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EXHIBIT 20

28 May 1971 Subject: Post Office Design, Construction, and Real Estate Responsibilities at the Regional Headquarters Level.

See distribution. 1. References.

a. Memorandum of Working Agreement between the Corps of Engineers, Department of the Army Providing for the Assignment of USPOD Facilities Program Functions to the Corps of Engineers.

b. Message ENGRE-AP, 28170).Z May 71. 2. Purpose.---This letter is in furtherance of the telephone information conveyed to your headquarters by Mr. Carl B. Barnes of this office and representatives of Real Estate Directorate on the above subject.

3. Background.-On 12 May, the Post Office Department announced its reorganization plan which involves the structuring of the Department as well as the organization of the Washington Headquarters and Regional Headquarters. A copy of the USPOD announcement is attached (Inclosure 1). The consequences of the reorganization is that the Washington Headquarters and Regional Headquarters are being relieved of certain real estate, design, and construction responsibilities. The extent of this relief is still to be determined. However, it is expected that the scope of responsibilities to be retained by the new 5 Regional Headquarters and those to be assumed by the Corps will be resolved within the next week. At this time, it is to be assumed that the leasing function and all new construction as well as major and minor repair and renovation (but not R&U type) functions will become the responsibility of the Corps. This assumption is for planning purposes only and is not to be expressed to any postal agency as a Corps agreed commitment.

4. Contact with the 15 Regional Headquarters.—Divisions have been requested to contact Regional Headquarters as follows: Regional Office:

Atlanta, Ga.
Boston, Mass.
Chicago, Ill.
Cincinnati, Ohio
Dallas, Tex.
Denver, Colo.
Memphis, Tenn.
Minneapolis, Minn.
New York, N.Y.
Philadelphia, Pa.
St. Louis, Mo.
San Francisco, Cal.
Seattle, Wash.
Washington, D.C.

Wichita, Kans.
Corps of Engineers Division :

South Atlantic
New England
North Central
Ohio River
Southwestern
Missouri River
Lower Mississippi Valley
North Central
North Atlantic
North Atlantic
Lower Mississippi Valley
South Pacific
North Pacific
North Atlantic

Southwestern
The purpose of the contact is:

a. Functions. To determine the real estate, design, and construction functions performed at the Regional Headquarters level.

b. The current design and construction workload. To determine the number, value, and current status of each project. These projects will involve new construction and major and minor repair and renovation.

c. Real estate workload. To determine affirmation relating to fee acquisition, lease build projects, number of leases to be administered, number of leases to be renegotiated this year and next year, lease improvement proj

ects, tax adjudication workload, etc. 5. Assignment of Project.—Divisions, in contacting Regional Headquarters, are acting as Corps of Engineers representatives. Having determined the location and nature of projects, the next step will be to arrive at an assignment of projects on a District basis. In contrast to the design of the post offices in excess of 50,000 square feet which will be handled by the designated 6 design districts, the design of the smaller post offices will be handled within Divisions by appropriate Districts. As a starting point for the assignment of projects, the Civil Works district boundaries can be used. However, adjustment will have to be made on the basis of economy and effectiveness. For example, in the St. Louis area, the Kansas City District boundry 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 water shed concept for determining district boundaries may not be the best criterion in all cases for determining the district boundaries for post office construction. Another consideration is the fact that the 5 new regional boundaries are for the most part determined by state boundaries. Thus, to facilitate coordination with the new Regional Headquarters, these new regional boundaries should be considered. In determining district boundaries for the post office program, Division Engineers are encouraged to coordinate with adjoining Divisions to arrive at a tentative assignment of the smaller post office projects. Once an overall tentative assignment of projects to districts has been made, it will be necessary to determine the manpower requirements to take on this added work so that offers can subsequently be made to the personnel in the Regional Headquarters being transferred to the Corps as a result of the transferred functions. These personnel will have first priority for these new positions resulting from the transfer of functions; however, Post Office personnel are not to be offered positions until such time as instructions on this subject are issued by this office. 6. Action Requested.

a. Contact the Regional Headquarters as indicated in paragraph 3 above if such contact has not already been made.

6. Submit to this office by 4 June for approval your recommendations regarding the delineation of district boundaries for the handling of the design, construction, and real estate regional workload.

c. Submit to this office by 9 June for approval your estimated personnel requirements by district to accomplish this small post office program assuming plan of proceeding subparagraph is approved.

GEORGE A. REBH,
Brigadier General, USA,

Chief, Corps of Engineers
Postal Construction Support Office.

(For the Chief of Engineers). Mr. CONSTANDY. I think we can go over to page 32 and discuss here the corps' in-house costs. We went into this at some length this morning, but perhaps there are additional points you would either like to clarify or amplify that would enable us to understand that better. The document here is a brochure dated February 12, prepared by the corps, and with a view to explaining the two points listed on page 1, preface, and these are spelled out as A, to indicate organizational arrangements by which the Corps of Engineers will accomplish the public building program; and B, to indicate the Corps of Engineers estimated in-house costs associated with execution of the program.

Is that true?
Mr. AHART. That is correct.

Mr. CONSTANDY. If wo could make that, Mr. Chairman, exhibit No. 21, perhaps we could talk about it, then.

Mr. WRIGHT. Without objection, that becomes exhibit 21. (Exhibit 21 was marked for identification, and follows:)

EXHIBIT 21

PREFACE

The purpose of this paper is two-fold :

(a) To indicate the organizational arrangement by which the Corps of Engineers will accomplish the Postal Public Building Program, and

(b) To indicate the Corps of Engineers estimated in-house costs associated with the execution of this program.

As background to a discussion of these two subjects, it is necessary to understand the over-all organization of the Corps and the responsibilities and functions of each echelon. The first part of this paper is devoted to a delineation of these matters.

CORPS OF ENGINEERS SUPPORT FOR THE POSTAL PUBLIC BUILDING PROGRAM

1. ORGANIZATION AND FUNCTION OF THE CORPS OF ENGINEERS

a. Existing Nation-Wide Organization

(1) The U.S. Army Corps of Engineers has an existing nation-wide organization staffed with over 42,800 employees experienced in planning and executing large-scale and diversified engineering, construction, and real estate operations. Field offices are located in many of the major cities in the Continental United States.

(2) This organization has been developed and refined over a period of years to discharge the construction and real estate missions charged to the Chief of Engineers, which in brief are to provide :

(a) Planning, engineering, construction and real estate services in support of the Army, for the Air Force and other agencies of the Defense Department, and, upon request, for other agencies of the Federal Government.

(6) Investigation, planning, design, construction, operations, maintenance, and real estate services necessary for the improvement of rivers, harbors, and waterways for navigation, flood control, and related purposes, including shore protection. This latter mission is generally referred to as

the Civil Works Program of the Chief of Engineers. (3) The combined Military Construction and Civil Works programs have averaged approximately $2.4 billion a year for the past several years and have involved construction in every State and in numerous foreign countries. The relatively large volume of construction in the combined Military and Civil Programs provides an economical base for a well-rounded organization covering all essential technical and administrative fields.

(4) Flexibility is inherent in the Corps' organization due to the rapidly changing requirements to meet military needs and due to the shifts in locations where major construction is required. Offices are reduced when dictated by changed conditions, and new offices are established at or near the center of major construction activity. b. District and Division Organization

(1) To carry out his missions, the Chief of Engineers has organized the resources available to him under the concept of maximum decentralization of authority. From this philosophy evolve two fundamental organizational levels below the Office, Chief of Engineers, which is located in Washington, D.C.

(2) The first is the supervisory level composed of 13 Engineer division offices, two of which are overseas. The newest division is Huntsville Division located at Huntsville. Alabama which directs the construction of SAFEGUARD (AntiBallistic Missile) facilities. The primary functions of the division offices are to plan region-wide activities, to supervise subordinate districts and review their work, to provide technical assistance in all areas of district activity, and to supplement technical skills of the districts by providing specialist services. The organization of Engineer division offices is essentially standardized : however, the staffing and fuctions of each division are tailored to its workload. As a typical example, the organization of the Southwestern Division, with headquarters in Dallas, Texas, is presented at Tab A. The advisory and administrative staffs provide full support to the technical staff, which is organized on a functional basis with separate staffs for Planning, Engineering, Construction-Operations, Real Estate, and Supply. It is a policy of the Chief of Engineers that all design will be technically reviewed by an organization separate from the one performing the design. The Division engineering staff performs this technical review for design prepared in-house by subordinate districts. Staffing is primarily civilian (246) under the direction of a General Officer and his military deputy. Fiscal Year 1970 workload totalled $70 million for military work and $193 million for civil proprograms. The Southwestern Division office supervises five districts.

(3) The Engineer district office constitutes the second level and is the primary executing or operational center of the organization. It is the “hard core" of the construction organization, which in total consists of 40 District, three of which are located overseas. A typical Engineer district is shown at Tab B. The organizational structure generally parallels that of the Division office. Certain technical elements directly supervise field activities, such as, the operation of reservoirs and real estate project offices. The basic construction field offices are under the direct command of the District Engineer. The Construction Division assists the District Engineer by providing staff supervision of the resident offices which directly supervise and inspect construction performed by contract.

(4) At Tab C is a list of Divisions and Districts. c. Office, Chief of Engineers (OCE)

(1) The organizational structure of the Office, Chief of Engineers is shown at Tab D.

(2) The immediate advisory staff is composed of a small number of assistants to provide the Chief of Engineers ready advice on special matters. The boards and commissions act for the Chief of Engineers in areas of unique engineering interest. One such example is the Coastal Engineering Research Board which meets twice a year to provide broad policy guidance for the conduct of the coastal engineering program.

(3) The ten separate offices on the next two lines of the chart provide necessary services in support of the primary missions of engineering design and construction. These support services include budgeting, accounting, audit, ADP, legal, safety, personnel administration, and research and development.

(4) The major portion of the OCE staff is in the four directorates. The Directorate of Real Estate, like the separate support offices, is organized on a functional basis, closely paralleling the structure of counterpart offices in the field (divisions and districts). Thus, the Director of Real Estate handles real estate problems exclusively. Engineering design and construction missions, however, are organized on a program basis. The Directorates of Civil Works and Military Construction have their own individual elements for engineering, construction, and operations. Both construction Directors deal directly with the principal field agencies, the Engineer divisions. d. Contract Administration

(1) In addition to the direct command relationship between the District Engineer and his project offices, there is an important contractual relationship. The District Engineer is the contracting officer for all major architect-engineer and construction contracts. For construction contracts, he formally delegates authority to area or resident engineers as resident contracting officers. The District Engineer has authority to award construction contracts in unlimited amounts, except for certain limitations on negotiated contracts. He delegates to his resident contracting officer authority to approve contract modifications up to a specified amount and to act for him in other ways in dealing with the contractors. He has authority to execute most contracts incident to his real estate functions.

(2) Except for unusual types of work, the Corps utilizes competitive contract procedures and ensures reliability of bids by comparison with carefully prepared government estimates. Similarly, a large share of engineering and design is accomplished through contracts with architect-engineer firms and the plans so produced are subjected to a technical review by the District Engineering Division for the contracting officer. e. Construction Capabilities

(1) The Corps of Engineers capabilities for construction include the full range of techincal and administrative services necessary to support a given project from the time of inception to turnover of completed construction to the user. These services include:

(a) Developing project cost estimates based on user criteria.

(b) Preparing preliminary and final project designs.

(c) Complete real estate services, including appraisal, acquisition, leasing, management, and disposal of real property.

(d) Preparing, awarding, and administering construction contracts.
(e) Supervising and inspecting contract construction.

(f) Complete legal services, including the handling of contractor claims and appeals, and labor disputes.

(8) Procuring supplies and materials and administering supply contracts. (h) Programming, budgeting, and accounting for funds.

(i) Reporting on the status of all construction and related activities. (2) The existence of complete and self-sufficient technical and administrative services at Engineer district level, coupled with maximum delegation of contractual and other authorities to project office level, provides the most effective and economical means of accomplishing construction and of responding to the needs of the user throughout the entire period of project planning, design, and construction

f. Composition of Work Force Engaged in Construction Activities. The civilian work force of the Corps of Engineers varies from 42,000 to 45,000 in the peak season, comprising 217 occupational fields in the "White Collar" category and 188 occupations in the trades and crafts. Nearly 10,000 engineers and scientists are employed in design, construction, research and development, and related programs of the Corps. Military personnel strength is approximately 1,300, of which 874 are officers. Nearly 2,200 civilian employees are engaged in real estate activities.

g. Nature and Volume of Current Work Programs. Corps of Engineers programs will total approximately $2.6 billion in the current fiscal year, distributed as follows: Civil Works

Millions Construction

$1, 005 Operations and maintenance

326 Other Civil_

233

Total..

1, 564

Military Programs

Military construction. *Other

$832 171

Total.---

1,003 *Programs for non-defense agencies and foreign governments.

Real Estate expenditures for land payments and rentals, included in the above, exceed $100 million.

h.. Real Estate Activities.

(1) The Corps acts as Real Estate agent for land acquisition for the Departments of Army and Air Force, Atomic Energy Commission, NASA, and other agencies upon request. Land requirements for projects are determined with real estate participation.

(2) In the case of Civil Works projects, basic real estate data are furnished for survey reports, and after authorization of the projects, Real Estate Design Memorandums are prepared to further refine real estate land and acquisition costs.

(3) For military projects (Army), a Real Estate representative of the Corps at Division or District level often participates as a temporary member of a Site Selection Board to furnish the required real estate data for the site selection report. When the project is approved and funded, a Real Estate Planning Report is prepared to detail the real estate requirements and costs.

(4) The Real Estate Design Memorandums and Planning Reports are essentially the same, containing maps; a general description of the land; and a discussion in general of improvements, crops, available utilities, access, proximity to markets, and other elements which influence value. A gross figure for land costs is included together with administrative costs, support costs, and contingencies calculated on the basis of current Corps experience factors.

(5) The principal site selection activity is at the District level and at Division level in our operating Divisions. This also applies to the acquisition of land

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