I have just got one further thing to say. This section 3 in the bill is put in simply as a matter of precaution. We believe in the executive branch that the same result would follow without the inclusion of this section, but it is put in because the situation which I have just tried to explain may not be familiar to some people, and it is thought that section 3, by making it explicit that the authority is conferred on the Department of the Air Force, will remove any possible doubt that might exist, though we do not think there is one.

Mr. FORRESTER. I do not think so either. I think the only reasonable interpretation would be that it is thoroughly comprehensive. The mere fact that there had been a change, and probably all the military had been brought under one tent, so to speak, I think any fair-minded judge would hold that it was intended to cover the field as proposed at the time you were trying to exercise the law.

On the other hand, I have experienced those same difficulties in private practice. Every now and then you might run into a judge, no matter how plainly it appeared, who would not think so.

As I understand, what you are trying to do is to clarify it and put it where even a man might read as he runs. Is there any question on that, Mr. Hillings?

Mr. HILLINGS. No.

Mr. BURRUS. The next item has to do with the authority to operate farms and plantations outside the United States. It is on page 15, item 1 (a) (11) at the bottom of that page. The law now provides that after the termination of the present war, the operation of any plantation which is under the jurisdiction of the Armed Forces is to be operated or accomplished by private contractors.

It is felt that for security reasons during the present emergency we would like to have the authority to operate these plantations in certain instances by military personnel.

Our witness is Commander C. L. Coombs.

STATEMENT OF COMMANDER C. L. COOMBS, OFFICE OF NAVAL INTELLIGENCE, SECURITY AND POLICY BRANCH, DEPARTMENT OF THE NAVY

Item 1 (a) (11), title 10, U. S. C.

Section 1214. Same; contracts for private management and operation.

After the termination of the present war the management, operation, maintenance, and improvement of any plantation or farm for which appropriations made available by section 1213 of this title are used shall be accomplished, insofar as practicable, through the instrumentality of a private contractor, lessee, or operator with or for the Government, and, to this end the Secretary of the Army shall make reasonable effort to enter into said contract, lease, or agreement with a person, partnership, or association, in civil life for his or its services upon terms advantageous to the Government, for such management, operation, maintenance, and improvement before employing Army personnel for that purpose: Provided, That the determination of the Secretary of the Army as to reasonableness of effort to enter into such contract, lease, or agreement, and as to the advantageous nature of the terms thereof shall be final. (June 28, 1944, ch. 306, section 2, 58 Stat. 624, amended July 1, 1947, ch. 188, 61 Stat. 234.)

(NOTE. The same provision is made with regard to the Secretary of the Navy by 34 U. S. C. 555b.)

Commander COOMBS. Mr. Chairman, my name is Coombs and I am in the Office of Naval Intelligence, Security and Policy Branch, which

by reason of reference often is required to express an opinion on matters involving security.

So my expression is purely from a security angle in this instance. The particular section by a 1947 amendment provides that after the termination of the present war, the operation and management of any plantation or farm under the jurisdiction of the Armed Forces outside the continental United States for furnishing fresh fruits and vegetables to the Armed Forces shall be accomplished as far as practicable through private contractors.

For security reasons, and to afford a more certain source of supply and to permit operation of these plantations without restrictions, it is considered desirable that the existing methods and procedures of management and operation employing personnel under the direct control of the military commander who is responsible for the security and safety of his station should be retained during the current build-up of the Armed Forces.

Our recommendation that, despite the termination of the present war, the operation and management of such plantations remain under the jurisdiction of the Armed Forces was based solely on the security considerations involved. Such plantations are located within the physical boundaries of the military station by reason of the practical need to use certain areas that are fertile or can be cultivated; and the fact that the military plants may be located at various points within the whole station.

Accordingly, the personnel operating the farm necessarily come on to practically every part of the military station and therefore could, without further action by the military commander, such as the installation of guards or fences to segregate the operating personnel, necessarily have access to the entire military installation.

Accordingly, it is considered that, from a security standpoint, the continuation of the use of military personnel from the station would provide for better control of admission to, and conduct of, such persons on the military installation and lessen the likelihood of any threat to the security of the station.

Mr. FORRESTER. Does that complete your statement?

Commander COOMBS. Yes, sir.

Mr. FORRESTER. Evidently you have won your case. Who is your next witness, Mr. Burrus?

Mr. BURRUS. The next item is section 1 (a) (1) which is on page 12. This item authorizes the Secretary of the Navy to acquire and operate certain buildings and facilities in connection with the procurement of construction items, and the act is effective only until the termination of the present war.

It is thought that the retention would be necessary due to the expansion that the Navy building program is going through at the present time.

It also provides a legislative basis for the acquisition and operation of facilities of a classified nature, which makes the usual specific project authorization inappropriate.

Mr. FORRESTER. You are still talking about item 42 on pageMr. BURRUS. That is right, at the top of page 12.

STATEMENT OF LAWRENCE E. CHERMAK, COUNSEL TO THE
COMPTROLLER, DEPARTMENT OF THE NAVY

Item 1 (a) (1), title 50 U. S. C.

Section 1201. Acquisition and operation of buildings and facilities by Secretary of Navy.

Whenever the Secretary of the Navy finds it impossible to make contracts or obtain facilities in the procurement or construction of items authorized in connection with the prosecution of war he is hereby authorized to provide, out of appropriations available to the Navy Department for such purposes, the necessary buildings, facilities, utilities, and appurtenances thereto on Government-owned land or elsewhere, and to provide for their operation, either by means of Government personnel or otherwise. (Dec. 17, 1942, ch. 739, section 1, 56 Stat. 1053, Aug. 7, 1946, ch. 770, section 1 (32), 60 Stat. 868.)

Mr. CHERMAK. As a part of the procurement process, the Department of the Navy is required by the nature of the military products it. procures to supplement the American manufacturing plant and industrial equipment which provides its military needs. To the extent to which existing tools, equipment, facilities and floor space can be shifted to meet the expanding production of military items, this is done.

Existing machinery, equipment and facilities are put to work on jobs which are foreign to their original design and purpose. This is done to the extent to which it is economically and technologically feasible. Yet a point is reached where the full product or part of its manufacturing processes cannot be tied into existing facilities or into new facilities which could be employed for products other than these unique military items. It is then that the military departments, as a part of their procurement process, must furnish to the contractor a part of the tools of production.

Although the authority to furnish such facilities is implied in the authorization given to procure the particular military items, specific authority was given by the act of December 17, 1942, cited in section 1 (a) (1) of House Joint Resolution 386, to the Secretary of the Navy to provide and operate such facilities, whenever he―

finds it impossible to make contracts or obtain facilities in the procurement or construction of items authorized in connection with the prosecution of war.

The definition of the items requiring such facilities are those required in the prosecution of war. No particular war is designated and this language is construed as applying to all the military items presently being procured for defense purposes by the Department of the Navy.

By Executive Order 9262, which continues in effect until the termination of title I of the First War Powers Act, 1941, the authority vested in the Secretary of the Army by the act of July 2, 1940, cited in section 1 (a) (7) of House Joint Resolution 386, was extended to the Secretary of the Navy. This authority is broader than that contained in the act of December 17, 1942, and makes even more explicit the implied authority found in the procurement powers of the Secretary of the Navy.

House Joint Resolution 386 continues in effect the provisions of this statute as authority for the Secretary of the Army for making contracts for Army facilities. Although not absolutely necessary for the Secretary of the Navy, the explicitness of the statute make its

application to the Department of the Navy most desirable. Definition of authority by the legislative branch, if feasible, always makes for greater clarity and ease of operation at executive levels.

The statutory authority found in the above-cited acts would cover the facilities authorized in the proposed appropriations contained in the budget for the Department of the Navy for the fiscal year 1953. Under the head "Facilities" the Secretary of the Navy is authorized-and incidentally, these various heads here are appropriation heads in the proposed 1953 budget-to transfer $100,000,000 for the acquisition, construction, and installation of production facilities and equipment from any appropriations available to the Department of the Navy during the fiscal year 1953 for procurement of equipment for installation or use in private plants.

The appropriations in which such moneys are being made available are "Construction of aircraft and related procurement"; "Aircraft and facilities"; "Ships and facilities"; "Ordnance and facilities"; "Construction of ships"; "Ordnance for new construction"; "Shipbuilding and conversion"; and "Ordnance for shipbuilding.

In addition, the appropriation "Construction of aircraft" contains authority for the expansion of public plants and not to exceed $100,000,000 for expansion of private plants. In the case of the appropriation "Research," authority is given to construct buildings to house special devices. The appropriation "Public works" is being handled separately and is related to the specific authority contained in the authorizing public works acts.

The authority granted by the retention of the act of December 17, 1942, would be helpful in giving a better definition to the authority to acquire and operate facilities of a classified nature which could not be specifically authorized in the public works authorization acts. Since some of these facilities may not be related to the procurement function, the authority would not be implied from such procurement function.

In light of the above, it will be highly desirable that the statutory authority contained in the act of December 17, 1942, be retained and that consideration be given to permitting the Navy to have the authority being extended to the Army under section 1 (a) (7) of House Joint Resolution 386.

Mr. BRICKFIELD. Mr. Witness, does this $100,000,000 authorization for appropriations pertain only to the acquisition and construction and installation of new facilities?

Mr. CHERMAK. I have two $100,000,000 items. There is one in the head "Facilities" and there is one in the head "Construction of aircraft." In both instances they apply to the acquisition and construction of new facilities.

Mr. BRICKFIELD. What are the appropriations earmarked for maintaining the present plants and production facilities and also for the appropriation for construction of aircraft?

Mr. CHERMAK. Actually these facilities will be utilized by the contractor for which the construction is being made. In the use of the facilities, the maintenance would be absorbed in the cost of such use, so that there is no appropriation as such for the maintenance of these particular production facilities.

As an example, if a plant is constructed, say a test facility for jet engines, when the facility is constructed the very testing of the jet engines becomes a part of the maintenance of the facility made. Mr. BRICKFIELD. I am reading from page 2 about the tenth line. It says, "Under the head 'Facilities' the Secretary of the Navy is authorized to transfer $100,000,000 for the acquisition, construction, and installation Nowhere do I read maintenance. Mr. CHERMAK. No. I say that maintenance is not a part of the appropriation; it is part of the cost of the use of the facility. Whoever uses the facility maintains the facility. If in the use of the facility I am producing planes, then it becomes part of the cost of the production of the planes.

* * * 99

Mr. BRICKFIELD. This $100,000,000, as I read it, has nothing to do, then, with maintenance or use.

Mr. CHERMAK. That is right.

Mr. BRICKFIELD. That is just for acquiring new buildings, new installations.

Mr. CHERMAK. That is right, to physicially set it up for use. The user of the facility would be the person to whom a supply contract would be given to produce.

Mr. BRICKFIELD. Under this appropriation for the construction of aircraft, there is authority for the expansion of public plants, and it does not give the figure there—

Mr. CHERMAK. No; there is no figure given for the expansion of public plants; but there is a ceiling set up in regard to the expansion of private plants. That ceiling is $100,000,000.

Mr. BRICKFIELD. That is private finance and that is not to exceed $100,000,000?

Mr. CHERMAK. That is right.

Mr. BRICKFIELD. And what is the ceiling as to the expansion for public plants?—and I wish you would distinguish public plants from private plants, especially where the Secretary of the Navy has taken over any of these plants.

Mr. CHERMAK. In the case of private plants, the facility expansion is primarily in the expansion of equipment; or maybe perhaps test cells or items that are unique to the manufacture of the military item that have no carry-over into private production, where the manufacturer himself could not use it by any conceivable means for the private product he produces.

Therefore he is reluctant to establish such a facility. It may be a small building; it may not even be a building. It just may be certain types of machinery that are unique to the production of the military item. In that case we put that into the private plant.

Mr. BRICKFIELD. To digress for a moment, just while we are on that point, sir, what happens to these new installations, say machinery, when the user is finished with them? Does the Navy still retain ownership, or do they?

Mr. CHERMAK. In the case of all facilities, title remains in the Navy.

Mr. BRICKFIELD. To be returned?

Mr. CHERMAK. To be returned, or to be purchased by the manufacturer if he sees a need for it and the compensation warrants selling it to him. I mean, an item may be embedded in concrete, and if it is returned to the Navy, that might destroy its usefulness.