Mr. SHIPLEY. The revolving fund finances all printing and binding activities of the Government Printing Office. It has shown a profit in each year except one since 1961. What will be your profit or loss projections in Fiscal Year 1979? Mr. DEVAUGHN. We should break even. Mr. SHIPLEY. Do you have any projection? Mr. BOYLE. We have projections for 1978 and 1979 with targets to break even in both years. Mr. SHIPLEY. How do you determine the profit or losses and what are your revenue sources, and are all of the GPO cost components accounted for when you figure this? Tell us how you do it. Mr. DEVAUGHN. We establish a pre-determined rate for each operation that we are performing in-house, so when a job comes in, if it has to go through ten of the 500 or so operations, they get charged for actual hours, whatever the actual hours are, times the pre-determined rate, and we bill the agencies for that, and that provides our income. At the same time we are keeping track of the actual cost of that operation, and as we accumulate our costs we are constantly comparing one to the other, and hopefully the charges and revenue are equal to or slightly in excess of the actual costs, and that would produce a profit. While we are technically shooting to break even, we have found over the years that we need about a one percent profit in order to keep up with the modernization of machinery and equipment. Mr. SHIPLEY. In figuring the costs here, do you include overhead like space and this type of thing? Mr. DEVAUGHN. Yes, depreciation on machinery and equipment, which we buy out of revenues and funds we collect for depreciation. But the amount recovered through depreciation is not sufficient because of inflation and other factors. Having recovered the full cost of an obsolete piece of equipment, and then trying to go out and replace it with a new piece of equipment reveals that we are short of funds and so use the one percent profit to make up the difference. Mr. BOYLE. There is another factor I would like to add to that, Mr. Chairman, if I could. As Mr. DeVaughn was saying, we recover all of our labor costs, and our costs such as electricity, heat, and materials and supplies. Hopefully we have costed these items so we break even at the end of the year. But we do incorporate a safety factor of one percent. In addition to that, the printing we buy for the Government agencies, for the Executive agencies and for the Congress we place a markup on it of 6 percent, which averages out, to about 4 percent overall. Mr. DEVAUGHN. That is not fictitious either, because we write the specifications. We evaluate the bids. When the bill comes in from the printer, we have to audit the bill and make sure it was ordered, and we pay it. So this is what the 4 percent is. Mr. BOYLE. It covers our labor expenses. Mr. COUGHLIN. The cost that you bill for, however, am I correct in understanding is an incremental cost? There is no allocation of the part of the original setup cost of the Congressional Record cost or something like that in the billing price, am I correct? Mr. BOYLE. In the billing price, there is no incremental cost in the setup or the composition or the make ready cost in the subscription selling price of the Congressional Record, to the public. Mr. DEVAUGHN. We may have two different things here. The Congressional Record is a Čongressional job, so we would bill that appropriation for full costs, and anybody else that wanted to ride that job would be billed at incremental costs. But if they were to send in a job, an annual report to be printed or something else, they would pay the entire thing, and if somebody else wanted a couple of extra copies they get it- Mr. COUGHLIN. It's the incremental costs? Mr. DEVAUGHN. Yes, sir. Mr. COUGHLIN. So the Sales Program is based on incremental costs? Mr. BOYLE. Yes, the Sales Program is. Every publication that is printed by the Government Printing Office or that we buy is charged against a Government agency, all of the rest of the add-on copies are incremental costs for the added time and material it takes to print it on the press. Mr. DEVAUGHN. We work on the theory that may not be 100 percent accurate in all cases, but every requisition we get to do a printing job has the statement on the bottom: "This work is necessary to carry out a governmental function". So we assume this job will be printed whether or not anybody else wants it or not, whether or not it will sell or any other agencies are interested, it will be printed, like the House Journal. So the agency that ordered it gets charged with all of the make ready costs, all of the setup costs and then we will let the press run a little longer and the incremental costs will be charged to anybody else that wants a copy. Mr. COUGHLIN. So the revenues you show are all based on incremental costs? Mr. DEVAUGHN. No, sir. Mr. BOYLE. Only documents. We get the incremental costs back, but those costs that you see there, any agency and the Congress that orders a publication would be billed at rates to recover the labor costs and the machine costs. The floor space that that equipment uses, the electricity it uses, the heat that is used in the room, all of the supervisory and overhead and administrative costs are built into the hourly rate for the equipment. Mr. COUGHLIN. But the income you show, for example, $516 million for 1978, estimated income, there is in that income from the Congress? Mr. DEVAUGHN. Yes, sir. Part is the $10 million we charge to the Congressional Printing and Binding appropriation for the Congressional Record. Mr. COUGHLIN. Okay. So there are appropriated funds in the increment? Mr. BOYLE. Yes, sir. All of the Congressional. Mr. DEVAUGHN. Everything in here would be charged against somebody's appropriation. If Agriculture asks for it, we charge their appropriation. Mr. COUGHLIN. Thank you, Mr. Chairman. Mr. SHIPLEY. Any other questions, Mr. Coughlin? 99-100 O 78-17 Mr. COUGHLIN. No questions, Mr. Chairman. Mr. SHIPLEY. All right. Thank you very much, gentlemen. I thought you whizzed by today. Mr. BOYLE. Thank you very much, Mr. Chairman. Mr. SHIPLEY. Thank you. WEDNESDAY, FEBRUARY 15, 1978. ARCHITECT OF THE CAPITOL (Including Botanic Garden) WITNESSES GEORGE M. WHITE, ARCHITECT OF THE CAPITOL MARIO E. CAMPIOLI, ASSISTANT ARCHITECT OF THE CAPITOL ELLIOTT CARROLL, EXECUTIVE ASSISTANT CHARLES K. TYLER, ATTORNEY WILLIAM F. RAINES, JR., ADMINISTRATIVE ASSISTANT J. RAYMOND CARROLL, DIRECTOR OF ENGINEERING C. M. BATES, SUPERINTENDENT, HOUSE OFFICE BUILDINGS TOM WARD, SUPERVISING ENGINEER, CAPITOL BUILDING HENRY C. KILBY, JR., ASSISTANT BUDGET OFFICER Mr. SHIPLEY. The committee will come to order. We will consider the budget of the Architect of the Capitol. There will be members coming and going because they are on two or three subcommittees and don't have an opportunity to be everyplace at once. We have George White with us this afternoon. The estimates we will be considering total $52,915,600, which is an increase of $9,193,300 above the amount appropriated to date plus the proposed wage board and civilian pay raise supplementals. We will take those up a little later. RETIREMENT OF CHARLES A. HENLOCK Before you proceed with your general statement, Mr. White, I would like to note the absence of one familiar face today, namely Charles A. Henlock, your Administrative Officer. I understand he has retired, as of December 31, 1977, after over 48 years of service with the Architect's Central Staff, and that his total Federal Service exceeds 53 years. This committee, particularly our staff, has had very close association with Mr. Henlock as he has had the responsibility for the preparation of the budget we have considered each year. And his close attention to detail has been of particular help to us. I would certainly agree with the comments that you made in 1975 when he was the recipient of the John McCormack Award of Excellence which I will quote: "He has served the Architect and the Congress with unexcelled devotion, with outstanding talent, and with the highest degree of intellectual attainment, always placing his duty ahead of any personal needs." I want to express the appreciation of the members and staff of the committee for all his assistance to us and to wish him well in his well earned retirement. I hope you will convey that to Mr. Henlock. Mr. WHITE. I certainly will. Mr. SHIPLEY. Will you identify the persons accompanying you? GENERAL STATEMENT OF THE ARCHITECT Mr. WHITE. The gentleman who has replaced Mr. Henlock is Mr. Crupi. You know Mr. Campioli; and behind me are various members of the staff whom I won't name specifically, but they are mentioned on the list of witnesses and are available for whatever backup information we may need. Mr. SHIPLEY. If you would like, you may proceed with your statement. Mr. WHITE. I have a short statement I will briefly run through, then be available for any questions you may have. Mr. SHIPLEY. All right, sir. At this point we will include your statement in the record. [The statement follows:] STATEMENT OF GEORGE M. WHITE ARCHITECT OF THE CAPITOL Thank you, Mr. Chairman. I am pleased once again to appear before your Committee, this time to present the appropriation request for fiscal year 1979 for my office. If it is agreeable, I thought it would be appropriate to present a brief summary of the various requests, following which I would be pleased to discuss in detail any of the specific items that you wish to pursue. The total appropriation request for fiscal year 1979 is $63,408,200, which includes funding for 1,910 positions. This represents a net increase of $9,937,400 and 71 positions over the fiscal year 1978 total of $53,470,800 and 1,839 positions. Stated differently, gross requested increases are $16,063,900 and 78 positions which, in the aforementioned net increases, have been reduced by nonrecurring fiscal year 1978 program deductions amounting to $6,126,500 and abolishment of 7 elevator operator positions through attrition in the House Office Buildings appropriation. If the items "Senate Office Buildings" and 'Senate Garage" are excluded, the $16,063,900 increase for 1979 reduces to $15,053,800 and the 78 additional positions requested to 6€. The $16,063,900 increases fall into five categories, namely, Mandatory Items, which total $939,000, or 6% of the increase; Annual Recurring Maintenance, which totals $2,680, 800, or |