The National Research Council has representatives from the asphalt industry, the cement industry, and the highway departments, and we talked to their staff here in Washington, and they assured us that they would be able to obtain an impartial expression of opinions, and that they would set up a special committee, with the necessary representation from various road-building associations, the airport group, the cement industry, and the asphalt industry. They felt that within about 6 or 9 months they would be able to give us some pretty good recommendations.

So, I think we have that situation under control.

REVIEW AND APPROVAL OF REQUESTED LINE ITEMS

Mr. DAVIS. In determining the projects which are included in the budget estimates now before us, has your staff had an opportunity to evaluate these specific items?

In other words, have you seen the program since the Bureau of the Budget put these dollar limitations on each of the three branches of the service?

Mr. FLOETE. Well, actually, we have not seen the President's letter, nor have I seen this document as yet. We participated, I will put it that way, in the final decision as to what items would be included in the appropriation request. We participated in that.

Admiral JELLEY. Yes; but more from a total dollar standpoint, rather than from the individual project basis,

In other words, we did not say that the Air Force has to cut out projects all the way down the line to come down to the $945 million, but we did participate in setting the total at $945 million.

The original Air Force authorization was about $1 billion.
Mr. FLOETE. It was $1,071 million.

Admiral JELLEY. They had already reduced it to $980 million, and I believe they are in the process of reducing it to $945 million. However, we have not seen that list which totals up to $945 million, nor have we seen the Navy list that totals $140 million. We have seen the original Army list which totaled $126 million, and we have seen their barracks list, and family housing list, but we have not as yet seen the list which they presented to you. We have approved all of the individual projects, but I do not think that it is going to be our place to determine relative priorities for the Air Force. That would be up to the Army, Navy, and the Air Force.

Mr. DAVIS. But you have seen and approved every item which is included in these justifications, hearings on which will start before this subcommittee next week?

Admiral JELLEY. Yes, sir. I might say we did two things with particular Air Force items and, to a lesser extent, the Army and Navy items. We either rejected the item or required them to modify them sometime. In other words, we, perhaps, cut a shop from 30,000 square feet to 24,000 square feet. We have been through every item, line by line.

Mr. DAVIS. I suppose the Comptroller's shop in the Office of the Secretary of Defense has more to do with the actual decision as to how much new or how much old money should be used for these in an overall program than you do. Is that correct?

Mr. FLOETE. Well, I think they have the dollar responsibility and we feel we have the individual responsibility, as to need for any given project.

Admiral JELLEY. We feel we can contribute to making recommendations as to the ultimate dollar amount from our ideas of urgency and so forth. We could say, "Well, it looks as if $900 million or $700 million is what will be required," but I think as a result of the Reorganization Act the responsibility for recommending to the Secretary of Defense the amount of money is lodged in the Comptroller.

Mr. FLOETE. That is a matter that I think will be worked out, and I think it is desirable that it should be.

Mr. DAVIS. This is the first year which you have really had a chance to review the construction program in the manner that you had hoped to be able to do when you started out on this job.

Is that a fair statement?

Mr. FLOETE. That is correct.

Admiral JELLEY. I do not think we will make a single change in our procedure next year.

INTERSERVICE USE OF WAREHOUSES AND OTHER FACILITIES

Mr. DAVIS. What measure of success have you had in attempting to obtain joint use of some of the bulk warehousing?

Are you making any tangible progress in that direction?

Mr. FLOETE. Oh, yes; we are making very tangible progress. It takes a long time, but progress is being made there.

Actually, the Army has developed, itself, a firm list of the items which they are ready to turn over to the Air Force, and the Air Force is now presently studying that list. We expect to have an agreement between them by the 1st of July, which will take care of actually all of the Air Force requirements for warehousing which was included in the 1954 bill, and which they indicated they would like to have in 1955. I will not say that that will do it 100 percent, because you have the geographic matter there, where sometimes you cannot fit them together, but actually the Army has come up with availability very considerably in excess of what the Air Force has indicated they needed, up to date, although the long-range Air Force program calls for considerably more. I think it is going to go a long way toward solving the Air Force problem.

We are still deferring the 1954 approval because we had this study underway. By the end of this month we should know the whole story, and it is a good story.

Mr. DAVIS. I think it would be of value to this committee, when you have worked out the problem, if you would give us a report, showing the savings in new warehouse construction which you have been able to accomplish by instituting joint use among the services.

Mr. FLOETE. Well, you see, actually the Air Force has requested in the 2 years-1954 and 1955-a total of just under 9 million square feet. As I say, the Army has actually come up with about twice that much which they can make available. The 9 million square feet is not enough to meet the Air Force needs, however. They need all that the Army can give them, and probably more, but actually it ought to be pretty close to 20 million feet, besides about that much in paved open storage.

It runs into a lot of money.

Mr. DAVIS. I think it would be of great interest to this committee if you will prepare that information for us.

Mr. FLOETE. It has been a matter of special interest to me, and I have really been behind the eight ball with Mr. Wilson since last November, because I said this could be done, but he doubted it a little, I think.

So, I have had to come up with something.

Mr. DAVIS. Something which has always concerned this committee, when these requests for new construction have been before us, is whether in many cases they were not duplicating facilities that might be furnished from other branches of the armed services. We will be very much interested in your progress report when it is ready.

Mr. FLOETE. Yes, sir; I will be glad to send it up, sir. I think a great deal can be done which has not been done yet on proper utilization of other facilities also. I think we have just scratched the surface on that item, but we are hard at work on it, and we are commencing to come up with some individual things which are good.

Unless we meet a road block, we will manage to get a good deal at Cleveland. They will provide us with a substantial amount of good office space for a trade-in on a separate building the trade-in of a Marine hospital that we had declared excess some time ago, and we have actually reached the point where they have made a tentative offer.

Mr. DAVIS. Can you point out anything, as of this time, where you are making progress in joint use of facilities other than warehouses?

You just gave us that one instance. Are there any others which come to mind?

Mr. FLOETE. Well, on leasing we have done a good deal by utilizing property owned by the other services. I cannot remember the individual items, however.

Admiral JELLEY. For instance, one item is in regard to the recruiting offices.

Mr. FLOETE. Yes, sir; we have been consolidating them. We have been instrumental in bringing about very substantial savings, but there are quite a number of items which I cannot remember now. We are continuously after it, and we screen every list that goes through very thoroughly.

Mr. HAND. Would all this surplus Army warehousing be available, or would not a good deal of it be unusable because of the geographic situation?

Mr. FLOETE. It really fits into the Air Force plan pretty well. I mean that if you have a great big warehouse available, it may be necessary for the Air Force to make some change in their warehouse system, but if it is big enough that a change will be well justified. The Army is really coming up with substantial amounts of warehousing space. I mean, they are not a lot of little warehouses, but it is on the magnitude of 1 million, 1.2 million, and 2 million square feet, which is a lot of warehousing.

I think it is going to work out fine. We have the different dates as to when it will be available, and the amount of square feet, and where it is located.

Admiral JELLEY. There are some other examples, Mr. Floete, which I do not think we can claim credit for at some of these new air bases.

For example, that is true at Klamath Falls, Clinton, Okla., and San Diego. There is one on which we are working now through the joint chief of the southern California area, where, by using an inactive naval air station for these new fighter defense squadrons, that will represent a good savings in money, but it was done between the Air Force and the Navy, and we did not direct it otherwise.

RESTRICTIONS ON CONSTRUCTION PROGRAM

Mr. DAVIS. In your letter of January 5 of this year, to Chairman Taber, Secretary Floete, you expressed the opinion that as of that time we were not yet in the position to think about removing these restrictions which have been placed on the program from time to time by the Congress and others.

Are you still of that opinion?

Admiral Jelley, you might cover that point.

Admiral JELLEY. The first one which we mentioned was apportionment. I do think the apportionment picture is clearing up a little bit. (Discussion off the record.)

Admiral JELLEY. I do think there has been an improvement within the last 6 months on apportionment which, of course, is a legal require

ment.

I think the situation in regard to real estate clearances is improving somewhat also, because we are able to go to the Armed Services Committee with a little more detailed information. However, it is causing delays because it requires field surveys, appraisals, and so forth, and I think if the two committees had a little more confidence in what is presented to them by the services they will relax some of their requirements for appraisals and metes and bounds descriptions, and things like that.

However, once again, that is a question of getting the confidence of the committee members.

Mr. DAVIS. It is still a matter of the armed services themselves demonstrating that they do not need that kind of a check at this time? Admiral JELLEY. Yes, sir In regard to clearance of classified projects, section 407 is beginning to work itself out.

The Air Force is utilizing two hundred-odd million dollars of that this year, in its appropriation request needs, and the House Armed Services Committee charged off their request for $110 million in aircraft control and warning stations to section 407. I think the Air Force is going to be down to something like $50 million balance.

So, there will not be too many of those coming along in the future, but it will be necessary for the Air Force to put definite projects in the 1956 program, rather than rely on section 407.

Of course, the clearance of the 1954 program is something else. That is just about worked out now.

In regard to limitations on cost and physical size of facilities, which in the past in some cases has necessitated redesign after bids were taken, Mr. Bates spoke of running into it at Brunswick, Maine, where enlisted men's quarters, which were supposed to have been $10,040, had been redesigned twice after taking bids, and he questioned whether

we had not spent money in design expenses that far exceeded the $10,000 which we were trying to hit.

I do think we are getting to the point where the cost restrictions should be modified. For example, the $6 a square foot on the warehousing and the $1,700 per man on barracks, and messes, and so forth, are examples of that.

As we get out these criteria, I think we will administratively be able to keep the costs down, and keep that program a little more flexible, because we certainly should be able to get the barracks down in Florida, say, for $1,500 instead of $1,700.

When you put an arbitrary limit of $1,700 on a matter of this kind, they will get as good a barracks as they can, no matter what the location is. What has happened is that we get a darned good barracks in the low-cost areas, and then a cheap barracks in the high-cost areas. I mean, cheap, in construction.

INDUSTRIAL AND COMMERCIAL TYPE FACILITIES

With regard to industrial and commercial type facilities we have been screening our projects on that. As a matter of fact, we anticipated the Ship Repair Association of America by some 3 months. The Army had a request in for a little work down at Charleston, where they wanted to paint barges which they had stored down there. We made them furnish actual bids. The cost of towing these barges up to Norfolk, which was the nearest place they could be painted, was requested, and we got the Navy to make a survey of what was available in the shipyards in Charleston in commercial facilities. We came to the conclusion that the project was justified, and would pay for itself, and it did not constitute too much competition with commercial type facilities. The Armed Services Committee agreed with us after hearing from the ship repair people just a week or so ago.

Mr. FLOETE. The screening of commercial and industrial facilities is under the directive known as 4000.8. I think it is a good thing to continue because that gives us a last look at the thing.

It may be that they were authorized 2 or 3 years ago. Admiral JELLEY. Some of them are legislative matters-for example, our bakeries, laundries, and dry-cleaning plants.

They would be legislative, but the warehouses would not be. Mr. FLOETE. I think that should be continued, because that gives us the last word.

Admiral JELLEY. In the Department of Defense they are doing it on a much broader basis. We had a letter yesterday from the Navy. We had approved a project in the "400" program for the Navy for dry cleaning facilities, at Kwajalein. I believe your committee later approved it. I got in a pad this thick which came from the Bureau of Aeronautics, the Bureau of Yards and Docks, and from the Assistant Secretary of the Navy with regard to obtaining clearance under the appropriations item section for a dry cleaning plant at Kwajalein. Well, there is no competition on Kwajalein, and there is nothing on Kwajalein. It only cost the Navy money to send it in.

Mr. FLOETE. Generally, that type of restriction is all right. I think it would be well to renew it.

Admiral JELLEY. When you put it in legislation for a minor thing like that, I think it is a little rigid.