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we have observed other areas in which management of its facilities acquisition program could be improved.

Section 2 of the Public Buildings Act of 1959, as amended, provides that no Government-owned public building shall be constructed except by the Administrator of General Services. Under section 13 of the act, public buildings include Federal office buildings, post offices, and customhouses, but exclude specific projects, such as projects on military reservations and hospitals. Section 15 provides that the Administrator, with certain exceptions, is authorized to delegate the authority vested in him by the act to an executive agency when the Administrator determines that such delegation will promote efficiency and economy.

The act provides also that no appropriation shall be made to construct any Government-owned public building involving an expenditure in excess of $100,000 or to alter any such building involving an expenditure in excess of $200,000 unless a prospectus has been approved by the Public Works Committees of the Congress.

In December 1964, the Postmaster General presented to the President a proposal that would have given the Department direct construction authority primarily because the characteristics of the buildings needed by the Department differed significantly from those of the office buildings needed by other civilian agencies. A committee of business executives, appointed by the President to advise the Postmaster General in this area, recommended that the Department have permanent authority to acquire, construct, and own buildings for postal purposes in addition to its authority to lease such facilities.

GSA did not concur with the recommendation on the premise that it had the experience and competency to design and construct postal facilities and that such work was foreign to the basic mission of the Department, that is, receiving, handling, processing, and distributing mail.

In April 1966, a bill was introduced in the Senate which would have authorized the Postmaster General to construct postal buildings. The Administrator of General Services by letter dated April 18, 1966, to the Postmaster General stated that the proposed legislation was unnecessary and ill-advised. Hearings on the bill were held, but it was not enacted.

During the summer of 1966, GSA, at the suggestion of the Bureau of the Budget, proposed to delegate to the Postmaster General the authority to design and construct postal facilities. In November 1966, the Postmaster General agreed to the delegation of authority, subject to working out specific language of the delegation.

On December 1, 1966, the Administrator of General Services delegated to the Postmaster General, with authority to redelegate, the authority to acquire sites, design, construct, and alter public buildings to be devoted primarily to postal purposes. The delegation of authority required that prospectuses be submitted by the Department to GSA for submission to the Office of Management and Budget and the Congress, and that funds for the approved projects be obtained from the Department's appropriations.

Although the delegation required that the facility design, construction, and alteration conform with GSA standards, GSĂ recognized

that in view of the trend toward mechanized mail processing plants, modification of the GSA standards might be necessary when applied to postal facilities.

As of April 30, 1971, 77 postal projects to be constructed under the delegation of authority at an estimated cost of about $1.2 billion had been approved by the Committees on Public Works. Based on data supplied by the Department, we identified 38 of these projects, valued at about $468 million-Government-owned—that had either been completed or were in various phases of completion.

The Department's latest estimates for 13 of the 38 projects exceeded the estimates shown on the approved prospectuses by about $38 million. The estimates for seven of the 13 exceeded the amounts in the related prospectuses by more than 10 percent, the point at which a revised prospectus would have to be submitted to the committees.

Department officials informed us that they advised the Appropriation Committees of the revised cost estimates; and therefore, in their opinion, submission of revised prospectuses to the Public Works Committees was not required.

Mr. WRIGHT. At that point, Mr. Staats, what is our legal opinion under the Public Buildings Act of 1959 ?

Mr. STAATS. would like Mr. Socolar to comment from the legal standpoint. I can comment from my own background and history of the legislation.

I can say from my recollection that it was pretty clear that it was intended that when one exceeded this 10-percent mark, it should go back through the committees and go through the same process. That is a recollection. Mr. Socolar might want to comment.

Mr. SOCOLAR. Yes; I think the requirement for going back with a new prospectus is quite clear in the law. However, I think also that the law is really, in effect, an internal requirement of the Congress itself so that if an agency, without coming back with a new prospectus, were to obtain appropriations to fund the building for which a prospectus was required but not submitted, I think we would take the position that that later appropriation, as a statute duly enacted by the Congress in itself, would cover the matter.

Mr. WRIGHT. That is an interesting-
Mr. Staats. May I add to that?
Mr. WRIGHT. I want to probe this further. Go ahead.

Mr. Staats. You may recall that this issue has been for discussion on a number of occasions, not just with respect to the Post Office Department, but other public works matters as well. The discussion has usually been in terms of whether the Congress goes ahead with the appropriations without referring the matter to the Public Works Committee, or refuses to appropriate until it did go through the process of concurrence. It therefore becomes an internal congressional problem, rather than a problem between the Congress as a whole and the agency.

Mr. WRIGHT. I think that is a very neat distinction. However, let me ask a question. Does not the law clearly require submission of these prospectuses?

Mr. SOCOLAR. The law states no appropriation shall be made unless the prospectus is provided. However, beyond that in terms of our looking at the full scope of the law, if in fact an appropriation had been made

Mr. WRIGHT. I understand. You mentioned that a moment ago, Mr. Socolar, as a rationale for evading or avoiding this particular provision of the law. The rationale would seem to boil down to this: That since Congress passed the law, if Congress lets us get by with avoiding the law, then we have no obligation to comply with it. Do you think that is a sound legal doctrine ?

Mr. SOCOLAR. Well, I think that the obligation on the part of the agency is still there. My response to your question was really directed to what the status of the situation would be if, in fact, an appropriation had been enacted.

Mr. WRIGHT. I understand that.

Mr. STAATS. May I interject here, Mr. Chairman, on this? I think it might help. A point of order, I think, would lie for appropritions which went beyond the 10 percent—it would require resubmission to the Congress. I think what Mr. Socolar is referring to would be the situation where our office would be called upon to make a legal ruling with respect to whether the funds were illegal.

Now, our position has been in this area as well as other areas where once the appropriation is enacted and the bill signed by the President, that that is as much a matter of law as any legislation.

Mr. WRIGHT. I think quite so.
Mr. STAATS. This is what he is referring to.

Mr. WRIGHT. I was not questioning the validity of the funds provided by Congress in the appropriation process. What I was questioning was the legality of evading the requirement of law and coming to the appropriations process of Congress without having first complied with what seems to me to be a clear provision of the law.

Mr. SOCOLAR. I would say in answer to that question that the agency, didn't comply with the law is going to the Appropriations Committee rather than to the Public Works Committee.

Mr. WRIGHT. Now let me ask this further question in that connection. Do you know whether or not the agency in these instances advised the Appropriations Committee in its application for funds for these specific projects that they hadn't been authorized in compliance with the law ?

Mr. SOCOLAR. I am not aware of that personally. I understand the agency advised us that they did communicate with the Appropriations Committee, but I don't know what the extent of that communication was.

Mr. STAATS. This could be determined, Mr. Chairman, I think with not too great difficulty, by simply examining the justification and the hearings before the Approciations Commitees on these items.

Mr. WRIGHT. I think so.
Mr. Staats. We would be happy to do that.

Mr. WRIGHT. I would appreciate it if the General Accounting Office might make an inquiry into the question of whether or not in these instances the agency seeking funds for projects not authorized under the provisions of the law had advised the Appropriations Committees in their budget submissions that these were outside the scope of the Public Buildings Act of 1959.

Mr. STAATS. This would be a matter of record. We would be happy to do that and supply it to the committee.

(The information referred to follows:)

NOTIFICATION OF APPROPRIATION COMMITTEES OF Cost INCREASES According to the Postal Service, general notification of cost increases on Postal Public Buildings projects was given to the Appropriation Committees “on the 3-year table in our FY 1972 Budget submitted to the Office of Management and Budget and the Congress.” This schedule may be found on pages 516–518 of Part 2 of the FY 1972 House Hearings on the Treasury, Post Office, and General Government Appropriations. In addition, on page 514 of those hearings the Post Office Department inserted the following paragraph regarding the FY 1971 Program :


“The estimates appearing in the FY 1971 program differ from those submitted to the Committee at the time of our request for the 1971 Postal Public Buildings Appropriation. Formal revisions to the program have deleted three projects and five were added. The cost estimates have been updated to reflect the latest construction cost escalation and operational concept changes. The construction cost estimates in the current 1971 program update the construction cost estimates presented to the Committee during the hearings on the FY 1971 Postal Buildings Appropriation request."

The following table shows at April 30. 1971, the seven postal projects on which the estimated costs exceeded by more than 10 percent the amounts approved by the Public Works Committees and the specific means used by the Post Office Department to notify the Appropriations Committees of such increases.

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1 The Postal Service did not request any construction funds for this project in any of its past original budget submissions However, on Aug. 27, 1970, the Postal Service notified the House Subcommittee on Treasury and Post Office Appropriations of its intent to include the Carbondale project in its revised fiscal year 1971 postal public buildings program.

2 The Postal Service furnished information relative to this project to the Appropriations Committees by letters dated Feb. 20 and Dec. 31, 1970.

3 On July 28, 1970, the Postal Service notified the Appropriations Committees of its plans to reactivate the Salt Lake City project and to include tits revised fiscal year 1971 postal public buildings program.

We found nothing to show that the Appropriations Committees were specifically advised that the projects had not been resubmitted to the Committees on Public Works as required by the Public Buildings Act of 1959.

Mr. WRIGHT. Thank you very much. Mr. Staats. The Postal Reorganization Act approved August 12, 1970--the provisions of which became fully effective on July 1, 1971– established the Postal Service and authorized it to construct, operate, lease, and maintain buildings and facilities without regard to the Public Buildings Act of 1959.

In early 1969, the Postmaster General began to evaluate the problems facing the Department and concluded that a fairly substantial investment in new plant and equipment was needed. The Postmaster General was of the opinion that the Department did not have an organization capable of completing, within a reasonable span of time, the large scale modernization program needed. Accordingly, he began discussing his problem with the corps and GSA.

In March 1969, the corps furnished the Department a brochure outlining its capability to provide design, construction and real estate services. The brochure referred to the corps' past experience in providing services to other agencies in the execution of large construction programs, such as its work for NASA and its design and construction of hospitals for the Veterans' Administration. In transmitting the brochure, the Acting Chief of Engineers stated that, subject to the approval of the Secretary of the Army, the corps would be pleased to support the Department's requirements for construction and the related services to whatever extent its future programs might demand.

In April 1969, the Administrator of GSA advised the Postmaster General that it might be easier and cheaper to use GSA but that since it was felt the corps would best be able to handle specialized new post office construction, there was nothing to stop the Department from using the corps at once.

The Department's decision not to use GSA was made on the basis that it did not have the size or experience to manage the postal facility construction program. The Postmaster General was of the opinion that a postal construction program of $250 to $500 million a year could be better handled by the corps, which had a construction program averaging about $2 billion a year, rather than by GSA which had a program averaging about $115 million a year with a projected fiscal year 1972 workload of about $180 million.

Mr. WRIGHT. Would you yield at that point. With regard to the construction program of the corps being estimated at $2 billion a year, I would like to specify in what areas that construction activity occurs. I don't think you are saying that they have a $2 billion a year construction program directed toward such things as NASA and VA hospitals, are you?

Mr. STAATS. No. I think those are in the nature of $400 million a year, as I recall. Mr. Ahart?

Mr. AHART. Mr. Chairman, I think actually in the 1970 program of the corps, they had about $21/2 billion, rather than the $2 billion which the Postmaster General cited, which was referred to here. Of the $212 billion, approximately $11/2 billion was on the civil works side.

Mr. Wright. Irrigation, flood control, things of that sort?

Mr. AHART. Yes. On the military side there was roughly $1 billion. This included $250 million for the construction of Army facilities, $40 million for modernization of Army munition plants, $47 million for family housing, $185 million for the construction of Air Force facilities, $21 million for NASA, $32 million for the ABM sites, and $200 million in miscellaneous construction. This adds up to $775 million. I think it would be difficult to sort out these figures without a complete analysis of how much of this would be comparable to the building and mechanized facilities construction which the corps will be called upon to perform for the postal service. It would be somewhat less than this amount.

Mr. WRIGHT. Quite a bit less, wouldn't it?
Mr. AHART. Yes.

Mr. WRIGHT. The biggest portion of the corps' budget is for civil works projects, river developments and things of that kind. I think we would have to conclude that the amount of expenditures reflected over the years in the operations of the corps in developing buildings of a character similar to those required by the Post Office would be a rela

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