hearing

121cherce c ontir.. the ro,:ect. if these probabilities appearzurficient to chtain an adequate return for the expenditure, therecan be no legal objection to this aspect of the project.5. It should be noted that there are two Circumstances whichrequire consideration in a final determination. As stated inSection V, our contribution, by appearing to be from a privatesource, would increase the matching Government contribution by asimilar amount which would not be the case if it were known thatthis was in fact a Government contributicn also. Secondly, it isthe stated policy of the hospital tb charge the Government endcommercial organizations 80 per cent overhead on research contracts,whereas nonprofit foxundations pay only direct costs but no overhead.Because of the ostensible source, our projects will not be chargedoverhead. This could be construed -as mbrally wrongful to thehospital,- .as normally we would pay the 80 Per cent overheadcharge for projects performed directly for us, but I believethis can be offset, at least to the amount of our donation, andperhaps by the further a:ount by which the other Government contributionsare increased by our dcnation. In any case, if theproject is a proper one and must be performed in this manner,security dictates these circu'stances and they, therefore, donot present a legal obstacle as such.6. We raised the question whether funds for the hospitalconstruction could not be obtained from other normal charitablesources. It appeared that there was a sting possibtility thatthe individual concerned could raise adequate funds from privateresources, but it was the position of TSS that if this were thecase we would not obtain the-commitment from the individual andthe degree of control which this project is desiGned to achieve.IAWHRENCE R. HOUSTONGeneral Counsel-!:'ar~oed to:thsrit of : 1874757!- 2q77Dorngraded to:by authority -: 27-173Iatc: JUIDo 117722 IITDE:Z; CL E713:7Copy # 1 of 1 copy