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STUDY OF AIR FORCE CONTRACT AF 33 (038)-18503
GENERAL MOTORS CORP.-BUICK-OLDSMOBILEPONTIAC ASSEMBLY DIVISION
SUBCOMMITTEE FOR SPECIAL INVESTIGATIONS
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
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
GOVERNMENT PRINTING OFFICE
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
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
Ambrose, John J., analytical statistician, Industrial Resources Divi-
sion, Air Materiel Command.--
Corkum, Mrs. Alice S., buying assistant, Air Materiel Command.. 2805
Goebel, Howard D., administrative contracting officer, Air Materiel
Command, at Buick-Oldsmobile-Pontiac plant.---
Gordon, John F., vice president, General Motors Corp., Buick-
Oldsmobile-Pontiac division --
Hammond, James H., Defense Accounting and Auditing Division,
General Accounting Office.-
Haycock, S. P., Legal Division, General Accounting Office
Lemley, William P., staff auditor, Air Materiel Command..
Loofbourrow, B. D., Deputy Chief, Pricing Staff Division, Air
Medberry, Col. J. R., United States Air Force.-
Newman, W. A., Deputy Director, Defense Auditing and Accounting
Division, General Accounting Office...-
Power, A. F., assistant general counsel, General Motors Corp----- 2709
Powers, Lawrence J., Director of Defense Auditing and Accounting
Division, General Accounting Office --
Richmond, Milton, cost analyst, Air Materiel Command.
Saxton, Richard C., price analyst and chief negotiator in last segment
for Air Materiel Command.
Thompson, Lt. Col. George W., chief, Pricing Staff Division, United
States Air Force.-
Thurman, Gen. William T., Deputy Director of Procurement and
Production, Headquarters, Air Materiel Command, United States
Air Force --
Letters, exhibits, etc.--
Air Force contract No. 33(038)–18503:
Allotment breakdown -
Part I. Statement of work.
Part II. Delivery ---
Part III. Preservation, packing, packaging, and marking- 2618
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
Development of forward price data supplementing proposal dated
February 3, 1955, contract No. AF 33(038)–18503 -
Forward fuselage assembly
Wing assembly-rotary fixture.
Aft fuselage structural assembly-
Wing assembly—main wing fixture
Electrical and tubing-.
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.
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..
Clapsaddle, H. W., divisional comptroller, General Motors Corp.,
Buick-Oldsmobile-Pontiac assembly division:
Affidavit dated August 21, 1957 -
Affidavit dated September 10, 1957
Excerpt from letter, dated June 18, 1957, of General Motors Corp.,
to Comptroller General stating their position.-
Excerpt from letter, dated July 8, 1957, from Comptroller General to
Secretary of the Air Force...
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..
General Motors correspondence re proposal for redetermination
of prices of F-84F produced on contract No. AF 33(038)-
Schedule A: Proposed retroactive prices-
Schedule A-1: Analysis of allied material content.,
Schedule A-2: Contract change notifications closed in first seg-
Schedule B: Proposed forward prices of F-84F airplanes.
Schedule B-1: Analysis of allied material content-
Exhibit II: Development of forward price data supplementing pro-
posal dated July 15, 1954-contract No. AF 33 (038)-18503 -- 2753
Analysis of incurred cost through May 11, 1954.
Average unit cost of factory-completed airplanes.
Analysis of burden by quarters, period June 1, 1953, through end
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.-
Dated October 25, 1956, from General Motors Corp. to General
Dated March 28, 1957, from W. E. Medcalf to General Accounting
Dated April 26, 1957, from the Comptroller General to Harlow H.
Dated June 3, 1957, from Joseph Campbell, Comptroller General,
to Harlow H. Curtice.
Dated July 19, 1957, from Congressman Hébert to Joseph
Dated August 2, 1957, from Dudley C. Sharp, Assistant Secre-
tary of the Air Force, to the Comptroller General.
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 -
Dated October 14, 1957, from Joseph Campbell, Comptroller
General of the United States to the Attorney General of the
Dent, Fred R., Jr., major general, United States Air Force, to
Letters, exhibits, etc.-Continued
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
Known reductions in subcontractor's prices..
Refund requested from the contractor.--
Spare parts for mutual defense assistance program.
Summary of price reductions which should have been attained. 2560
Summary of profit contemplated and experienced.--
Table of selected prices negotiated and profits realized.
Appendix A: Letter, dated March 28, 1957, from Dudley C.
Sharp, Assistant Secretary of the Air Force, to the Comptroller
Appendix B: Letter, dated May 3, 1956, from T. P. Murphy to
Forrest R. Browne...
Letter, dated June 18, 1957, from John F. Gordon, to Joseph
Campbell, Comptroller of the United States.---
Exhibit A: Letter, dated April 25, 1951, from H. H. Curtice
to Brig. Gen. Phillips W. Smith..
Exhibit B: Letter, dated May 9, 1951, from Brig. Gen.
Phillips W. Smith to H. H. Čurtice.
Exhibit" C: Letter, dated August 13, 1951, from H. H,
Curtice to Brig. Gen. Phillips W. Smith..
Exhibit D: Letter, dated October 25, 1956, from John F.
Gordon to Brig. Gen. William T. Thurman.
Exhibit E: Letter, dated June 27, 1956, from John F.
Gordon to the commander, Headquarters, Air Material
Command, Wright-Patterson Air Force Base..-
Appendix D: Letter, dated July 8, 1957, from Joseph Campbell,
Comptroller General to the Secretary of the Air Force
Quotation in Aviation Week of part of testimony of Hon. Lee White,
Assistant Secretary of War, before a Senate subcommittee on
Section 3–801.4, Air Force procurement instructions, entitled “Cost,
Profit, and Price Relationships”,
Section 3-802.4, Air Force procurement instructions, entitled "Nego-
tiated Prices Versus Actual Cost and Profit”.
Summary schedule (contract No. AF 33(038)–18503).
Dated July 26, 1957, from Congressman Hébert to Harlow H.
Dated July 26, 1957, from Harlow H. Curtice to Congressman
Dated July 29, 1957, from Congressman Hébert to Harlow H.
Dated August 21, 1957, from Congressman Hébert to John F.
Dated August 23, 1957 (2), from John J. Courtney to John F.
Dated August 30, 1957, from John J. Courtney to A. F. Power.. 2920
Power, A. F.:
To F. Edward Hébert-
To John J. Courtney (2)
Thompson, Lt. Col. George W., United States Air Force, Chief,
Pricing Staff Division, Deputy Director, Procurement, Air Materiel
Command, memorandum dated August 13, 1957-
Vinson, Hon. Carl, Chairman, Committee on Armed Services:
Letter to, dated July 19, 1957, from Joseph Campbell..
Letter from, dated Šuly 19, 1957, to Joseph Campbell..