(The information requested follows:) Cost per flying hour (H-13 and H-23)-Army National Guard Technician labor only Maintenance, fiscal year 1959: H-13 4.53 hours per 1 hour of flight at $3.77 per hour__ H-23 7.46 hours per 1 hour of flight at $3.77 per hour--Maintenance, fiscal year 1960: H-13 5.22 hours per 1 hour of flight, at $4.50 per hour---- H-13 8.2 hours per 1 hour of flight, at $5.30 per hour_--- Above costs do not include: Cost per fying hour $17.09 28.12 23.49 42.35 43. 46 68.90 (1) Cost of repair parts furnished by Army Transportation Corps at no cost to Army National Guard. (2) Cost of facilities provided for maintenance. Increase in costs attributable to: (1) Increase in hourly rate for Army National Guard technicians. (2) Age of equipment on hand and age of equipment issued to Army National Guard increases maintenance requirement per flying hours. Mr. FORD. We all know from experience that the maintenance cost in helicopters is very substantial; far greater than your fixed wing aircraft. What has been your experience? Have you had a gradually reducing cost of maintenance in helicopters or has it gone the other way? General MCGOWAN. It has gone in the way you indicated. It is actually costing less to maintain these observation type helicopters today than it did 5 or 6 years ago-improved types of assemblies and experience with it. Certain assemblies are kept in operation for longer total hours of operation before overhaul as experience has warranted. Mr. FORD. Can you show when you produce these figures for your own maintenance costs what the trend has been for the last 3 or 4 years? General McGoWAN. We will do that for the record, sir. CREDIT FOR EXCESS PROPERTY Mr. FORD. Your warehouse inventory figures are extremely interesting and your program of disposition of excess property is very impressive. Was any of this material in what we know as the stock fund? Colonel METCALFE. No, sir. These are stockages within the State. Some were purchased from a stock fund but these are not within a stock fund at this time. Mr. FORD. The guard bought some of this material from the stock fund but it was held outside of the stock fund after the procurement? Colonel METCALFE. Yes, sir. Mr. FORD. In your figures you indicate that $86.3 million of this excess property was turned over for utilization by other Department of Army agencies. Did they give you any credit for this? How was the transaction handled? Colonel METCALFE. In part credit is given, sir, based on the requirement for the particular item and their capability of reuse. The amount of credit is established by the depot, depending upon the demand for the item and its reusability. Mr. FORD. How much credit did the National Guard get from the Department of the Army for this $86.3 million which was transferred? Colonel METCALFE. May we furnish that for the record, sir? Mr. FORD. Not only give the figure, but show how the transaction was handled, and how, if any benefit the guard got from this exchange or donation. (The information is as follows:) CREDIT FOR PROPERTY TRANSFERRED Approximately 16 percent of that used by Department of the Army agencies was transferred directly and no sales return credits are involved. The remaining 84 percent is returns to depots. Ninety-four percent of returns to depots is organizational equipment (nonstock fund) for which no credit is received. Of the remaining 6 percent, representing stock funded items returned to depots, it is estimated not more than 25 percent of stock fund returns are creditable. $86.3 million times 16 percent equals $13.8 million direct transfers in DA. $86.3 million minus $13.8 million equals $72.5 million returned to depots. $72.5 million times 94 percent equals $68.2 million of organizational equipment returned to depots. $72.5 million minus $68.2 million equals $4.3 million of stock fund items returned to depots. $4.3 million times 25 percent equals $1.1 million in sales return credits. Appropriation reimbursements-$0.196 million. Such sales returns credits as are received by States are used to purchase, from the stock fund, authorized TOE or TA items stocked by the depot issuing the credit. When received as credit for the fair value of repair parts or a repairable major assembly, such as a tank engine, the credit may be applied against the cost of a replacement assembly or other stock fund items. Appropriation reimbursements are credited to the O. & M., ARNG appropriation and are available for funding program distribution subject to apportionment request approval by OSD and Bureau of the Budget. General MCGOWAN. I would like to say for the record, the Army was very generous with us in crediting to our account the value of many of these items. We felt we were very generously treated and I think our figures will indicate that. Mr. FORD. They treated you generously in the dollars, but how did that benefit the guard? That is what I am interested in. You turned over to them X number of millions of dollars worth of equipment. How generously in kind, or in what way were you benefited? General McGOWAN. In drawing down against that credit for spare parts and assemblies for the equipment we retained, in that fashion. Mr. FORD. When you made available this material, which was excess to your needs, did you get something back in kind or was it just a donation? General McGOWAN. A dollar credit against which we could draw. Mr. FORD. Were you able to use this dollar credit to buy other equipment which was needed over and above what you justified in the budget for procurement? Colonel METCALFE. Yes, sir. May I say for the record, sir, that much of this equipment is in TOE items which we do not get credit for. To the extent that sales credits were given to the States, we were able to reuse that money for additional purchases from the stock fund and we will furnish the amounts involved for that year and that we were able to use for additional purposes. Mr. FORD. Certainly the guard could not justify keeping this if you did not need them. Colonel METCALFE. For example, sir, if we turned in a tank which was furnished us on free issue, we would not receive a credit for that. If we turn in a transmission, we get credit based on the condition of that transmission, what cost is required to put it in usable shape by rebuild. We get a partial credit on the transmission. We would then be able to use that amount of money toward additional purchases from the depot. Mr. FORD. What happened when you disposed of this excess property to other Federal and State agencies? How was that handled? What benefit, if any, did the guard get from those transactions? Colonel METCALFE. None on this. Mr. FORD. What happened when the guard turned this excess property over to property disposal officer? Who is he in the first place? General McGowAN. An Army disposal officer at an Active Army installation where it is disposed of as unneeded by the armed services by sale. Mr. FORD. The $20.6 million was a redistribution of equipment within the National Guard itself? Colonel METCALFE. Yes, sir. Mr. FORD. This is for fiscal year 1961? Colonel METCALFE. 1960. Mr. FORD. These figures are for fiscal year 1960. Are you carrying out the same program in general in fiscal year 1961? Colonel METCALFE. Yes, sir. Mr. FORD. Do you have any estimate of what it will be like, or what the figures will be in fiscal year 1961 in the various categories? Colonel METCALFE. I should not like to estimate now, Mr. Ford. STATUS OF EQUIPMENT Mr. FORD. The chart on page 7 points out very helpfully the status of your equipment. This is as of what fiscal year? General McGoWAN. This is a current chart, Mr. Ford, and the bars include as we state in the testimony also the obsolete and substitute items. Mr. FORD. How would this chart which you say is a current one compare with what you might have submitted a year ago? General MCGOWAN. Very little change. It shows no improvement in signal items. What would not be reflected there is that under Ordnance we have exchanged practically all of the M-47 tanks for the newer M-48 tank. Mr. FORD. This is just a percentage General MCGOWAN (continuing). Of the total number of items; for instance, so many hundred thousand rifles plus so many hundreds of tanks plus so many other individual items of Ordnance equipment would show all in the Ordnance bar by total number. There are many ways to present this. We could put it on a dollar value. For instance, certainly it is more significant to us to receive several hundred new tanks than the fact that all of our M-1 rifles are allegedly obsolete. It is still a good rifle but it is not the current standard item. For that reason, we did not break the bar down to show which are presently authorized and which are obsolete or substitute items because we did not think it would be reflecting an absolutely honest situation. Mr. FORD. Under the fiscal year 1962 budget, what will be the change, if any, in this chart? General MCGOWAN. It will depend on whether procurement generally for the Army is stepped up to meet the progress made in developing new items. We have been hoping for this for several years. Mr. FORD. This chart is going to be in the record, is it? General McGOWAN. Yes, sir. (The chart may be found on p. 346.) Mr. FORD. That is all, Mr. Chairman. Mr. MAHON. Mr. Weaver? ARMY ADVISER TRAVEL COST Mr. WEAVER. General McGowan, on page 1 of your statement, item F, "Travel for Active Army advisers," how much money is involved on that item? General McGOWAN. The amount is $801,000. Mr. WEAVER. If I might ask you, under item E, "R. & U.," what does that stand for? General McGowan. Repair and utilities. STOCK INVENTORY OBJECTIVE Mr. WEAVER. On page 3 of your statement, the last sentence, where you refer to inventory management, your sentence reads, "The current $15.1 million stock objective is approaching validity." I know what the word "validity" means but would you comment a little further on that? General McGOWAN. Yes, sir. We feel that that level represents the real stockage needs of the State. Two things have happened since we put in financial inventory accounting: The number of items carried in stock in each State has been reduced sharply and the amounts of the items retained have been reduced. Two or three demands a year are required to keep an item in stock. Our property and fiscal officers in the States have worked very well under this system to reduce the number of items stocked and the numbers within each item stockage that they do keep. PERSONNEL BENEFITS Mr. WEAVER. On page 3 of the justification, item 12, "Personnel benefits," from the actual amount expended in 1960 and comparing that to the 1961 estimate, the 1962 estimate is nearly doubled. Could you explain the reason for that? Colonel METCALF. Yes, sir. The increase in 1962 is to provide for the contribution to State retirement systems for technicians. Mr. WEAVER. And that was not required before? General McGOWAN. That had not hitherto been authorized. TRAVEL COSTS Mr. WEAVER. Under item 21, on that same justification sheet, for "Travel and transportation of persons," the estimate for 1962 is less than it was for 1961 which is good but is slightly more than the actual amount in 1960. What would you say that could be attributed to? That is on page 3 of the justification, "Travel and transportation of persons.' In other words, everything has been going up and there has been more travel in all branches of the service and I wondered why your request is less than what you requested in 1961 and to what could you attribute that? General DUFF. We will furnish that for the record. (The information is as follows:) Mr. WEAVER. If you would supply any further information for the record, that will be all right. DISPOSITION OF EXCESS PROPERTY On page 5, in the disposition of excess property, you state that— 20.6 million was distributed laterally between the States and utilized within the Army National Guard. |