2. All contractual matters referred by the Contracting Officer to higher authority for decision or approval will be brought to the attention of the USPOD. 3. If, after consultation, the USPOD requests termination of any contract for the convenience of the Government, the Corps will so terminate such contract.

B. Design.

1. For each project on which the Corps' design services are requested, the USPOD will provide the Corps with applicable project design standards, specific design criteria, general functional requirements, mechanization requirements, and any descriptive material or sketches needed to define the general quality of construction, space allocation, functional layout, and operating characteristics to be incorporated into the design of the project. An agreed time schedule within which the design services are to be completed by the Corps will be established.

2. The Corps will prepare or cause to be prepared, either by Corps personnel or by an Architect-Engineer (A-E) all designs, plans, drawings, specifications, and technical requirements necessary for the completion of the project in accordance with the USPOD Project Authorization and the USPOD design standards, criteria, general functional requirements and layout, and mechanization requirements. The Corps also will make, or cause to be made, soil tests and sub-surface investigations as needed either for selection as between alternative sites or for project design and construction. Whenever the services of an A-E are to be used, the A-E will be selected by the Corps, with the USPOD having membership on the A-E Selection Board.

3. The Corps will submit to the USPOD for approval, outline specifications and concept drawings, to include site plans, floor plans, building elevations, building cross-sections, space allocation, functional layout, and operating characteristics, including mechanization. This submission will also contain the Corps' estimated completion date of the project and its estimated costs of the project. Subsequent development of drawings and specifications for the project will be accomplished under the supervision of the responsible Corps activity in accordance with the established time schedule and Project Authorization limitations, and in conformity to the USPOD-approved concept drawings and design concepts.

4. The Corps' reviews and approvals of intermediate phase drawings will be accomplished in the office of the A-E. The reviews and approvals of the final phase submittals may be accomplished in the appropriate District office. The Corps will notify the USPOD of the time and place of all such reviews as much in advance as possible so that the USPOD may arrange to have personnel present to participate in the reviews. All final working drawings will be approved by the USPOD as to conformity to the approved concept drawings and design concepts. If at any time during the course of the project any change or revision in the project cost estimate is made, such change or revision will be reported immediately to the USPOD together with a statement of the reasons therefor, and, if the change or revision is an increase, possible alternatives to reduce or eliminate the increase. If necessary, a revised USPOD Project Authorization will be issued.

C. Construction.

1. The USPOD Project Authorization accompanying each USPOD request for the Corps' construction services will state the construction project funding limitation and will authorize the obligation of funds within specific limitations for the services requested and the construction project funding limitation.

2. The Corps will contract for construction of the project, including mechanization, in strict accordance with the USPOD Project Authorization construction project funding limitation, scheduled occupancy date, and approved final working drawings, plans, and specifications furnished by the USPOD or prepared by or under the direction of the Corps pursuant to this Agreement, and will perform all necessary inspection, supervision, and other architectural and enginering services during construction. Subject to the provisions of this Agreement, the Corps Contracting Officer will advertise, award, and administer the construction contract, issue change orders, execute supplemental agreements, decide disputes, and take all other necessary and appropriate action to assure the successful completion of the project. In contracting for facilities which are to contain mechanization, the Corps will include both construction and mechanization in a single prime contract unless the Corps determines that significant time and/or cost savings will result from separate contracting, and so advises the USPOD.

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3. The Contracting Officer will take all pre-award actions including the preparation and issuance of the solicitation for bids or proposals for construction of the project. The Contracting Officer will not reject all bids, nor award a contract for a price exceeding the runuing limitation in the applicable USPOD Project Authorization, without first obtaining the concurrence of the USPOD and a USPOD Project Authorization revision if funding adjustments are necessary. The USPOD will be afforded the opportunity to send representatives to the preconstruction conference held after award.

4. Approved shop drawings, including manufacturers' literature, will be made available to USPOD personnel for review at the project site. As-built drawings will be furnished to the USPOD within 60 days after transfer of accountability for the facility to the USPOD.

5. Representatives of the USPOD will visit the site from time to time as the USPOD deems necessary or desirable during construction and will report any observed deficiences to the Corps. The Contracting Officer will modify the construction contract if necessary to comply with the written requirements of the USPOD. A USPOD Project Authorization revision will be issued if additional funding is required.

6. The Corps will not extend the time for completion of any project by more than a total of 30 days beyond the scheduled completion date, nor negotiate supplemental agreements for work outside the scope of the contract, without the prior written approval of the USPOD. The Corps will not, without the prior written approval of the USPOD, issue any single change order or contract modification which increases the contract price by more than $100,000 unless otherwise agreed in writing. However, notwithstanding the foregoing limitations, nothing in this Agreement shall be construed as limiting the Contracting Officer's. or a Board of Contract Appeals', authority to decide any dispute concerning a question of fact arising under a contract pursuant to the Disputes Clause there of and to grant whatever relief the contractor is determined to be entitled to. If at any time the Corps determines that the cost of the project will, or is likely to, exceed the USPOD's construction project funding limitation, or that the completion of the project will, or is likely to, be delayed beyond the scheduled completion date, the Corps will so advise the USPOD, giving the estimated amount of the anticipated excess or delay, and the reason or reasons therefor. If necessary, a USPOD Project Authorization revision will be issued.

7. Upon completion of a project, representatives of the USPOD and the Corps will make a joint final inspection to determine whether the work has been completed satisfactorily. In the event of deficiencies resulting from design error or failure of the contractor to comply with the plans and specifications, the Corps will take necessary action with the contractor to correct the same. Acceptance of the completed facility, including the fixed mechanization, will be effected by the Corps with the concurrence and assistance of the USPOD. Transfer of accountability for the facility will be accomplished by the use of a DD Form 1354. The USPOD will assume the custody, operation, and maintenance of the building on the effective date of the transfer of accountability. Any construction deficiencies which, with the USPOD's acquiescence, are not corrected prior to acceptance, will be listed on the reverse of DD Form 1354. The Corps will be responsible for action with the contractor for correction of all deficiencies listed on the reverse of DD Form 1354 at the earliest practicable time. However, the transfer of accountability for the facility will not be delayed pending such correction.

8. All necessary parts lists and maintenance and operating manuals and instructions, and all warranties and guaranties required by the conract specifications, will be delivered to the USPOD at the time of transfer of accountability for the facility to the USPOD. The Corps will make all necessary arrangements for, and will conduct all inspections and operational tests of the fixed mechanization and other equipment in the facility, notifying the USPOD well in advance of the dates set for such inspections and tests so that USPOD personnel may be present. The Corps will contract for and will take necessary action with the contractor for accomplishing the training of USPOD personnel in the operation and maintenance of the building and the fixed mechanization. Such training will be scheduled so as to be completed in time for the USPOD's assumption of the operation and maintenance of the building and the fixed mechanizaiton, respectively. The USPOD will assume the operation and maintenance of the fixed mechanization after successful completion of the operational tests. The Corps will schedule these tests to commence before or concurrenly with the USPOD's

beneficial occupancy of the building. The tests should be completed as soon as practicable after occupancy so that full utilization of the facility may be effected promptly.

V. BUDGET AND FINANCE

1. The obligation of USPOD funds for projects and specific services requested under this Agreement will be authorized individually by USPOD Project Authorizations. The Corps will not start work on any project or specific services until it receives the applicable USPOD request for services. Each request for services will identify the project or specific services to which it relates and will contain a general description of the scope of the services requested. In addition, each request for services will be accompanied by a Project Authorization which will set forth the approved funding and any specific limitations. For this purpose, project costs are the customary charges which include applicable engineering and design services and construction expenses, whether by contract or hired labor, cost of supervision and inspection of construction, support costs, costs of settling contractor claims and disputes and, in addition, costs attributable to the acquisition of real estate.

2. Design, Construction, and Mechanization. The USPOD will fund all payments to contractors pursuant to the provisions of contracts entered into by the Corps in accordance with this Agreement, including costs of settling contractor claims and disputes. The USPOD will additionally fund the costs incurred by the Corps in connection with each individual project, to include the Corp' costs for supervision of design, engineering, construction and mechanization. The Corps will establish controls over its operations to ensure that its costs for such services will not exceed 5.5 percent of the total program payments to contractors for design, construction, and mechanization and for any Corps inhouse design. This rate is based on the assumption of a continuing program of not less than $250 million annually and a schedule of projects at least six months in advance of dates on which services are required. Should this assumption not materialize, the Corps and the USPOD will consult to develop a mutually acceptable course of action. Regardless of the terms of this Agreement, the Corps will continuously seek ways of performing its services in the most efficient and economical manner.

3. Real Estate. The USPOD will fund all payments for land acquired through purchase contracts or by condemnation requiring deposits of estimated compensation together with any deficiency which may be awarded. The USPOD will additionally fund all costs incurred by the Corps in providing real estate services pursuant to this Agreement. It is estimated that the Corps' costs for site selection for budgeting purposes will average $3.500 per location and that the Corps' costs for site acquisition will average $3,800 per parcel inclusive of administrative and support costs, provided, however, that the USPOD will fund the actual costs incurred by the Corps in connection with each individual project. The Corps will effect continuing aggressive management to minimize its costs to the extent practicable.

4. At the end of Fiscal Year 1972 and each succeeding fiscal year while this Agreement is in effect, the USPOD and the Corps will conduct a joint review and analysis of the costs specified in paragraphs 2 and 3 of this section to include the status of Corps costs in not exceeding the 5.5 percent program limitation, with particular emphasis on problem areas, if any, and to consider the need for any adjustments, as appropriate.

5. The specific funding procedures are as follows:

a. Existing USPOD Contracts for Which the Corps Designates a Successor Contracting Officer.-The USPOD Project Authorization applicable to each contract will include the status of contract financing and will authorize contingency funds in a specific amount for the issuance of change orders and/or contract modifications as authorized by this Agreement. Change order and contract modification documentation will be forwarded to the USPOD to be recorded against the contingency funds authorized to be obligated by the Corps. Vouchers for payments due under the contract will be certified by the Corps and forwarded to the USPOD for payment. Services performed by the Corps under the terms of this Agreement and within the budget estimate for the project or specific services requested will be on a reimbursable basis. Standard Forms 1080 will be forwarded to the USPOD for reimbursement.

b. Projects for Which the Corps is to Let Contracts During FY 1971.Total Program funding, including the Corps' related costs, both direct and indirect, will be transferred to the Corps on SF 1151. The authorization to proceed with individual projects will be given by specific USPOD Project Authorizations. Unexpended balances as of June 30, 1971, will be transferred back to the Postal Service on Standard Form 1151. Cash to cover payments for projects commenced prior to July 1, 1971, will be included in the Standard Form 1151 described in Paragraph c below.

c. Projects on Which the Corps is to Commence Providing Services on and after July 1, 1971.-On or before July 1, 1971, the Corps will be issued a SF 1151 and a Budget Authorization authorizing the Corps to obligate Postal Service funds required to accomplish planned projects, subject to receipt of specific requests for services and accompanying Postal Service Project Authorizations. Promptly after receiving the Budget Authorization, the Corps will prepare and submit to the Postal Service a projection of monthly expenditures by project for one year in advance. The projection will be revised in February of each year for the twelve months commencing the next previous January 1st, and in August of each year of the twelve months commencing the next previous July 1st, and at such other times as may be necessitated by changes in the Budget Authorization or otherwise. The cash required by the Corps for disbursements in accordance with the monthly projection will be transferred to the Corps monthly in advance, or as otherwise agreed by the parties. If at any time additional funds are required for any project, or it becomes evident that additional funds are likely to be required, the Postal Service will be so advised.

VI. AUDIT

The USPOD may examine all records and documents pertaining to direct and indirect costs charged to the USPOD pursuant to this Agreement.

VII. REPORTS

In addition to all other reports, consultations, advice, notifications, and transmittals provided for in this Agreement or indicated by emergent developments, the Corps will submit in writing to the USPOD the following periodic reports:

A. Monthly Project Progress Reports. For each project on which the Corps is providing services under this Agreement, the Corps will submit to the USPOD each month on a mutually agreeable date a Project Progress Report detailing, in an agreed format, the status and progress of the project as of the last day of the preceding calendar month. Each such report will cover all major activities involved in the project for which the Corps has responsibility including, as appropriate, site selection, site acquisition, design, and construction. Each Report will include pertinent information concerning the scheduled and actual commencement and completion dates for the major activities involved in the project, and will show the scheduled and actual percentages of completion of each major activity; the estimated and/or actual costs of site selection and acquisition; the basic terms of contracts as they are let and modified; increased costs and time extensions made by change order, supplemental agreement, or otherwise; developments having, or likely to have, a significant effect upon the cost or time of completion of the project; and such other information as the USPOD may reasonably request.

B. Monthly Project Fiscal Status Reports.-For each project on which the Corps is providing services under this Agreement, the Corps will submit to the USPOD each month on a mutually agreeable date a Project Fiscal Status Report detailing, in an agreed format, the fiscal status of the project as of the last day of the preceding calendar month. Each such report will include the original and current amount of the Budget Authorization and the applicable Project Authorization, the amount of accrued expenditures, the undelivered orders, the unobligated balance, and such other information as the USPOD may reasonably request. The Corps will also submit monthly on the agreed date a summary report reflecting the totals of the individual project fiscal status reports.

C. Special Reports on Completed Projects.-Concurrently with the submission of the final progress and fiscal status reports on each project, the Corps will

submit to the USPOD a special report setting forth, in an agreed format, such fiscal and physical data on the completed project as the USPOD may reasonably request.

VIII. AMENDMENT, DURATION, AND TERMINATION

1. This Agreement may be modified or amended by written agreement between the USPOD and the Corps, and it is understood that appropriate amendments may be made as appear necessary or desirable when the Post Office Department is succeeded by the United States Postal Service. It is also understood and agreed that detailed forms and procedures will be adopted, and coordinating groups may be established to implement this Agreement.

2. This Agreement will continue in effect for a period of three years following its effective date, and thereafter as may be agreed by the parties. The USPOD and the Corps will consult in advance of termination of all or any part of this Agreement and will, insofar as possible, fix a termination date sufficiently in advance so that both parties will have a reasonable period of time to make personnel and other adjustments in their operations in light of such termination. For the purposes of this paragraph, a period of six months will be deemed to be a reasonable period of time. Upon termination of this Agreement, all pertinent documentation requested by the USPOD relating to projects handled by the Corps under this Agreement will be delivered to the USPOD.

IX. EFFECTIVE DATE

This Agreement will be effective commencing with the 11th day of March, 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.

Mr. CONSTANDY. I would like to add that for fiscal year 1972, in addition to the $222 million, that fiscal year provides for $159 million. I think I gave the figure erroneously for both years as $222 million. Mr. AHART. To clarify this for the record, I beleve you are readng from the appendix material which was attached to a corps document as opposed to appendicies to a March 19 document from the Office of Chief of Engineers to the field offices.

Mr. CONSTANDY. You are correct. We will get to that next. Thank you for pointing that out.

Mr. WRIGHT. The Chair would like to observe in connection with these projects listed for fiscal year 1971 and fiscal year 1972 a rather curious omission. Unless the Chair may be remiss in his attempt to find it, there is no reference herein to any facility at Charlotte Amalie, Virgin Islands, and yet the reason given by the Post Office Department for withdrawing from the multipurpose project in Charlotte Amalie was that it needed a facility very quickly. Unless I have missed it in my perusal of these listings, I do not find any reference to such project.

Mr. CONSTANDY. That is correct and I think the explanation would be that the Post Office Department is proceeding with that project as a lease construction project at the present time; isn't that so? Mr. AHART. That is correct.

Mr. CONSTANDY. While the Corps of Engineers took over certain projects that were under construction in that category of lease construction, the balance of these projects I referred to were for direct Postal Service construction.