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an urgent need for having the building built. This is why it was decided to lease the building at that time. If the decision were being made today we would probably do our best to own that building.

Mr. GRAY. General, I will put in the record here a letter dated May 15, almost a month after your return from the Virgin Islands, with a verbal commitment for that land, a letter signed by Postmaster General Blount asking for permission to withdraw from the Charlotte Amalie project.

Now, remember, that is almost a month after you were down in April. It says inasmuch as this project, this is Mr. Blount speaking, has a low priority on your construction schedule, and yet GSA tells me they had it in the 1972 fiscal year budgets, and our space requirements have increased considerably-remember 16,000 is considerable, their space requirements have really increased since the approval of the prospectus—your site is inadequate and the site you took was 3 acres and you took an option on 31/2 and we therefore plan to proceed with the construction of a new-lease facility, but will retain a station either in the existing or new building, the new Federal building to be constructed by GSĂ.

That is a month after you visited and took an option on the lot.

I just wonder what would have happened had the Commissioner written back and said, no, we have already socked the taxpayers for $100,000 in design and if we take you out of the building, you are going to occupy 90 percent of the building, that is going to cost $100,000 more. We are not going to let you off. Congress says it wants a multipurpose facility. We are not going to do it. You would really be embarrassed, would you not?

Mr. LEHNE. I think I heard you, Mr. Gray.

Mr. GRAY. Without objection, there will be submitted for the record, as Exhibit 9, the letter from the Postmaster General dated May 15, 1970, to Mr. Robert L. Kunzig, Administrator for GSA. (The document follows:)

EXHIBIT 9

THE POSTMASTER GENERAL,

Washington, D.C. May 15, 1970. Hon. ROBERT L. KUNZIG, Administrator of General Services, Washington, D.C.

DEAR MR. KUNZIG: Reference is made to Mr. Chapman's letter of May 4, 1970, relating to the Post Office Department's plans for participating in the proposed joint GSA-POD projects in Augusta, Georgia, Manchester, New Hampshire and Charlotte Amalie Virgin Islands.

The arrangements with respect to our participation in these projects as set forth in your letter is substantially in accordance with the understanding reached. between Mr. Lehne and Mr. Sampson in their meeting held on April 22, 1970. This understanding may be summarized as follows:

Augusta-In view of the fact that GSA will include construction funds in your 1972 fiscal year budget request, POD will continue to rely on this new building to meet our postal requirements in Augusta.

Manchester-Since this project has a low priority on your construction schedule, and no site has been acquired, POD is withdrawing from participation and will plan

to meet our postal requirements independently, either by the construction of a Postal Public Building or a leased facility.

Charlotte Amalie Inasmuch as this project also has a low priority on your construction schedule, and our space requirements have increased considerably since the approval of the prospectus, your site is inadequate to accommodate the Project need and description.—The Post Office and Customhouse, constructed in 1938, the District Court building, constructed in 1864, and its annex, constructed in 1941, are inadequate and obsolete. The postal space situation is extremely critical in that the U.S. Postal Service occupies about one-third of the space required for efficient mail handling. Charlotte Amalie is located in the Virgin Islands on the southern side of the Island of St. Thomas.

total space needs. We therefore plan to proceed with the construction of a new leased postal facility, but will retain a station either in the existing or in the new Federal building to be constructed by GSA. We shall furnish you our space requirements for this station at an early date. Sincerely yours,

WINTON M. BLOUNT.

CHARLOTTE AMALIE, ST. THOMAS, VIRGIN ISLANDS—Post OFFICE, COURTHOUSE

AND FEDERAL OFFICE BUILDING Prospectus approved : Senate-September 20, 1966; House - October 6, 1966. Total estimated project cost: $6,376,000.

Fiscal year Funds appropriated : Site

$10,000 Design

255, 000 Construction

1968

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Site: Size and location—77,537 Sq. Ft.: A portion of barracks yard renewal project (parcel G); Status of Acquisition-Completed September 5, 1968.

Building area : Gross—102,500 Sq. Ft. Net–78,300 Sq. Ft. 34% of space for postal use.

Status of design: Design stopped in August 1970 at tentative stage due to post office withdrawal; region 2 was authorized on July 2, 1971 to negotiate A/E contract for reduced project.

Date of postal withdrawal : May 15, 1970.
Remarks : Reduced project and revised prospectus being developed.

FUNDED FOR SITE AND DESIGN-UNFUNDED FOR CONSTRUCTION AND MANAGEMENT

AND INSPECTION

Project.-Charlotte Amalie, St. Thomas, Virgin Islands, post office, courthouse, and Federal office building; city population : 13,000.

Prospectus approved.–Senate, September 20, 1966; House, October 6, 1966.

The proposed project provides a reinforced concrete or steel frame structure on special foundations with four stories, penthouse, part basement, brick and special face stone trim, flat composition roof, elevators, airconditioning, one courtroom, postal maneuvering area, exterior parking for about 125 vehicles, and a vehicle maintenance building as a separate structure on the site. Gross area of buildings, square feet-

102, 500 Net area of building, square feet-

78, 300 Percent of net area to gross, percent.

76 Estimated site, design, and review cost:

Site cost (exchange expenses only) (funded fiscal year 1968)--- $10, 000 Design and review cost (funded fiscal year 1968)

255, 000

Total site, design, and review cost

265, 000

Estimated construction cost :
As of October 1972_-

5, 698, 000 Cost per gross square foot--

55. 59 Estimated management and inspection cost :

Funds will be requested under sites and expenses at the time
construction funds are requested.--

413, 000

6, 376,000

Estimated total project cost-----
Construction capability for contract award.--Undetermined.
Site data :

Total site size, sq. ft-
Building area, sq. ft---

Cost of site per square foot--
Building population.-
Building occupants:

U.S. Postal Service, sq. ft. (34 percent)-
U.S. courts (including attorney/marshal), sq. ft. (25 percent).
Department of the Interior, sq. ft. (9 percent).
Other agencies (7), sq. ft. (17 percent)--
Vehicle maintenance facility, sq. ft. (4 percent).
Other service and custodial areas, sq. ft. (5 percent).
Reserve for expansion, sq. ft. (6 percent).

77, 537 30, 623 (1)

172

23, 000 17, 275

6, 025 11, 850 2,800 3, 280 3, 770

Net assignable area of buildings, sq. ft.

68,000 Government-owned space for release, sq. ft.

25, 399 Rented space for release, sq. ft.--

3, 683 Annual net rental of rented space for release..

$21, 407 1 Exchange.

These data indicate the status of the currently approved project as of December 31, 1970. The U.S. Postal Service no longer intends to participate in this project, and a review of Federal space requirements in this community is being made. If this review determines that a revised project is required, a new authorization will be sought.

Mr. LEHNE. The site we have taken is 31/2 acres and we carefully tried to evaluate whether that additional site that GSA owned could be expanded or not.

We came to the conclusion, both organizations, it could not be expanded.

Mr. GRAY. General, I have been there. I have seen the site. I have looked at it before our committee approved it and it faces the Caribbean on one side and it has land on three sides around it.

There is absolutely no reason why you could not have condemned the land to get all you need for that site, absolutely none and it has approximately a gross of 172,500 square feet now. The original plan for the GSA building for your needs and their needs would only be 102,000 square feet.

Mr. LEHNE. The building is that way, but the land is 177,000 square feet.

Mr. GRAY. But there is plenty of room to acquire additional land and you did not have to go a mile and eight-tenths up the road.

I have a picture and even the topography is not good.

Mr. LEHNE. If I can say, sir, the point you are making quite a bit of today is we have changed our operational characteristics.

The operational characteristics are the mail processing facility should be on the outskirts of the town. They should not be in the center of town where they create a lot of traffic jams.

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What we have attempted to do is put stations in the center of town where they can serve the people, where they can buy the stamps and mail their packages. The processing of the mail will be on the outskirts of town where other vehicles can get to them without creating traffic jams. This is the basic operational characteristic that has been changed in the last few years.

Mr. Gray. You say where the land is cheaper.
Mr. LEHNE. Outside of town.
Mr. GRAY. You call $165,000 an acre cheap?

Mr. LEHNE. It is comparative, Mr. Gray, with what it would cost downtown. I believe you quoted earlier yourself, $700,000 in Grand Rapids.

Mr. GRAY. Grand Rapids is not the Virgin Islands with 16,000 people.

Mr. LEHNE. The Virgin Islands are much more expensive property than Grand Rapids from what I have heard.

Mr. Gray. The GAO report certainly does not show that this was the only location to place this facility.

There are many others. And what I am saying here for the record is that this was a hasty decision. It was made without any consideration of direct Federal construction. It was made without any consideration of the $200,000 plus that is going to be wasted on architectural and engineering fees.

It leaves the General Services Administration and the courts and the other agencies in that area in a limbo state of not having a justifiable project.

None of these decisions were made because you ordered the lease to be signed before you even talked to the GSA about pulling out.

That is the type of thing I am complaining about, and every single project we have looked into is replete with the same story, duplication, high costs, socking the taxpayer with extra millions in waste.

Who is going to pay for this?

This is not a pie in the sky thing. Every dime you spend comes out of the pockets of American taxpayers. It all comes from the same place.

Mr. LEHNE. Who is the user of the mail?

Mr. Gray. You are going to have to take it out of the hide of the taxpayers to increase postal rates.

Much of that is due to the taking of the control away from the Congress, not that we want to have everything to say, but if you run into a situation like this where you need a facility, you could ask for a delegation of authority. You could have gone to the Appropriations Committee and gone to the Office of Budget and Management and said we need a number of dollars to do this job.

Unfortunately, the Postal Service was filled with so many problems that the Congress wanted to get rid of it and there was little debate other than my speech on the floor, very little debate about the public buildings program of the Post Office Department.

Yet, to me, that was the most important, because you have the authority now to go out and soak the taxpayers for $10 billion in debt, plus the interest on top of that. Just think of that-$10 billion.

Mr. LEHNE. That is the total that we can raise, not anything on top of that, sir, $10 billion.

Mr. GRAY. Including interest!
Mr. LEHNE. I believe that is all we can raise.
Mr. GRAY. Let us take that as a fact.

Mr. LEHNE. That is a lot of money and we are vitally interested in cost.

Mr. GRAY. Yet, the President vetoed recently a $2 billion, small by comparison public works bill, but can you tell me any difference in deferring a needed sewage project to clean up the Potomac or build a needed hospital because that is inflationary, and yet you are given a free hand to go out and spend $10 billion for postal buildings ?

Is that any less inflationary?

Mr. LEHNE. I do not think we have a free hand. I think the legislation requires us to not exceed $1.5 billion in any one year. That is not quite a free hand as you indicate.

Mr. GRAY. Let me refer to Mr. Kreger's testimony, where he states that the Postal Service now has a free hand to do what they please.

Did you read his testimony?
Mr. LEHNE. I read Mr. Kreger's testimony, and I read my own.
Mr. GRAY. He said free hand to do as you please.

You have a free hand. Is that right or wrong? If you do not have a free hand, how could you catapult the price of that new project in New York to $135 million? That is unconscionable.

Mr. LEHNE. We are vitally concerned, whether you want to admit it on the record or not. We are vitally concerned about the cost of these buildings.

We are doing our best to run a very, very efficient organization.

We are not changing sites for the fun of changing sites, to annoy people. We are doing it for what we believe are sound economic reasons and are going to result in less operating costs in the future.

Mr. GRAY. General, I have given you three, just three, of many, many instances where you have made changes that are extremely costly to the American taxpayer.

I have not had the first justification other than the fact it is crowded, not enough parking, et cetera, same old wornout excuses, and which are in direct opposition to our own reports when the initial project was presented to the Congress.

We know why these changes are being made. We know why. It is no secret. You know as well as I do why the changes are being made.

Mr. LEHNE. I think I have one opinion and not the same as yours. Would you care to state yours?

Mr. GRAY. I will be glad to state mine.

Congress placed a limitation on these projects, and now that you have to account to no one, you want to build what you think

you

need without any regard to cost.

No. 2, the President wanted freedom so he would not have to show your funds in his budget deficits. It is just that plain. Backdoor financing

Our committee would never have allowed you to move the site at Carbondale.

Our people would never have allowed you to pull away from the Virgin Islands project and commit the taxpayers for $150,000 a year for 45 years. Never.

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