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General THURMAN. I undoubtedly have other memoranda dealing with this subject. Would the committee like to have that made available to them?

Mr. HÉBERT. If you think it can add to it, yes; we certainly would like to have it.

General THURMAN. I can use my judgment, though?
Mr. HÉBERT. You can use your judgment any way you want.
General THURMAN. All right, sir.
Mr. HÉBERT. We don't close the door on anybody.

General THURMAN. All right. I just want to be cooperative, that is all.

Mr. HÉBERT. I know you do, General. You are most cooperative. And you always have been. And the committee wants to help you be cooperative.

Mr. Hardy. I think, Mr. Chairman, the general's position on this matter that you have just discussed is not unique. That goes through all of the agencies.

Mr. HÉBERT. Oh, I know.

General THURMAN. You know, I wish we could convince you folks that that is not so. I tell you from the bottom of my heart it is not so.

Mr. HARDY. It has been my experience, and I wouldn't say it is intentional. I certainly don't want to try to read your mind or to attribute intent, but there has developed a situation in all of the agencies where anybody who is called upon to supply information to a congressional committee tries to spoon-feed us and give us only the stuff that they want us to have, and in order to get anything else we just have to dig interminably.

General THURMAN. I am probably cutting my throat by saying this, but I will cut it. Mr. HARDY. We don't ask

you

to. Mr. HÉBERT. You won't do that, General.

General THURMAN. Any time there is a question raised as to what one of the people has done for whom I am responsible, I have always got two considerations that I have to face, and this is true of anybody who has any supervisory responsibility:

One of them is to the extent that what this "guy" has done that is reasonable, he has to stick with them. To the extent that what he has done is not reasonable, common integrity requires that he stand up and say “we were wrong. Now, that is the rule we try to follow, Mr. Hardy:

Mr. HARDY. That is not the whole point that I am trying to make.

The other piece of this picture which you have not touched on is that some of you folks down in the agencies—this is just not the Air Force. I am having some trouble with the State Department myself.

And I will probably have some more. But they all try to determine what we ought to have, instead of making it available to us and let us make a decision. After all, we have to evaluate these things and come up with the exercise of our judgment. You have exercised yours in the decisions that you have made.

Our decisions are not necessarily going to conform to yours, based on the same set of facts. And, in addition to that, we will probably get a few facts that you didn't have when you made yours.

General THURMAN. It always turns out that way.

Mr. Hardy. Well, that is just exactly the point. But for the agencies to make a decision “Well, we won't give them this, they don't need this, this is not pertinent to their inquiry, we will brush this aside and let it lie under the rug until somebody turns the rug over”-that is where you make your mistake.

And that is where you made your mistake on this Thompson memorandum. I wouldn't say it was a deliberate attempt to give the committee only half of what Colonel Thompson's position was, but I say you made a mistake in judgment in supposing that the committee was not interested in that, if that is the basis on which it wasn't presented. And it isn't too critical. But I think it is probably a sort of decision that permeates the executive department. I wish I could find a cure for it, because it is giving me no end of trouble.

General THURMAN. We may be just stupid, and I can't do anything about that.

But I would like to get it across that we are trying to be fair with the committee, and we are trying to be fair with our people. And that is what we are going to do. To the best of our ability. Mr. HÉBERT. I know that.

General THURMAN. I am not talking about a guy named Thurman. I am talking about all of the responsible people in the services.

Mr. HÉBERT. I recognize that, General.

General THURMAN. And we aren't trying to kid you at all. We are trying to give you the facts.

Mr. HÉBERT. And, as you see, we want the facts, as Mr. Hardy has pointed out. As an example, if I hadn't been adamant and encour. aged your displeasure at the particular moment, we would never have had Mr. Saxton in here, and he contributed more to conversation and this investigation, perhaps more than any other individual.

Mr. HARDY. At least on that segment. Mr. HÉBERT. On that subject. And you insisted that Colonel Thompson knew more about this business than everybody else and Colonel Thompson would really give the story, and there was no necessity of having him in here. I stood adamant and insisted he come in. I am glad we got him in here. Anyway, let's end this on a sweeter note.

Mr. Hardy. Before I go, let me express appreciation to the general and his cohorts here. Actually, I hope that my questions have been constructive.

General THURMAN. They have, Mr. Hardy.

Mr. HARDY. I have intended them to be. I certainly don't want to give anybody the idea that I had a knife out for anybody in the Air Force or anybody in General Motors. I don't. But it just goads me no end to have to be confronted with making a decision or deciding what is right or what is wrong with something on the basis of half of the facts. If I find somebody that is guilty of wrongdoing and poor ethics, I don't care whether he is a street sweeper or whether he is the President of the United States, if I can prove it I am going to say so.

General THURMAN. Yes, sir.

Mr. Hardy. That applies to General Motors. And I think they are guilty in this case.

Mr. HÉBERT. General

General THURMAN. Sir, may I take advantage of being on the record to make one more statement?

Mr. HÉBERT. I am giving you the field. We are just having a pleasant afternoon.

General THURMAN. I have asked you, and the commander of the Air Materiel Command has confirmed it—we would like awfully well if the committee would come out sometime and spend enough time with us to look at the way we do our business, in general, as distinguished from specific cases about which there can be differences of opinion.

Mr. HÉBERT. General, I want to assure you the committee appreciates your invitation. We want to go. Now, General, one thing very serious. I want to indicate that, during your last appearance here, during the investigation on negotiated contracts

General THURMAN. Yes.

Mr. HÉBERT. We came into a decision and agreement after a discussion on the method of procuring new contracts.

General THURMAN. Yes, sir.
Mr. HÉBERT. You will recall that.
General THURMAN. Yes, sir.

Mr. HÉBERT. We were talking about it informally before we came into the room.

General THURMAN. Yes, sir.

Mr. HÉBERT. I would like for Mr. Courtney at this time to spread upon the record the experiences which have come back to us in that connection to show exactly what can be done through cooperation. We want to give you another accolade on that particular thing.

General THURMAN. Thank you, sir.
Mr. HÉBERT. Mr. Courtney.

Mr. COURTNEY. Mr. Chairman, on page 652 and following in the record, the proceedings of this committee, which are included in this report on negotiated contracting, we made reference to the procedure established within the Air Force under the direction of General Thurman for so-called two-part procurement, where technical proposals were required to be evaluated before pricing, in distinction, in contradistinction to the old method where technical proposals were submitted with price.

I think the general would be interested to know that the response which we have received, unsolicited, from industry, has been a compliment to the way in which the Air Force is now proceeding.

I would like to make particular reference to one concern which sent in as an expression of its approval and of its appreciation of the new form of procedure a copy of the solicitation which it received. I will

say to you, General, unreservedly, that after some years of reading Government material, that is the first time I can say there is before us and was before this and all bidders a model of clarity. I don't know how anyone, in or out of the fold, by whatever breed developed, who could misunderstand anything that is in this inquiry. Now the particular inquiry is a letter request for technical proposal

a PE-716H-4770, and it was issued on July 12, 1957, and it bears symbols “MCPEC-A.” The first portion of it very simply states what is required and the number. The second portion of it details the sched

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ule required. The third portion deals with the method of solicitation and the responses which are expected.

I don't see how anyone could possibly misconstrue the intent of the Air Force, nor how you could fail under these circumstances, and the committee feels the same way, in getting good technical proposals and having an opportunity to fully evaluate them and develop prices about which there can be no concern.

General THURMAN. Thank you, Mr. Counsel. Let's have a hearing on that one.

Mr. HÉBERT. Don't worry, we will.
Thank you, General.
The committee will stand adjourned, subject to call of the Chair.
Mr. COURTNEY. Subject to the affidavit.
Mr. HÉBERT. Subject to the affidavit.

(Whereupon, at 3:20 p. m., the subcommittee was adjourned, subject to the affidavit.)

(The following data were received by the committee subsequent to the last hearing date :)

WEDNESDAY, AUGUST 21, 1957. Mr. John F. GORDON, Vice President, General Motors Corp.,

Buick, Oldsmobile Division, Detroit, Mich. : Subcommittee is holding record open pending receipt of affidavit which your company agreed to file with General Accounting Office for use and information of subcommittee. Advise when document will be received and copy sent to subcommittee. Urgently necessary to conclude hearings promptly.

F. EDWARD HÉBERT, Chairman.

SPECIAL INVESTIGATIONS SUBCOMMITTEE,
HOUSE ARMED SERVICES COMMITTEE,

August 23, 1957.
JOHN F. GORDON,
Vice President,

or A. F. POWER,

General Counsel, General Motors Corp., Buick Division, Detroit, Mich.: Reurtel Wednesday, August 21, advising affidavit General Motors promised to file with subcommittee was being mailed to me night of Wednesday, August 21. No communications received Thursday, August 22. None this morning August 23. Advise return wire. Report delivery.

JOHN J. COURTNEY, Special Counsel.

DETROIT, Mich. F. EDWARD HÉBERT,

Chairman, House of Representatives, Committee on Armed Services,

Subcommittee for Special Investigations, Suite 306, Old House Office

Building, Washington, D. C.: Re your telegram to John F. Gordon, General Motors Corp. Affidavit being mailed tonight to Mr. Courtney with signed copy to the Comptroller General of the United States.

A. F. POWER, Assistant General Counsel, General Motors Corp.,

SPECIAL INVESTIGATIONS SUBCOMMITTEE,
HOUSE ARMED SERVICES COMMITTEE,

Friday, August 23, 1957.
JOHN F. GORDON,
Vice President,

or A. F. POWER, General Counsel, General Motors Corp.,

Buick Division, Detroit Mich. Your transmittal 14-242 received.

John J. COURTNEY, Special Counsel, House Armed Services

Special Investigations Subcommittee.

FRIDAY, AUGUST 23, 1957. A. F. POWER, Esq., Assistant General Counsel,

General Motors Corp, Detroit, Mich. DEAR MR. POWER: When your letter was not received this morning containing the affidavit which the subcommittee had been promised, I wired you at 9:55, our time. Shortly after that wire was sent, your transmittal was received and I countered with a followup wire, copy of which is enclosed.

For your records, the envelope containing your transmittal was duly postmarked August 21, 10:30 p. m., from Detroit, Mich.

I shall explain to the chairman that the delay was entirely due to delay in the mail.

I thought you would like this information to be in your files in view of the exchange of telegrams. Sincerely yours,

JOHN J. COURTNEY, Special Counsel.

GENERAL MOTORS CORP.,

Detroit, Mich., August 21, 1957. Mr. John J. COURTNEY,

Special Counsel, House of Representatives Committee on Armed Services,

Subcommittee for Special Investigations, Old House Office Building,

Washington, D. C. DEAR MR. COURTNEY: In accordance with the statement made by me at the hearing before the Subcommittee for Special Investigations, Committee on Armed Services, House of Representatives, on Friday, August 16, 1957, that I would submit to the committee an affidavit setting forth the facts relating to Revision No. 15 of Purchase Order No. KDS-9328 issued to the Vendo Co., at Kansas City, I am enclosing herewith the affidavit of Mr. H. W. Clapsaddle, divisional comptroller of Buick-Oldsmobile-Pontiac assembly division of General Motors Corp.

At the hearing, one of the committee members, Mr. Hardy, referred to the statement in the report of the General Accounting Office, reading as follows:

“Although the supplier and the contractor had redetermined the price of this assembly prior to the submission by the contractor of his proposal, the

reduction in price was not recognized in the proposal.” He inquired as to why we failed to comment on this statement when the proposed report was submitted to us by the General Accounting Office. I am informed that representatives of Buick-Oldsmobile-Pontiac assembly division and a member of our legal staff interpreted the phrase "the reduction in price was not recognized in the proposal" as meaning that the proposal reflected the price of $1,507.22 as applicable to the first 68 units of the second segment but did not reflect the lower price of approximately $400 a unit applicable to the remaining 160 units of the second segment. This interpretation was based on the statement in the report immediately preceding the above quotation, reading as follows:

“However, this price applied to only the first 68 assemblies and the remaining 160 assemblies were priced at approximately $400 per unit, a total reduction of $177,000.”

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