In each of these projects the Navy considered that the work performed increased the original scope of the facility. For this reason they were judged to require new authorization and funds through the military construction program. Mr. SIKES. In view of the extreme tightness of O. & M. money, it would appear that the Navy would make a fight for projects in which there is dubious distinction, such as these, in the construction program rather than to take the money out of a tight O. & M. budget. Would you comment on that? Admiral SYLVESTER. Mr. Chairman, we find each of these budgets about equally tight. Mr. FLOOD. Well, that takes care of that, Mr. Chairman. BUDGET FORMULATION Mr. SIKES. How do you determine the overall amount of O. & M. money that is going to be available to the Navy? How is that allocated and by whom? Who decides the proper level of O. & M. money for the Navy? Admiral SYLVESTER. The budget planning cycle is a long one, sir, and it essentially commences by the establishment of program objectives and the basic Naval Establishment plan, which are approved. Mr. SIKES. In which does the Navy have greater flexibility, in establishment of the requirement for Ŏ. & M. or the establishment of its requirement for construction? Admiral SYLVESTER. They are done by essentially the same people within the Navy, sir. After the programs are formulated, that is, the initial budget programs by the managing activities, they are reviewed by the senior officers in the Office of the Chief of Naval Operations, who then provide the results of their review to the Secretary of the Navy. He, with his Under Secretary and the Assistant Secretaries and the Chief of Naval Operations, go over the whole budget, the entire set of appropriations, each considered against the other, sir, and we endeavor in doing that to formulate the best, well-rounded series of programs that can be financed in the budget. In other words, the personnel, the O. & M., the procurement of all types, the military construction, are all balanced against each other. CONSTRUCTION PROGRAMS FINANCED OUT OF 0. & M. FUNDS Mr. SIKES. I believe the committee will want a full continuity to show how these four projects found their way into the O. & M. program, the source of the authorization for placing them in the O. & M. program, the source of the work orders, and the listing of the progress reports. We would like to know in detail how each of these four projects came to be listed in O. & M. and the derivation of funds as opposed to placing them in construction projects. Will you attend to that and provide it for the record? Admiral SYLVESTER. Yes, we shall provide it, sir. (The information follows:) NAVY REPAIR PROJECTS DISCUSSED IN GAO REPORT B-133316 Dated The four Navy repair projects in question are: (1) Airfield pavements at Naval Air Station, Memphis, Tenn. (2) Steam distribution system at Naval Underwater Ordnance Station, Newport, R.I. (3) Ammunition loading pier at Naval Ammunition Depot, Concord, Calif. (4) Bachelor officer quarters at Naval Submarine Base, New London, Conn. The first three of these repair projects are under the administrative direction of the Bureau of Naval Weapons, and the fourth is under the administrative cognizance of the Bureau of Ships. These projects are discussed separately, by Bureau, as follows: BUREAU OF NAVAL WEAPONS The administrative system utilized for repair projects involves the annual preparation by each field activity, for budget development and execution purposes, of those projects which competent military and civilian engineers deem necessary preparation by each field activity for budget development and execution purposes, for effective operations and proper safeguarding of Government property. These projects are assigned a command priority and are submitted to the Bureau for review and funding. Bureau review by qualified technical engineering and administrative personnel leads to the selection, out of a total of some 80-odd million dollars worth of projects, of that portion which can be funded within budgetary dollar considerations for the given year. These selected projects are then listed by line item and included in the annual budget submission to the Congress. By reason of the very nature of repair projects, controls cannot, and are not, maintained on a line item basis. A repair project which was needed but not critical at the time of budgeting might quickly thereafter become critical by reason of wind, rain, erosion, failure, use, or other reason and require immediate funding, in which event this project is substituted for a less urgent one on the list. After funds have been appropriated and apportioned, all of the repair projects to be accomplished are re-reviewed, the estimates are finalized, and an allocation of funds is made to the commanding officer of the shore station involved. This allocation generally takes the form of a single allotment providing total funds for all projects at the station, which while separately itemized with estimated costs, are not subject to rigid dollar control on the item basis. The projects are accomplished generally through contracts let by the civil engineering offices under the cognizance of the Bureau of Yards and Docks. Two types of reports are submitted by the station to the Bureau regarding these projects-monthly allotment reports on the status of funding and monthly progress reports on the projects are submitted to the technical engineering office. In addition, these projects are subject to review by Bureau program officers, the Bureau Inspector General and his staff and by Navy auditors under the cognizance of the Navy Comptroller. The specific projects in question, which are discussed hereinafter, were handled in accordance with the procedures described. REPAIR AIRFIELD PAVEMENTS, NAVAL AIR STATION, MEMPHIS, TENN. A. Background and scope of project This project, project identification No. 2-56, was submitted on the April 1956 repair and maintenance list as station priority No. 2. The purpose of the project was to restore the concrete pavement in the aircraft operations area to its intended effectiveness. The then existing concrete pavment in the aircraft operations area had deteriorated rapidly within the previous 6 months to the point where approximately 10 percent required immediate replacement. The pavement was so badly broken in many places that handfuls of loose aggregate could be picked up and daily sweeping of the apron was required. Considerable damage to both jet aircraft engines and propeller-type aircraft was being experienced. Small pieces of loosened aggregate had been sucked into intakes of jet aircraft or had been blasted into propeller blades. Three jet engines had just required replacement from this cause and 35 percent of all jet engines passing routine inspections showed damage from this source. The project consisted of the placement of 196,000 square yards of 11-inch overlay concrete with 1-inch asphalt leveling course on existing concrete pavement 6 inches thick with edge thickness of 8 inches; replacement of 28,000 square yards of existing concrete sections with 11-inch concrete; corresponding utility adjustments; 24,000 tons of asphaltic conrete for 1- and 2-inch overlay on taxiways and parking area; and replacement of 3,000 square yards of 6-inch concrete. The nature of this project and operational considerations were such that the project could be accomplished in four increments. Accordingly, it was submitted in four increments roughly approximating $500,000 each. B. Method of accomplishment This project was accomplished in increments, by contract, over a 2-year period in accordance with the following funding schedule: The first increment was accomplished for $51,000 less than the estimated cost and allotment decreases in this amount were processed. The bid prices for the second and third increments exceeded the estimates and allotment adjustments in the amounts of $27,300 and $75,392, respectively, were processed. RENOVATION/REPLACEMENT OF STEAM DISTRIBUTION SYSTEM, U.S. NAVAL UNDERWATER ORDNANCE STATION, NEWPORT, R.I. A. Background and scope of project A major part of the steam distribution system in the Coddington Cove area was composed of Ric-Wil preinsulated pipe buried in the ground. Due to wartime construction and speed when this system was installed and to the inherent characteristics of the insulation, many of the joints in the waterproof jacket were not completely watertight, thus allowing ground water to saturate the insulation and corrode the pipe. Leakage had become very extensive throughout the system since December 1950, and, because the pipe was buried, the leaks were not discovered until they became serious, To correct this continuing deficiency and avoid further high and increasing maintenance and heating costs, this project required accomplishment at the earliest possible date. This project involved the replacement of 7,545 feet of steam lines, in sizes varying from 1 inch to 10 inches, 9,300 feet of gravity and forced condensate lines, from 1 inch to 4 inches in size, and the construction of 6,925 feet of waterproof concrete conduit, average size 2 to 3 feet, with removable covers. Some lines were not replaced in their existing location, but were rerouted for more economical construction. B. Method of accomplishment Other higher priority projects prevented the funding of this project in the military construction program. The steam system, meanwhile, reached a condition where action toward replacement became mandatory to prevent a complete breakdown. The project was essentially a replacement of steam lines and condensate lines and was not a new requirement. It consisted solely of repairs and replacement and thus was considered properly fundable by O. & M. funds. It accordingly was determined that the station would be divided into three separate sections, each operable independently to provide for accomplishment in increments as the availability of O. & M. repair funds would permit. The method of accomplishment was to provide permanent repair of the most economical type, including the rerouting of portions of the lines to achieve this end. Funds have been allocated as follows: Fiscal year 1958 1st increment-- Fiscal year 1959 2d increment_-_. $198, 853 139, 664 Total. 338, 517 There are no plans for accomplishing the third increment at the present time. REHABILITATION OF PIER 2, U.S. NAVAL MAGAZINE, PORT CHICAGO, CONCORD, CALIF. A. Background and scope of project A requirement existed for the rehabilitation of this wooden two-berth ships pier. This project involved replacement of deteriorated wood structural members to place the pier in a safe operating condition. The principal task of the station is the transshipment of ammunition. Any reduction in station shipping potential by inability to use pier 2 would have been directly reflected in a corresponding reduction in capability for transshipping munitions for the Navy, Army, and the Air Force. Construction of pier 2 was started in the summer of 1944 to replace facilities destroyed by an explosion. The war situation in the Pacific area at that time required that the prime requisite for replacement of the destroyed pier was speed of construction. The requirement for a usable complete loading pier at the earliest possible date completely overshadowed all other considerations. Hence, any available material was used, and normal construction and engineering practices became secondary to the need for speed. Treated piling was available and used, but the remainder of the pier structure was composed of any material that could be found. Much of this timber was untreated, and due to physical conditions at the site, evidenced the advanced rotting and deterioration which is a characteristic of its use for this purpose. It was evident that the necessity for speed resulted in many construction practices which would not be permitted under normal circumstances. Taken all together, the end result of the deterioration of untreated members and hasty construction was a pier which did not have the structural rigidity and load bearing capacity of members to permit continued safe and unlimited operations. This project provided for the replacement of deteriorated structural members of a two-berth shiploading facility for ammunition. The pier was 1,150 feet long and 70 feet wide, with approach trestles for truck and railroad traffic. The project involved the rehabilitation of the pier in its present location, making maximum use of existing wooden bearing piles and replacing the wood superstructure and the pile caps with treated timber. B. Method of accomplishment This project was determined to be a repairs only project and hence fundable within the limits of O. & M. funds. Because of the high cost in relation to the annual availability of major repair funds, the project was undertaken incrementally and financed as follows: In March 1956 the repair and rehabilitation of bachelor officers quarters D was included in the fiscal year 1957 facilities program of the Submarine Base, New London, to be funded from operation and maintenance appropriations. Funds for architectural and engineering costs were allocated by the Bureau of Ships in June 1956. Due to a shortage of operation and maintenance funds, the project was not accomplished in 1956 or 1957. The data concerning the work and proposed funding was furnished the Appropriations Committees of the Congress in support of requests for operation and maintenance funds for fiscal year 1958. The decision to fund this project in the O. & M. appropriation was made in the Bureau of Ships, based on descriptions of the work furnished by the Submarine Base, New London. This was a rehabilitation of an existing structure to permit continued use for the purpose for which originally constructed. No additions to the structure, or increase in the floor space were involved. It had originally been determined to be properly chargeable to O. & M. funds in fiscal year 1958, and while the SUBBASE subsequently considered it for funding under the "Military construction, Navy," appropriation, no recommendation for such funding was ever received in, or endorsed by, the Bureau of Ships. Source of funds With the acceleration of the training program in support of the expansion of nuclear submarine capability, the urgency of the need for the rehabilitation increased, and the project was resubmitted in March 1958 with a much higher priority. In April 1958, operation and maintenance funds had become available by reason of other projects at New London having been accomplished at reduced cost or possibly canceled for reasons not connected with this requirement. Accordingly, the Bureau of Ships authorized the accomplishment of the work to the extent of the funds available. The Bureau of Ships later provided, from an accumulation of savings in projects at other activities, some funds to cover cost increases on the BOQ project, but the net increase cannot be attributed to a specific list of decreases. Accomplishment of work The work was performed under a contract issued and administered by the area public works office, New York. No progress reports were required. Physical description Bachelor officers quarters at New London is a 1918 brick exterior structure which had deteriorated through shrinkage, settling of the wood frame interior, and the resultant cracking of plaster walls until it was considered virtually uninhabitable. Although the exterior walls were in good condition, the floors were deformed and had settled, the utilities were in poor condition from age and use, and the ancient lavatories, water closets, and showers were grouped into a single community facility for each floor. The adjoining galley was unsanitary and inefficient. The building was rehabilitated by replacement of the interior floors and partitions in an arrangement complyng with the then current criteria for bachelor officers quarters accommodations as adapted for the particular needs of this base. The roof and utilities were also replaced. Baggage and trunk storage was provided on a high shelf in each closet. The galley was repaired and some 1918 equipment was replaced, and the interior of the galley and bachelor officers quarters were painted. The community sanitary facilities were replaced with a lavatory and water closet for each bedroom and a shower for each two bedrooms. Upon completion of the rehabilitation the bachelor officers quarters was considered to meet the minimum criteria set by Department of Defense instruction. The following table lists the basic features of the building before and after the rehabilitation: Mr. SIKES. I would like to have a description of the facilities before the work was done, according to the original authorization, a description of the facilities after the work was completed, with a listing of any additions or major changes. Mr. FORD. Mr. Chairman. Mr. FORD. Would there be any similar projects, to those that have been selected by GAO, in the fiscal year 1962 budget? |