General WHEELER. Yes. Mr. SCRIVNER. In considering escalator clauses do you make any provision for a downward price, a reduction in price? General WHEELER. Yes, sir. Mr. SCRIVNER. As well as an upward price? General WHEELER. Yes, sir. We are considering an escalator clause for labor, an escalator clause for material, and an escalator clause for supplies, both up and down. Mr. SCRIVNER. That certainly becomes necessary, particularly as we think of the programs, due to the fact that we are in here now trying to look ahead a minimum of 6 months to a maximum of 18 months, during which time anything can happen. General WHEELER. Yes, sir. EFFECT OF INCREASED COSTS UPON WORK ON AND APPROPRIATIONS FOR PROJECTS Mr. SCRIVNER. In view of the statement that has been made on the increasing costs of materials and labor, do we not find ourselves in a position of having one of two options? First, to take a certain specified sum of money, which means with the increased cost, a fewer number of projects and a reduced amount of work on the projects; or, on the other hand, if we are to take the same number of projects further progress will require an additional amount of money. So we are in between those two options. General WHEELER. That is right, sir. Mr. SCRIVNER. Is it not possible, in view of the conditions we are now facing, that we might find ourselves in the position of the necessity of possibly putting some of the plans on the shelf until the cost of construction would be more beneficial than it is at the present time? General WHEELER. That would be a high-level consideration for Congress to make, Congressman Scrivner, about whether to initiate any new projects at this time. The projects that we are presenting to you have been reanalyzed on the basis of increased costs, and the benefits justify the continuation of these projects. EFFECT OF PROGRAM UPON AVAILABILITY OF MATERIALS FOR PRIVATE CONSTRUCTION Mr. SCRIVNER. General Wheeler, would you discuss briefly the situation in which we find ourselves as to the use of materials on these projects which might come into competition with the use of those same materials or similar materials in private building, particularly as related to private construction for housing? General WHEELER. Congressman Scrivner, I accompanied the Secretary of the Army day before yesterday when he appeared before the Joint Committee on Housing to testify about the use of building construction materials by the Army that would affect the use of those materials on the civil housing program. An analysis of some 25 items that go into housing was made and it showed that the average of only 1 percent of those items was used by the Army on projects last year. The Army proposes to purchase in the next fiscal year a negligible amount of the annual production of the United States. Mr. SCRIVNER. In other words, whether we call it the high cost of living, the boom, or inflation, it all boils down to a situation of where there is more money readily available to spend now for an inadequate supply of goods for which it can be spent, and as I understand the answer, the work for which projects here are presented by the Army will not materially increase the demand for the already scarce materials. General WHEELER. That is correct, and as a matter of fact, the small amount of housing that is being constructed for these projects as well as the so-called conversion type of housing that is being done in connection with military construction, are relieving the civil requirements, because the future occupants of those places are required to live now in civil houses. Mr. SCRIVNER. This would be particularly true in and around several of the remaining military installations, where you are converting some of these barracks into six-apartment dwellings. General WHEELER. Yes, sir. Mr. SCRIVNER. So that while on those programs you would necessarily have to go out into the market and buy some materials which would be used for instance for the construction of private homes which somebody would occupy, that is offset by the fact that you are, through your program making more living units available than have been before under the other program. General WHEELER. Yes; and another advantage, Congressman Scrivner, is the fact that when we do provide housing by the Army the costs are only around $3,500 per unit, whereas similar units for civilian housing the costs are a great deal more. Mr. SCRIVNER. At any rate in each instance where you make available six apartments, we will say on an Army post for Army personnel, those quarters which they occupied become available for somebody else. General WHEELER. That is correct, sir. CONFIDENTIAL STATUS OF AUTHORIZED ESTIMATES OF COSTS Mr. KERR. General Wheeler, when a project is authorized by law and the engineers make their plans and specifications, then as I understand it, the Army begins to figure on the cost of the construction of the project. General WHEELER. Yes, sir. Mr. KERR. That is the initial part of the work. General WHEELER. When we presented the project to the Congress for authorization we also present an estimate of what the cost would be. When we make up the definite plans and specifications we again make an exact estimate of what it would cost. Mr. KERR. You estimate the construction cost of the project before you get bids on it, do you not? General WHEELER. Yes, sir. Mr. KERR. You have your own point of view, and then you call for bids. General WHEELER. That is right, and we always try to get as many bids as possible. Mr. KERR. There is no way that any of those bidders can find out what your estimate of the cost would be, I do not suppose. General WHEELER. No, sir. Mr. KERR. Not even after the bids are opened and the contract is let? General WHEELER. When the bids are opened our estimates are also opened. Mr. KERR. That is after the contract is closed they can see your estimate? General WHEELER. Yes; our estimate is secret only up to the conclusion of the bid opening. After the bids are opened, our estimate is opened. Mr. KERR. After the consummation of the contract your bid is available if they want to see it. General WHEELER. Yes, sir. Mr. KERR. But there is no way for them to find out what the Army estimate would be for the possible cost of construction? General WHEELER. No, not before the opening of bids. They possibly think they are just as good as we are in the way of making an estimate on the work to be constructed; they probably think they are better than we are. The contractors have to be good; they have got a tremendous amount of construction experience to back them up. RESTUDIES OCCASIONED BY INCREASED COSTS Mr. NORRELL. General Wheeler, pursuing the thought a little further as to making the original estimates of costs and filing your report with the Congress: As the costs of labor and material increase does it not become necessary for you to restudy some of these costs? General WHEELER. Yes, sir. Mr. NORRELL. To ascertain whether they are economically feasible. General WHEELER. Yes, sir. ESTIMATES FOR NEW PROJECTS Mr. NORRELL. Now as to your budget estimate this year-and this may have been asked while I was out; I could not be present during the entire hearings this morning-but do you have any estimates for new projects? General WHEELER. Yes; we have a total, Congressman Norrell, of 19 new projects; two of them for rivers and harbors, and 17 for flood control. The two new River and Harbor projects are for channel work at St. Thomas Harbor in the Virgin Islands and dredging the Sacramento ship channel. The 17 new projects for flood control-if you would like I can give them to you. Mr. NORRELL. I would like to have them in the record. General WHEELER. Yes. Savage River Dam, Md; Macon, Ga.; West Morrilton, Ark.; East Poplar Bluff and Poplar Bluff, Mo.; Eufaula Reservoir, Okla.; Kaw Arkansas River, Okla.; Oklahoma City floodway, Oklahoma; Red Rock Reservoir, Iowa; Coralville Reservoir, Iowa; Elkport, Iowa; Bartlett, Nebr.; Denison, Iowa; Hazen, N. Dak.; Beulah, N. Dak.; Mandan, N. Dak.; Latrobe, Pa.; and Folsom Reservoir, Calif. Mr. NORRELL. Those are new projects. General WHEELER. Yes, sir. DISCUSSION OF PROJECTS READY FOR WORK IN VARIOUS STAGES OF APPROPRIATION AVAILABLE AND AUTHORIZATION Mr. NORRELL. Now in connection with that answer, how many projects over the country are ready for work, so far as the Army is concerned? In other words, I am thinking of approved projects in various stages so far as you are concerned, the ones that could be started if the money were provided. General WHEELER. I can supply that in round numbers now and check it later for correctness. Mr. NORRELL. That is all right. General WHEELER. The estimated backlog of authorized projects that we could start construction on, and on which no construction has as yet been started, totals over $3,000,000,000. Mr. NORRELL. That is the number of projects that you are ready to start on if you had the money available? General WHEELER. For flood control the backlog of unappropriated authorization is $1,288,772,000. There are many other approved projects not now covered by money authorization. For rivers and harbors, it is $1,833,227,000. And for flood control lower Mississippi and tributaries it is $445,000,000. That would make a total of around $3,500,000,000 for all work. Mr. NORRELL. For projects which have been approved and now are ready to start construction when the money is provided. General WHEELER. Yes, sir. Mr. NORRELL. I would like to know right at this point-and you may not be able to answer the question now but you can supply it for the record the number of projects and the names of the projects in the final investigation stage, that is, the next step back, that are just about ready for construction so far as the engineers are concerned. General WHEELER. You mean for presentation to the Congress in an omnibus bill. Mr. NORRELL. Yes. Colonel FERINGA. I have that list before me. Roughly there are before Congress, 22 river and harbor and flood control reports. Before the Bureau of the Budget there are 23. Before the Governors of the States, awaiting their approval, there are 17. The total investigations still outstanding are 760. Mr. NORRELL. Do you have any projects in this category, General Wheeler, that have been authorized and no budget estimates are pending and yet are ready to start construction on? General WHEELER. Yes, sir. Mr. NORRELL. About how many, would you say? General Wheeler. As we say on the chart there are rivers and harbors, advanced planning, there are some 13 ready. Under flood control, general, there are about 100 projects which we are now ready to start. Mr. NORRELL. Those listed in the advance planning stage. 70546-48-13 STATUS OF NAVIGATION PROJECT, ARKANSAS RIVER, BELOW LITTLE ROCK Mr. NORRELL. I am interested in a project in Arkansas, that has been authorized for construction but a ceiling was placed on the amount of money to be expended. I understand there has been some confusion with reference to the improvement of the Arkansas River, especially from Little Rock to the Mississippi River. If you are familiar with that project I wish you would state the status of it for the purpose of eliminating the confusion if any exists. General WHEELER. I assume you refer to the navigation project downstream from Little Rock. Mr. NORRELL. Yes. General WHEELER. As to whether or not the authorization is for construction in the main channel of the river? Mr. NORRELL. Yes. General WHEELER. The results of our engineering study shows that the proper location for the channel for navigation is in the main stream of the Arkansas River from Little Rock to the Mississippi. The confusion to which you refer, I think, comes from some of those interested in the Grand Prairie area, thinking that a diversion is going to be constructed to the White River. However, that is not the authorized plan for the Arkansas. The approved plan is for the navigation project to proceed down the main stream. Colonel FERINGA. May I add that the amount of the authorization by Congress is limited at the present time to $55,000,000, which is not enough to undertake all of the construction. Mr. NORRELL. But the bill, as I understand it, and as you understand it—that is, as approved by the Army engineers and Congress is that the construction shall be on the main channel of the Arkansas River to the Mississippi River? General WHEELER. Yes, sir. Mr. NORRELL. There is an angle with reference to the feasibility of supplying the Grand Prairie, the rice region of Arkansas, with water. Can you give me the status of that investigation so that the people may know something about the investigation for water in the Grand Prairie region, which would include Bayou Meto? General WHEELER. Yes, I will supply that. The report on it is in the field, but I will furnish the information. (The information requested follows:) On December 18, 1945 the Flood Control Committee of the House of Representatives requested the Chief of Engineers to review the report on White River, Mo., and Ark., contained in House Document 102, Seventy-third Congress, first session; the report on the Arkansas River and tributaries contained in House Docket 308, Seventy-fourth Congress, first session, and subsequent reports on the Arkansas and White Rivers and their tributaries, with particular reference to the area known as the Grand Prairie region in Arkansas which is all of that area between White River, Bayou Meto and Wattensaw Bayou, and for the purpose of the study includes the entire drainage area of Bayou Meto to determine (a) the feasibility of flood control on Bayou Meto with particular reference to the elimination of the pooling of the Bayou Meto behind the Arkansas River levee when it becomes necessary to close the flood gates at the mouth of Bayou Meto; (b) the need for and possible resources of irrigation water for this region including estimates of future needs and estimates of cost for the development of sources of supply; and (c) methods and costs for the solution of local drainage problems including the additional problem which may be created by the importation of adequate irrigation water supply. The district engineer at Vicksburg held a public hearing at Stuttgart, Ark., on May 2, 1946 and additional public hearings were held on September 3 and 4, 1947, |