Mr. VINSON. Let us assume they are put in there. Nevertheless, there is nothing to make them change to add more provisions, and in subsequent contracts, therefore, a contractor must be conversant with all the regulations being promulgated from time to time.

Mr. HANCOCK. We do not promulgate any on that point. We have had one interpretation since January.

Mr. VINSON. You saw what we got into on renegotiation.

Mr. HANCOCK. Yes; but you did not have standards set up in renegotiation.

Mr. VINSON. Of course not; therefore, we did put standards into renegotiations when we rewrote the law. When we first passed the law, we did not have any standards. Industry complained so viciously about it that we opened hearings and spent 2 months, calling industry in, and they convinced us that it was wise to put standards in. Mr. HANCOCK. You were dealing with a new field.

Mr. VINSON. It is a new field.

Mr. HANCOCK. Not wholly new; it is already in the contracts.

Mr. VINSON. Well, in some of them. The policy might be to do it along a certain line. It might be changed at the whim or the instigation of the Director, and a new condition arises. The first thing a Congressman knows about it is when he gets a letter from a constituent. Over in New Jersey one standard is set down; over in Pennsylvania a different one is invoked. The question is asked, "Why can we not have some uniformity?" If Congress will write standards with enough flexibility and fluid enough, this can be accomplished.

Mr. WALTER. So that in each one of the several ordnance districts of the United States, for example, rules will be exactly the same.

Mr. VINSON. That is right. Then, it gets back to the fundamental question. If we can legislate, it is our duty to legislate. We should not delegate authority. That is what we are here for. Of course, I grant you that in thousands of instances you have got to delegate authority. But nothing has harassed the American public more than laws becoming effective by regulations or regulations having the effect of law.

Mr. KEFAUVER. Is it not also a great protection to the Executive to have some standards written in, so he will not have pressure put on him to vary the rules here and there or to change the regulations? Mr. VINSON. That is right.

Mr. HANCOCK. I do not think there is much to the argument and I am not opposing the idea, because it is already in the contracts. If it were not in the contract, I would be all on your side.

Mr. VINSON. If it is already in the contract, there is no harm in putting it into law.

Colonel ROSE. To quote paragraph 18 of your bill, on page 50:

No costs shall be allowed which were treated as deductions from income during the period covered by a previous renegotiation under the Renegotiation Act if a refund to the Government was made for such period, or to the extent that such deductions are shown to have avoided such refund.

An argument against the fairness of that provision has been made, which some of our people are disposed to take quite seriously. Under that provision no costs shall be allowed that cannot be justified by statute. You may not take that cost into account. That is inflexible.

Mr. VINSON. That is right. There are certain factors that can be considered, and why should not all those that can be considered be put in, so far as they can be considered? That enables the contracting officer and helps the contracting officer to bring the issue to a head and reach a decision.

Mr. HANCOCK. Our difficulty is that we had to write a plan without benefit of current experience to guide us at all. It came pretty much from plain thinking and out of a blue sky. It cannot fit all the existing situations.

Mr. VINSON. All right. That is the very reason why what you have brought out should be incorporated, because further hard thinking might cause you to change, and there will be so much uncertainty. We will be where we were on renegotiation.

Mr. WALTER. Particularly in view of the fact that we want to decentralize this whole thing as much as possible.

Mr. HANCOCK. I am sure that the thought throughout the whole organization is to have an advisory group, a policy group, with the power or decision in one man, as has been given to me in the Joint Contract Board, because otherwise you will have difficulty in getting a decision. You will have a debating society; you will get no action. It is better to have some mistakes and to get action than to try for perfect justice and have long delay. My only fear arises from modesty about the completeness and entire wisdom of our own work.

Mr. VINSON. I will say, Mr. Hancock, if it does not work out, we are in session all the time; we act pretty fast.

Mr. HANCOCK. The Senate might not.

Mr. VINSON. Well, the Senate has acted faster than we have on this. We can act as fast as Executive orders can be made. Mr. HANCOCK. I am not being critical.

gress has from the other end of the Avenue.

I am the best friend Con

Mr. VINSON. When we can intelligently legislate, I think we should legislate, instead of passing the responsibility on to somebody else. So why not do it? The practice has been to give it to somebody with authority to do it, and that is what harasses the country. I was trying to get the attitude.

Mr. HANCOCK. Just one more point. This field of legislation has been this. This was the primary thought at the start. I said to Senator George in December, "Let us try to legislate in a field where we can get quick action, a field of agreement. Let us let alone all the other things we cannot agree on.' My only concern is that having got a bill through the Senate, if we are going to have additional legislation added to it, if it is going to slow up approval by the Senate, I would be very much concerned, because I think the responsibility is on the Congress to enact this legislation. I have no reason to fear it any more than you do, but I am frank to tell you that if there should be an early end of the German part of the war, the services will be in an awful fix, and the country will also be.

Mr. VINSON. Yes. In reply to that, I will say if there is any logic in the House's contention, it will prevail very quickly upon the Congress. If there is no logic in the House's position, when they go into conference, the Senate will prevail. Everybody has to give and take. It does not mean that just because the Senate has passed the Murray bill that that is the final and best legislation that can grow out of this thing. From

That is the reason why I am in here now.

your conversation now you are shedding light on this subject and separating the chaff from the wheat. It will not be long before this subcommittee will report to the full committee. I doubt whether the full committee will have extended hearings; but it would have to have extended hearings on the Murray-George bill. They could not say, "Because the Senate has done it, we have got to do it," unless you want to accept the Senate version without investigation and we do not do that. We have to do a lot of thinking ourselves. So do not worry. I know what the Navy Department is up against. I know how many contracts have been terminated. I am just as anxious to get uniform procedure for all the departments as you and the departments are. We will have something decided by the 20th

of June.

Mr. HANCOCK. I can tell you frankly that no matter when the end of the war comes, we are not going to be ready. The services will need not less than 4,000 trained men. We are going to have to also train men from industry. I think it will take almost a miracle to have it done in 4 months.

Mr. VINSON. The Comptroller General has got about 1,500 men in the General Accounting Office.

Mr. HANCOCK. That is his worry. But the buying services have a lot of men to train.

Mr. WALTER. Why will they have a lot of men to train? Can they not use the same personnel?

Mr. HANCOCK. We will transfer them from their present work to this work, but these men have got to learn this law from top to bottom. We are, after all, painting with a very broad brush in this law. I would guess that the regulations under this law would be six times as extensive.

Colonel ROSE. I should think our existing ones were 75 closely printed pages.

Mr. HANCOCK. There will be problems arising that none of us can foresee.

Mr.. VINSON. But there is another phase of this thing, too. Of course, the speed with which you want to consider it and the speed with which you want legislation and the speed with which you seek to settle a contract do not keep adverse economic conditions from arising.

Mr. HANCOCK. No, but it is the only protection you have.

Mr. VINSON. You can put the money in the contractor's pocket by giving him what he wants.

Mr. HANCOCK. That is not what I am proposing.

Mr. VINSON. No, but you can put the money in his pocket, but what is going to become of the millions of people who are going to be affected by the terminating of that contract? I dodged that, and you dodged it, too.

Mr. HANCOCK. No, I have not dodged it.

Mr. VINSON. That is a factor. Some day somebody is going to come face to face with it. Suppose we go to the Bethlehem Steel Co., that has $100,000,000 worth of contracts with the Navy, and they are canceled. Immediately 25,000 people are affected. What is going to become of those 25,000 people? Now, I said to myself, "I have enough trouble on my hands. Let me see what Mr. Hancock

and Mr. Baruch did." I said, "They did not do anything. I am going to leave it alone, too."

Mr. HANCOCK. But you are wrong.

Mr. WALTER. Let me call attention to the fact that when we took this bill up, taken up by the Post-War Planning Committee, which considered first the question of employment, and we felt that this was the first step in order to provide employment.

Mr. VINSON. That is right; exactly.

Mr. WALTER. We are thinking of doing the first things first.

Mr. VINSON. That is a thing that has sometime got to be raised. Some day somebody has got to think it out. I am anxious to see how Mr. Hancock and Mr. Baruch are going to reach a decision on the service pay for all these thousands of people. It did not worry Mr. Hancock. You just help us write a good bill.

Mr. KEFAUVER. We will have to have a conference with the Senate. Mr. VINSON. Of course you would.

Mr. WALTER. Yes, because the changes we have already made would necessitate that.

Mr. VINSON. I would like to see you safeguard that all around. This applies to every other service, but I was particularly concerned with the settlement in the Navy, and you will find that on page 53 of H. R. 4469:

No settlement agreement hereunder involving payment to a contractor of an amount in excess of $50,000 (or such lesser amount as the contracting agency may from time to time determine) shall be permitted to become binding upon the Government until the agreement has been reviewed and approved by a settlement review board of three or more members established by the contracting agency in the bureau, division, or other unit of the contracting agency having cognizance of such settlement.

A contracting officer would settle under $50,000. Over $50,000, then, you have your review board to come in, and you will find on page 54 the protection to the contracting officer in having his work reviewed. I do not think that is going to delay it in any way. Do you, Mr. Hancock?

You

Mr. HANCOCK. I am afraid that that will fill the needs of the naval service far better than the other services. My only concern has been the same as yours, I am sure. I do not want to see any bottlenecks created. Either you get perfunctory approval or you get delay. On this whole appeal machinery you have to decentralize them. will have to trust some men. You can sue afterward if there is fraud. But to me the important thing was to get the man who is settling the contract to feel his absolute responsibility for it and to put the load on him as heavily as we can.

Mr. VINSON. But at the same time, when I know that somebody else is going to pass on my handiwork, I am a little more particular in reaching a decision.

Mr. WALTER. But that happens in the case of the War Department, because there is no matter is settled until the entire matter is submitted to the board.

Mr. HANCOCK. If you try to set a rigid plan, you may find that you are creating bottlenecks. The War Department gave the district ordnance chiefs in 13 districts of the country the power to make contracts up to a certain size; the others were to come here. The result was such delay that the first limit had to be raised successively. It

seems to me that with that kind of situation you can perfectly trust a director. You are going to have to find a good man, surely, a man that you have faith in, a man whom the Senate will confirm. I do not think you want to tie up procedural matters in a statute.

Mr. VINSON. In the Senate bill they say that each contracting agency shall establish methods and standard suitable to the condition of various war contractors. You do not get any uniformity under that.

Mr. HANCOCK. Yes, under the Director.

Mr. VINSON. All right; the Director does it. But he may allow a certain way in the Navy Department and a certain way in the War Department. Yet you have there a contract that is an overlapping contract. You have a part Navy contract. Under my proposal here, if it were a part Army and part Navy contract, it would be settled entirely by the Army and would be on a uniform basis.

Mr. HANCOCK. That is contemplated by both within limits. I think it can be done. It is better in theory than it is in fact.

Mr. VINSON. Then, there is duplication of work; there is no saving of manpower.

Mr. HANCOCK. Let me make my case. Let us say that Westinghouse is making a great variety of standard motors for the Army. The Army is the predominant body in the Westinghouse plant. The natural thing would be to have the Army handle all the terminations for Westinghouse.

Mr. VINSON. A company-wide settlement.

Mr. HANCOCK. But at Westinghouse they happen to have a lot of radar, as detailed and technical a job as there is in the service. It might be for the Navy. I think it would be ideal in a big plant like that to have one accounting force investigate all the accounts and certify as to the accuracy of all facts. But if you did not have the disposition of the radar material handled by the Signal Corps men, who know most about it, it would be mishandled.

Mr. VINSON. I think that would happen all through the Army and all through the Navy on technical matters.

Mr. WALTER. But there is not so much of that.

Mr. VINSON. Oh, yes, there is; there is a great deal of it. For instance, you might have certain construction for the Bureau of Ships and for the Maritime Commission. There might be certain phases that would go to the Maritime Commission, and a certain part of the contract would go to the Bureau of Ships. I was hoping that the company-wide settlement would effect a saving of manpower and a saving of efforts. That is why I was very much sold on the companywide settlement.

Mr. HANCOCK. I do not like to avoid troubles. I have enough of my own without throwing them on your shoulders. There is, I think, a technical problem. The words "company-wide settlement" have been abused in discussions. I call the settlement the payment. It might be called either of two things. It might be a decision as to how much the Government pays and separately a payment. I can see how you can have company-wide determination. So long as he is the prime contractor, you can decide what to pay and then settle. Where he is a subcontractor-and they are all subcontractors, to about half of their business, when you get to the field of their