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We have already advised you that the start of construction was contemplated on 33 projects and only four construction starts were achieved as of May 28. Other points which reflect milestone accomplishments are the complete functional designs specification. As of May 28 they expected to have 35 accomplished and they achieved 27. Also, with respect to site selection, they expected to have 36 sites selected, and they have only selected 33.

With respect to site acquisition, they expected to have 30 sites acquired and they had acquired 16. with respect to starting detailed design, they had planned to start 36 project designs and they had started on 24.

Mr. CONSTANDY. Now, before we become too objective—I do not know if you can become too objective-before we put too much emphasis on the fact that it is a new program, and as a consequence you can reasonably expect that it will not get off the ground in the way you hope it will be running a year or 2 years later, they set the dates, did they not? They set the targets for those periods?

Nr. ZIMMERMAN. These are their target dates.
Mr. CONSTANDY. They have not met them to the extent you indicated ?
Mr. ZIMMERMAN. That is correct.

Mr. CONSTANDY. If it is a new program, and they anticipated a new program not functioning as well as an old program, it would behoove them to have taken that into consideration when they established those items as target dates, would it not?

Mr. ZIMMERMAN. Yes.

Mr. CONSTANDY. They were at liberty to choose any program schedule they wanted to?

Mr. AHART. Yes; I think this is correct.

Mr. CONSTANDY. With the full realization of where they were at the time they established them. They failed to meet them to the extent you have shown.

Mr. AHART. I might add a little bit to what Mr. Zimmerman has pointed out. There are other statistics in this report which may give a different perspective to this or amplify it somewhat. The figures he just gave you were in terms of the time to get things done. I think the existing indication of when construction will be completed on these projects is probably relevant here also. Out of the 36 projects we are talking about, 23 of them had slippage construction dates ranging up to 20 months.

In other words, the construction dates as such, the completion dates. The completion dates for seven of the projects were not known as of that time. In other words, they had not reestablished completion dates, and there are three of the projects that are on or ahead of schedule out of the 36.

Mr. CONSTANDY. Thirty-three are behind schedule to varying degrees?

Mr. AHART. I just have information on 30 of them.

Mr. CONSTANDY. Keeping in mind that the anticipated saving leased to bulk mail facility network of $310 million a year is predicated on, as has been expressed repeatedly by the Post Office Department and the corps, bringing these projects to fruition and on line by the expected delivery date, they are going to be a little bit disappointed when they reach that date.

Mr. AHART. Of course, any slippage in the actual bringing them on line is going to cut into expected savings resulting from it.

Mr. CONSTANDY. It may be worse than that if you have part of a system completed and you have part of it partially done; you may be incurring additional costs because of the partially completed system that is not functioning correctly, and you may not realize any savings until it is all completed ?

Mr. AHART. This is a possibility. I am not that familiar with the makeup of the estimated savings.

Mr. CONSTANDY. Do you have any idea what the anticipated completion date for the bulk mail system was?

Mr. AHART. I believe the Postmaster General expects them to be on line in 1975.

Mr. CONSTANDY. Some of these projects are for that network, are they not?

Mr. AHART. That is correct.

Mr. CONSTANDY. Some of them are behind as much as almost 2 years now?

Mr. AHART. Some of them have slipped as much as 20 months, almost 2 years; yes.

Mr. CONSTANDY. Are there any other particulars pertaining to that section?

Mr. AHART. I do not believe on that particular matter, Mr. Constandy.

Mr. CONSTANDY. May we make that document exhibit No. 23 ?

Mr. WRIGHT. Yes; without objection, this document becomes exhibit 23.

(Exhibit No. 23 was marked for identification and is retained in the subcommittee's files.)

Mr. CONSTANDY. We have two other things.

One of them is the 12-month estimated construction periods. I think you have some material on that do you not?

Mr. AHART. Yes; we do. I would like for Mr. Zimmerman to respond. You are referring to the estimated construction periods for projects that have been transferred to the corps ?

Mr. Constanty. Yes; on page 36, the top of the page.
Mr. AHART. Yes; I have some information here on fiscal year

1971 and 1972 for projects which have been transferred, for which some kind of service, which had construction periods of approximately 12 months.

As of May 28, the corps had been requested to provide services for 20 fiscal year 1971 projects and two fiscal year 1972 projects. Fourteen of the 22 projects have construction periods of 12 months, plus or minus a few days, and these projects range in value from a low of about $570,000, which happens to have only 6 months construction time, to one in Stamford, Conn., of $11.7 million value, which has the construction time of 12 months.

Mr. CONSTANDY. Can you give any indication of how many had construction times of 13 months, if you know?

Mr. Ahart. I think out of the total of the 22 projects, there were only three that had construction periods of more than 13 months. One of these had a 15-month period, and one had a 24-month period, and one had 26

Mr. CONSTANDY. How many were anticipated to be completed within 12 or 13 months ?

Mr. AHART. Well, let me see, 19, I guess, out of the 22 would be about 13 months.

Mr. CONSTANDY. Is there anything to suggest that that is not realistic?

Mr. AHART. I think Mr. Zimmerman has some more detailed information on this, but I think the reaction which we have gotten in our discussions with the Corps people is that if you have a major project and try to compress it within too tight a time frame and they consider some of these too tight—that, number one, it is very unlikely that you will be able to live with that time frame because of the unforeseen difficulties that you have, and secondly, you will have a major acceleration of your construction costs. We do have information, our analysis that was mentioned by Mr. Staats this morning, concerning the Jacksonville Post Office facility, prepared for the district engineer in Savannah. The chief of the Jacksonville district's construction division prepared an analysis of what would happen if he tried to build that particular project within a 12-month period, and he estimated an additional cost of $2.6 million. He concluded that his estimate for additional costs is based upon a rational approach. However, it is known from experience that we never receive what we pay for when we do construction work on a crash basis, and that not only will the cost be higher, but it is doubted that the time savings will be realized regardless of the amount of effort exerted to keep the contract on schedule.

We did talk to officials in the Baltimore district to see whether or not they had ever completed a comparable project within a 12-month construction period, and they were unable to identify for us any comparable projects which had been completed within 12 months, with the exception of one, I believe, which was done at the Aberdeen Proving Grounds, to support the Vietnam conflict, on a crash basis, which was accomplished in something like 205 days.

Mr. CONSTANDY. May we have the letter pertaining to the Jacksonville project as an exhibit?

Mr. AHART. Yes.
Mr. CONSTANDY. We could make that exhibit No. 24, Mr. Chairman.
Mr. WRIGHT. Without objection, that will be exhibit No. 24.
(Exhibit No. 24 was marked for identification, and follows:)

EXHIBIT 24

DEPARTMENT OF THE ARMY,
JACKSONVILLE DISTRICT, CORPS OF ENGINEERS,

Jacksonville, Fla., May 7, 1971.
Subject: Construction Time, Jacksonville Post Office Facility.
District Engineer, Savannah
(Attention of Mr. George Smith, Ch, Military Branch)

1. It is understood that the Jacksonville Post Office facility will have 250,000 square feet of usable space, will be similar in design to the Tallahassee Post Office, and is estimated to cost about 7 million dollars.

2. It is believed that a reasonable construction time without overtime operations and considering lead time for materials and equipment is 18 months. This estimate is partially based upon the following experiences :

(a) A research building similar in design of 200,000 square feet constructed at Patrick Air Force Base was originally scheduled to be completed in 12 months. Actual construction time under crash conditions was 16 months. The cost of the work escalated to represent price levels is 542 million.

(6) An office building of about 350,000 square feet constructed at Patrick Air Force Base was originally scheduled to be completed in 12 months. Actual construction time under crash conditions was 21 months. The cost of the work escalated to represent 1971 price levels is 942 million.

(c) The Headquarters, Major Command, building at MacDill Air Force Base which was constructed in 1967–68 is 180,000 square feet in area. The contract construction time was 15 months, but there was an overrun of 7 months in actual construction time. The cost of the work, escalated to represent 1971 price levels is $5,030,000.

3. If it is essential that the work be completed on a crash basis in 12 months construction time, it is estimated that the increased cost will be as follows: (a) Estimated labor, 18 months schedule, regular time:

250,000 square feet x 1.7 man-hours per square foot 425,000 man-hours. (6) Reduction in efficiency, crash conditions = 20%.

(c) Number of man-hours required under crash conditions equals 1.2X 425,000=510,000.

(d) Average per week=510,000:-52=9,800 man hours. (e) Average number of people who can work efficiently in available space 150.

(f) 9,800:-150=65 hours/person/week. Say 60 hours.
(9) Jacksonville labor rates—(Means, 19'1.)

Average all trades, U.S.=7.61.
Jacksonville factor (78%)=5.94.
Plus taxes and insurance, 15%=6.83.
Plus overhead, 10%=7.51.

Plus profit, 19%=8.26. Say 8.25.
(h) Rate for 60 hour week:
40 hours (40 x 8.25) -

330 20 hours (20 X 2.424 X 8.25).

400

730

(Means, page 157) 730:-60=12.00 per hour. (i) Cost of labor:

Crash basis (510,000 X 12)
Normal construction (425,000 X 8.25)---

$6, 100, 000 3,500,000

Additional cost--

2, 600, 000 4. This estimate of additional costs is based upon a rational approach. However, it is known from experience that we never receive what we pay for when we do construction work on a crash basis, and that not only will the costs be higher, but it is doubted that the time savings will be realized regardless of the amount of effort exerted to keep the contract on schedule. For the District Engineer.

F. O. BIEHN,
Chief, Construction Division.

DISPOSITION FORM

MAY 6, 1971. Subject: Additional Cost for Building Fort Lauderdale Post Office on a Crash

Basis.
From : Ch, Construction Div.
To: Division Engineer, SAD
(Attention of Mr. Lein).
Labor rates (means, building construction cost data 1971):
Average, all trades, United States---

$7. 61 99 percent factor for Miami area--

7. 55 Plus 15 percent taxes and insurance

8. 68 Plus 15 percent overhead...

10.00 Plus 10 percent profit---

11. 00

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