Mr. WHITTAKER. Yes, sir, I will be glad to. This is obviously one of the major first steps in our look-see at the history of the C-5. Senator SYMINGTON. Thank you.

In addition, and no doubt in effort to ameliorate the problem of the C-5A, the Air Force testified before the Joint Economic Committee that a study had been made in Boston where 12 weapons systems were chosen at random, and the average increase as against the original quotation was 220 percent. Then the testimony referred to a recent study of the Brookings Institution, quite a reputable organization, and that study showed that the increase from the original quotation ranged in the contracts they studied from 300 to 700 percent.

My point in bringing this up is that, although the C-5A could well be an illustration of a bad situation, based on that testimony it might not be nearly as bad-if the testimony in defense of the contract by the Air Force was accurate than some of the other contracts now in process.

So I would hope when you make a report on this question of contracting, you also would bring into the discussion the figures I presented this morning, which in turn were given the Joint Economic Committee by a representative of the Air Force when the matter of the C-5A came up.

Mr. WHITTAKER. Yes, sir.

Senator SYMINGTON. Thank you, Mr. Chairman.
Chairman STENNIS. Thank you.

We have in the record, it came in the day before yesterday I believe, through the testimony of General Jeffrey, the Air Force figure now on these amounts. It runs over a billion dollars.

(The following information was subsequently furnished:)

Our projections of cost growth on the C-5A program are based on the Air Force October 1968 estimate and are reflected in our recent C-5A Review Report. The best measure of the cost growth is to compare program costs based on the contract target prices at the time of contract award in October 1965, with our latest cost estimate of October 1968. For comparison purposes, we have measured first, the cost growth in the basic contracts with Lockheed and General Electric and second, the cost growth for the program, including these basic contracts plus other program costs including initial spares.

The cost growth in the Lockheed contract for 115 C-5A aircraft is from $1,945 million (target price at the time of contract award in October 1965) to an estimated cost to the government of $3,169 million, an increase of 63%. Cost to the government on the General Electric contract for 564 engines through Run B (including 69 engines intended to be used as spares) is estimated to have grown from $632 million target price to $829 million, an increase of 31. The estimated cost growth to the government for both contracts is $1,421 million, a 55% increase. The program costs, which include in addition to the basic contract, 5 additional Run C'aircraft, other Air Force costs, and initial spares, are estimated to have increased from $3,369 million in October 1965 to $4,531 million. This cost growth of $1,462 million is about 44%.

The expressions of cost growth presented to the Joint Economic Committee, as referred to, were based on Air Force costs estimates made in October 1964, before award of the C-5A contracts. That program estimate was made in constant 1964 dollars and was based on a smaller aircraft. The comparison presented the Joint Economie Committee applied adjustments to the original estimate for inflation and the size change in the aircraft in an attempt to identify some of the reasons for the cost growth shown in our October 1968 estimates. I believe the October 1965 contract baseline provides a better baseline for measurement of cost growth.

Chairman STENNIS. I believe I ought to call on Senator Schweiker now. He has not had a chance.

Do you have a question?

Senator SCHWEIKER. No questions, Mr. Chairman.

Chairman STENNIS. Senator Dominick?

Senator DOMINICK. Mr. Chairman, I do not want to be specific, particularly in a situation which involves the Army more than it does the Air Force, but it is important in these decisions to determine who the contracting officer is, and on whom you can place ultimate responsibility.

I bring this up because I had quite a fight with the Army, in which one of our people developed a type of new weapon-it is classified at the moment and offered to do research and development on a certain number of these on a fixed cost, and the contracting officer gave it to a company which had never been engaged in this, at three times the price, at a cost plus fixed fee, and I was unable to get this reversed, because they said the contract had already been granted.

Now somebody down below-this is the point I am making—often becoms responsible for making these decisions, and somewhere it seems to me that we are going to have to find a chain of authority under which the first responsibility can be placed and some action can be taken in case the contracting officer as such has made what I conceive in this case to be a grievous error, and which I am sure has been in some other cases.

I want to make that statement for the record, Mr. Chairman. Chairman STENNIS. Yes, thank you, Senator. Senator Murphy. Senator MURPHY. I would like to make one observation in connection with what Senator Dominick has just said. I know of cases that he has touched on where in bidding for Government contract companies that have had no background, no history, no experience, have gone in and bid, hoping that having gotten the contract, then they will put together a shop to carry it out.

Now in this great complex society of ours, I do not think we are short on experienced hands in practically any field, and I would think that the Government would certainly be in much safer hands dealing with a contractor who has had experience, who has had a background of performance, not that in any way we should stifle new company startups. That is not what I mean, but I think that this should be a very careful consideration in letting these contracts.

As has been pointed out, I would think that this would tend not only to guarantee building quality and preformance but also would probably save the Government tremendous expenditures.

I know that I have only been on this committee a short time. I am absolutely appalled at the amount of profit that I have come across in this short time, in the rising costs, the unbelievable costs, the tremendous amounts of research and development that seems to be going on endlessly, and the balance between actual hardware and what went into research and development. There must be some control of this.

I know that many of the scientific people enjoy thinking up new things, and they are great at thinking, but maybe not as great in doing. I think that the balance has gotten out of hand. I think, Mr. Secretary, in the post which I sincerely hope you will assume very quickly, that this would be one of your prime considerations, because

from your experience in industry and in business, you well know that there must be firm controls on these matters, and this will end in a much, much better, and a more capable Defense Department, and a lot less expenditure of the taxpayers' money who are already bearing too much of the cost and I hope you will find ways to cure it, without tending to destroy this whole great system, this greatest of all systems. Mr. WHITTAKER. I might just comment, Senator, that I majored in English and business at college, and I have been living in high technology kinds of worlds for the last 25 years, so I know what you

say.

Senator MURPHY. I know you have had background experience so that you do have an understanding.

Chairman STENNIS. Gentlemen, I believe that completes the examination of Mr. Whittaker.

Do you wish to say anything further, sir?

Mr. WHITTAKER. No, thank you, sir.

Chairman STENNIS. We appreciate your being here. You do not have to leave but you may if you wish. We have other matters to take up.

Mr. Whittaker. Thank you, sir.

(The nomination of Mr. Whittaker to be an Assistant Secretary of the Air Force was subsequently approved by the committee in executive session and conformed by the Senate on May 5, 1969).

H.R. 9328

Chairman STENNIS, I am going to ask Secretary Hittle, Admiral Rickover, and Admiral Duncan to take their places at the table. I have a very brief statement about this bill, members of the committee.

The last item of business today will be the consideration of H.R 9328, which would authorized special pay for junior nuclear-qualified submarine officers who extend their period of active service. (H.R. 9328 follows:)

[91st Cong. 1st sess. H.R. 9328]

AN ACT To amend title 37, United States Code, to provide special pay to naval officers, qualified in submarines, who have the current technical qualification for duty in connection with supervision, operation, and maintenance of naval nuclear propulsion plants, who agree to remain in active submarine service for one period of four years beyond any other obligated active service, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That chapter 5 of title 37, United States Code, is amended

(1) by adding the following new section:

"§ 312. Special pay: nuclear-qualified submarine officers extending period of active service

"(a)" Under regulations to be prescribed by the Secretary of the Navy, an officer of the naval service who

"(1) is entitled to basic pay;

"(2) is currently designated 'qualified in submarines';

"(3) has the current technical qualification for duty in connection with supervision, operation, and maintenance of naval nuclear propulsion plants; "(4) has not completed ten years of commissioned service; and

"(5) executes a written agreement to remain in active submarine service for one period of four years in addition to any other period of obligated active service,

may, upon the acceptance by the Secretary or his designee of the written agreement, in addition to all other compensation to which he is entitled, be paid a sum of money not to exceed $3,750 for each year of the active-service agreement.

The Secretary of the Navy shall determine semiannually the necessity for continuance of the special pay and the rate of special pay per year for such activeservice agreements accepted within each six-month period. Upon acceptance of the agreement by the Secretary or his designee, the total amount payable shall become fixed and shall be paid in four equal yearly installments, commencing at the expiration of the initial obligated service; except, the Secretary or his designee may accept the active-service agreement not more than one year in advance of the expiration of the initial obligated active service and the amount may then be paid in five yearly installments, not to exceed $3,000 per year, commencing with the date of acceptance of the agreement.

"(b) No more than one agreement for each officer shall be accepted under this section.

"(c) Pursuant to regulations prescribed by the Secretary of the Navy and subject to such exceptions as may be prescribed in those regulations, refunds, on a pro rata basis, of sums paid pursuant to this section may be required if the officer having received the payment fails to complete the full period of four years of active submarine service which he agreed to serve.

"(d) Nothing in this section shall alter or modify the obligation of a regular officer to perform active service at the pleasure of the President. Completion of the additional period of four years' active submarine service under this section shall in no way obligate the President to accept a resignation submitted by a regular officer at the end of the four-year period.

"(e) The provisions of this section shall be effective only in the case of officers who, on or before June 30, 1973, execute the required written agreement to remain in active service."

(2) by inserting the following new item in the analysis:

"312. Special pay: nuclear-qualified submarine officers extending period of active service."
Passed the House of Representatives April 1, 1969.
Attest:

Chairman STENNIS. This goes to the submarine problem, and it in effect provides that junior nuclear-qualified submarine officers who extend their period of active service, who have completed their minimum obligated service but who have not completed 10 years of service, may be paid an additional $3,750 per year under a 4-year contract. The reason for that classification of it will be readily explained by the witnesses.

We have with us the Honorable James D. Hittle, one time Marine Corps general, who is now Assistant Secretary of the Navy for Manpower and Reserve Affairs. I am going to call on him first to present this bill.

General Hittle, do you wish to put your entire statement in the record and explain it, or do you wish to read it?

STATEMENTS OF HON. JAMES D. HITTLE, ASSISTANT SECRETARY OF THE NAVY (MANPOWER AND RESERVE AFFAIRS); VICE ADM. HYMAN G. RICKOVER, USN (RET.), DEPUTY COMMANDER FOR NUCLEAR PROPULSION, NAVAL SHIPS SYSTEMS COMMAND; VICE ADM. CHARLES K. DUNCAN, USN, DEPUTY CHIEF OF NAVAL OPERATIONS (MANPOWER AND NAVAL RESERVE) AND CHIEF OF NAVAL PERSONNEL; AND CAPT. CHARLES H. GRIFFITHS, PROGRAM MANAGER, NAVY NUCLEAR POWER PROGRAM, BUREAU OF PERSONNEL

Mr. HITTLE. Whatever is your preference.
Chairman STENNIS. Suppose you read it.
Mr. HITTLE. All right, sir.

I appear before you in my position, Mr. Chairman, as Assistant Secretary of the Navy for Manpower and Reserve Affairs and am representing the Department of Defense on H.R. 9328. We believe it is extremely important to our Nation's security.

I would like to point out at this time that I am accompanied by experts in this field of nuclear propulsion and manpower. On my right is Vice Admiral Rickover. On my left is Vice Admiral Duncan, who is the Chief of Naval Personnel, and we are also accompanied by Captain Charles H. Griffiths, who is the Program Manager for the Navy nuclear power program in the Bureau of Personnel.

The proposal, in essence, involves special pay legislation for a certain category of officers qualified for service in our Nation's nuclear submarines.

This proposed legislation, Mr. Chairman, would amend title 37, United States Code. It would provide special pay for those submarine officers who have additionally the technical qualification for duty involving supervision, operation, and maintenance of the Navy's nuclear propulsion plants. These officers who would receive the proposed special pay would, in turn, remain on active duty service for 4 years beyond obligated service.

This is important because of prerequisite training and sea experience, a nulcear submarine department head should be an officer of 5 to 9 years' naval service. This is the specific group about which we are talking at this time with respect to this bill.

Why is this legislation so urgent? The reason, Mr. Chairman, is a simple one. The Navy is faced with a rapidly increasing rate of resignations by qualified nuclear submarine officers. The rate at which the resignations are being submitted confronts the Navy with an immediate problem of manning with qualified personnel the nuclear submarines which are so vital to our Nation's security.

In fact, the rate at which resignations have been and are being received, to be effective upon completion of currently obligated service, points inescapably to the fact that unless remedial action is taken promptly, there will be not only a further shortage of officers for shore duty rotation and postgraduate work, but the shortage is going to increase in the group of officers-and it is a small one-who are qualified for the key technical assignments for submarines. In other words, Mr. Chairman, the present shortage of personnel generates resignations, which in turn generates more resignations. The problem feeds on itself.

The Navy is well aware that this committee fully appreciates the capability of the nuclear submarine and knows that it is the heart of the Polaris-Poseidon strategic system; a vital element in our antisubmarine warfare capability; and that any situation that impairs our ability to man properly our nuclear submarines could have a serious adverse effect on our national security.

Actually, the number of officers involved in the proposed legislation and who would receive the special nuclear submarine pay is small. The total is 1,123 such officers over the entire life of the legislation. This group is practically all in the grade of lieutenant.

This group, Mr. Chairman, is small, but it is critically important. The officers in this group possess unusual educational qualifications. Also, their long specialized training in nuclear submarine experience makes them a clearly identifiable group of naval officers. Because of