Page images
PDF
EPUB

STUDY OF AIR FORCE CONTRACT AF 33 (038)-18503

GENERAL MOTORS CORP.-BUICK-OLDSMOBILEPONTIAC ASSEMBLY DIVISION

HEARINGS

BEFORE THE

SUBCOMMITTEE FOR SPECIAL INVESTIGATIONS

OF THE

COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES

EIGHTY-FIFTH CONGRESS

FIRST SESSION

UNDER THE AUTHORITY OF

H. Res. 67

HEARINGS HELD JULY 22, 26, AUGUST 15, 16, 19, AND 21, 1957

Printed for the use of the Committee on Armed Services

SUBCOMMITTEE PROCEEDINGS No. 9

1

UNITED STATES
GOVERNMENT PRINTING OFFICE

WASHINGTON : 1957

SUBCOMMITTEE FOR SPECIAL INVESTIGATIONS

F. EDWARD HÉBERT, Louisiana, Chairman OVERTON BROOKS, Louisiana

WILLIAM E. HESS, Ohio L. MENDEL RIVERS, South Carolina LEON H. GAVIN, Pennsylvania. 0. C. FISHER, Texas

PAUL CUNNINGHAM, Iowa PORTER HARDY, JR., Virginia

WILLIAM H. BATES, Massachusetts GEORGE P. MILLER, California

FRANK C. OSMERS, JR., New Jersey

CARL VINSON, Georgia

EX OFFICIO

LESLIE C. ARENDS, Illinois
JOHN J. COURTNEY, Special Counsel
EDWARD T. FOGO, Staff Assistant
LLOYD R. Kuhn, Staff Assistant
ROBERT N. TYLER, Staff A88istant
RAYMOND WILCOVE, Staff Assistant

CONTENTS

Statement by-

Pago
Ambrose, John J., analytical statistician, Industrial Resources Divi-
sion, Air Materiel Command.--

2805
Corkum, Mrs. Alice S., buying assistant, Air Materiel Command.. 2805
Goebel, Howard D., administrative contracting officer, Air Materiel
Command, at Buick-Oldsmobile-Pontiac plant.---

2805
Gordon, John F., vice president, General Motors Corp., Buick-
Oldsmobile-Pontiac division --

2709

Hammond, James H., Defense Accounting and Auditing Division,

General Accounting Office.-

2557, 2868

Haycock, S. P., Legal Division, General Accounting Office

2557

Lemley, William P., staff auditor, Air Materiel Command..

2805

Loofbourrow, B. D., Deputy Chief, Pricing Staff Division, Air

Materiel Command.

2805, 2852

Medberry, Col. J. R., United States Air Force.-

2805

Newman, W. A., Deputy Director, Defense Auditing and Accounting
Division, General Accounting Office...-

2557

Power, A. F., assistant general counsel, General Motors Corp----- 2709

Powers, Lawrence J., Director of Defense Auditing and Accounting

Division, General Accounting Office --

2557

Richmond, Milton, cost analyst, Air Materiel Command.

2805

Saxton, Richard C., price analyst and chief negotiator in last segment

for Air Materiel Command.

2805

Thompson, Lt. Col. George W., chief, Pricing Staff Division, United

States Air Force.-

2811

Thurman, Gen. William T., Deputy Director of Procurement and

Production, Headquarters, Air Materiel Command, United States

Air Force --

2800

Letters, exhibits, etc.--

Air Force contract No. 33(038)–18503:

Allotment breakdown -

2615

Schedule:

Part I. Statement of work.

2615

Part II. Delivery ---

2618

Part III. Preservation, packing, packaging, and marking- 2618

Substituted clause---

2619

General provisions-

2619

Exhibit 1.-

2647

Exhibit 2.

2647

Department of Defense security requirements checklist, table--- 2650

Buick-Oldsmobile-Pontiac assembly division:

Analysis of burden by quarters, period June 1, 1953, through end of

contract. ---

2575

Development of forward price data supplementing proposal dated

February 3, 1955, contract No. AF 33(038)–18503 -

2651

Graphs:

Total plant-

2660

Forward fuselage assembly

2661

Wing assembly-rotary fixture.

2662

Sheet metal.

2663

Aft fuselage structural assembly-

2664

Final line

2665

Wing assembly—main wing fixture

2666

Electrical and tubing-.

2667

Hangar.

2668

Machine shop

2669

[graphic]
[ocr errors]

Page

Letters, exhibits, etc.—Continued
Buick-Oldsmobile-Pontiac assembly division-Continued

Second redetermination, Buick-Oldsmobile-Pontiac proposal

dated February 10, 1955:

Schedule A: Analysis of exhibit, dollar spare parts ship-

ments through December 31, 1954.

2653

Schedule A-1: Analysis of allied material content in exhibit

4, spare parts shipments through December 31, 1954.-- 2653

Schedule A: Proposed forward prices for 300 F-84F airplanes. 2655

Schedule A-1: Analysis of allied material content..

2655

Clapsaddle, H. W., divisional comptroller, General Motors Corp.,

Buick-Oldsmobile-Pontiac assembly division:

Affidavit dated August 21, 1957 -

2916

Affidavit dated September 10, 1957

2922

Excerpt from letter, dated June 18, 1957, of General Motors Corp.,
to Comptroller General stating their position.-

2595

Excerpt from letter, dated July 8, 1957, from Comptroller General to

Secretary of the Air Force...

2588

Excerpt from Public Law 245, 82d Congress, re contract auditing--- 2586

Exhibit A: Principal delivery schedule changes and the actual air-

craft deliveries, contract No. AF 33(038)–18503..

2745

Exhibit I:

General Motors correspondence re proposal for redetermination

of prices of F-84F produced on contract No. AF 33(038)-

18503.

2747

Schedule A: Proposed retroactive prices-

2750

Schedule A-1: Analysis of allied material content.,

2750

Schedule A-2: Contract change notifications closed in first seg-

ment..

2751

Schedule B: Proposed forward prices of F-84F airplanes.

2752

Schedule B-1: Analysis of allied material content-

2752

Exhibit II: Development of forward price data supplementing pro-

posal dated July 15, 1954-contract No. AF 33 (038)-18503 -- 2753

Exhibit III:

Analysis of incurred cost through May 11, 1954.

2760

Average unit cost of factory-completed airplanes.

2761

Analysis of burden by quarters, period June 1, 1953, through end

of contracts..

2761

General Accounting Office comments re material costs.. 2772, 2779, 2786

Gordon, John F., to Lt. Col. George W. Thompson, Pricing Staff

Division Deputy Director, Procurement Headquarters, Air Ma-

teriel Command, Wright-Patterson Air Force Base, Ohio, dated

August 10, 1957.-

2921

Letter:

Dated October 25, 1956, from General Motors Corp. to General

Thurman.

2595, 2726

Dated March 28, 1957, from W. E. Medcalf to General Accounting

Office..

2605

Dated April 26, 1957, from the Comptroller General to Harlow H.
Curtice...

2603
Dated June 3, 1957, from Joseph Campbell, Comptroller General,
to Harlow H. Curtice.

2606
Dated July 19, 1957, from Congressman Hébert to Joseph
Campbell..

2557
Dated August 2, 1957, from Dudley C. Sharp, Assistant Secre-
tary of the Air Force, to the Comptroller General.

2849
Dated August 21, 1957, from A. F. Power to John J. Courtney - 2915
Dated August 21, 1957, from Joseph Campbell, Comptroller

General of the United States, to Congressman Hébert--- 2630

Dated August 23, 1957, from John J. Courtney to A. F. Power.- 2915

Dated August 27, 1957, from John J. Courtney to A. F. Power.. 2919

Dated September 10, 1957, from A. F. Power to John J. Courtney- 2920

Dated October 14, 1957, from Comptroller General of the United

States to Congressman Hébert -

2924

Dated October 14, 1957, from Joseph Campbell, Comptroller

General of the United States to the Attorney General of the

United States....

2924

Dent, Fred R., Jr., major general, United States Air Force, to

General Motors.

2715

Letters, exhibits, etc.-Continued

Pago
Loofbourrow, B. D., deputy chief, Pricing Staff Division, Air Materiel
Command, Memorandum for the File, dated January 3, 1957----- 2851

Purchase Order Revision (document) on ordersNo. ŘDS 9328. 2918, 2796

Powers, Lawrence J., Director of Defense, Auditing and Accounting

Division, General Accounting Office:

Action taken by the Air Force, more effective pricing negotiations. 2566

Administrative audits.-

2565

Known reductions in subcontractor's prices..

2560

Refund requested from the contractor.--

2566

Spare parts for mutual defense assistance program.

2564

Summary of price reductions which should have been attained. 2560

Summary of profit contemplated and experienced.--

2558

Table of selected prices negotiated and profits realized.

2559

Appendix A: Letter, dated March 28, 1957, from Dudley C.

Sharp, Assistant Secretary of the Air Force, to the Comptroller

General

2568

Appendix B: Letter, dated May 3, 1956, from T. P. Murphy to

Forrest R. Browne...

2570

Appendix C:

Letter, dated June 18, 1957, from John F. Gordon, to Joseph

Campbell, Comptroller of the United States.---

2573

Exhibit A: Letter, dated April 25, 1951, from H. H. Curtice

to Brig. Gen. Phillips W. Smith..

2577

Exhibit B: Letter, dated May 9, 1951, from Brig. Gen.

Phillips W. Smith to H. H. Čurtice.

2577

Exhibit" C: Letter, dated August 13, 1951, from H. H,

Curtice to Brig. Gen. Phillips W. Smith..

2578

Exhibit D: Letter, dated October 25, 1956, from John F.

Gordon to Brig. Gen. William T. Thurman.

2578

Exhibit E: Letter, dated June 27, 1956, from John F.

Gordon to the commander, Headquarters, Air Material

Command, Wright-Patterson Air Force Base..-

2580

Appendix D: Letter, dated July 8, 1957, from Joseph Campbell,

Comptroller General to the Secretary of the Air Force

2581

Quotation in Aviation Week of part of testimony of Hon. Lee White,

Assistant Secretary of War, before a Senate subcommittee on
F-84F program.

2714
Section 3–801.4, Air Force procurement instructions, entitled “Cost,
Profit, and Price Relationships”,

2721
Section 3-802.4, Air Force procurement instructions, entitled "Nego-
tiated Prices Versus Actual Cost and Profit”.

2722

Summary schedule (contract No. AF 33(038)–18503).

2858

Telegram:

Dated July 26, 1957, from Congressman Hébert to Harlow H.

Curtice.

2609

Dated July 26, 1957, from Harlow H. Curtice to Congressman

Hébert.-.

2609

Dated July 29, 1957, from Congressman Hébert to Harlow H.

Curtice

2610

Dated August 21, 1957, from Congressman Hébert to John F.

Gordon ---

2914

Dated August 23, 1957 (2), from John J. Courtney to John F.
Gordon -

2914

Dated August 30, 1957, from John J. Courtney to A. F. Power.. 2920

Power, A. F.:

To F. Edward Hébert-

2915

To John J. Courtney (2)

2915, 2919

Thompson, Lt. Col. George W., United States Air Force, Chief,

Pricing Staff Division, Deputy Director, Procurement, Air Materiel
Command, memorandum dated August 13, 1957-

2901
Vinson, Hon. Carl, Chairman, Committee on Armed Services:
Letter to, dated July 19, 1957, from Joseph Campbell..

2556
Letter from, dated Šuly 19, 1957, to Joseph Campbell..

2556

« PreviousContinue »