer programing and training services. This unique requirement also requires skills not readily available to the Air Force. Western Electric has been furnishing technical services for the engineering and construction of the SAGE system. This requirement was essentially one time in nature and is now phasing down rapidly. Mr. HARDY. Before you leave that-Mr. Chairman, if I might? Mr. HÉBERT. Mr. Hardy.

Mr. HARDY. In looking at these two listings that you had, I believe your ground rules eliminated from the beginning research and development contracting. Isn't that right?

Colonel HILL. Yes, sir.

Mr. HARDY. I fail to observe any indication of any contract in these areas with Thompson Ramo Wooldridge or any of its affiliated companies. Don't they have anything except R. & D. contracts? Colonel HILL. No, sir.

Mr. HARDY. They are not operating any Air Force facilities?
Colonel HILL. No, sir.

Mr. HARDY. Now, since we sold this proposition in California-did that take them out of this category?

Colonel HILL. They have never been in this category that I know of, sir.

Mr. HARDY. They have never been in this category?

Colonel HILL. No, sir.

Mr. HARDY. I thought that we had had some indication that they have had some production contracts operating Air Force facilities.

Isn't that correct?

Secretary IMIRIE. I think production contracts. You might be right, sir, but I am not personally aware that they had the facility type contract. It is something that I would have to doublecheck. Mr. HARDY. Well, the facilities that they have used and operated under contract, then, were on a lease basis, presumably, and not in this kind of a direct service performance?

Secretary IMIRIE. I believe that is correct, sir.

Mr. HARDY. Let's see what is the name of that wholly owned subsidiary that handled the weapons systems?

Mr. SANDWEG. Space Technology.

Mr. HARDY. Space Technology. But that didn't fall in this kind of category, either, is that right? Colonel HILL. No, sir. Secretary IMIRIE. No, sir. Mr. HARDY. All right.

Colonel HILL. The next chart portrays each of the food service contracts in the Air Force. The first 10 bases are in the Air Training Command, while the following 5 are all in different commands. As indicated previously, contracting in this function is based primarily on economy. All of these contracts have averaged about 27 cents per meal, while inservice performance of these functions previously exceeded 30 cents per meal.

FUTURE TRENDS AND OBJECTIVES

COMBAT AND DIRECT COMBAT SUPPORT-INDIRECT COMBAT SUPPORT

With respect to fiscal year 1962 and beyond, we expect to keep working on 'the development and maintenance of inservice capability in the combat and direct combat support functions. The increasing demand for highly technical skills on new systems will make this an extremely difficult effort. In the indirect combat support functions, we do not anticipate any radical change. There will be a continuing

effort to determine and implement an improved distribution between military, civilian, and contract services resources.

This concludes my presentation, Mr. Chairman.
Mr. HÉBERT. Thank you very much, Colonel.

I want you to share the thanks and the cooperation of the committee which was extended yesterday to Colonel Riemondy. You have done a very, very fine job.

Mr. Secretary, this is the type of presentation the committee desired. I am grateful for it.

Secretary IMIRIE. Thank you, sir.

Mr. HARDY. Mr. Chairman, could I just pursue one step further the question I raised with the colonel a minute ago, about the Thompson Ramo Wooldridge aspect.

Now I want to be sure that I understand the ground rules of what eliminated them from this consideration, because one of the things that has bothered some of us in times past was the determination with respect to using Space Technology Laboratories to perform functions which generally had been considered were essentially inhouse type of functions.

(Secretary Imirie nods.)

Mr. HARDY. At least in times past they have been so regarded. But it is because we are not dealing in this development area that they are not involved in this project.

Secretary IMIRIE. That is correct, sir.

If we understood the committee's wishes, the sequence would be— we would talk, this morning, in our appearance at this particular phase, of the more mundane types of contracting: maintenance, food services, medical, and so on.

Mr. HARDY. All right.

Secretary IMIRIE. Then at step 2, I think we are to be back to talk about the research contracts specifically: STL, ThompsonRamo-Wooldrige and those things.

Mr. HARDY. Well, these were not always research contracts, Mr. Secretary, and that is why I raised this point.

Some of these were actually production contracts.

Secretary IMIRIE. That is right, as we discussed the last time we were up before you, in the fillister head screw production thing, which was a production contract.

Mr. HARDY. That is correct.

Secretary IMIRIE. Yes, sir, which are not included here.

Mr. HARDY. All right.

Mr. HÉBERT. Mr. Secretary, of course, you are familiar with the President's letter to Mr. Bell, the Director of the Bureau of the Budget.

Secretary IMIRIE. Yes, sir.

Mr. HÉBERT. In which the President, taking cognizance of this hearing which we are conducting, expanded the study in the executive department to include many other agencies, of which Defense

is one.

Secretary IMIRIE. One, right.

Mr. HÉBERT. You are familiar with that?

Secretary IMIRIE. Yes, sir, I am.

Mr. HÉBERT. And the returnable date on that is December 1, as I understand it.