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down to the final analysis, it depends, after it once passes out of our possession, on State laws, and the State laws are not uniform.

Mr. NORRELL. So it would depend, in the final analysis, on the State law?

General LARKIN. Yes, sir.

Mr. NORRELL. But it is not the intention of the War Department that the casket should be opened by the family; is that correct?

General LARKIN. That is correct. If they be opened at all, they should be opened by the mortician who handles it; not by the next of

kin.

Mr. NORRELL. How is it fastened when you put the remains in there for shipment to the relatives?

General LARKIN. The casket is firmly screwed to the base of the shipping case, and then the top of the shipping case is put down on the casket which is resting on the shipping case base, and that is fastened by lug fasteners that you see here on the side [indicating]. The lid of the casket itself is firmly screwed by lugs to the base of the casket, and it is not an easy matter to open it up.

We had a case that, I think, occurred out in Colorado where the undertaker, without any authorization at all from the next to kin, opened one up, and then he could not close it and he had to get the help of our personnel to close it.

Mr. NORRELL. That is all.

Mr. ENGEL. Take up the next.

CEMETERIAL EXPENSES, NO YEAR (ACT OF MAY 16, 1946)

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Colonel MARSHALL. The next item is for the continuation of the evacuation program which was started in 1946. In presenting this estimate, we have listed under each project the total program as estimated. For example, you will notice on page 119 the total program is listed in the first column, and then we show the amount appropriated, then the amount deferred, and, last, the amount in the fiscal year 1949 estimate.

Because of the fact this is a no-year program and a continuing program, we have introduced the totals rather than to try to segregate each year, in order to keep this committee advised of the progress.

SUMMARY OF PROJECTS

Mr. ENGEL. I think we will put in the record, pages 116, 117, and

118.

(The matter above referred to is as follows:)

Cemeterial expenses, Department of the Army, no year (act of May 16, 1946)

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PROCUREMENT OF CASKETS AND SHIPPING CASES

Mr. ENGEL. Now, suppose you begin with project 110, "Procurement of caskets and shipping cases. The total program calls for $52,258,851; there has been appropriated $52,225,101; and there is required for 1949, $33,750, which will complete the program. that right?

INCREASE IN COST OF CASKETS

Is

Colonel MARSHALL. Yes, sir. That reflects an increase of approximately $13,000,000 over the estimate we computed a year ago, mainly due to the fact that the price redetermination on the purchase

of caskets resulted in an increase of the basic unit cost from $125 per casket to $183 per casket.

Mr. ENGEL. An increase of how much per casket?
Colonel MARSHALL. An increase of $58 per casket.
Mr. ENGEL. To what is that due?

Colonel MARSHALL. The original contract was made with the five contractors involved on a basis of a price redetermination, due to the fact at the time the original contract was made the contractors involved refused to contract for a fixed price for this number of caskets extending over the period of time necessary for their manufacture. That was their primary reason, and the other basic reason was the unstable labor and material market.

Mr. ENGEL. The original price was how much per casket?

Colonel MARSHALL. The original price estimated on prices of labor and material at that time was $125 per casket and case.

Mr. ENGEL. How many were delivered at that price?

Colonel MARSHALL. There were none delivered at that price. That price was subject to renegotiation upon delivery of 25 percent of the contract. They refused to make any contract for a firm price. Mr. ENGEL. Was that price renegotiated?

Colonel MARSHALL. It is in process of renegotiation now.

Mr. ENGEL. You mean you have to pay $58 extra for every casket delivered?

Colonel MARSHALL. Yes, sir.

General LARKIN. Casket and case.

Mr. ENGEL. In other words, when did you start the delivery of these caskets?

Colonel MARSHALL. June 1947.

Mr. ENGEL. When was the price renegotiated?

Colonel MARSHALL. It is being renegotiated right now. Three contracts have been renegotiated.

Mr. ENGEL. Are they all on the same basis?

Colonel MARSHALL. Yes, sir. That is the only way we can let a

contract.

Mr. ENGEL. What do they do get their heads together? Colonel MARSHALL. I do not believe so. We do not know; we have no way of knowing. Some of the companies which accepted these contracts were not able to tell what a casket of the type we bought would cost.

Mr. ENGEL. When was the contract first signed?

Mr. O'CONNOR. All five were signed on the 2d of August, 1946. The contracts were negotiated in April of 1946, but the contracts were not let until after the appropriation was made.

Mr. ENGEL. That was April 1946, and there are 18 months between the time of the signing of the contracts and the time of renegotiation. Now, are we expected to pay the increased cost of material during those 18 months, despite the fact they may have bought that material and negotiated for the caskets, say, at the 1946 prices?

General LARKIN. As a matter of fact, they had great trouble in securing the materials even as late as 2 months ago-both the steel and plywood.

Mr. ENGEL. But that does not answer the question. Naturally, when the man signed the contract for these caskets, he would go out and buy what material he could obtain at the then price, which has

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gone up a lot in the last 18 months. Now, suppose I am a contractor: I have gone out and bought my steel in April, May, and June, 1946, for part or all of my caskets. I start manufacturing; my labor cost is down in the first 6 months; and I manufacture so many caskets, say a third of my caskets, and they are manufactured and donemanufactured with a low labor cost and a low cost of material. Then the price goes up, and the next third is at a certain price increase, and then it goes up again.

Do you mean they would have to pay the price of the increased labor and increased material he would have?

General LARKIN. In the renegotiation, all that they paid for labor and all that they paid for material is taken into account.

Mr. ENGEL. In other words, you go into their actual costs for the manufacture of the total number of caskets?

General LARKIN. That is right.

Mr. ENGEL. And then add the overhead which is a part of the cost, and the profit?

General LARKIN. That is right.

Mr. ENGEL. How much profit do you allow in that renegotiation? Mr. O'CONNOR. It ran from $11.93 to $12.50 per casket for the different manufacturers. We use a different formula for different manufacturers, depending on the efficiency of the operation and the amount of subcontracting.

Mr. ENGEL. I am willing to pay them a profit, but I am not willing to pay an exorbitant profit for bringing back these dead. General LARKIN. $12 is a small profit.

Mr. ENGEL. The total cost is how much?

General LARKIN, $183.

Colonel MARSHALL. All of these renegotiations are based on audits by the Army and independent auditors.

JUSTIFICATION OF PROJECT

Mr. ENGEL. I think we ought to put in the record page 119, which gives the number of caskets to be provided and the various items, together with pages 120 and 121 down to the word "overseas." (The matter above referred to is as follows:)

CEMETERIAL EXPENSES, WAR DEPARTMENT, NO YEAR (ACT OF MAY 16, 1946) PROJECT 110.-Procurement of caskets and shipping cases

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The increasing cost over the previous estimate is due to a renegotiation requested by the contractor of the terms of the contract. The request for renegotiation was initiated because of increased cost in labor and materials. The renegotiated

terms will increase the average cost per casket and shipping case under the second contract from $124.52 to $183.

Requirements for the total program:

Caskets provided from funds included in Second Urgent Deficiency
Act, appropriation act of 1946----

1 13, 710

Caskets provided under "Cemeterial expenses, War Department, no year"..

278, 985

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1 The sum of $3,000,000 was provided in the Second Urgent Deficiency Appropriation Act of 1946, for the purchase of caskets. A total of 13,710 caskets at an average cost of $155.25+ have been provided under contract at a cost of $2,128,503.57.

The caskets are being manufactured at factories located in Cincinnati, Ohio (Cincinnati Casket Co.); Chicago (Continental Industries); Plainfield, Conn. National Manufacturing Co.); Alliance, Ohio (Gallino Manufacturing Co.); and Akron, Ohio (Goodyear Manufacturing Co.).

Caskets produced to Nov. 1, 1947..........

Delivery dates for balance:

November...

December..

January to completion (per month)_.

Summary of requirements for total program:

278,985 caskets with cases, at $183, including provision for 3 percent normal breakage allowance.

2,000 cremation urns, at $75, to provide containers for known cremated remains plus estimated request of next of kin.......... 14,490 shipping cases, at $54.67 (the existing contract price of $49.67 increased by renegotiation), to provide replacement of cases damaged in handling...

1,000 carrying cases for urns, at $28 each, for final delivery of remains to next of kin in the United States only...

68, 199

20, 000

22, 000

25, 500

$51,054, 255

150,000

792, 168

28, 000

Total for zone of the interior...

52, 024, 423

PROCUREMENT OF CASKETS AND SHIPPING CASES OVERSEAS

Mr. ENGEL. The next item is overseas.

Colonel MARSHALL. This item is for the local purchase or manufacture of the boxes necessary to pick up the remains from the isolated areas, at an average cost of $10 to $15 each.

Our estimate of the requirements of the various theaters is listed as shown on page 122.

PROCUREMENT OF MOTOR VEHICLES AND SPARE PARTS

Project 120, on page 123, shows the total program of $1,300,147, all of which has been appropriated and, as a result, no funds are requested in fiscal 1949.

Mr. ENGEL. Do you have any money left over?

Colonel MARSHALL. We won't know until the end of this year. We have ordered the parts.

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