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60 hour week :

40 hours at $11. 20 hours at $22..

Average hourly rate.

$880/60 Estimated man-hours, normal construction period of —

18 months. Labor rate_

$440.00 440.00 880.00 14. 60

425, 000

X11

Total labor.

4, 675, 000 Estimated man-hours; Crash construction period of 12 months : Loss of efficiency 20 percent. 1.2X 425,000=510,000 man-hours.

Maximum average number of men who can work efficiently in available space= 150.

Average hours per week=510,000:-52=9,800.

Average hours per man=9,800-:-150=65. Use 60. Average, rate, 60-hour week (14.60 X 510,000).

$7, 450,000 Total labor--

7, 450, 000 Labor, normal construction--

4, 675, 000

2, 775, 000

Total
Say 234 million.
For the District Engineer.

F. 0. BIEHN, Chief, Construction Division.

Mr. CONSTANDY. We are in a bit of a rush, but there are other parts of that letter, are there not, which pertain to the folly of attempting to build a project within 12 months?

Mr. AHART. Yes. He has the whole rationale for the estimate here, and he spells out in some detail why they reach these conclusions.

Mr. CONSTANDY. Do you have any other documents pertaining to that besides the letter from Jacksonville ?

Mr. AHART. We do have a similar estimate for the Fort Lauderdale facility, which reaches a conclusion that the cost would increase by $2.7 million, which we will be glad to supply for the record, as well.

Mr. CONSTANDY. If we could include that in exhibit 24. Mr. Wright. Without objection, that will be included with exhibit No. 24.

(The above-mentioned estimate was included in exhibit No. 24.)

Mr. AHART. We do have other information on the Roanoke, Va., project, but it is of a similar nature. I do not have the complete documentation here. Mr. CONSTANDY. Fine. If we could then take

up
the
corps

construction time on comparable projects and conclude with that. As I understand this, you asked General Rebh to provide the GAO with a list of projects that he feels are comparable to the work that would be done for the Poset Office Department, that had been done by the corps within the past 5 years, and he produced for you a list of some 150 projects.

Mr. Ahart. He produced a list of 120 projects. Mr. CONSTANDY. And you subsequently went to three GAO regional offices, took 12 of the projects and made tests to see on those projects which he considered to be comparable, what was the corps experience of its own, meeting its critical target dates, is that true?

Mr. AHART. That is true. We reviewed 12 projects in that context. I would point out we have no assurance that these are representative of the total.

Mr. CONSTANDY. We are depending on General Rebh. He thinks they are comparable.

Mr. AHART. Of the 12 we selected, we have no assurance that they are representative of the 120.

Mr. CONSTANDY. Whether 10 percent is a representative sample?

Mr. AHART. We have no assurance that it is representative. It was not selected in that manner.

Mr. CONSTANDY. But these 12, as any of the balance, would be selected by him as being comparable to the Postal Service!

Mr. AHART. That is correct. Mr. CONSTANDY. Could you run down the list of the 12 projects, with what overruns?

Mr. AHART. If you like, I will give you a description of the project, what its value was, and the number of days overrun, would that be satisfactory!

Mr. CONSTANDY. It may be more than satisfactory for the time we have.

Mr. AHART. Do you just want the days of overrun?

Mr. CONSTANDY. I think it will suffice, and perhaps you have this information in a form we could include as an exhibit.

Mr. AHART. We could provide that.
Mr. CONSTANDY. If we could make that exhibit No. 25.
Mr. WRIGHT. Without objection, that will be exhibit 25.
(Exhibit No. 25 was marked for identification, and follows:)

EXHIBIT 25

COMPARABLE PROJECTS CONSTRUCTED BY THE CORPS OF ENGINEERS AND REVIEWED BY GAO

Construction

cost

Overrun in construction time (days)

Project

(rounded)

542 512 290 287 250 239

Armed Forces Institute of Pathology, addition, Walter Reed Hospital, District of Columbia..
Southeastern Signal School, phase II, Fort Gordon, Ga.
Climatic test facility, Eglin Air Force Base, Fla..
Composite medical facility, Scott Air Force Base, Ill.
Field maintenance hanger and fuel system maintenance dock, Dover Air Force Base, Del..
U.S. Army Hospital, Ft. Rucker, Ala..
Medical and biological research laboratory, Fort Detrick, Md:

Phase I.

Phase II.
Command control-lower level addition and utility building, Offutt Air Force Base, Nebr..
Armament engineering evaluation facility, Eglin Air Force Base, Fla.
Aerospace data facility, phase II, Buckley Air National Guard Base, Colo.
Motor repair shops, Fort Carson, Colo.-
Average..

$5,998, COO
8,038,000
2, 466, 000
3,150,000
3, 823, 000
2,763, 000
8, 259, OGO
6,055, 000
1,694, 000
1,877, 000
5, 247, 000
3, 123,000

208 1 35 130 109 92 30 227

1 Project still under construction.

Note: The overruns in construction time were due primarily to design changes and work stoppages caused by strikes and inclement weather.

Mr. AHART. Would you like for me to read!
Mr. CONSTANDY. Yes; go ahead.

Mr. Ahart. The high was 542 days—this is in terms of overrun beyond the scheduled completion date-512 days, 290 days, 287, 250, 239, 208, 130, 109, 92, there is one here with 35 days, and one with 30 days, giving the range of 30 to 542, which we mentioned in our testimony this morning.

Mr. WRIGHT. In all cases there was an overrun of one sort or another

Mr. AHART. On the 12 projects we reviewed, Mr. Chairman, that is correct.

Mr. WRIGHT. And with the exception of two, which have 30 days and 35 day overruns, very close to target day, the others ranged rather high; did they not?

Mr. AHART. From 90 some days on up to 542 days, which is approximately a year and a half.

Mr. CONSTANDY. Of course, the significant thing we are measuring here is that these are projects which relate to the Corps' own experience when it undertook those projects and had all the information possible available to them in exercising their best judgment to pick the critical completion date and missed it by that much. This does not show any influence as your slippage did as to the effect on the project by delays from the Post Office Department. These are purely Army projects.

Mr. Ahart. This is correct, but of course they would have to deal with the customer agency such as U.S. Army, the Air Force, and so on.

I suppose they had some problems.

Mr. CONSTANDY. I see. I think that would conclude the material except for one other thing.

If you would, if we could make this an exhibit, but not to be included in the record, it is a letter dated June 30, 1971, to Mr. Zimmerman and signed by Billy B. Geery, colonel, Corps of Engineers, the Engineer comptroller.

Mr. WRIGHT. Without objection, this will become exhibit 26, but not to be included in the record. The exhibit will be retained in the files of the subcommittee.

The Chair would like to express the appreciation of the committee for your indulgence in answering these questions, for your directness, your candor, and your usual professional skill.

As a result of today's hearings several conclusions seem apparent to the Chair.

1. It seems apparent that the agreement which the Post Office Department and now the Postal Service entered into with the Army to conduct this building program was consummated over the strenuous objection of the General Services Administration.

2. It sems apparent that that agreement may have a profound effect upon the future capacities of the General Services Administration to perform its legislatively imposed functions. The abrupt divorce of the Postal Service from the General Services Administration may indeed make it difficult for the GSA to provide needed space for the Federal agencies.

3. It is clear that the negotiations leading up to the agreement were conducted in an atmosphere of high secrecy and that as late as March of this year there was a calculated attempt to deny to Congress the pertinent information as to the details of the March 11 agreement and that then and subsequently there have been a series of elaborate precautions developed to insulate this program from congressional knowledge and scrutiny.

4. It seems apparent as a result of today's hearings that the Army has assumed far broader responsibilities to perform a wide variety of work for the Postal Service than even the Army itself may have initially anticipated and that much of this work is outside the previous experience of the Army.

6. Based upon the experience rate to date, the Army may indeed have great difficulty in staying within the 5.5-percent ceiling on overhead costs to which it has agreed.

6. The chairman assumes that if a cost overrun does occur the Treasury will have to bear the expenses and that ultimately means the taxpayers.

All of these matters obviously are of great concern to Congress. If we should fail to develop the necessary facts in full, this committee would be thoroughly derelict in its duty.

On behalf of the committee I would like to thank the General ACcounting Office for its very comprehensive work in this investigation and to pledge our continuing diligence to developing these facts.

If there are no further questions or comments, and no further business to come before the subcommittee at this time, the subcommittee is adjourned until 10 o'clock tomorrow morning.

(Whereupon, the subcommittee adjourned at 4:02 p.m., to reconvene at 10 a.m., the following day.)

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