(The information requested follows:) Unobligated balances, military construction, Army 1. Major construction. (a) To complete projects for which construction has been awarded. 2. Minor construction. These funds have been committed for approved minor construction projects and other projects are awaiting the fiscal year 1964 appropriations for approval. 3. Planning.. These funds were all obligated during the first quarter, fiscal year 1964 and additional funds have been transferred from construction, temporarily, to continue planning until fiscal year 1964 appropriations become available; $96,000 of this advance was obligated by Sept. 30, 1963. These temporary transfers must be restored to construction when fiscal year 1964 planning funds are appropriated. 4. Supporting activities. (a) Access roads. (b) Family housing support These funds are committed for certified access-road projects and to complete off-site utilities and supervision of the few Capehart projects still under construction. (761,000) (569,000) Total unobligated.. 102, 956, 000 83,964,000 Senator STENNIS. Also, I want a tabulation covering the military construction contracts awarded without formal advertising during the 12-month period from July 1, 1962, to June 30, 1963. Major General SHULER. We can furnish that. I can tell you it is almost 98 percent advertised formally. (The information requested follows:) The following military construction, Army, contracts were awarded between July 1, 1962, and June 30, 1963, on other than advertised competitive basis: Senator STENNIS. That is very good. What effect does the gold-flow program have on the implementation of the fiscal year 1963 construction program? We had that up last year. Major General SHULER. I would like to reply to that now, if I may. Senator STENNIS. Very good. BALANCE-OF-PAYMENTS SITUATION Major General SHULER. In June of 1962 the Secretary of Defense prohibited the commitment of any funds on new construction projects overseas while the three services conducted extensive studies with the objective of determining how we could reduce the foreign exchange expenditure. This action was necessitated, of course, by the critical balance-of-payments situation. In order to reduce our costs entering into the international balance of payments, we are utilizing revised contracting procedures. These procedures include, but are not limited to, the use of U.S. contractors in lieu of foreign national contractors, the use of U.S. prefabricated structures, U.S. materials instead of local materials, the use of U.S. transportation; that is, instead of foreign-flag ships; and returning our procurement to the United States in any way possible rather than procuring in the local country. The cost of the original oversea fiscal 1963 Army construction program utilizing the normal contracting procedures was estimated to be $59.3 million with a gold outflow possibility of $45.7 million. The latter figure is the one we set about to try to reduce. Through the deferral of certain projects and the maximum use of the revised contracting procedures that I have already described, the international balance-of-payment costs to the fiscal year 1963 MCA program were reduced from $45.7 to $22.6 million. The increase in overall costs resulting from the use of revised contracting procedures was only eight-tenths of a million dollars. Projects in the amount of $4.3 million were deferred to fiscal year 1964, and projects in the amount of $9.4 million were deferred to future years; that would be after fiscal year 1964. In comparison with the original oversea fiscal 1963 MCA program of $59.3 million, which I said had an international balance of payment of possibly $45.7 million, the fiscal year 1964 MCA oversea program is estimated at $29 million with an international balance-of-payments cost of $14.5 million. REDUCTION OF GOLD OUTFLOW Now, this we have already massaged, so to speak, sir, to get out all of the gold outflow we can, so we have here a $29 million program in 1964 and a gold outflow of only $14.5 million. It would have been much, much higher if we had not resorted to these revised procedures. Of course, our objective in the fiscal year 1965 program is to hold the gold outflow down as much as we can possibly do. In some instances efforts to reduce outflow of gold require expenditures of construction funds over and above the original estimated costs in order to realize these gold-outflow savings. As an example, controlled-humidity storage facilities for prepositioned equipment for 10 support units in Europe are planned to be constructed under provisions of section 103, Public Law 87-554, in order to maintain a required combat-readiness condition. Once the project is completed and the equipment is relocated in the new facilities, maintenance personnel requirements will be reduced considerably, and an airfield in France can then be released. It is estimated these two actions will result in an annual gold-flow savings of approximately $1 million. In summation, we are taking all necessary actions short of the loss of our operationally required facilities in order to reduce the outflow of gold. This is confidential information I have given and ask the committee to treat it so. Senator STENNIS. Is not this whole area? Major General SHULER. It is. May I say something off the record? Senator STENNIS. Yes. (Discussion off the record.) Major General SHULER. Mr. Chairman, this is all right and is cleared. I have not given the part that is confidential. Senator STENNIS. That is very good. Now, are there any projects in the bill which are questionable because of negotiation because of foreign-base rights? Major General SHULER. No, sir, there are not. We have all of the problems licked on all of the items in this bill. Senator STENNIS. That is a general question but you mean licked them by formal documents being included? Major General SHULER. We have no item, sir, in any place I am aware where we need any documents now. AIR-TRAINING PROGRAM Senator STENNIS. What about your air-training program now? You are going up considerably on that, of course. I just asked you a question here about your increase in air training. Do you have some ready figures showing how much you have in here for construction along that line? Major General SHULER. Yes, sir. I can tell the chairman: on everything having to do with our air training, that we have approximately $14.5 million in this total bill. I understood that the committee would like to talk about Army Aviation, the Air Assault Division and airborne training in general, and I brought with me General Rowny of the Office of Assistant Chief of Staff for Force Development and also General Tolson, head of Army Aviation. If the committee would desire to question these gentlemen I would be pleased to bring them to the table. Senator STENNIS. Well, somewhere in the hearing we want to know about an estimate, not only for what is in the bill, the actual figures in the bill, but something for what the future spread is going to be and a picture of what the total bill is going to be 7 years in advance. Major General SHULER. Can we furnish that, sir, for the record? I am sure we could work something up on that. (The information requested follows:) Estimated cost of Army aviation facilities included in the 5-year force structure and financial program, dated Aug. 15, 1963 [In thousands of dollars] Fiscal year Fiscal year Fiscal year Fiscal year Fiscal year Fiscal year Fiscal year 1965 1966 1967 1968 Senator STENNIS. How many programs do you have in operation now for training, pilot training and operation crews? How many in other types of training, small plane training? I have always thought you gentlemen could get that done by the Air Force, a lot of it anyway. You don't agree with that, I know. General TOLSON. We have two basic programs, our rotary-wing training and fixed-wing training. Our primary rotary-wing training is conducted as a civilian contract at Fort Wolters, Tex. This is generally speaking; and then, of course, we also have an aviation center at Fort Rucker, Ala.; two installations at this time. The man in rotary-wing training, after he receives primary, goes to Fort Rucker, where he finishes his basic and advanced training. That is rotary wing. In the fixed wing, he has primary at Fort Rucker and then he has his advanced and instrument training there under military control at Fort Rucker. They are the two main courses and places that we currently have. CHANGE IN CONSTRUCTION PROGRAM I think you are familiar with the plan, I have had people over to your office earlier, familiar with the plan of ours for opening a third base, which is required by our increase in requirements for aviator pilots. Also it is caused by a change in our program of construction basically in the rotary-wing field where, with this change in our program, our helicopter pilots will also get instrument training, just as we have always given our fixed-wing pilots. So with this expansion in pilots, we have already received from DOD authority for increased training of pilots for this year and for next year to the point where we will turn out roughly 1,480 pilots compared with an output of around 900 that we are currently operating on and have been on our old base. By this change, we are planning to inaugurate our primary fixed wing and instrument training for fixed wing at the third base. It has been announced that the place will be Olathe, Kans., which is currently a naval air station in operation. Then we will have all of the helicopter instrument training at Fort Rucker as well as the advanced helicopter training and all of our advanced fixed-wing training at Fort Rucker. We will move out the primary fixed wing and the instrument phase following that to the third base. CONTRACT TRAINING Senator STENNIS. How far have you gone on your contract training? General TOLSON. On contract training, right now all of our primary fixed wing is conducted by contract at Fort Rucker, and all of the primary rotary wing is accomplished by civilian contract at Fort Wolters. Under our new change proposal that we have approval on, in addition to those two, all of our instrument fixed-wing training will be conducted by contract and all of our rotary-wing instrument training will be by civilian contract. Senator STENNIS. How does the Air Force conduct their rotarywing training? General TOLSON. All of their training, as far as I know, is currently under military control. Senator STENNIS. No longer under civilian? General TOLSON. No, sir; some years ago they used to have primary under civilian contract, but to the best of my knowledge, 2 or 3 years ago, that was changed and all of their instruction currently is given under military control. Senator STENNIS. All right, we will come back to these when we get to the items but that gives a general idea of it now. Thank you very much. All right. General Shuler, continue. First, Senator, we have come to line items here. Do you have any questions you would like to ask? Senator PROXMIRE. NO. Senator STENNIS. The Chair is very glad to note in the record that we have with us now Senator Proxmire, as a member of the subcommittee, who is successor to the late Senator Kefauver, who was a member of this subcommittee. |