Mr. CONSTANDY. I would just like to call the attention of the committee to the grand totals on page 3, which I think begins to give some idea of size that we have been talking about from the dollar standpoint. Those 26 projects had a total estimated cost at the time of the prospectus, is that not right, Mr. Kreger?

Mr. KREGER. Right.

Mr. CONSTANDY. At that time it was $173 million, and that is broken down to $117 million some odd to the group 1 projects, $55 million in the group 2 projects.

go.

Of course, those figures today would be appreciably more than that. Mr. KREGER. Yes, sir; they would.

Mr. GRAY. Mr. Kreger, I want to ask one more question before you

As I pointed out, there were two ways. I say "were" in the past tense. There were two ways that the Post Office could proceed immediately before the Postal Reorganization Act in constructing buildings.

One, which I alluded to a moment ago, was where if the project is less than $200,000, they needed no congressional authority.

Secondly, all they had to do on any project over $200,000 that has been approved, was to ask you for delegation of authority. Since you have served in your position either as Deputy Administrator at the present time, or Assistant Administrator, do you know of any instance where the Post Office has come to GSA and said, "I want a delegation of authority to proceed with the construction of a building," and that delegation of authority being denied?

Mr. KREGER. I do not think we have ever refused any delegation of authority, Mr. Chairman.

Mr. GRAY. So, the allegation that Congress is sluggish and GSA is sluggish in providing space needs has no basis in fact. All they needed to have done was to come to GSA and ask for a delegation of authority.

Mr. KREGER. We gave them a delegation of authority.

Mr. GRAY. Do you know at any point where that authority was denied?

Mr. KREGER. There may have been one, Mr. Chairman. I am not sure. Mr. GRAY. There may be one, out of 10,000.

Mr. KREGER. I will search the records to see.

Mr. GRAY. I want to thank you gentlemen for coming. You have been very helpful to the committee.

Thank you very much.

The committee will be in order.

Our next witness is Mr. Henry Lehne, Assistant Postmaster General-facilities, U.S. Postal Service, accompanied by Mr. Frederick Batrus, Assistant Postmaster General-engineering and logistics, U.S. Postal Service, and Mr. Robert E. Isaacs, technical adviser for construction programing, U.S. Postal Service.

Would you gentlemen please rise and raise your right hands?

Do you solemnly swear to tell the truth, the whole truth and nothing but the truth, so help you God?

(Messrs. Lehne, Batrus and Isaacs answered in the affirmative.)

Mr. LEHNE. Mr. Chairman, if I may, there is another witness who was overlooked, Mr. Jim French.

Mr. GRAY. Mr. French, do you solemnly swear to tell the truth, the whole truth and nothing but the truth, so help you God?

(Mr. French answered in the affirmative.)

Mr. GRAY. Thank you, gentlemen, for coming, and thank you for your patience. It has been a long day, but we have no control over these rollcalls.

General Lehne, you have a prepared statement. You may proceed in your own fashion.

TESTIMONY OF HENRY LEHNE, ASSISTANT POSTMASTER GENERAL-FACILITIES, U.S. POSTAL SERVICE; ACCOMPANIED BY FREDERICK BATRUS, ASSISTANT POSTMASTER GENERAL-ENGINEERING AND LOGISTICS, U.S. POSTAL SERVICE; ROBERT E. ISAACS, TECHNICAL ADVISER FOR CONSTRUCTION PROGRAMING, U.S. POSTAL SERVICE; AND JAMES H. FRENCH, DEPUTY ASSISTANT GENERAL COUNSEL, REAL PROPERTY AND PROCUREMENT DIVISION, U.S. POSTAL SERVICE

Mr. LEHNE. Thank you, Mr. Gray.

Before getting into the prepared statement, I think it would be appropriate for me to comment a little bit more about these colleagues at the witness table with me.

If I may, Mr. Chairman, I would like to introduce my colleagues here at the witness table a little more fully to describe their role in the new U.S. Postal Service facilities program.

Mr. Frederick E. Batrus was recently appointed Assistant Postmaster General for Engineering and Logistics. He has been with the Postal Service since 1946, and has served as Assistant Postmaster General for Transportation-the last Presidential appointee to hold that position. Since October 1969, he has been Executive Assistant to the Deputy Postmaster General. Mr. Batrus, in his new position, will have overall authority over the facility needs and construction program of the U.S. Postal Service

Mr. Robert E. Isaacs is an architect who was in private practice in Cincinnati for 20 years. He came to the Postal Service in May of 1970 as Deputy Assistant Postmaster General for construction engineering in the facilities department. Mr. Isaacs was recently appointed technical adviser to the Senior Assistant Postmaster General for construction programing and, as such, will have liaison responsibility between the Postal Service, General Services Administration, and the Corps of Engineers in the implementation of the Postal Service facilities construction program.

Mr. James H. French is Deputy Assistant General Counsel in the real property and procurement division. He has been in the General Counsel's office for 2 years. Prior to that, he was in private practice in Washington for 11 years.

Mr. GRAY. We are glad to have that information.

Mr. LEHNE. I would like to read the prepared statement, if do not mind.

Mr. GRAY. Proceed any way you wish.

you

Mr. LEHNE. Mr .Chairman, I have been advised by your Assistant Chief Counsel that the subcommittee desires me to testify concerning

joint Postal Service/General Services Administration construction projects.

While I will be glad to try to answer any question put to me, this prepared testimony deals only with the subject of the joint GSA/POD projects.

These joint projects antedate the Postal Reorganization Act, which was enacted on August 12, 1970, by as many as 11 years, and by 3 years in the case of the most recently approved project. The Post Office Department's space requirements for most of the projects were given to the GSA in 1964, 1965, or 1966.

In the case of Elkins, W. Va., the POD's space requirements were given to the GSA in April 1960, and in the case of Moscow, Idaho, they were given prior to April 1964, although the precise date is uncertain.

By providing in the Postal Reorganization Act that the Postal Service be financially independent and largely self-sustaining, Congress created a new and different relationship between the GSA and the Postal Service affecting these joint projects. The Postal Service, unlike the former Post Office Department, must pay rent for the space it occupies in GSA buildings.

In addition, the Postal Service's facilities decisions must be shaped by considerations of mail processing efficiency, service improvement, and economy-with due regard for customer convenience and the creation and maintenance of safe and desirable working conditions for Postal Service employees.

The other major change affecting the joint GSA/POD projects was the statement in the appendix to the President's Budget for fiscal year 1972, at pages 810-811, to the effect that funds were not being requested to construct these projects, but that the projects were being scheduled for lease construction under the authority of legislation which will be proposed to the Congress in the future.

Since the Postal Reorganization Act was signed, the Postal Service has made repeated requests of GSA for a commitment of early construction of the projects in question. Most of these projects had been pending for many years, and the need for action by the Postal Service had become critical.

In addition, the new responsibilities and authorities conferred on the Postal Service by the Postal Reorganization Act, coupled with the need to integrate all new facilities into our nationwide bulk and letter mail processing systems, made it incumbent on the Postal Service, we felt, to review these projects at an early date and come to a decision in time to include them in our own fiscal 1972 construction program. No commitment from GSA was forthcoming. The uncertain status. of lease projects to be constructed under the authority of legislation not yet proposed-much less enacted-made it highly improbable that the projects could be constructed in time to meet the needs of the Postal Service.

Accordingly, I wrote the Commissioner of the Public Buildings Service on May 5, 1971, that the Postal Service was withdrawing from the projects. In this letter, I stated that the Postal Service planned to satisfy postal needs in the affected localities by the most economical and expeditious method possible and would be glad to consider including, and leasing to GSA, space for other agency needs.

Since May 5, 1971, similar offers have been made to GSA, both in meetings and by correspondence.

By letter, dated June 17, 1971, the Postal Service reiterated in the following terms the offer initially made in my May 5 letter, and repeated in a meeting with the Commissioner of the Public Buildings Service on May 26, 1971.

I would read again from that June 17 letter:

I hereby restate our verbal proposal for the Postal Service to build these facilities for joint tenancy and lease to GSA non-postal space for use of other Government tenants. Of course, this proposal assumes that GSA and the Postal Service will wish to review each of these projects on an individual basis.

I do not believe that GSA has responded to any of these offers. Thus, the Postal Service is in the position of having offered, without response from GSA, initially to continue in the joint projects if it could obtain a commitment of some sort that the projects would be built in the reasonably near future, and, failing that, to construct joint-occupancy facilities itself and lease the non-postal space to GSA. What the Postal Service has declined to do is to refrain from going ahead with its own plans for badly needed and long overdue postal facilities in those localities where a joint GSA/POD project is proposed to be built only at some uncertain future date.

I think this is an eminently reasonable position. Withdrawing from the joint projects and going ahead with the construction of singleoccupant postal facilities appears to be the only acceptable alternative open to the Postal Service, barring a firm commitment by GSA either to go ahead promptly with the joint projects or to authorize the Postal Service to include space for other Government agencies in multioccupant buildings to be constructed by the Postal Service in the localities where the joint projects were to have been built.

If GSA will commence construction of the projects in the reasonably near future, and if it promptly makes a firm commitment to do so, the Postal Service expects to participate in most, if not all, of the projects, subject to the reservation that some revisions may have to be made in the size and configuration of the Postal Service's space, and parking and maneuvering area. These adjustments would be necessary to assure compatibility with the new mail processing systems being implemented by the Postal Service.

If GSA will authorize the construction of these projects by the Postal Service on a prompt basis, the Postal Service expects to commence construction in fiscal year 1972 of most, if not all, of the projects.

In this event, since the buildings would be Postal Service buildings, it would be anticipated that the sites and designs already acquired by GSA would be transferred to the Postal Service.

If the Postal Service constructs the facilities, it is anticipated that the construction agency executing the rest of the Postal Service's construction program, the Army Corps of Engineers, will contract for, manage, and supervise the construction.

The Postal Service wishes to cooperate to the fullest in achieving the early construction of the facilities in question. The Postmaster General has made this absolutely clear. It will only be if the projects cannot be commenced in a reasonably short period of time that the

Postal Service will unilaterally undertake to construct its needed postal facilities in the affected communities.

This concludes my prepared statement, Mr. Chairman. I shall be happy to respond to any questions the committee may have.

Mr. GRAY. Thank you, Mr. Lehne. Counsel.

Mr. CONSTANDY. Mr. Lehne, you pose the problem or the question that if the GSA can proceed expeditiously with the construction, you would be agreeable to becoming tenants of theirs.

However, I think the conclusions you drew, and the correspondence that we read earlier, leads me to believe that you have already made the conclusion that they will not be able to proceed with them in the time-frame that you must have them.

Is that true?

Mr. LEHNE. Well, Mr. Constandy, as far as we know at the present time, the legislation authorizing this lease construction has not been introduced. At least, we have not received any copies of such authorizing legislation.

Mr. CONSTANDY. It has been encumbered, because if it were introduced, there are 18 of them which the Post Office wishes to withdraw from participation, so we are talking about the other 27, which does not concern you.

Mr. LEHNE. Well, as far as I can understand, the GSA authority to build these buildings, and lease them back, has not yet been introduced, whether it is 18 buildings or 45 buildings.

Mr. CONSTANDY. It has been the subject before the committee. It has been sent to the Speaker, has it not?

Mr. LEHNE. I was not aware of the fact that it had been sent to the Speaker. Legislation, as far as I know-I was not aware of that fact. Mr. CONSTANDY. As legislation?

Mr. LEHNE. Yes, sir.

Mr. CONSTANDY. Well, we come down to this.

In the earlier part of this same year, you people had drawn a conclusion that GSA would not likely proceed that route fast enough to accommodate your needs, true? That is contained in your letter withdrawing from participation in these projects.

Mr. LEHNE. Yes, sir. Some of these projects have been outstanding for over 10 years.

Mr. CONSTANDY. Has anything happened since you wrote the letter, withdrawing from the project? Do you think GSA has a better way to get underway with these projects now than you thought then?

Mr. LEHNE. I do not know of anything that would lead us to that conclusion, except you people are being very active in this field, and maybe something would happen.

Mr. CONSTANDY. Maybe. I think we can conclude that the expressions you made in your letter withdrawing them were just as pertinent today as they were then, as far as anybody knows.

If that is true, you are in the position, then, of saying since this is true, you can proceed with these projects of your own.

Mr. LEHNE. We are trying to say, and I think the Postmaster General has made it clear that we are not trying to take unilateral action in this matter. We strongly believe that the mail has to be delivered, and in delivering the mail, we have to have modern facilities to do