Evening star., 1934-02-06
ADAMS AND
TO Be QU|zzED0N
NAVY AIR PROFITS
House Subcommittee to Call
Former Secretary Re-
garding Contracts.
INGALLS, AND WARNER
TO BE ASKED FOR DATA
Admiral King Unable to Explain
Net of so Per Cent on
Planes.
BY the Associated Press.

BY the Associated Press.
A House Naval Affairs Subcommit-
tee decided today to call Charles
Francis Adams. forrHer Secretary of
the Navy, and two of his assistants
to find out what they know about
alrplane contracts on which it has
been told profits of as much as so
per cent we're made.
The assistants are David S. ingalls,.
Assistant Secretary for AeronautlcS
from 1929 to 1882. and Edward P
Warner, who held the same post from
1926 to 1929.
The decision was reached after
Chairman Delaney. whose group is
investigating Navy airplsne and en-
gine contracts. concluded that pres
ent officials of the Navy had no di-
rect knowledge OF contracts awarded
before last March.
Moffetts Death Cited.
Even Rear Admiral Ernest j. King
now chief of the Nays Aeronautics
Bureau, could not furnish the desired
information because he did not take
his present post until Rear Admiral
William A. Moffett died, when the
airship Akron dropped into the At
lantic in April, 1888.
Il think that to clear up the ques-
ton of why the Navy continued to
grant contracts after auditS showed
such big profits, We should summon
these three men, Delaney said.
Other committee members agreed.
Delaney Immediately arranged to send
letters to the three former officials.
The committee has no authority to
compel them to appear, but Delaney
told newspaper men he felt sure they
will accept"
A determination to explore every
one Of the many naval alrplane and
engine contracts awarded without
competitive bidding has spread among
members of the House Committee.
The committee previously had been
informed that under one non-com-
petitive bidding contract for engines,
the manufacturer. the Pratt Whitney
Co.. netted a so per cent profit on
$4,000 900 order.
Rear Admiral Ernest J. King yes
terday submitted a memorandum to
the committee explaining the Nays
usual procedure, but Chairman De-
laney said more light is needed on
the whole subject
King explained that, before a naval
plane is built. manufacturers enter
design competition. If enough funds
are available. the three best designs
are chosen and experimental planes
built After these are tried in actual
service. the Navy awards a quantity
production contract to the builder Of
the most satisfactory airplane.
Says Cost Is Estimated.
The prices paid both for the ex-
perimental airplane and the produc-
ton alrplanes," King reported, ARE
negotiated with the successful con-
tractor on the basis of labor, material
and overhead
From past experience We can
closely estimate the actual cost of
producing airplanes and therefore
know what is fair price.
If at any time a satisfactory price
cannot be negotiated with contrac-
tor for a service test order. we have
the right to advertise in the open
market for bids, and We nave done
so in many instances.
This procedure, as matter OF
fact. generally has been found dis
advantageous to the service and in
some cases disastrous to contractors
who have misjudged or deliberately
underestimated on the cost of the
article bid on
Repeat Orders Cited.
Occasionally, King said. the expert
mental program lags behind the need
of 3erviceable aircraft and an order
is given for a repeat on a model al
ready IN service.
"A repeat order always can be built
by the original contractor at a cheap
er price" King said.