PLAN TO BEGIN CONSTRUCTION ON THE DAM Colonel FERINGA. Senator Russell, the funds in the bill as passed by the House will be not quite enough to finish the contracts that General Wheeler stated are now under way, and unless some restoration is made wo will not be able to go into the dam construction. The modest amount by which we are asking the Senate to increase the amount set up by the House for Clark Hill will enable us to initiate construction of the dam itself. We are limited, of course, by the over all amount that the Bureau of the Budget set up. The House had added certain additional projects which had to be absorbed somewhere; that was absorbed by the omission of one flood-control project in its entirety, by the omission of another project in accordance with our recommendation, by the omission of 50 percent of the planning money. and by the omission of $2,725,000 from the Clark Hill project. The project, as General Wheeler has stated. is economically justified. It is necessary and vital for flood control and for navigation, and has incidental power benefits, Senator Russell. Of course, now with this $1,800000 what could you do on the main dam? Colonel FertNGA. We can start actual construction on the main dam, sir. There is a coffer dam now under construction which will be completed with the funds that we have in the bill, and we will be able to start some of the work on the dam, sir, although not nearly as much as we would like to. Senator KURSELL. If the Senate, then, were to restore this budget estimate in proportion to other items that are as meritorious as this project, could the money be well spent in the completion of the project? Colonel FERTSOA. Absolutely, sir. Senator RUSSELL. Do you think it would be justified? Colonel FERINGA. Yes, sir. Senator RUSSELL. All right. BASIS OF COST ESTIMATES Senator GURNEY. General Wheeler, I would like to have one overall statement from you. You give the estimated cost here of each of these projects, both flood control, and rivers and harbors. On what basis of cost are these estimates made? Are they 1946 or 1947 estimates? General WHEELER. September of 1946. Senator GURNEY. September of 1946? General WHEELER. Yes, sir; that is when we prepared the estimates that are now before you, and they are on that basis. To reflect present costs the estimates would have to be increased by the percentage by which construction costs have increased since that time. Senator GURNEY. That is the estimated cost of the increased costs since these figures were made up, percentagewise? General WHEELER. I have the curve here, Senator. This shows the construction costs index curve, including labor and materials. The ordinates are the units of construction costs based, in January 1945, on 300, Senator GURNEY. Three hundred what? General WHEELER. Just units, based upon a level of 100 in 1913. Senator GURNEY. All right. ESTIMATED COST INCREASE SINCE BUDGET WAS PREPARED General WHEELER. The increase from the time we prepared the estimates in these papers to July 1947 is an increase of 46 points, which would be an increase of about 12 percent. Senator GURNEY. Twelve percent higher than the costs figures here? General WHEELER. Yes, sir. Senator GURNEY. In other words, it would take 12 percent more money to do the same work. General WHEELER. Yes, sir. When we prepared the estimates in September 1946, we hoped that the curve might be leveling off, because it was paralleling pretty well the experience on construction costs after World War I, both in length of time and in amount. However, it did not stay leveled off very long; it started going up. Senator GURNEY. In September the unit chart there shows the cost of 360-361.37; and in July, 406.52; breaking that down, it figures about 12 percent, you feel? General WHEELER. Yes, sir. Senator GURNEY. All right. Senator Knowland. Senator KNOWLAND. That was the question I wanted to clear up. But I wondered if the general had any break-down as between labor costs and material costs. General WHEELER. The Engineering News Record, which prepares the index for the entire engineering and construction profession, does have that in great detail. All construction people and engineers accept the curve that they prepare, which is based on a detailed breakdown. I do not have the detailed break-down here. CHARTS ON CONSTRUCTION COSTS Senator GURNEY. General Wheeler, if you can, I believe that chart should appear in the record at this point, if you can furnish it. General WHEELER. All right, sir. Senator GURNEY. All right. General WHEELER. This second chart is for the purpose of comparing recent construction costs with the situation following World War I, when there was a great rise about 1920 and the chart was started at a base figure of 100 representing costs in 1913. Senator GURNEY. Probably both charts would be helpful if you would furnish them for the record. (The chart referred to follows:) ENGINEERING NEWS RECORD 1913-1945-ENR. YEARLY AVERAGE INDEX NUMBERS AVAILABILITY OF MATERIALS AND LABOR Senator WHERRY. General Wheeler, regardless of the price increases, what is your experience now on the availability of materials and labor? Is it possible to contract this work? General WHEELER. Yes, sir, Senator Wherry, we have been getting very good bids in the last several months. As you know, when we advertise for bids we prepare an estimate of what we think it would cost the Government to do the same job, and we use that to compare with the estimates submitted by the bidders. We are able also, when the bids come in, to take each item and compare with ours so we have a pretty good idea, we think, of what the job should cost. We have been getting bids close to the Government estimates recently on all types of construction. Senator WHERRY. So, your advice to the committee is that if you get the appropriations you will not have any trouble getting the contracts negotiated, and the construction done. General WHEELER. We are confident that we can do this. We feel that there will sometime be a downward trend of construction prices to parallel the one of 1920, and we are hoping to have the benefits of that over the construction period. Senator WHERRY. I am not worried so much about the prices as I am the question of getting it done. It is one thing to appropriate, and it is another thing to get the work done. Now, what I am asking is. Is it your advice to the Senate that if the appropriations are made the work will not be held up because of lack of contractors or materials or labor? General WHEELER. We expect that it will not be; and if it is, we will come back to Congress and tell our problems. Senator WHERRY. I understand; but the situation now is easier than it has been, and you feel that you can proceed if you have the appropriations. General WHEELER. Yes, sir; we do, very definitely. Senator WHERRY. And get the fiscal program for 1948 out of the way as far as materials and labor are concerned. General WHEELER. Yes, sir; we do. Senator GURNEY. For the information of the committee, it is about 11 o'clock now. There have been men who have been promised to be heard this morning, very few in number, and we may have to stop General Wheeler's testimony and questioning in order to get at these men, to give these men the opportunity of being heard. There are men from West Virginia brought in here by representatives from their State, and also from Kentucky. Senator Thomas. EXTENT TO WHICH PROJECTS ARE PERFORMED UNDER CONTRACTS Senator THOMAS. Just one question, Mr. Chairman. To what extent to you construct your projects under contracts? General WHEELER. We try to have all of our projects constructed under contracts wherever practicable. Senator THOMAS. At a later date I wish you would advise the committee about the relative efficiency of constructing projects by con |