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aries can be used. However, adjustments will have to be made on the basis of economy and effectiveness.

Mr. CONSTANDY. May I interrupt you?
What are the civil works boundaries predicated upon?

Mr. AHART. Basically, I think, it gets into this. It is basically on a watershed, river basin basis, as I understand it.

However, adjustments will have to be made on the basis of economy and effectiveness. For exampe, in the St. Louis area, the Kansas City District boundary lies just to the north of St. Louis. It would thus seem that it would be better for the St. Louis District to be responsible for those Post Offices in the eastern region of the Kansas City District. The point being that the watershed concept for determining district boundaries may not be the best criterion in all cases for determining the district boundaries for Post Office construction.

Mr. CONSTANDY. Say that again. Mr. AHART. The point being that the watershed concept for determining district boundaries may not be the best criterion in all cases for determining the district boundaries for Post Office construction.

Mr. Wright. So that it is possible that the Corps of Engineers for that broad new portion of its recently assumed activity that deals with the Postal Service, would have to create a separate system of geographical divisions than the one through which it has operated in the past, is that what you read into it?

Mr. AHART. At the district office level, that would certainly be true. Mr. WRIGHT. District offices were set up for the principal business of the Corps of Army Engineers which has been civil works?

Mr. AHART. That is correct.

Mr. WRIGHT. Logically they followed river basins. In this new arrangement, they are acknowledging that they may have to have superimposed upon this another district or regional setup for the exclusive purpose of servicing the Postal System, is that your interpretation ?

Mr. AHART. They would have to draw different geographical boundaries and adjust them for the purposes of carrying out these functions. Yes, that is what this reports. This goes on pretty much in the same vein.

The May 28 letter states that the action required at the division level is to first contact the regional headquarters of the Post Office Deparment, to find the information, get the information that they need; and, to submit to the Chief of Engineers Office by June 4, for approval, their recommendations regarding the delineation of district boundaries for the handling of the design, construction, and real estate regional workload; and, to submit to the Chief of Engineers Office by June 9 for approval the estimated personnel requirements by district, to accomplish this small post office program, assuming plans of the preceding subparagraph were approved.

In effect, what they were trying to do was to take inventory of the workload that they were going to be acquiring, how they would organize it geographically, and what the personnel requirements would be

Now, this was to come in here June 9. We have not seen what they came in with, but the functions were transferred, as I understand it, on June 27, or effective July 1.

Mr. CONSTANDY. It begins to suggest that these arrangements with the Postal Service are going to begin to disjoint the corps' normal structure and operations, does it not?

Mr. AHART. As the Comptroller General pointed out in his statement this morning, I think we can certainly expect that it will have an influence upon the organization and staffing of the corps, the marnitude of which is pretty difficult to determine until they have actually assumed the functions to see how they are organized to operate.

Mr. CONSTANDY. It seems, though, that it will have some major ramifications on the reassignment of personnel that has the capability to perform the functions of the breadth that you have outlined that are anticipated in the June 28 letter. The thing that troubles me with it, any one of the contingencies which you made reference to in that list of functions that they perform is at least possible to occur in any one of the 27,000 present leaseholds, which means that there has to be within some reasonable distance from any one of them the capability to handle any of those problems. It does not seem that the corps' activity in the past is meshed with that kind of a need.

Mr. AHART. They have not been involved in a leasing service program of anywhere near this magnitude. Certainly, they would have to have people capable.

Mr. CONSTANDY. I would suggest building maintenance.

Mr. AHART. They would be responsible for repair, as pointed out in this agreement of leaseholds and fairly minor alteration projects.

Mr. CONSTANDY. Mr. Chairman, if we could make the May 20 agreement exhibit No. 18.

Mr. WRIGHT. Without objection, that will be exhibit 18.
(Exhibit No. 18 was marked for identification.)
Mr. CONSTANDY. And the June 28 agreement, exhibit 19.
Mr. WRIGHT. Without objection, that will be exhibit 19.
(Exhibit No. 19 was marked for identification.)

Mr. CONSTANDY. And may we have this document, General Rebh's instruction to the Corps with that information, dated May 28, 1971, made exhibit 20, then.

Mr. WRIGHT. That will be fine.
(Exhibit No. 20 was marked for identification.)
(The 3 exhibits follow :)

EXHIBIT 18

MEMORANDUM OF WORKING AGREEMENT BETWEEN THE POST OFFICE DEPARTMENT

AND THE CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY PROVIDING FOR THE ASSIGNMENT OF USPOD FACILITIES PROGRAM FUNCTIONS TO THE CORPS OF ENGINEERS

I. TRANSFER OF FUNCTIONS 1. In furtherance of the Memorandum of Agreement signed on March 11, 1971, by the Postmaster General and the Secretary of the Army, and the Memorandum of Agreement signed on March 11, 1971, by the Postmaster General and the Chief of Engineers, it is understood and agreed that there shall be transferred from the Post Office Department (USPOD) to the Corps of Engineers, Department of the Army (Corps), responsibility for the acquisition, engineering and construction functions, except policy determination and program management, involved in the execution of the USPOD Facilities Program.

2. The USPOD has identified the USPOD employee positions being abolished as a result of this transfer of function responsibility to the Corps; these are listed in Attachment A (USPOD Headquarters) and Attachment B (USPOD Regional Office). It is agreed that those USPOD employees occupying positions listed in Attachment A and B will be granted transfer rights to the Corps of Engineers Postal Construction Support Office, or the Corps field elements, in accordance with Civil Service Regulations.

3. A schedule for effecting all aspects of the transfer shall be devised jointly at the earliest practicable date following the signing of this Memorandum of Understanding. Actions to determine and consummate transfer of function rights shall be accomplished in accordance with this schedule. It is intended by both parties that all such actions shall be accomplished by July 1, 1971.

4. The Corps will make formal offers to the USPOD employees having transfer of function rights, and will notify USPOD of those who decline an offer of transfer. The Corps will process personnel actions for the transfer of those eligibles and available. The USPOD will issue appropriate travel orders and cite USPOD funds for all costs associated with personnel relocation. The USPOD will process necessary personnel actions on those individuals unwilling or ineligible to transfer, and will carry them on USPOD rolls through date of separation.

II. ASSIGNMENT OF PROGRAM AND PROJECT RESPONSIBILITIES

1. Program Responsibilities.—The Corps will be responsible for providing all USPOD facilities acquisition, design, engineering, construction, and real estate services, to include: project cost estimates and the selection of all contractors and architect-engineer firms; site acquisition ; lease-construction; preparation, award, and complete administration of design, construction, and fixed mechanization fabrication and installation contracts and modifications thereto; supervision and inspection of contract construction; legal services including requirements resulting from contractor claims and appeals, and labor disputes ; equal employment opportunity requirements; disbursing and accounting for funds; and reporting on the status of all construction and related activities. 2. Project Responsibilities.

A. Existing Projects.The Corps will accept responsibility for, designate the successor contracting officer for, and administer to completion, all USPOD contracts presently in force and awarded during the remainder of Fiscal Year 1971 which are for the design or construction of public buildings fixed mechanization including modifications thereto, lease-construction projects, and leased-facility improvement, modernization, extension, or renovation projects. The list of all such existing contracts, with locations and amounts, and status will be set forth in an Attachment which is to be provided at the earliest practicable date. Funding for such projects will be provided by project authorizations in accordance with the Memorandum of Agreement signed March 11, 1971 by the Postmaster General and the Chief of Engineers. Responsibility for all such projects shall be assigned to and accepted by the Corps às rapidly as possible. It is intended by both parties that these responsibilities be fully transferred by July 1, 1971. A schedule and the procedures for effecting the transfer of responsibility for those projects shall be devised jointly at the earliest practicable date following the signing of this Memorandum of Understanding.

B. New Construction Projects Under 50,000 square Feet, Fixed Mechanization Including Modifications, and Major Improvement and Modernization Projects, To be commenced in Fiscal Year 1972 and After.---The Corps already has assumed responsibility for execution of the USPOD “major facilities” (50,000 square feet and larger) construction program with a few exceptions which will be assigned to the Corps at the earliest practicable date in accordance with A above. Responsibility for new construction projects under 50,000 square feet, fixed mechanization including modifications, and Major (over $500,000) improvement and modernization projects to be commenced in Fiscal Year 1972 and after, will be assigned to, and accepted by, the Corps as rapidly as possible commensurate with new Postal Service Technical and operational concepts. The list of all approved Fiscal Year 1972 new construction projects with locations and sizes in square feet, will be set forth in an Attachment D to be provided.

C. Transitional Personnel Costs.To assure funding of transitional personnel costs associated with the Corps employment of former USPOD regional personnel, the USPOD will establish a Personnel Cost Transition Fund in the initial amount of $500,000, to be adjusted to meet actual costs. The Corps will be authorized through December 31, 1971, to draw down all or such portions of the said fund as the Corps determines necessary to cover transitional personnel costs experienced through September 30, 1971, in connection with the Corps' employment of former USPOD regional personnel. Individual project costs shall not include any transitional personnel costs. For the purposes of this paragraph II, C, transitional personnel costs are those costs (other than transfer and relocation costs, which are provided for in paragraph 1, 4, above) incurred through 30 September 1971, which are associated with the Corps' employment of former USPOD regional personnel, and which are not directly related or chargeable to any individual Postal Service Project or projects for which the Corps is responsible.

II. AMENDMENT AND TERMINATION

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This Memorandum of Understanding shall be equally as binding upon, and for the benefits of, the United States Postal Service (USPS) as the Post Office Department. This agreement may be amended at any time by mutual agreement. This agreement may be terminated by either party six months after giving notice of termination to the other party, or at any time by mutual agreement.

CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY,

By J. A. RAYMOND,
Major General, USA, Director of Military Construction, Office of Engineers.

Post OFFICE DEPARTMENT,
By

Assistant Postmaster (General), Post Office Department.
Date: May 20, 1971.

EXHIBIT 19

MEMORANDUM OF AGREEMENT BETWEEN THE Post OFFICE DEPARTMENT AND THE

CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY PROVIDING FOR THE ASSIGN-
MENT OF RESPONSIBILITY FOR EXECUTION OF THE USPOD LEASING PROGRAM TO
THE CORPS OF ENGINEERS

I. INTRODUCTION
This Memorandum of Agreement assigns specific responsibilities and estab-
lishes funding procedures for the leasing and lease servicing functions involved
in the execution of the USPOD Facilities Program, excluding policy determina-
tion and program management, transferred to the Corps.

II. ASSIGNMENT OF RESPONSIBILITIES

1. The Corps will be responsible for, and is hereby authorized to accomplish, the execution of the USPOD leasing program, in accordance with the USPOD's leasing authorities, policies, guidelines, and determinations, to include:

Maintaining the USPOD's lease records :

Obtaining new leasehold space for the USPOD in accordance with USPOD requests ;

Renewing USPOD leases and executing USPOD purchase options after obtaining determinations from the USPOD as to whether to renew or purchase ;

Representing the USPOD in all negotiations and discussions with lessors concerning leaseholds and the terms and provisions of leases;

When made aware of the need by the USPOD, or becoming aware thereof in the course of performing other duties, taking action with lessors to insure that the lessors fulfill their lease obligations including the making of needed repairs which are the obligation of lessors;

Negotiating and executing supplemental lease agreements under which lessors accomplish USPOD-approved leasehold alterations and improvements, and repairs which are the obligation of the USPOD, of which the total cost, including all lessor charges, is $2000 or more;

Awarding, executing, administering, and supervising contracts with thirdparties for the design and construction of USPOD-approved leasehold improvements, alterations, and repairs of which the estimated construction contract cost is $2000 or more, or for which architect-engineer services are required :

Submitting promptly to the USPOD, as and when requisite, lease or rental payment authorizations (USPOD Form 125) to include authorizations for the withholding of rental payments when appropriate;

Submitting on a regular and current basis lease data requested by the USPOD for inclusion in the USPOD's ADP system; and furnishing additional specified lease data upon request of the USPOD;

Monitoring and challenging all excessive or unwarranted increases in state and local real property tax assessments against properties leased by USPOD where USPOD pays, or reimburses the lessor for, all or part of such taxes;

Negotiating with state and local authorities for compensation, and with lessors for rent reductions, and arranging for the USPOD to be formally represented in court proceedings, whenever property leased by USPOD is taken by a state or local government by eminent domain;

When requested, subletting space in USPOD-leased buildings which is excess to the needs of USPOD, and acting as the USPOD's agent for the collection of rentals and other dealings with the sublessees;

When requested, assisting USPOD procurement contracting officers with real estate services needed in connection with the erection of free-standing

Self-Service Postal Units. 2. The USPOD will deliver its lease files and related documentation to the Corps, and the Corps will accept delivery of the same, at the fifteen regional offices of the USPOD on June 27, 1971. The responsibilities assigned to the Corps hereunder will become vested in the Corps upon delivery of the files as above provided and funding as hereinafter provided.

III. DISBURSEMENTS AND FUNDING

A. Disbursements. Disbursements for rent, and lump sum payments made pursuant to both lessor and third-party leasehold improvement contracts, including design, will be made by the USPOD in accordance with lease or rental payment authorization (USPOD Form 125) issued by the Corps. B. Funding

1. The USPOD will fund the costs incurred by the Corps in executing the USPOD leasing program, to include Corps costs for leasehold improvements, alterations, and repairs. On or before July 1 of each year, commencing with July 1, 1971, the USPOD will issue to the Corps a Standard Form 1151 and a Budget Authorization authorizing the Corps to obligate Postal Service funds required to cover all costs incurred by the Corps in executing the USPOD leasing program for the ensuing fiscal year. Additional funding will be provided if required. The cash required by the Corps will be transferred to the Corps monthly in advance. Any balance remaining at the end of a fiscal year will be credited against the funding for the next succeeding fiscal year.

2. The Corps will make every effort to perform its services hereunder in the most efficient and economical manner. The Corps and the USPOD from time to time will conduct a joint review of this program with particular emphasis on problem areas, if any, and to consider the need for any adjustments, as appropriate. In January and July of each year, the Corps will submit to the USPOD a brief written report summarizing the Corps' conduct of this program and making recommendations to the USPOD for improvements.

IV. AUDIT

The USPOD and its auditors may examine all records and documents in the possession of the Corps or for which the Corps is responsible, pertaining to lease or rental payment authorizations (USPOD Form 125) issued by the Corps, and to Corps costs and disbursements funded by the USPOD, pursuant to this Agreement.

V. AMENDMENT AND TERMINATION

This Memorandum of Agreement may be amended at any time by mutual agreement. This Agreement may be terminated by either party six months after giving notice of termination to the other party, or at any time by mutual agreement.

VI. EFFECTIVE DATE

This Agreement will be effective commencing with the 28th day of June 1971.

CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY,
By F. J. CLARKE,

Lieutenant General, USA, Chief of Engineers.
Post OFFICE DEPARTMENT,
By WINTON M. BLOUNT, Postmaster General.

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