Interstate System adequate for our highway needs, which has caused us to neglect other sections of our primary highways. Mr. DEMPSEY. Mr. Wilson, do you think it would be feasible to have the States each operate on their own, using the Federal money, without the Bureau of Public Roads, and have a comprehensive system of highways? Mr. WILSON. No, sir; I think that it is very desirable to keep the Bureau of Public Roads in the highway construction and improvement picture, because in that way you have uniformity over the United States. It is also desirable from our standpoint to have the advantage of their engineering experience and to have them in on the design and inspection of our highways. Mr. DEMPSEY. Thank you very much. Mr. DONDERO. Does the Highway Commission of the State of New Mexico take the same position that Mr. Heimann took in regard to the bill before this committee? Will it help solve your problems in New Mexico? Mr. WILSON. Yes, sir. We need help badly, as I stated before, and the bill before the Congress and this committee will help us very decidedly in the program to solve our highway needs. Mr. DONDERO. That is all. Mr. FALLON. Thank you very much, Mr. Wilson. I would like to announce now that due to the quorum call, the Members must go to the floor, so we will declare a recess for 15 minutes and then come back. We have another witness here this morning, Mr. George Koss. (Whereupon at 10: 15 a. m. a recess was taken until 10:35 a. m.) Mr. FALLON. Ladies and gentlemen, this is a continuation of the hearings on H. R. 4260. Our next witness will be Mr. George Koss, president, Associated General Contractors of America, Inc. Mr. Koss, do you have a prepared statement? Mr. Koss. Yes, sir; I do. Mr. FALLON. You can read the statement or you can give us the highlights of it and file the whole statement in the record, whichever you like. Mr. Koss. All right, sir. I will read most of it, and then when I get to the questions, I won't repeat the questions, but I will merely give the answers in the same sequence that you asked them in your memorandum. STATEMENT OF GEORGE KOSS, PRESIDENT, ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. Mr. Koss. My name is George C. Koss, president of the Koss Construction Co., of Des Moines, Iowa. Our firm specializes in highway concrete paving in the Midwest area. This year I am president of the Associated General Contractors of America and it is in that capacity that I appear as a representative of more than 6,500 of the Nation's leading general contracting firms which annually execute the majority of contract construction throughout the United States. Of these companies, more than 2,700 report that they engage in highway construction either exclusively or as a part of their operations, and another 2,300 report that they engage in what we refer 63235-55- 26 to as heavy construction which would include bridge building and other types of work related to highway construction. Many of our association's more than 120 chapters in all States of the Union are statewide associations of highway and heavy contractors that work closely with their State highway departments for improvements in highway construction procedures. I am familiar with the memorandum which the committee has issued relative to these hearings, and I shall give answers to many of the questions which you ask the witnesses to answer. Before doing that, I would like to report to you the official actions which our association has taken with respect to the proposed highway legislation. Ever since the President first spoke of an expanded highway-construction program, our association and our highway contractor members have been studying the capacity of the contracting industry to carry out the work. The results of our studies were reviewed by the highway contractors attending the association's 36th annual convention in New Orleans in March. Our group was unanimous in the conviction that we can give assurance to you that the highway-contracting industry has the capacity to carry out any greatly expanded highway construction program necessary to meet the Nation's needs, and that the industry can carry out the program promptly, efficiently, economically, and in such a manner that the public will receive increasing value for its investment in highway construction. The surveys which the association has made had results similar to those conducted by the Bureau of Public Roads. Deputy Commissioner A. C. Clark reported to our convention that Bureau surveys showed that as an industry average highway contractors could immediately double their production with the equipment and manpower at hand. Our chapters in responding to an association survey agreed with this conclusion, and also reported that if contractors could count on an expanding construction program, they could increase their capacity to 400 percent of the present within 5 years. We do not foresee any problems of shortages of materials or equipment hampering an expanded program. Before leaving this subject, I would like to emphasize our assurance that an expanded highway-construction program can be carried out so that the public will continue to receive value for its investment in highway construction. The keenest of competition is now prevailing in highway construction and can be expected to continue to prevail. Also, we take pride in the fact that our highway contractors individually, and our highway chapters as groups, are cooperating with Federal and State highway departments and other agencies in practical means of making highway construction more economical. I will now turn to the questions which the committee proposed to witnesses in your memorandum on these hearings. Question No. 1 Major emphasis should be placed on the National System of Interstate Highways for the reasons that they carry the heaviest load of traffic and are most useful in the national defense. Reports of the Bureau of Public Roads, American Association of State Highway Officials, the Clay committee, and others give good reasons for placing emphasis on this network. In order to develop an adequate coordinated program during the next 10 years, expenditures on the network should be in the amounts recommended by the advisory committee, namely, $25 billion in Federal funds and $2 billion in State funds. Question No. 2 The Federal-aid primary and secondary system programs should be maintained at not less than the present level. Increased amounts for these systems were provided in the 1954 Highway Act. If this rate of Federal aid is continued, progress can be made in overcoming the deficiencies on these systems. Question No. 3 One of the specific recommendations which our association has made is that national and State highway construction programs should be established on a continuing basis, without a tie-in with motor fuel revenues, preferably for a period as long as 10 years, and should be carried out in an orderly manner at a known rate in each of the years. There are two primary reasons for this. First, there will be greater likelihood that the system will be brought up to standards in a reasonable length of time if it is scheduled for a definite period, such as 10 years. Second, greater efficiency can be achieved if the program is carried out at a known rate in each of the years. Federal, State, county and municipal highway departments and others participating can know better how to plan their parts of the program if it is at a known rate each year. Contracting organizations, if they can count on a construction program of a known size each year, can afford to secure additional trained personnel and equipment which will make for maximum efficiency and economy in their operations. They cannot achieve the same efficiency if they must build up an organization quickly for a big program in 1 year, and tear it down again because of a small program the following year. Continuity of work brings about increasing efficiency. Question No. 4 To permit sufficient emphasis to be placed on the Interstate System to assure its completion in a reasonable time, we recommend a matching ratio of 90 percent Federal funds and 10 percent State and local funds. This will put the emphasis on the Interstate System its importance requires. Question No. 5 Another specific recommendation of our association is that for an expanded highway construction program to be carried out in an orderly manner, it should be administered through the established channels of the Bureau of Public Roads and the State highway departments. The Bureau has served as a valuable medium for uniformity in standards to be followed by the States in administering construction programs. The State highway departments are experienced in administering construction programs and in coordinating the work within the States. We believe that a departure from this traditional procedure might lead to confusion and extra expense. Question No.6 Placing of special emphasis on the Interstate System will beneficially affect the State's capacity to carry on an effective program of construction on the regular Federal-aid primary and secondary highway systems, because with the increased interstate appropriations more money will be available to States for primary and secondary construction. On questions 7 through 11, these questions relate to methods of financing an expanded construction program. We do not consider it appropriate that we, as contractors, make recommendations on this subject, nor does our experience qualify us to give information on it. Gentlemen, we have taken that position for a number of years. It is not for us contractors to say how the work should be financed. Question No. 12 Federal-aid primary and secondary funds should not be limited since no one can foretell what the requirements for those systems will be in future years. Spending at least the presently authorized $623 million annually in Federal aid for the primary and secondary systems in the next few years, with greatly increased amounts for the Interstate System, will help overcome deficiencies on the primary and secondary systems. Questions 13 and 14 can be answered together. Our recommendation is that the functions of the Federal Highway Corporation be limited to financing, and that matters of design standards and construction policies and procedures continue to be the responsibility of the Bureau of Public Roads and the State highway departments, as at present. Question No. 15 Our question to the first part of the question is that if the Interstate System is to be improved to carry the large volumes of traffic already existing, plus the increased traffic which will develop in future years, control of access should be built into most of the system as it is improved. Complete control of access need not be built now on highways in sparsely populated areas, but provision should be made for control as increased traffic and roadside developments make it desirable. With respect to the second part of the question, our association makes the specific recommendation that adequate provisions be made for the purchase of right-of-way well in advance of construction. For maximum efficiency in construction, land must be available before the contract is awarded. It is costly both to the public and to the contractor if operations must be delayed or suspended while land is acquired. With regard to questions 16 through 18, these questions relate to reimbursement to the States for toll or other roads incorporated into the National System of Interstate Highways. As contractors, we do not feel that it is appropriate for us to comment. In other words, as a contractor, I work for both toll authorities and for various State highway departments. In conclusion, let me again give assurance to you that the highway contracting industry has the capacity to carry out an expanded highway construction program to fulfill the Nation's needs promptly, efficiently, economically, and in such a manner that the public will continue to receive value for its investment in highway construction. As contractors who have practical experience in highway construction, and as taxpayers who have a direct interest in the expenditure of public funds with the maximum of economy, we make the following recommendations: 1. National and State highway programs should be established on a continuing basis, preferably for a period as long as 10 years, and should be carried out in an orderly manner at a known rate in each year. 2. Adequate provisions should be made for the purchase of right-ofway well in advance of construction. 3. An expanded highway-construction program should be administered through the present channels of the Bureau of Public Roads and State highway departments. 4. The expanded program should be carried out under the contract method which safeguards the expenditure of public funds, with contracts awarded to the lowest responsible bidder after public advertisement. About 99 percent of the $7.3 billion in Federal-aid highway construction put in place throughout the country since 1946 has been done by contract. We believe that this experience demonstrates the effectiveness of construction by contract. Mr. FALLON. Thank you very much, Mr. Koss. That was a very intelligent and well-prepared statement. Any questions? Mr. DEMPSEY. I would like to ask a question, if I may. You referred to the part that the Corporation will take in financing this program. As I understand it, their function should be the financingperiod-is that correct? Mr. Koss. Yes, sir. Mr. DEMPSEY. And the Bureau of Public Roads should continue as they are now, cooperating with the State highway departments on design and various matters which come under their control. Mr. Koss. Yes, sir. We are entirely in favor of that without any qualifications. We believe that the Bureau of Public Roads should be maintained and that the work should be done through the Bureau and the highway departments. Mr. DEMPSEY. And that no other Government agency should be superior to the Bureau of Public Road insofar as the construction of highways is concerned. Mr. Koss. That is our feeling, sir. Mr. DEMPSEY. I quite agree with you. Thank you very much. Mr. DONDERO. Mr. Koss, the $7.3 billion that has been expended on the highways has that work been done mostly by private enterprise or has it been done by States acting as a State? Mr. Koss. I would say that the great part of that money is State money, Federal grants, and municipal work. Now, the toll road part of that $7.3 billion, I cannot give you the figure on that, sir. Mr. DONDERO. The point of my question was, has this work been let out to contractors, such as yourself, or has the State done it and gone ahead on its own responsibility? Mr. Koss. With their own forces? Mr. DONDERO. That is right. Mr. Koss. I believe that these figures, in which I said about 99 percent of the $7.3 billion has been done through the contract method |