Mr. DRYDEN. In that connection we noticed in the morning papers that the George Washington University Hospital is being built at an increased cost. The figures we obtained this morning, compared with ours, indicate that the cubic-foot cost of that hospital was about $1.20. The cost we had for the Providence, R. I., hospital was $1.14. The contract for the George Washington University Hospital was awarded, I understand, about 6 months ago, I think these prices reflect conditions in the current market.

Mr. MAHON. Have you contacted a Government agency like the War Department?

Mr. DRYDEN. We find that these figures represent what they are encountering for the same type of construction.

Mr. MAHON. The Army engineers tell us that they did not have enough money in some instances for planning, and that the planning was poorly done, and that that was why they find themselves confronted with these costs.

One explanation that has been given is that the Veterans' Administration in prior years has done a bad planning job. Is that so?

Mr. DRYDEN. No, there were very adequate and complete plans for the jobs in question.

General BRADLEY. When we made our estimate about a year ago it was made at 67 cents.

Mr. MAHON. It seems to me that this is a most astounding increase. How much money is involved in this construction program, approximately, about which we are talking?

General BRADLEY. The total over-all appropriated and in the 1947 bill-the total amount is about $420,000,000.

Mr. MAHON. That is the money available for hospital construction? General BRADLEY. Yes. With the other appropriation bill already passed.

Mr. MAHON. That has gone to the President. We are talking about the $400,000,000 worth of construction.

General BRADLEY. Yes.

Mr. MAHON. That means there will be an additional cost to the Government perhaps of $200,000,000. That is the figure we are talking about.

Mr. MARTIN. We do not expect it to be that high.

General BRADLEY. The 1947 estimates were based on 75 cents per cubic foot. These particular figures were based on 67 cents. There will not be quite so much difference there.

Mr. MAHON. Is it inaccurate to say there will be a 50-percent increase over the estimate and appropriate costs of about $400,000,000? Mr. MARTIN. We hope it will not run 50 percent.

Mr. MAHON. In the construction program if we decided to build a hospital at some point, and the extent of the increase in cost had nothing to do with the need, why can you not say the increased costs are tremendous at this point, so we will go to a place where the cost is more or less in line with the estimates? It seems to me that would be common sense.

General BRADLEY. These were based on priority of the needs in that place at that time. They were set up by this particular order before I came onto the job.

Mr. MAHON. I think, Mr. Chairman, it will be helpful if we had the best estimate we could get as to how much more money may be

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required by way of a deficiency to complete the $400,000,000 program. Can you give us such an estimate?

Mr. MARTIN. The program is being reviewed in order to arrive at that figure.

We hope as time goes on and when we see the effect of this limitation order, that larger contractors who heretofore have been hesitant about entering the market on Federal construction, until they knew what the supply situation would be, will show more interest in Government work.

We think that under this limitation order there will be a minimum of large construction projects, except for housing, and we think we will get better bids. In our opinion the total deficit under this large program may not be as high as indicated by the two bids on hand right now. There are many factors involved that affect current prices. I think that everything that Mr. O'Neal has said is true.

Mr. MAHON. If you want to take a figure out of the air, the cost, according to our best judgment, would be about what?

Mr. MARTIN. Our guess would be about $100,000,000.

We think we can avoid a number of supplementals if we followed a procedure which would set up at one time, that is at the time of the regular appropriation hearings, the whole fiscal situation that confronts the Veterans' Administration.

The

In other words, this is the picture as you have it today. amount of money the Veterans' Administration had on February 11 for new obligations was $294,000,000. There is pending in the 1947 bill $147,000,000, making about $441,000,000 for new obligations. That is more money than they could possibly spend in the next 12 months, and they know it. But we realize that the Veterans' Administration, on the basis of what they intend to build and the estimate they presented to you when they asked for the appropriation will require further supplemental appropriations. They are now faced with the problem of either canceling projects or delaying the program and carrying it out piece by piece and asking for supplemental appropriations.

We believe that during this emergency period the Veterans' Administration can present a complete picture every year, not only in new projects asked for, but also information as to the number of projects that are under contract and previously authorized with the revised costs on the basis of the current bids, together with a statement of the amount of money they have available for new obligations, and that would show up as a part of the annual estimate.

Mr. MAHON. It is your opinion, if you were asking now for additional appropriations to cover the complete cost, that you would have to ask for more money because of the present uncertainties, and that after you cut those costs, or they begin to recede, you will have better competition in the bidding?

Mr. MARTIN. That is our opinion, definitely. I do not know whether the Veterans' Administration goes along to the extent that they will get better bids, but from the information from other agencies, I think there is every reason to expect that after the market stabilizes and as the supply picture improves, we will get more competition for these hospitals.

Mr. MAHON. Is this $100,000,000 figure that we picked out of the air, estimated upon the immediate future, or is it on the basis of a long-distance program?

Mr. MARTIN. It is on the basis of a long-distance program as previously presented to Congress.

Mr. MAHON. As to your construction, Mr. Dryden, if Mr. O'Neal's idea should be adopted and the Government could work out a procedure for the contractor and he would know he could get this stuff and go ahead with the construction, your problem would be practically solved?

Mr. DRYDEN. We think it is essential to do that.

Mr. TABER. Mr. Martin, what is your relationship to his set-up? Are you in the Veterans' Administration?

Mr. MARTIN. No, sir; I am with the Bureau of the Budget, which is going to be pressed for action on numerous supplemental estimates under present procedure.

We think that the present procedure is one which is not conducive to the best administration of this emergency program.

Mr. CANNON. I will say to the committee that I invited the Bureau of the Budget to be here this morning, and Mr. Martin comes as a representative of the Bureau of the Budget at my request.

Mr. TABER. That is all right, but I wanted to get the picture so that I would know just what it was. I have known Mr. Martin for over 20 years.

I am wondering whether we could have this information. I do not know whether it should be in the record, but I would like a list of each of the projects you have passed upon, with the amuont in the first column. I would like the amount of the estimate that was involved in the submission to the Congress.

In the second column I would like the date on which bids were received, and in the third column I would like the amount of the bids that were received in order, that is, the low bid first.

Mr. MARTIN. We can give you that.

(The statement referred to may be found on pp. 83 et seq.)

Mr. TABER. I would like some other information, if I might have it, for the use of the committee, and I likewise do not know whether it should be in the record. There are other items that should be asked for, but these occur to me.

I would like them as of April 1, 1945, July 1, 1945, and presently. I think Mr. Martin would know where to get them.

I would like to have the prices of cement by the barrel. I would like to know the price of the type of brick you use by the thousand. I would also like to have the price of the routine type of hemlock, spruce, and pine by the thousand feet that you would use.

I would also like to have the wages of carpenters, mechanics, plumbers, roofers, and common labor, if you could give us those figures, giving us a table with three columns for those three different dates. Are you in charge of this program, Mr. Dryden?

Mr. DRYDEN. Yes, sir.

Mr. MARTIN. We will give you that information.

(The statement requested may be found on pp. 83 et seq.)

Mr. WIGGLESWORTH. General Bradley, I am a little bit alarmed about your testimony that we only get 14,900 beds from the Army and Navy to help out on this matter. When you were here 3 months ago you looked forward to having an excess of about 25,000 patients as of July 1 and I asked you at that time if you figured you can handle an excess load outside of veterans' hospitals. Your reply was "Yes,

if we do not have an extension of the NP cases; but I am not sure about that."

General Hawley added, "That is correct." This picture here this morning is alarming by comparison.

General BRADLEY. We had hoped to get 10,000 beds each from the Army and the Navy, but due to rapid demobilization and other causes, and prices also, they have not been able to furnish us those beds.

Mr. WIGGLESWORTH. So you are only getting 14,900 instead of 20,000?

General BRADLEY. I do not have the exact figures. It is between 7,000 and 8,000.

Mr. WIGGLESWORTH. As compared with 20,000 you expected? General BRADLEY. We had hoped to get 20,000 by the end of the summer. The Navy says they think they can furnish 9,000. We are expecting to get reports from the Army, but we have not received a final reply. But they do not think they can, because of rapid demobilization and also of the extent of closing down Army hospitals, that they can give us what they thought they could.

I am hoping with the Navy set-up of their permanent Medical Corps some time ago that they have secured doctors. The Army has not yet set up their permanent peacetime Medical Corps, and they do not have the complete Medical Corps for peacetime operations, and that is why, as I understand it, they will not be able to furnish what they thought they could by the end of September, and we will not be able to get what we expected from the Army by that time. Mr. WIGGLESWORTH. Do you expect a decrease in your load from now on, with spring coming on?

General BRADLEY. I doubt it, because most of these admissions. are for operations of various types that are not affected by the weather. (Discussion off the record.)

Mr. WIGGLESWORTH. Is there a limit of cost specified anywhere with respect to individual veterans' hospitals?

General BRADLEY. No.

Mr. WIGGLESWORTH. The only limit is what the Veterans' Administration face when they come before the Bureau of the Budget and the Appropriations Committees of Congress?

General BRADLEY. That is right.

Mr. MAHON. Please note this: We should have the approximate amount of hospital-construction contracts which have been made, let us say, during the last 12 months, and then we ought to know the sum by which the contracts that have been let during the last 12 months have exceeded the estimates of cost which were previously made by the Veterans' Administration.

Mr. CANNON. And also include the cost per cubic foot.

Mr. MAHON. Yes.

Can you tell us about the last 12 months in reference to that. matter?

Mr. DRYDEN. Yes, sir. We have, for instance, the cost at Reno of 81 cents.

Mr. MAHON. I am talking about the whole picture.

Mr. MARTIN. I think the Veterans' Administration or Bureau of the Budget can work that out.

Mr. TABER. When you get those figures for me, with that table I asked for, be sure that the figures are comparable. That is, if you give the price of cement as of some particular place as of April 1, be

sure that it is the same place that you will refer to as of July 1 and presently. Likewise, will you do the same thing in connection with the wage prices? If you give one figure from one place, and do not go to some other place and give the wage figure for the same time or some other time, but give it as of the same time and place.

Mr. CANNON. You have come before us today, General Bradley, to get the proper approval of this committee to go ahead and make these contracts regardless of the amount by which they exceed the estimated costs. In other words, to add inflationary figures, and this committee is not in a position to authorize you to go ahead and let contracts at these exorbitant increases.

My suggestion and my request is that in accordance with the suggestion of the gentleman from Kentucky (Mr. O'Neal) that you ask for further bids, and I will ask the gentleman from Kentucky to indicate the form in which these bids should be requested.

Mr. O'NEAL. I would like to know what could be done under the cost-plus-a-fixed-fee basis, and whether you think that possibly it might reduce the cost.

General BRADLEY. Yes, sir.

(Discussion off the record.)

General BRADLEY. I would like to know just what you would want. We want to do what you want us to do in this matter because we are vitally interested in it, and we want to get some guidance because. with $420,000,000 we can build a certain number of beds. We cannot build all we want to build or ought to build. We would like to know whether with this amount of money we can go ahead and build as many as we can out of the money available and come back for what is necessary.

Mr. CANNON. We are not authorized to give you that green light, General Bradley. We would have to take a resolution into the House to increase the building cost to that extent.

We are asking you now to come up at your earliest opportunity and give us your request based upon the result of your studies so we can take action at the earliest date that can be arranged.

General BRADLEY. You want us to submit that in accordance with

Mr. O'NEAL. We want a figure under which you can do more effective and more economical work, and give that to us.

Mr. MARTIN. If General Bradley feels that it is necessary for the Veterans' Administration to have priority of materials, you would want that?

Mr. CANNON. In any event, we would have to get a resolution through both Houses, no matter what we do, and the quicker you can let us have all this material the quicker we can get the resolution through.

(The information requested during the hearing is as follows:)

COMPARATIVE DATA ON RECENT VETERANS' ADMINISTRATION HOSPITAL CONSTRUCTION COST EXPERIENCE AND ON LABOR AND MATERIAL COSTS AS REQUESTED BY MEMBERS OF THE COMMITTEE ON APPROPRIATIONS

HOSPITAL CONSTRUCTION

In accordance with requests of Mr. Taber and Mr. Mahon, the attached tab A has been prepared by the Veterans' Administration showing the individual hospital construction projects on which awards have been made or bids received and rejected during the period February 1945 to March 1946.