for training at sea and departed as scheduled, but stopped enroute for approximately four hours while the Neosho sequence was filmed. The ship's fund received $200.

The USS Spinax (SS 489) was utilized for filming of a scene wherein sailors raising the colors on the morning of December 7th were strafed and dived overboard but returned to complete the job. The Spinax remained in port and no other services were required and no donations made.

The amounts of the various donations to ship welfare and recreation funds, it appears, were suggested by the Navy project officer. Of course these payments, though representing a financial outlay from the film. company, are not payments to the Government as such but serve to augment the ship welfare and recreational funds, which are comprised principally of receipts from ship stores activities.

A root difficulty in reimbursement is the premise underlying Government assistance that the film serves a mutual interest, that of the Government as well as the company. Given the DOD policy to assistand the Navy eagerness to cooperate a great variety of services was performed which benefited the film project but presumably also the Government. For example, countless hours were spent by Government historians and researchers checking the accuracy of the script, for Government cooperation was conditioned upon an acceptable script. Government officials, in response to film company requests, ran down elusive items of equipment or dress, or individuals desired for a particular military scene, to lend authenticity and realism to the film.

Once cooperation was extended, innumerable communications and operations became necessary, not only to accommodate the requirements of the film project but to insure conformance with Navy regulations and practices, where safety or liability or other factors might be involved. Thus the use of ammunition and explosives in film scenes, or the transporting of a piece of equipment from one place to another, required approval of the appropriate authorities and supervision in many cases by military personnel.

As for the military personnel who participated directly in the filming of "Tora! Tora! Tora!", these were in a leave status, though certainly there had to be some accommodation to permit all these individuals to be on leave at the same time. This is particularly true in the case of naval aviators who were qualified to fly the simulated Japanese Zeros from the deck of the Yorktown. It appears that these men received leave over a span of several consecutive days in order that they might be able to fly the aircraft. For their part, the military personnel who participate in such filming generally do not find it objectionable since they are paid the going rate for extras or, in the case of pilots, appropriate skilled wages, for their time, without risking in any way their career employment.

Several instances of uncompensated service by the Government were justified in terms of training value to the Government. Thus six fiberglass mockups of P-40 fighter aircraft beyonging to the film company were transported by Navy helicopter from Ford Island to Wheeler Air Force Base, both locations within Hawaii. This was authorized as a training mission because of the close approximation in size and weight of the mockup to an aerial target drone (BQM-34A) the Navy planned to buy. This training haul was recommended as a way to

evaluate flight characteristics and to test quick-disconnect and stabilizing devices. It was conducted on a "no interference with normal operations" basis, with the company assuming full liability for any loss or damage to material or equipment.

The identification of training value, it is obvious, affords great latitude to the military service in extending uncompensated assistance. In filming "The Green Berets", the GAO reported, UH-1 helicopters were flown for 85 hours of flying time, and troops and various equipments made available without charge under the justification of Army training benefits. In the "Tora" film, apparently the carrier Yorktown was made available without reimbursement except for meals of company people aboard and paint used in exterior painting of certain ship areas. The GAO, we understand, will report that $8000 worth of fuel was consumed by the Yorktown during the filming, but no reimbursement was sought by the Navy, presumably because the filming was compatible with training schedules.

Apart from training values, the rationale of DOD reimbursements in such matters is recovery of out-of-pocket expenses when the military service has to deviate from schedule to accommodate the filming, or for services directly related to the making of the motion picture. Thus, in making available the tug Hitchiti and several other vessels for filming the scene in which the World War II destroyer Ward is sunk, the cost of fuel for the diversion was assessed, not the hourly or daily cost of operating the ships.

The rationale, reflected in DOD Instruction 5410.15, is that the ships are crewed and maintained and incur costs to the Government regardless of the accommodation to the film company. If the rationale of out-of-pocket costs for temporary diversion is accepted, the only question is whether all of the significant out-of-pocket costs (with deductions for legitimate training) were identified and billed. If the rationale is not accepted, then some concept of total allocated costs is implied, and the question becomes one of arriving at a suitable concept and identifying applicable costs. BOB Circular A-25 approaches the concept of total allocated costs, but DOD Instruction 5410.15, approaches that of out-of-pocket expenses.

From our discussions with GAO staff, it appears that the GAO report will identify out-of-pocket costs for some ammunition items which were not assessed, as well as fuel charges of $8,000 while the Yorktown was at sea for filming scenes. At the same time, the GAO report may question the costing approach on the assumption that a concept of allocated total cost is applicable. The latter method would yield more than $100,000 in additional charges.

Although from an accounting point of view, allocated costs may be easier to derive than out-of-pocket costs, and the returns to the Government are higher, other difficulties are presented. If, for example, the total allocated cost of a carrier is established at $40,000 a day, as mentioned on the Reasoner-Wallace TV program, to charge the film company on that basis means that theoretically all the resources of the carrier are available and under the control of the company for the time. they use it. On the other hand, the crews below deck may be engaged in prescribed training, do not participate in the filming scenes, and draw their Navy pay whether in port or at sea. To use this method entails charging the cost of a carrier's 1500-man complement even where the

ship does not maneuver, and the delays in docking may be only one or two hours to accommodate filming. Furthermore, as noted above, putting out to sea for filming purposes can be readily adjusted to, and made a part of, training exercises which the ship must perform anyway.

COMPETITION WITH COMMERCIAL SERVICES

The general principle stated in the DOD instructions that competition with private industry will be avoided was qualified in practice by considerations of cost, convenience, timeliness, realism, safety and other factors. The complexities attending on a decision whether to use private or Government services were illustrated in the transportation of company-controlled planes from San Diego to Honolulu. Twentieth Century-Fox approached the Navy through the film project officer, Commander Stafford, in November 1968 on the question of carrying 33 "Tora" aircraft to Hawaii in December. The film company initially had made arrangements with a commercial carrier, the Dillingham Corp. of Honolulu, which was under contract for barging services in the film project. Dillingham was reluctant or unwilling to transfer the aircraft. It pointed out that the barges would have to be modified and the aircraft disassembled, and Dillingham already was heavily committed to Twentieth Century-Fox for ship towing and construction in the Hawaii area. Dillingham also was said to be concerned that disassembly of the aircraft would make it impossible to guarantee the future flight safety of the aircraft, and this point evidently struck a sensitive chord in the Navy since Navy pilots (on leave status) were to fly the aircraft in the film sequences.

Commander Stafford learned that the carrier Yorktown was "going light"-without its normal complement of aircraft-from San Diego to Hawaii for Apollo recovery operations, and the Naval Air Command in the Pacific was disposed to cooperate since shipment via the Yorktown rather than commercially would give the Navy complete control of the transit and reduce the possibility of damage to the aircraft. The Chief of Naval Operations approved the sealift in the latter part of November 1968.

This development, incidentally, illustrates the occasional lack of good communications and the differing views of responsibility for decisions between the Navy and Public Affairs on matters of mutual interest. Whereas the CNO was taking responsibility for approving the sealift within the Navy chain of command and communications, Public Affairs apparently did not get wind of the matter until it received a weekly status report from Commander Stafford dated November 15, 1968, the day of CNO approval. After consulting with the DOD General Counsel and the Assistant Secretary of Defense for Installations and Logistics, Public Affairs decided to "concur" in the aircraft haul, subject to three conditions: (1) No interference with Yorktown operations; (2) advance evidence in writing by Twentieth Century-Fox that no commercial carriers were available; and (3) reimbursement to the Navy by the company at the current MSTS rate for shipping. The company treasurer for Twentieth Century-Fox accepted the conditions in a letter to Public Affairs of November 29. He promised that there would be no interference with normal operation of the Yorktown in the shipment, transport, and removal of the aircraft and

stated that "presently no commercial carrier [is] available to transport the aircraft in the desired manner in order to arrive at Hawaii on or before December 15, 1968."

This was represented as a case in which the interests of the film company, the Navy, and industry were mutually served by carrier transport of the aircraft. It was timely, convenient, and safer from the standpoint of future flight operations to haul the aircraft without disassembly on the Yorktown. No commercial company reportedly wanted the job or was able to deliver in the required manner or time frame. In this connection, the Matson line as well as Dillingham was contacted by Twentieth Century-Fox and, as we understand it, neither company could make the delivery by filming time in December 1968. It may be also that in Matson's case the charges for this service (reportedly $150,000) were a dissuading factor to Twentieth CenturyFox. On the return trip, when time, convenience, and safety were not pressing issues, the film company had Dillingham barge the planes to the mainland.

Two points are at issue here: The extended delay in the billing (about 6 months) and the company's questioning of the amount of the Navy bill. On the first point, the implication has been drawn in some quarters, but we see no evidence to support it, that the Navy tendered a bill for the aircraft haul only because of the unfavorable publicity attending the incident. A better explanation for the delay in billing is the uncertainty as to the method of determining the proper tariff and the fact that the responsibility for this decision fell between several Navy components.

It was stipulated by Public Affairs, as a condition of DOD approval for the carrier transportation of the aircraft, that the charges would be based on the MSTS tariff. Since the MSTS is not in the business of transporting assembled aircraft, there did not appear to be a tariff on this particular cargo. The question then became one of determining how many aircraft were hauled and what their size and weight was, to arrive at a measurement ton (40 cubic feet) figure as the basis for tariff rates. Complicating the situation was the fact that a Navy manual specified that commercial rates should be charged in such instances, and therefore it became necessary to get an idea of the commercial charges.

The Navy Office of Information, having learned that Twentieth Century-Fox had not been billed for this service, recommended to the Naval Supply Systems Command that billing action be taken. This was done in a memorandum of April 7, 1969, which pointed out that since a comparative commercial rate had to be identified for cost assessment purposes, Twentieth Century-Fox could supply a statement of charges from Dillingham. It was the understanding of the Office of Information that 32 aircraft had been hauled, although the figure of 30 was mentioned in other documents. The actual number was 33.

The Naval Supply Systems Command directed a speed letter on April 15 to the Naval Air Station at North Island, San Diego asking for weight and cube data on 32 aircraft. A memorandum of April 24 from the Commander of the Naval Air Force, U.S. Pacific Fleet, to the Naval Supply Systems Command stated that 30 aircraft had been shipped at a weight of 5600 pounds each and a cubic footage of 13,078. At the DOD level, Public Affairs requested Twentieth Century-Fox to

supply a copy of the quote from Dillingham. The reply came in a letter of May 16 from the Washington representative of Twentieth CenturyFox.

The Naval Supply Systems Command, through Captain G. C. Nelson, deputy commander for transportation, wrote to Twentieth Century-Fox by letter dated June 12, 1969 requesting reimbursement of the $134,376.45 for the ocean shipping and attendant services provided by the Department of the Navy in the transportation of 30 aircraft on the Yorktown from San Diego to Hawaii. The letter pointed out that the MSTS tariff rate was a condition of the haul and that this came to $12.30 per measurement ton free-in-and-out. The free-in-and-out principle means that the cargo sponsor must independently arrange and pay for the physical loading at origin and the discharge at destination. In this case it meant that a loading charge of $1.40 per measurement ton would be added to the shipping rate of $12.30 per measurement ton, making it $13.70 per measurement ton, for a total 9808.5 tons or $134,376.45.

Stanley Hough, the executive production manager for Twentieth Century-Fox, replied to Captain Nelson by letter of June 26 pointing out that Dillingham charged only $82,180.77 for returning 29 aircraft, plus $14,588 for installing aircraft wheel chocks and a door on the barge, plus $11,600 for crating the aircraft wings, for a total of $108.338.77. Mr. Hough said that it seemed equitable to him that since the Yorktown did not have to remove the wings of the planes or install chocks, the figure of $82,180.77 could be used as a comparison against the Navy billing of $134,376.45. He requested a review of the Navy charge looking toward a reduction.

Following the review and an adjustment to reflect that 33, not 30, aircraft were shipped, the Navy requested reimbursement in the amount of $153,944.16. In the Navy view, the return shipment by Dillingham occupied considerably less cubic volume than the Yorktown haul because wings and other pertinent equipage had been removed on the back haul. Furthermore, the Navy noted that only 25 of the dismantled aircraft had been returned by Dillingham barge and these were not subject to billing at commercial tariff rates, but on a charter basis. since the movement was part of a charter arrangement for multiple barge movements. Three aircraft could not fit on the barge and were returned on commercial bills of lading, and the rate for these three billed by Dillingham was $25.30 per measurement ton of 40 cubic feet. Added to this was an additional charge of $1.80 per measurement ton for wharfage, or a total unit cost of $27.10 for 40 cubic feet. Considering that the charges for Yorktown carriage were $13.70 for 40 cubic feet, this seemed to the Navy to be much more equitable to the company than if Twentieth Century-Fox had to pay Dillingham at the full commercial rate of $27.10.

We understand that the upward revision of the bill for the transport of aircraft was a result of the GAO investigation, which disclosed that additional aircraft were shipped. The Navy did not seem to have an accurate count originally for billing purposes.

A parallel situation which favored use of Government as against commercial equipment developed in the case of helicopters for filming scenes of carrier operations. Twentieth Century-Fox requested the use of Navy helicopters as camera platforms for filming these sequences