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those costs (other than transfer and relocation costs, which are provided for in paragraph 1, 4, above) incurred through 30 September 1971, which are associated with the Corps' employment of former USPOD regional personnel, and which are not directly related or chargeable to any individual Postal Service Project or projects for which the Corps is responsible.

II. AMENDMENT AND TERMINATION

This Memorandum of Understanding shall be equally as binding upon, and for the benefits of, the United States Postal Service (USPS) as the Post Office Department. This agreement may be amended at any time by mutual agreement. This agreement may be terminated by either party six months after giving notice of termination to the other party, or at any time by mutual agreement.

CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY,

By J. A. RAYMOND,
Major General, USA, Director of Military Construction, Office of Engineers.

Post OFFICE DEPARTMENT,
By

Assistant Postmaster (General), Post Office Department. Date: May 20, 1971.

EXHIBIT 19

MEMORANDUM OF AGREEMENT BETWEEN THE Post OFFICE DEPARTMENT AND THE

CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY PROVIDING FOR THE ASSIGNMENT OF RESPONSIBILITY FOR EXECUTION OF THE USPOD LEASING PROGRAM TO THE CORPS OF ENGINEERS

I. INTRODUCTION

This Memorandum of Agreement assigns specific responsibilities and establishes funding procedures for the leasing and lease servicing functions involved in the execution of the USPOD Facilities Program, excluding policy determination and program management, transferred to the Corps.

II. ASSIGNMENT OF RESPONSIBILITIES

1. The Corps will be responsible for, and is hereby authorized to accomplish, the execution of the USPOD leasing program, in accordance with the USPOD's leasing authorities, policies, guidelines, and determinations, to include:

Maintaining the USPOD's lease records ;

Obtaining new leasehold space for the USPOD in accordance with USPOD requests;

Renewing USPOD leases and executing USPOD purchase options after obtaining determinations from the USPOD as to whether to renew or purchase;

Representing the USPOD in all negotiations and discussions with lessors concerning leaseholds and the terms and provisions of leases;

When made aware of the need by the USPOD, or becoming aware thereof in the course of performing other duties, taking action with lessors to insure that the lessors fulfill their lease obligations including the making of needed repairs which are the obligation of lessors;

Negotiating and executing supplemental lease agreements under which lessors accomplish USPOD-approved leasehold alterations and improvements, and repairs which are the obligation of the USPOD, of which the total cost, including all lessor charges, is $2000 or more;

Awarding, executing, administering, and supervising contracts with thirdparties for the design and construction of USPOD-approved leasehold improvements, alterations, and repairs of which the estimated construction contract cost is $2000 or more, or for which architect-engineer services are required ;

Submitting promptly to the USPOD, as and when requisite, lease or rental payment authorizations (USPOD Form 125) to include authorizations for the withholding of rental payments when appropriate;

Submitting on a regular and current basis lease data requested by the USPOD for inclusion in the USPOD's ADP system; and furnishing additional specified lease data upon request of the USPOD;

Monitoring and challenging all excessive or unwarranted increases in state and local real property tax assessments against properties leased by USPOD where USPOD pays, or reimburses the lessor for, all or part of such taxes;

Negotiating with state and local authorities for compensation, and with lessors for rent reductions, and arranging for the USPOD to be formaliy represented in court proceedings, whenever property leased by USPOD is taken by a state or local government by eminent domain;

When requested, subletting space in USPOD-leased buildings which is excess to the needs of USPOD, and acting as the USPOD's agent for the collection of rentals and other dealings with the sublessees;

When requested, assisting USPOD procurement contracting officers with real estate services needed in connection with the erection of free-standing

Self-Service Postal Units. 2. The USPOD will deliver its lease files and related documentation to the Corps, and the Corps will accept delivery of the same, at the fifteen regional offices of the USPOD on June 27, 1971. The responsibilities assigned to the Corps hereunder will become vested in the Corps upon delivery of the files as above provided and funding as hereinafter provided.

III. DISBURSEMENTS AND FUNDING

A. Disbursements. Disbursements for rent, and lump sum payments made pursuant to both lessor and third-party leasehold improvement contracts, including design, will be made by the USPOD in accordance with lease or rental payment authorization (USPOD Form 125) issued by the Corps. B. Funding

1. The USPOD will fund the costs incurred by the Corps in executing the USPOD leasing program, to include Corps costs for leasehold improvements, alterations, and repairs. On or before July 1 of each year, commencing with July 1, 1971, the USPOD will issue to the Corps a Standard Form 1151 and a Budget Authorization authorizing the Corps to obligate Postal Service funds required to cover all costs incurred by the Corps in executing the USPOD leasing program for the ensuing fiscal year. Additional funding will be provided if required. The cash required by the Corps will be transferred to the Corps monthly in advance. Any balance remaining at the end of a fiscal year will be credited against the funding for the next succeeding fiscal year.

2. The Corps will make every effort to perform its services hereunder in the most efficient and economical manner. The Corps and the USPOD from time to time will conduct a joint review of this program with particular emphasis on problem areas, if any, and to consider the need for any adjustments, as appropriate. In January and July of each year, the Corps will submit to the USPOD a brief written report summarizing the Corps' conduct of this program and making recommendations to the USPOD for improvements.

IV, AUDIT

The USPOD and its auditors may examine all records and documents in the possession of the Corps or for which the Corps is responsible, pertaining to lease or rental payment authorizations (USPOD Form 125) issued by the Corps, and to Corps costs and disbursements funded by the USPOD, pursuant to this Agreement.

V. AMENDMENT AND TERMINATION This Memorandum of Agreement may be amended at any time by mutual agreement. This Agreement may be terminated by either party six months after giving notice of termination to the other party, or at any time by mutual agreement.

VI. EFFECTIVE DATE

This Agreement will be effective commencing with the 28th day of June 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.

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, 281753Z 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 Req ed.

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 port 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 navigat 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. 6. 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 reviero 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

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