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OCR Page 1 of 3DEPARTMENT OF THE NAVY
OFFICE OF THE SECRETARY
WASHINGTON 25, D.C.
16 February 1959
MEMORANDUM FOR THE PRESIDENT
Subj : Chartering of a Navy Hospital Ship to People to People Health
Foundation, Inc.
l. Purpose of Memorandum. The memorandum discusses the cost and time
required for placing a Navy hospital ship in operating condition, and the
terms upon which such ship can be chartered to the Foundation.
2. Placing Ship in Operating Condition.
(a) Cost. $1,780,000 as follows:
(i) $1,280,000 is the Navy's best estimate to activate the ship and
place it in operating condition for use by a civilian crew. This amount
has been discussed with Dr. Walsh and includes $40,000 for advance planning
costs and preparation of specifications. The $1,280,000 includes all
outfitting required for the operation of the ship but not for outfitting
the hospital. It does not include any cost for altering the ship to
accommodate any medical or other special equipment and supplies which
Dr. Walsh expects to be donated to the Project.
(ii) $500,000 allowed to cover any necessary alteration to the ship
to accommodate medical equipment and supplies which are not presently on
the ship. Any balance of these funds not needed for this purpose could
be used for the outfitting of any needed medical equipment and supplies,
or for restoration and inactivation of the ship upon its return to the
Navy.
(b) Time required.
To meet the Foundation's target sailing date of 15 September 1959,
it would be necessary to have the ship placed in operating condition by
15 August 1959. To assure that this is done economically, the work must
commence by 1 May 1959 and the planning and preparation of the specifications
for the work should begin by 1 March 1959.
3. Chartering the Ship. The Navy will lease the ship under the authority
of 1OUSC2667, which authorizes the Secretary of a military department to
lease property such as here involved, "upon such terms as he considers will
promote the national defense or will be in the public interest". The
principal terms of the lease will be as follows:
(a) Rental. No cash rental will be required. The Navy will accept the
"maintenance, protection, repair, or restoration, by the lessee, of the
property leased
as
all of the considerations for the lease", as
expressly authorized by 1OUSC2667.
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