General AGEE. You are aware that the Air National Guard has been provided with six squadrons of C-97's, and they are programed for additional?

Mr. SIKES. Yes.

General SPICER. To show the availability of aircraft, of the approximately 600 KC-97's, tanker configuration, in the regular establishment, we are forecasting only about 150, not including command support, for use in the Guard. A few will be configured as tankers; the balance the preponderance-in the cargo version.

Mr. SIKES. Thank you very much.

If there is anything you want to add to any of these responses, I wish you would see that we get a picture of the future.

FUTURE OF MANNED BOMBERS

I was interested in the fact, in your statement, the manned bomber force is going to be important a long time. You went a number of years into the future. I happen to share that feeling.

How far in advance do you project this feeling that the manned bomber force is going to be a very important part of our defense system?

General AGEE. I think into the indefinite future.

Mr. SIKES. Beyond 1970?

General AGEE. Yes, sir.

Mr. SIKES. With current-type aircraft?

General AGEE. Well, I think the B-52 aircraft will surely be with us through the 1960's in any case, possibly longer than that, I do not know. The requirement for manned bombers goes beyond the lifespan of the B-52's.

MISSILE RELIABILITY

Mr. SIKES. I hear a great deal about the difficulty of maintaining enough operational missiles to do the required job in case of an emergency. In other words, these missiles are ticklish birds; they have to be petted and pampered and groomed and babied.

If anybody pushes the panic button and we have to get a lot of missiles underway, are we going to find most of them balky and not in a position to be fired, or do you think most of them are going to be ready to go?

General FRIEDMAN. We are certainly attempting to build that kind of reliability into the missiles.

Mr. SIKES. Do you have any misgivings about it? I know you are attempting to do it.

General FRIEDMAN. No, sir; I think the people who are responsible for this program have a great deal of confidence in it.

Personally, I can only rest on their technical judgment. They must "work" because that is the direction we are going. I know of no reason why they should not.

Mr. FLOOD. I think Mr. Sikes, who is an old Army man, is afraid of the experience the Army has had in every war, and the Navy has had in every war, and we are thinking of what happened to the 16-inch Navy shells that just did not perform. There are long, sad stories of mortar shells and long-range 16-inch shells, shells of all kinds that when the pistol went off and the Navy fired them and the

Army fired them they just did not have it. They deteriorated, and they were not good.

Mr. SIKES. That is exactly it. This is an extremely costly program. We are spending a lot of money for the construction of sites and a lot of money for the procurement of missiles and O. & M., and yet this is the most delicate weapon we have ever possessed.

Everything has to be exactly right, or it is not going.

We would be in one heck of a mess if they do not go.

Mr. WEAVER. With the exception of Vandenberg and Canaveral, every other missile complex, whether it is MINUTEMAN, ATLAS, or TITAN, will be from stands over which no firing will ever be made except in case of emergency; is that right?

General FRIEDMAN. I think, generally, you could say there would not be firings unless the shot were in anger.

Mr. WEAVER. Has the Air Force ever given any consideration to the placement of these stands in localities where you can have test firings like you do from Vandenberg and Canaveral?

We are only going to need these one time, I would assume.

General FRIEDMAN. Yes.

Mr. WEAVER. How do we really know everything is going to work? General FRIEDMAN. We do this through what we call confidence firings, and on a sampling basis we would hope to get a pretty good picture. We have to date the reliability you can attach to these. Being a field artilleryman of some time ago, and being well aware of

Mr. FLOOD. If that is in the day of 3-inch guns.

General FRIEDMAN. They were not given the day-to-day maintenance care that is performed on missiles-the instrumentation and the checks.

Mr. SIKES. I think you should examine my questions, and the questions of the other members of the committee on this subject rather carefully and provide any additional information you want to which will give us the factual picture, as much as possible for the record, because I think the public would like to be assured, if you can assure us, this picture is a good one.

ANNUAL MAINTENANCE COST PER MISSILE

Mr. FORD. Do you figure out, or make an estimate of the annual maintenance cost per launching site, or per missile?

General FRIEDMAN. As I indicated, we are estimating about $16 million of what we call operating costs. This would include the cost of the military personnel, the operation of the base, the replacement parts, the maintenance for a squadron.

Mr. FORD. Is that ATLAS, TITAN, and MINUTEMAN?

General FRIEDMAN. That was ATLAS in that particular instance. We are talking about 10 missiles per squadron, so it would average out about $1.6 million per missile in terms of annual operating costs. Mr. FORD. Per missile, or per launching site?

General FRIEDMAN. You have a 1 by 9 configuration and 10

missiles.

Mr. FORD. $1.6 million per a number?

General FRIEDMAN. Yes, sir.

Mr. FORD. That includes personnel, military and civilian?

General FRIEDMAN. Military and civilian. It includes replacement spares.

In other words, what you would call in the commercial world, operating type expenses as opposed to capital investment.

Mr. FLOOD. $1.6 million per what?

General FRIEDMAN. Per missile.

Mr. SIKES. Per missile for maintenance.

Mr. FORD. Is this for your Frances Warren?
General FRIEDMAN. Yes.

Mr. FORD. When you get into your other bases, will this probably hold true, or what will be the picture?

General FRIEDMAN. I would think it would vary by site, but as an average, I thing this a pretty fair estimate.

Mr. FORD. The same for TITAN &

General FRIEDMAN. Yes, sir; as I recall, our forecasts would be about the same.

POLICY ON CONTRACT MAINTENANCE, AIRCRAFT AND HOUSING

Mr. SIKES. I have an additional question.

I note the Air Force is moving more and more into the field of contract O. & M. You are more firmly wedded to this policy than either of the other services.

I wonder why you feel that this is more desirable than depot O. & M. operations, and whether you have tested out costs on it compared to the other services, and what causes you to feel this is the proper procedure. Give me an answer. I want this in detail. (The information to be supplied follows:)

CONTRACT VERSUS ORGANIC DEPOT MAINTENANCE

The Air Force policy is to use the organic work force to accomplish those work projects which will contribute most to a full tactical capability in the event of an emergency and provide an in-being maintenance readiness capability to support the combat forces. Industry is used to the extent necessary in the accomplishment of depot support for vital systems which exceed the organic work force capability. That work not critical to the development of in-being readiness support within the organic system is contracted to industry. Regardless of where the work is done, the Air Force must posses a technical capability to manage the complete program. In following this policy the amount of depot level maintenance being done by contract over the past 5 or 6 years has averaged about 45 percent annually

The Air Force policy is in complete accord with the Department of Defense policy 4151.1 which specifies the method in which work will be done as pertains to organic and contract resources.

Maintaining this industrial work force provides a ready resource of capability in the event of emergency. A good example is the severe structural problem experienced in the B-47 aircraft. Using the two industrial facilities working the B-47 at that time, and two organic facilities we were able to solve the problem with a minimum loss of strike potential. More recently industry participated in a similar type job on the B-52.

Experience shows that in the early stages of operational life, utilizing contractor capabilities and know-how greatly expedites the many engineering changes associated with any new weapon system.

The work done by industry has been entirely satisfactory. The Air Force does not, however, anticipate that the amount of work done by industry in the future will increase above the fiscal year 1962 level.

The Air Force has not exercised a comparison of its depot operating costs with that of the Army and Navy. However, studies have been made in an attempt to compare costs of Air Force organic versus contract. It was found that it was not feasible to make a valid comparison of the cost of doing main

tenance organically and the cost of doing it by contract, due to inadequacies and variances in cost accounting systems and lack of comparability between work projects. It is pointed out that this also is the finding of the surveys and investigations staff in a report made to the Committee on Appropriations, U.S. House of Representatives, dated February 1959.

It is the Air Force position that, by following our stated policy, maximum value is being realized from the programed dollars.

AIR FORCE POLICY ON THE USE OF CONTRACT MAINTENANCE FOR FAMILY HOUSING

1. Each individual base or installation commander determines the method of accomplishment of family housing maintenance at his facility (i.e., whether to use contract services, civil service, or military manpower, or a combination of them).

(a) The relative economy and effectiveness of performance of each method is evaluated based upon the following:

(1) Contract services are used, when not otherwise prohibited, when such use is in the best interest of the Air Force and the Nation and when one of the two following conditions apply:

(a) Such use improves effectiveness or economy.

(b) Adequate inservice skills are not available to perform the necessary work.

(2) The effectiveness of contract services is determined in terms of more work produced, better quality work or completion of work in less time than required through the use of inservice personnel. Required levels of effectiveness are established in making such determinations. Likewise, the existing adequacy of Air Force facilities and equipment are considered.

(3) Economy in the use of contract services is an important consideration in all cases. Economy considerations are waived only when the Air Force's lack of required skills, facilities, or equipment, and the urgency of accomplishing required work makes the use of contract services necessary. In determining economy, the following points apply:

(a) When the contractor furnishes only a work force and management overhead with the Air Force furnishing close supervision on materials, equipment, and facilities and when no skill deficiencies are involved, the economy of using contract services must be clearly demonstrated and recorded.

(b) Cost comparisons of contract versus inservice performance of work are tailored to the particular case or area involved and governed by directives and guidance applicable to that area. In general, however, cost comparisons include and itemize both direct and indirect costs (e.g., indirect personnel costs, facilities, equipment, and other capital costs).

(c) Economy considerations also include examination of the long-range costs pertaining to any particular course of action.

(b) When contract services are used to perform any portion of family housing maintenance, the following procedures apply:

(1) The base maintains a file explaining and justifying each decision to use contract services, whether or not the services are a continuation with the same contractor; this file contains as a minimum:

(a) An estimated total cost comparison of performing the job with contract services, civilian personnel, military personnel, or a combination of the last two methods.

(b) Detailed statements comparing the relative effectiveness of each of these methods.

(c) Conclusions, with supporting statements fully substantiating each conclusion.

(d) A copy of the communication notifying the major command of any surplus manpower authorizations resulting from the use of contract services (or an explanation as to why a surplus is not generated). (2) The base notifies its major command headquarters of any surplus manpower authorizations that result when contract services replace inservice performance of all or a portion of the family housing maintenance functions, and states the number of such surplus authorizations which must be retained to administer and supervise the contract. The major command headquarters, in turn, return to Headquarters USAF any such surplus manpower authorizations within 30 days after implementation of a contract, indicating the name of the

base or installation doing the contracting, and identify the work being done with contract services (e.g., family housing maintenance-painting).

(3) Technical specifications of a contract are carefully prepared to:

(a) Provide a contract that is readily controllable and manageable (insofar as practical, specifying measurable units of work).

(b) Produce costs that are reasonable and in line with similar services in commercial practice.

(c) Provide a contract that is sufficiently simple and specific to avoid paying for contingencies and uncertainties that do not occur.

(d) Provide a virtually self-contained contract document (i.e., with minimum reference to Air Force regulations and manuals).

(e) Exclude tasks or services that are the responsibility of housing occupants.

CONTRACT SERVICES NORMALLY PROVIDED

Contractual services normally will only be used to provide maintenance of measurable items of work (i.e., square feet floors and floor coverings, number of refrigerators, and other household appliances, number of windows, screens, doors, storm sash, number of furnaces, stoves, and other installed real property equipment, garbage and trash removal, etc). Conversely, the base civil engineer will normally, by extension of existing forces and equipment, accomplish unmeasurable work items such as street cleaning and repair, snow removal, utility distribution system repairs, grounds care, etc.

INSPECTION AND CERTIFICATION OF PERFORMANCE OF FAMILY HOUSING MAINTENANCE CONTRACTOR

The contracting officer normally designates the base civil engineer as his representative for the purpose of technical supervision and inspection and assisting the contracting officer in the administration of the contract. The contracting officer designates in the contract the officer responsible for inspection and supervision. In this respect decisions of the base civil engineer on details of performance, quality of materials, and work are accepted by the contracting officer when they are within the scope of the contract.

The base civil engineer, as technical representative of the contracting officer, is responsible for acquainting the contractor with required procedures for all operations necessary to accomplish the technical requirements of the contract. He evaluates the contractor's performance and accomplishments within the scope and terms of the contract. However, in no case will base civil engineers or their representatives require the contractor to perform work beyond, or which changes, that prescribed in the contract. In this respect, it is the responsibility of the contracting officer and the base civil engineer to properly instruct technical inspectors as to their authority and responsibility under the contract. Authority to designate personnel within the base civil engineer office to perform certain functions in connection with a contract carriers with it the requirement that such representatives be fully informed of their duties and that their efforts be supervised to the extent that no action on their part will commit the Government beyond the terms of the contract.

Mr. SIKES. Let me give you an illustration of what I am talking about.

(Off the record.)

MAINTENANCE OF B-47 AIRCRAFT

Mr. ANDREWS. On page 3 you stated:

In 1961 we spent an average of $15,776 on each B-47 for depot maintenance of the basic aircraft, and in 1962, we have programmed only $11,380 for the same requirement.

General FRIEDMAN. Yes, sir.

Mr. ANDREWs. What is the reason for the reduction?

I am glad to see a cost reduction, but I want to know that the B-47 is safe and ready to go.