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in funds, because any time you appropriate or you authorize the same amount of money taking into account the increased need and the increased cost of living and the increased cost of construction, you have actually reduced the level of funding for an agency that has a primary concern with safety. Is that a reasonable statement?

Senator BARTLETT. I couldn't be in more complete agreement with what you say. I just can't understand it. I was highly hopeful that this year, budgetary stringencies notwithstanding—the budget is pretty large, after all—that this very essential agency within our Government would be properly funded.

Obviously it will not be. I understand the reluctance of the witnesses to press for more money, they can't under the rules of the game. But it seems to me that those of us who know what the function of the Coast Guard is and realize how it is being diminished to a certain degree by lack of money, have a heavy obligation to do what we can to bring it up to date.

And I am certainly in absolute agreement with the Senator from Michigan.

Senator GRIFFIN (presiding). Admiral, you stated there will still be 32 of these old aircraft remaining in our inventory. That is from your testimony relating to the proposed acquisition of some new helicopters.

Exactly how old are those 32 old aircraft and what limitations, if any, do their age place upon the serviceability of those aircraft?

Admiral SMITH. Senator, they are about 15 years old. They were built over a period of 2 or 3 years, about 15 years ago. And we have considered them as reaching the end of their useful age at 15 years.

However, at the present time we are examining one of these aircraft very carefully, particularly the wing spar and the main structural members that have a bearing on the safety in flight, and if we find that the aircraft can be extended, we propose to do that with the best ones of the group beyond what we would normally consider the end of their useful life.

Senator GRIFFIN. Mr. Barer. Mr. BARER (staff). Admiral, you indicated presently there are 10 cutters which have been funded. If you had maintained your earlier replacement schedule with 1974 completion date, 'approximately how many cutters would have been funded at this time?

Admiral STAFF. I will ask Captain Scheiderer to speak to that. · Captain SCHEIDERER. Our initial plan called for something like three to four a year, so if we started with 1962 and went through 1974, that is three for 36 and four for 48, so by 1974 we could have completed it, in view of the fact that our plan calls for at least 33 highendurance cutters under normal operating conditions.

Mr. BARER. I assume there must be some escalation in construction costs of these vessels from year to year. How soon will the funds for the 10 cutters be actually expended for cutters? I am concerned about whether those funds will be able to build the 10 cutters by the time they are actually expended.

Admiral Smith. We presently have five of those vessels under contract within the estimates of money that we requested. We have only one of them that is not now under contract. When we go out for additional vessels of this class, we would anticipate that increased construction costs would be reflected in somewhat higher prices.

Mr. BARER. Is the cost of one of these cutters approximately $14.5 million now?

Admiral SMITH. That is correct.

Mr. BARER. Is the one cutter that you have not contracted for but have funded, represented by the funds that are frozen now by the Bureau of the Budget?

Admiral SMITH. They are the funds that are in reserve with the Bureau of the Budget.

Mr. BARER. Is that in the amount of $12 million rather than $14.5 million?

Admiral Smith. In the amount of $12 million for this specific ship; yes.

Mr. BARER. So before you can move further on that particular cutter, you are going to have to get an additional $2.5 million?

Admiral Smith. We would have to find another $2.5 million; yes. Mr. BARER. That $12 million was given to you by the Appropriations Committee last year in lieu of the oceanographic vessel; is that correct?

Admiral SMITH. That is correct. Mr. BARER. Last year this committee reduced the funds for public family quarters by approximately $1.7 million on the basis that construction of some 60 units at Guam was not sufficiently justified. Is it correct the Coast Guard has no plans now to construct public family quarters at Guam?

Admiral SMITH. This is correct. And let me explain that a little bit. Last summer we assigned two additional vessels to Guam, buoy tenders, in order to get them closer to their areas of operation. We at that time anticipated that in order to take care of at least the families of part of the personnel that we should start to provide some housing on the island of Guam.

In the meantime the Navy, as the host activity on the island of Guam, told us they would make public housing available to our personnel on the same basis as they do for other military personnel on the island, so it was not necessary for us to go in and actually construct housing.

Mr. BARER. How much is requested this year for construction of public family quarters?

Admiral Smith. We have asked for $8 million for that. · Mr. BARER. How many units will that allow to be constructed?

Admiral Smith. We estimate that the total number of units will be about 290.

Mr. BARER. Approximately what then is the cost per unit on the average?

Captain SCHEIDERER. Our average unit cost has been running somewhere in the vicinity of about $24,000. On this basis we wind up withlet's see

Admiral Smith. The overall average unit cost we have projected is about $27,600.

Mr. BARER. Do you have any information that shows whether this is consistent with the average cost per unit for the other services or how it compares?

Admiral Smith. We can compare it with the costs of the other seryices. Would you like to have this made a part of the record?

Mr. BARER. I would appreciate it if that could be supplied for the record.

(The information follows:)

Cost Of Coast GUARD HOUSING VERSUS DOD HOUSING Standards for Coast Guard housing are consistent with BuBud Circular A-18 and DOD standards. Beyond this it is extremely difficult to make realistic comparisons—similar "yardsticks” for comparisons just do not exist. DOD projects are generally in excess of 100 units. Since 1966, 28 of 31 Coast Guard projects have been 15 or less units—(23 were 10 units or less).

For example, the FY 1966 Coast Guard program consisting of several small projects within the Continental limits, the largest of which totaled 15 units, produced an average cost of $23,650 per unit. In FY 1967 projects constructed within the Continental limits averaged $24,800, The DOD maximum average unit cost of family housing in the corresponding area during this period established by the Military Construction Authorization Acts for the same two fiscal years was $17,500 with the further provision that no single unit could exceed a cost of $32,000.

In FY 1968 the average cost of units to be constructed within the Continental limits is $23,200, which includes two major projects-140 enlisted units at Treasure Island, San Francisco, and 50 units at Boston, both of which are joint construction projects with the Navy, and are therefore priced within DOD limitations. The DOD maximum average unit cost for FY 1968 established by the Military Construction Authorization Act of that year is $19,500, with the proviso that no single unit can exceed à cost of $35,000.

The average unit cost of Coast Guard construction outside the Continental limits in FY 1968 is estimated to be $46,000 for projects at Annette Island, Alaska, and Wake Island. The DOD maximum average unit cost in the corresponding area in any project of fifty units or more can not exceed $32,000, with the proviso that no single unit can exceed $40,000.

The only sizeable Coast Guard project actually under construction is in Honolulu, Hawaii (164 units) from FY 1967 funds, at an average cost of $24,300 per unit. This project also requires construction of a sewage treatment plant which would raise the average unit cost to $25,600. This compares very favorably to the DOD cost limitations noted above for overseas construction.

Excluding DOD projects for general officers and CO's, during the same period, DOD had only two of 83 projects under 15 units. The important point to be noted here is that the DOD maximum cost limits are based on average costs for all units constructed in any specific fiscal year.

The major reasons why costs are not comparable for the Coast Guard and DOD are:

(a) Most DOD projects involve a large number of units and DOD can take advantage of the economies associated with quantity construction.

(b) Most Coast Guard projects are for a very small number of units which are located in remote, isolated, or resort areas. These sites lack utility services which generally exist on DOD bases.

(c) Additional factors—more unfavorable site conditions requiring higher site development costs; mobilizations costs higher and spread over fewer units; utility services do not exist and/or are more costly to develop; located

generally near waterfront property or less sheltered area. Mr. BARER. Does the average cost vary substantially from one area to another?

Admiral SMITH. It does vary substantially from one area to another, particularly when we go outside of the United States, and when we build housing in rather isolated areas, then the unit costs go up. Another place where the unit costs are going to be higher than we would like to see them would be at Governors Island, N.Y., although we are building what we think is the most economical and the most effective arrangement, an apartment system.

The unit costs for construction in the New York area are going to be rather high.

Mr. BARER. With the information that you are going to supply the committee relating to family quarters, could you also supply us with what that substantial variance is, in other words, at the various locations what is the average cost going to be and where will these be constructed?

Admiral SMITH. We can furnish that for the record.

Mr. BARER. We had some difficulty last year on this item, as you know, and I would like to have as much information as possible.

Admiral Smith. Yes.
(The information requested follows:)

REASONS FOR Cost VARIANCES OF Coast GUARD HOUSING BETWEEN AREAS

Most of the Coast Guard's housing projects consist of a small number of units and are located at remote, isolated, or resort areas. Cost differences are attributed to varying site conditions, availability of utilities, and the number of units in the project. Generally, each project has its own peculiarities of conditions, thus meaningful comparisons are sometimes difficult to make. Climatic conditions will dictate differences in materials and construction from one area to another.

We strive to give our men good accommodations to compensate for drawbacks of assignment and to provide units that will instill some occupant desire to live in the house and care for it. Major factors for cost variances are different degrees of the following:

(a) Number of units in project; per unit costs vary.
(b) Site conditions and utility services.
(c) Mobilization costs; availability of contractors.

(d) Degree of permanence required due to climatic conditions and other environmental conditions.

(e) Materials required for a low maintenance structure in a given area. (1) Different cost construction areas.

(g) Security requirements such as fencing around antenna fielda, ete. An overall average unit cost of family housing units to be constructed from funds requested in FY 1969 is estimated at slightly more than $27,000 cach. Cnita are planned for construction at the following locations, in the n'imbare indicated: Annapolis Station, 8

Hobucken Station, 7 Pt. Allerton Station, 2

New York Base Governors Island), Eaton's Seck Station, 11

160 (estimates. Siuslaw River Station, 7

Boston Area Complex, 100 Mr. BARER. How many Coast Guard vessels are now operating with the Navy off Vietnam?

Admiral SMITH. We have five of our large vessels with Operation Jarket Time, and twenty-six 2-foot patrol boats.

M. BAPER. That is 31 vessels?
Admiral SMITA. Thirty-one vessels in all

Vir. BARER. Has the Vietnam effort of the Coast Guard detrarted from that agency's ability to bave sifficient vesela and equipment available for its other duties? In other words, wiat has hapered to your ability to function with 31 vessels taken o'it of the best, so to speak?

Admiral SMITH. I would like to say first of all that the 52-566 patrol boats, the twenty-six 2-ost patrol boats amined to Vietnam have been replaced in a's inventory. Let Le CoreT, tha Seret:teen of te boats have been replaced and are 10* bark gir ir. the United States.

The in part of the five large vereis has been hat. I perkare had to spend a reater time at we ard te bare tar to lake reductions in tisce that we derrted to training and certire patrols. Bit it bas 16" preverted 29 frol. CarTİR. 01 6 1 Tee 10 bilities as far as the p ic is concerned.

Mr. BARER. Do you feel there is a direct relationship between the lag in the replacement program and the Vietnam effort?

Admiral SMITH. I don't quite understand you.

Mr. BARER. Has your Vietnam duty in any way been responsible for your lack of complying with your scheduled replacement program?

Admiral Smith. No, I don't believe this has had any impact on our A.C. & I. program, our scheduled replacement of equipment.

Senator GPIFFIN. The record will be open for the submission of any further statement or information which may be useful. But there being no other witnesses to be called this morning, we will adjourn the hearings until the call of the Chair.

(Whereupon, at 11:45 a.m., the subcommittee was adjourned, subject to the call of the Chair.)

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