The subcommittee met at 10 a. m., pursuant to recess, in room F-39, the Capitol, Hon. William F. Knowland (chairman of the subcommittee) presiding.

Present: Senators Knowland, Young, Dworshak, Ellender, and McClellan.

CIVIL FUNCTIONS

NAVIGATION CONSTRUCTION PROJECTS

STATEMENTS OF BRIG. GEN. C. H. CHORPENING, ASSISTANT CHIEF OF ENGINEERS FOR CIVIL WORKS; LT. COL. GEORGE F. DIXON, JR., ASSISTANT CHIEF OF CIVIL WORKS FOR RIVERS AND HARBORS; B. J. TOFANI, CHIEF, PROGRAM DEVELOPMENT BRANCH; AND A. J. SMET, CHIEF, RIVER AND HARBOR SECTION

SUGGESTED PROCEDURE

Senator KNOWLAND. The hour of 10 o'clock having arrived, the committee will be in order.

I would like to request the witnesses on each project that they will give to the committee the amounts unexpended on June 30, 1953; unobligated on June 30, 1953; the appropriation for fiscal year 1954; the unobligated balances on December 31, 1953; the unexpended funds on December 31, 1953; the estimated unobligated funds on June 30, 1954; and the estimated unexpended funds on June 30, 1954.

Also, if there have been any loans or borrowings to or from the project, that they include that information also.

BUDGET REQUEST

General CHORPENING. Prior to getting into the first project, Mr. Chairman, in connection with navigation construction projects, I would like to make a brief statement. There are 22 projects included m the budget for navigation which call for an appropriation of $36,710,000. Of this number of projects, 10 are classified as new starts, although 3 are resumptions of projects on which some work has been done in the past.

All of the projects being presented have relatively high benefit cost ratios. These new starts are generally small projects, the exception being the Warrior lock and dam in Alabama, which is a replacement of existing locks and dams, and the Green River locks and dams 1 and 2, also a replacement proposition.

Senator KNOWLAND. Will you also indicate in both the new starts and the continuing projects the benefit-cost ratio?

Colonel DIXON. Yes, sir.

GENERAL CHORPENING. The first project is the Demopolis lock and dam in Alabama authorized by the 1945 act. It is a replacement project to replace obsolete locks and dams 4, 5, 6, and 7 on the Tombigbee River. The present estimated cost is $20,397,000, of which $16,565,800 has been appropriated to date. Of that amount, $4,655,000 was appropriated in fiscal year 1954. We are requesting this morning $3,500,000 for fiscal year 1955, which will in essence complete the project. There will remain $331,200 for minor items.

Senator KNOWLAND. What type of items would be left for later years?

Colonel DIXON. The $331,200 will involve houses, grading and landscaping, and certain utilities.

Senator KNOWLAND. It will not affect the operations of the project itself!

Colonel DIXON. That is correct.

The benefit-cost ratio of the project is 1.36 to 1.0.

As of June 30, 1953, we had an unexpended balance of $3,006,915. As of December 31, the unexpended balance was $3,155,356, and our estimate for June of 1954 is $190,500.

Senator KNOWLAND. I notice on the item of grading and landscaping the estimate last year was $8,500. It has increased to $183,000. What type of supergrading are you doing there?

Colonel DIXON. I think, Mr. Chairman, that is an unfortunate choice of language. As you are aware, at one time there was consideration of putting our shops and yards at the project. Instead, a recent study has indicated we can leave them at Tuscaloosa. That made a

reduction in the total cost of the project, but there was a certain amount of work which was under contract which had to be completed. The increase you mentioned represents that work, in addition to the minor landscaping and grading proposed. It is not our intention to go to a major landscaping project.

Senator KNOWLAND. Proceed.

WARRIOR LOCK AND DAM, ALABAMA

Colonel DIXON. The next project to be discussed this morning is Warrior lock and dam. Warrior lock and dam, as was the Demopolis project just discussed, is a replacement project. It replaces obsolete

s and dams 8 and 9 presently in existence, and in operation on the Warrior-Tombigbee Waterway system. This is to be undertaken under the authority of the 1909 River and Harbor Act. It will be a dern replacement lock 110 feet by 600 feet. The cost estimate is $2,629,000. To date there has been allocated $133,000, which has Poze to planning. The request is for $2 million. The benefit-cost ratio is 1.55 to 1.0.

PLANNING STATUS

In that this is a new start, it might be well for me to discuss a little of the planning status. We expect to be in position to advertise, with var plans and specifications all ready by the end of June 1954. As of day, the general design memorandum is complete. The specificas for the lock are 55 percent complete. Two million dollars would be applied for acquisition of lands at the lock, for a lump sum conact for excavation at the lock site, for driving piling for the lock 4 for a continuing contract for the operating equipment. M.zor items would include an access road and one building. Local operation required on this project is zero.

Serator KNOWLAND. Going back to this Warrior lock and dam, does your estimate now compare with the original estimate for &g that work? Have the estimates gone up or down?

Colonel DIXON. There is an increase in the estimated cost of this et compared to that presented to the Congress last year, which Arounted for by the general price level increase, and a minor item zoving the recent law requiring us to pay certain resettlement costs dition to the appraised value of the land.

ESTIMATED COST

Senator KNOWLAND. What was the estimated cost?

Corel DIXON. Last year, $19,100,000. As of today we are discuss22 $19,629,000, making a difference of $529,000. The price-level ge accounted for $487,000.

The estimated cost of the resettlement provisions of Public Law 4 of the 2d Congress increased the project $42,000.

Naator KNOWLAND. Are your cost-benefit ratios based on the Pent-day costs or the original costs?

Corel DIXON. On present-day costs, sir.

General CHORPENING. Going back to the first project, we had a Let decrease in cost on the Demopolis lock and dam.

Serator KNOWLAND. What has been the experience of the engineers and large throughout the country on the contracts they have been g! Are you getting any better cost figures?

Geral CHORPENING. Our experience in the past year generally has that we are getting very excellent competition and excellent bids. Of course, as the chairman realizes, the bulk of our program is now our multiple-purpose projects. Two-thirds of the construction is that we are asking for in this budget cover those projects. An

indication that we are getting excellent bids and that we are reflecting those bids in our cost estimates before the Congress is that, for our multiple-purpose projects where the budget request is for $200 million, the percentage increase in cost has been negligible.

As we go through these projects, you will find there are some where there has been an increase, generally due to some change in conditions. In others, there has been a very decided decrease in cost.

Senator KNOWLAND. Where you are getting the decided decrease in cost, you are not taking up the slack by putting in new units or addi tional landscaping or something, are you?

DISCUSSION OF COST

General CHORPENING. No, sir. Our estimates are based on July of each year. So between July 1952 and July 1953, there was actually an increase countrywide in Engineering News Record cost index of nearly 6 percent, but overall, our own estimates, as shown in the justification sheets, have remained practically the same, just a few million dollars increase on over a billion dollars worth of work still to be placed.

Had we applied the countrywide cost index, there would have been a net increase of about $60 million. We did not do that, however, because of our own cost experience and the fact that we have been getting better bids. I believe that is responsive to the chairman's question on that point.

Senator KNOWLAND. I hope any saving that is made possible by getting better bids will be reflected to the credit of the Treasury and will not induce anyone to figure they can put in a couple of extra things that normally would be perhaps desirable but not absolutely

essential.

General CHORPENING. Mr. Chairman, we are extremely alert to that and are scrutinizing extremely carefully any ideas along those lines. Furthermore, it is one of General Sturgis' particular interests that we eliminate any unnecessary refinements of design that may not be required to the proper operation of our projects.

On a number of our multiple-purpose projects, unless there are happenings not foreseeable now, I believe that we will be able to construct them for somewhat less than our present estimated costs. However, I am very reluctant to reduce those estimated costs too rapidly because, particularly in the early stages of construction, you can have troubles such as floods, cofferdam failures, or slides that would cause us to come back with an increased cost. I would rather, when we take a decrease, have it remain stable, and I am sure the Congress would desire the same thing.

Colonel DIXON. In that connection with Warrior and Demopolis, we now have under study the possibility of deleting some of the houses which have been shown in the justification. That study is not complete but we hope it will reduce the cost. We are eliminating what frills we can.

Senator KNOWLAND. The next item.