pletion date and the work seemed to string out longer than we thought it should. In the interest of getting this tremendous investment into service as soon as possible we did accept the ship with a higher percentage of unfinished work than we had done before

Mr. ROONEY. You accepted it?

Admiral SCHULTZ. We accepted it conditionally, yes, sir.

Mr. ROONEY. What are these derelictions and changes in plans going to cost the taxpayer in the final setup?

Admiral SCHULTZ. Well, I wouldn't necessarily define the changes in plans as derelictions, sir.

Mr. ROONEY. You mentioned certain changes in plans and you also mentioned derelictions on the part of the Wolfson yard, if I understood you correctly.

Admiral SCHULTZ. Those things for which the contractor is responsible, he will pay for, sir. They will be backcharged to the contractor himself.

The changes in plans for the building of the ship, for which the Government is responsible, and these were changes which we went into knowingly, will be paid for by the Government. As I recall, the change order for the installation of the missile battery was negotiated at something like $21 million.

CONSTRUCTION SITE FOR NEW CARRIER

Mr. ROONEY. I don't think so much of the Bureau of Ships any more. After what was done with regard to the last new carrier in denying it to the Brooklyn Navy Yard, I give up.

Admiral SCHULTZ. In what respect sir?

Mr. ROONEY. In permitting some of us to understand that if we got the money through the Congress for you that the new carrier was going to be built in the Brooklyn Navy Yard when as a matter of fact you had already made your plans to give it to a private yard. These are the facts, aren't they?

Admiral SCHULTZ. I do not know anything about that, sir.

Mr. ROONEY. You perhaps weren't there then, but I remember them. Admiral SCHULTZ. I think on the other hand though, sir, New York has been given considerable new construction work. Frankly, as a former shipyard commander, I would say that the employees of the New York Naval Shipyard and the yard itself is better for the kind of work that they have been given because the building of a

Mr. ROONEY. I have always taken the position over the years that I would rather have the same amount în general repair work for Brooklyn Navy Yard than I would in new construction. There is nothing new about this. I have found many people in Brooklyn who disagreed with me but we never had real troubles until the time of this last carrier. I don't think it was playing the game right to permit some of us to think that if we got the appropriation through for the new carrier-and there was quite some hassle over it, over a couple sessions of Congress-that we were going to get that carrier built in the New York yard, which is certainly the No. 1 carrier yard. While the admiral who preceded you was seated across the table telling us about it he had plans to send it to where? Newport News?

Admiral SCHULTZ. I think he had no plans to send it to any particular private yard.

Mr. ROONEY. Oh yes he did.

Admiral SCHULTZ. Three companies were invited to bid on it. Mr. ROONEY. I heard the facts out of the admiral's mouth some while back during a hearing.

Mr. THOMAS. Mr. Jensen, have you finished?

Mr. JENSEN. I have finished.

Mr. Bow. I have no questions, Mr. Chairman.

Mr. THOMAS. Mr. Jonas.

CURRENT FINANCING OF REPAIR OF CONSTELLATION

Mr. Jonas. From what fund are you carrying this construction now?

Admiral SCHULTZ. On the Constellation, sir.

Mr. JONAS. On the repair?

Admiral SCHULTZ. We are using unobligated money in the ship construction appropriation for this.

Mr. JONAS. In what appropriation?

Admiral SCHULTZ. Ship construction. The same appropriation. It is being temporarily diverted to this. This is money which is not yet obligated but which will be needed in the future to complete ships now under construction.

Mr. JONAS. And what you are asking for is that that be replaced? Admiral SCHULTZ. Yes, sir.

Admiral HIRSCH. In order that the ships from which the money was borrowed may be completed.

Mr. JONAS. I just asked you where you were getting the money you are using now to repair it.

What ships have you had to stop repairing in order to use that money? Give us a list of the ships.

Admiral SCHULTZ. I don't think we could tie it to any specific ship. Mr. JONAS. The comment was just made, when I asked you a question, you said you want to replace that money, you said in order to continue the repair of ships that had to be suspended, that the work had to be suspended on. What work has been suspended?

Admiral HIRSCH. We have not suspended any work. If I gave you that impression, it was certainly unintentional.

Mr. JONAS. Read that back. Maybe I misinterpreted what you said. Do you have that answer to my question?

The REPORTER (reading):

Mr. JONAS. From what fund are you carrying this construction now?
Admiral SCHULTZ. On the Constellation, sir.

Mr. JONAS. On the repair?

Admiral SCHULTZ. We are using unobligated money in the SCN appropriation for this.

Mr. JONAS. In what appropriation?

Admiral SCHULTZ. Ship construction. The same appropriation. It is being temporarily diverted to this. This is money which is not yet obligated but which will be needed in the future to complete ships now under construction.

Mr. JONAS. And what you are asking for is that that be replaced?
Admiral SCHULTZ. Yes, sir.

Admiral HIRSCH. In order that the ships from which the money was borrowed may be completed.

Mr. JONAS. I just asked you where you were getting the money you are using now for repairs?

What ships have you had to stop repairing in order to use that money? Give us a list of the ships.

Admiral SCHULTZ. I don't think we could tie it to any specific ship.

Mr. JONAS. I took it from that that you took money from other ships in order that the work may be completed.

Admiral SCHULTZ. It takes anywhere from 3 to 6 years to spend all of the money that is appropriated for construction of one ship. Mr. JONAS. I understand, sir.

The truth about the matter is you haven't suspended work on any ship repair projects.

Admiral SCHULTZ. No, sir.

Mr. JONAS. But the funds that you are using on this repair job would have been spent at some future date on some other program that you had in mind; is that right?

Admiral SCHULTZ. Yes, sir.

Mr. JONAS. You are not going to spend that money in 1962. Why can you not wait until your next regular bill for this replacement? Admiral SHULTZ. We will be carrying a deficiency forward, sir. I will ask Admiral Hirsch if he might answer that.

Admiral HIRSCH. We make a quarterly report to the Department of Defense and to Congress showing the status of funds for each of our ships in the shipbuilding program. It is our objective to keep this fund completely in balance ship by ship. If these borrowed funds are not replaced, we will have a deficiency of this amount in the funds required to finance the shipbuilding program.

Mr. JONAS. That would be a matter of bookkeeping. You would tell Congress that you had to spend the money that you had for 1963 in order to repair this ship.

Admiral HIRSCH. We want to give Congress an accurate picture of how we stand financially as well as to keep the shipbuilding program fully funded at all times, rather than to have a deficit.

Mr. JONAS. We are dealing with emergencies here. That is what this is, a deficiency. A supplemental request over and above regular appropriations and we want to be sure that we have to have this money appropriated in this bill instead of in the regular bill that you are now working on for 1963.

Admiral HIRSCH. A decision by the Defense Department was that, as a deficiency, it would be handled in this manner rather than included as a part of the current bill.

Mr. JONAS. I understand. Thank you, that is all.

CONTRACTS TO SHIPYARDS INADEQUATELY EQUIPPED TO HANDLE CONTRACTS

Mr. KIRWAN. Congressman Rooney asked you what the trouble was at the Philadelphia yards. You said it was because of the size of the construction job just what was the problem?

Admiral SCHULTZ. The magnitude of the management job of building a ship of this size is greater than any other single project the shipyard ever had. To build a ship of this size involves coordination of somewhere near 4,000 workmen on a single job toward a single end at one time. The biggest job that this company had handled previously, I would say, took in the neighborhood of 2,000 workmen on a single job at a single time.

Mr. KIRWAN. How did it come to create the trouble? What was wrong?

Admiral SCHULTZ. The shipyard expanded from 6,000 employees to I would guess some 13,000 employees in the course of construction of this ship and in this expansion the old-hand employees who would normally have been the mechanics on the job became the supervisors and to some extent I suppose inexperienced people were brought aboard and trained and perhaps there were some deficiencies in their training.

Mr. KIRWAN. Was that taken into consideration before you gave the contract?

Admiral SCHULTZ. Normally you would expect that a company that had been in the shipbuilding business some 50 years had handled such problems in the past

Mr. KIRWAN. Now the reason why I am asking those questions, the Navy gave a contract to build five submarines in the South and they discovered later the channel had to be deepened to get the ships out.

You wouldn't think the Navy would give that contract when it knew it couldn't get the submarine out.

Admiral SCHULTZ. This is the Ingalls yard in Pascagoula, Miss. I believe that the Army Engineers had agreed to

Mr. KIRWAN. They couldn't get ships out of there until the Engineers went down and dredged it.

If the yard wasn't equipped, why did they give it to that yard? Why did they not give it to a properly equipped yard?

Admiral SCHULTZ. I don't know the thinking behind this but a channel of 35 feet was guaranteed. I know the Ingalls Yard silts up periodically.

Mr. KIRWAN. The Army Engineers had to dredge it. We had to provide a special appropriation. It wasn't even budgeted. Mr. THOMAS. Thank you very much, gentlemen.

TUESDAY, AUGUST 8, 1961.

GENERAL SERVICES ADMINISTRATION

WITNESSES

AGENCYWIDE MATTERS

JOHN L. MOORE, ADMINISTRATOR

BERNARD L. BOUTIN, DEPUTY ADMINISTRATOR

PAUL M. HAINES, EXECUTIVE ASSISTANT

ROBERT T. GRIFFIN, ASSISTANT ADMINISTRATOR FOR CONGRESSIONAL AND PUBLIC AFFAIRS

WILLIAM P. TURPIN, COMPTROLLER

J. H. MACOMBER, JR., GENERAL COUNSEL

HOWARD GREENBERG, ASSISTANT COMPTROLLER, BUDGET

PERSONAL PROPERTY ITEMS

C. D. BEAN, COMMISSIONER, FEDERAL SUPPLY

J. W. FLATLEY, ASSISTANT COMMISSIONER, PROPERTY MANAGEMENT

FEDERAL TELECOMMUNICATIONS SYSTEM

ROBERT F. MUNDY, ACTING DIRECTOR, OFFICE OF TELECOMMUNICATIONS

JOHN SCOTT, ACTING ADMINISTRATIVE OFFICER, OFFICE OF TELECOMMUNICATIONS

REAL PROPERTY ITEMS

LAWSON B. KNOTT, JR., DEPUTY COMMISSIONER

L. L. HUNTER, ASSISTANT COMMISSIONER, DESIGN AND CON

STRUCTION

WILLIAM A. SCHMIDT, ASSISTANT COMMISSIONER, BUILDINGS MANAGEMENT

WARREN OLNEY III, DIRECTOR, ADMINISTRATIVE OFFICE OF THE U.S. COURTS

JOHN C. AIRHART, ASSISTANT DIRECTOR, MANAGEMENT

DR. OTIS R. FARLEY, VICE PRESIDENT, GREATER SOUTHEAST COMMUNITY HOSPITAL FOUNDATION, INC.

GEORGE T. STAFFORD, DIRECTOR

Mr. THOMAS. We have with us this morning our friends from the GSA. It is certainly nice to welcome all of you.

Mr. Moore, do you have a statement for us? Do you want to lead off with the testimony?

We have looked over your budget. You go all the way across the lot, do you not? I note that in House Document No. 210 you are requesting supplemental appropriations for several purposes totaling $12,050,000.

Mr. MOORE. Yes, sir.

GENERAL STATEMENT

Mr. MOORE. Mr. Chairman, members of the committee, I recognize that this is rather early in the year to appear before you to request additional funds for the fiscal year 1962 for the General Services Administration. However, recent developments make it essential that this be done.

Our supplemental requests for appropriation are summarized as follows:

Additional court facilities_.

Hospital facilities in District of Columbia....

Operating expenses, FSS__

Expenses, supply distribution...

Expenses, Federal telecommunications system--

Total--

$4,650, 000 3, 000, 000 1, 000, 000 2,500,000 900, 000

12, 050, 000

I would like to speak briefly to each of these items and then they can be explained in detail by members of my staff and the other gentlemen who are here to assist us.

The estimate for "Additional court facilities" is occasioned by recent legislation authorizing the appointment of 10 additional circuit and 63 district judges. The amount requested covers space rental, moving, space adjustments and related costs, alterations and extensions in buildings estimated to cost less than $200,000, and furnishings and equipment at all locations.