4. The secretary-steno and the secretary will support the Executive Office and the assistant for construction.

(c) The Assistant for Construction and the Assistant for Design. As described previously, these individuals will be responsible for the program aspects of their areas of responsibility. These are envisioned as one-man offices; it is not considered, at this time, that they require assistants. The Assistant for Design will have the additional responsibility of Chief of the Technical Division. (d) The Assistant for Planning and Reports.

1. The Chief will manage his subordinates and will constitute the principal over-all program interface with the Post Office Department so far as concerns general status of real estate, design, and construction activities. 2. The Program Planner will be concerned with future programs and projects which the Post Office Department will be assigning to the Corps. He will also be responsible for preparing or coordinating replies to Congressional correspondence for forwarding to the Post Office Department.

3. The Program Analyst will analyze project progress and fiscal reports which will serve as the basis for preparing analytical reports reflecting program status and highlighting potential problem areas for use within OCE.

4. The Programs Specialist will be responsible for establishing and maintaining the necessary reporting systems so as to provide the information required by the Post Office Department. Formal reports furnished to the Post Office Department will be consolidated by this individual.

(e) Project Managers. The number of Project Managers will depend on the number of projects assigned to the Corps. As a starting point, it is considered that a Project Manager will be able to manage five projects. Experience will indicate whether this number should be increased or decreased. Project Managers will act in two-man teams to ensure continuity and back-up.

(f) Technical Division. Insofar as CEPCSO is concerned, it is considered that two teams will be able to handle the review of functional design packages and the subsequent reviews during the design process. Each team will consist of an architect as a team chief; a structural engineer; a mechanical engineer for heating, ventilation, and air conditioning; a mechanization engineer; and an electrical engineer. A landscape architect is also required for site development matters. The Division is rounded-out with a draftsman, a secretary-steno, and two typists. As mentioned previously, the Assistant for Design will double as Chief of this Division.

3. COSTS

a. Design and Construction Costs. These costs have four principal components: (1) District Design and Construction Costs. These costs include payments to contractors for design, construction, materials, and equipment. (2) Supervision and Inspection (S&I).

(a) Description. S&I of construction is the effort expended for supervision, inspection, and administration of construction contracts and includes but is not limited to services and activities such as: analysis of plans and specifications by the construction staff to establish construction sequence and to become familiar with design and construction requirements; the award and technical administration of construction contracts; review of drawings, manuals, and other information submitted by construction contractors; assurance that construction is performed in compliance with the drawings and specifications; negotiation, and preparation of contract modification documents; review and approval of contractors' construction schedules and progress charts; estimating and verifying quantities and preparation of documents for payments to contractors; and performance of other construction supervision, technical evaluations, management, and inspection not otherwise included in the foregoing summary. In general, S&I costs commence to accrue during or at phases of advertising/bidding/award/mobilization and essentially culminate with final acceptance and demobilization: however, some S&I costs continue to accrue until the contract is financially closed and transfer of records is accomplished.

(b) Where S&I Costs are Incurred. S&I costs are incurred, for the main part, at the District and job site construction offices by direct participation in the supervision, inspection, and administration of construction contracts. Norminal S&I costs are also incurred by the Divisions and OCE and are relatable to technical evaluation of construction in process, consulting services during construction, and material testing at Division laboratories.

(c) Factors which Influence S&I Costs. There are a number of factors which may directly influence the projection and accrual of S&I costs. These factors, which must be known or assumptions made in estimating their influence on S&I costs, are as follows:

1. Since S&I costs are made up primarily of personnel salaries, estimates must be based on a period of service, i.e., the construction schedule. If construction delays are encountered, such as, strikes, suspensions, terminations, weather, etc., the additional S&I costs may be directly proportional to the additional period of service over and above the original period considered in projecting and estimating S&I costs.

2. The program composition has a direct and major impact on S&I costs. The S&I rate will be significantly lower on large projects than on small projects.

3. Location of projects with respect to existing District and Project offices will affect S&I costs. Projects located within commuting distance of existing District offices will reduce travel and personnel relocation expenses. The reverse effect will be true where projects are not within commuting distances of existing Districts or construction project offices.

(3) Supervision and Review of Contract Design (S&R).

(a) Description. S&R costs are those incurred by Corps forces in the technical administration, supervision, and verification of the design of projects by A-E contractors and includes:,

1. Predesign contract award activities, such as; development of project criteria, preparation of design contract documents, selection of A-E contractors, and contract negotiation and award.

2. Technical supervision and verification of the preparation of design analyses; bills of materials; cost estimates; and preparation of construction contract documents, such as, project working drawings and technical provisions of the specifications.

(b) Where S & R Costs are Incurred. These costs are incurred primarily at the District level. Design is procured either by :

1. A-E contract, in which case the contract is technically administered and supervised by the District staff, or

2. In-house design effort, in which case the design review is accomplished by separate technical personnel within the District of by the Division staff. For projects of unusual technical complexity, consulting services are provided by Divisions and the Office, Chief of Engineers.

(c) Factors Affecting. S&R costs will be affected by factors associated with the size of a total program, the program size for each design district, the ability of the customer to furnish criteria according to a schedule which permits optimum utilization of design staffs, and the particular geographical relationship of districts to the design contractors. Individual factors contributing will be: the range in project size and complexity, the extent and timing of changed criteria during the design period, the amount of lost design effort, and the length of time scheduled for design completion.

(4) Support Costs.

(a) District:

1. Description. Within a District, support is provided to the technical staffs by the executive, advisory, and administrative staffs plus a portion of the Supply Division. The organizational elements involved are the Executive Office, Comptroller, Public Affairs, Safety, Counsel, Personnel, Administrative Services, Security, and an ADP element (excluding direct support). In addition to salaries, there are miscellaneous expenses, involving printing and reproduction, office supplies, travel, transportation of office equipment and supplies, permanent change of station of District office personnel, and communication. The nature of functions performed by various organizational elements are:

(a) Executive. The District Engineer and Deputy District Engineer manage the activities of the district, review technical aspects of projects, and perform on-site inspections.

(b) Office of Comptroller. Performs functions such as internal review of district activities; preparation and coordination of district budgets; processing fund authorizations; finance and accounting; and management analysis.

(c) Public Affairs Office. Plans and executes programs to accomplish public information objectives; disseminates information to press and other media; and coordinates public displays.

(d) Safety Office. Provides advisory safety engineering services in support of accident prevention, including features of design, occupational health, fire prevention and protection; and safety in all end-use items or services.

(e) Office of Counsel. Provides staff advice on legal matters, including negotiation of contracts and contract termination matters; reviews contracts and drafts non-standard form contracts; processes claims and appeals; and handles labor relations.

(f) Personnel Office. Provides civilian personnel services and manpower management functions, including position and pay management, recruitment, selection, and personnel action processing.

(g) Office of Administrative Services. Performs services common to and required by all elements of command, such as, printing and preproduction, photography, administration of records, management of forms, receipt and issue of office supplies and equipment, and travel services. (h) Security Office. Responsible for physical security at construction sites.

(i) Automatic Data Processing (ADP). Develops ADP business systems and engineering applications to support administrative and technical activities of district and operates or controls input to computer. 2. Method of Calculation. The accounting system, which the Corps uses for distributing support costs, was established in 1927 and has been under refinement and improvement since that time. This system has been approved by the Comptroller General of the United States. Two factors determine the allocation of support costs to each program:

(a) the relative size of each program to the total district workload, and (b) the application of weighted factors to the various program elements. This weighting system gives recognition to the fact that certain type programs and program elements require less support effort than others. The established weight factors were developed by a field survey of all field offices during a 12-month period of the years 1964-65. These weight factors are:

(b) Division. Whereas only the costs of the executive, advisory, and administrative staffs of the District Office are classified as support costs, the entire cost of the Division Office is considered as a support cost. Thus, in the Division Office, the technical personnel of the Engineering and Construction/ Operations Divisions are, for accounting purposes, treated as support costs in the same way as are the personnel of the executive, advisory, and administrative staffs. Technical support provided by Division personnel includes inspection of construction work in progress, technical consultation when problems develop, and general supervision to ensure quality construction. The only exception to charging Division costs as support costs is when Division personnel are detailed to a District to perform work normally accomplished by District personnel. For example, if a District requires the services of a geologist and does not have one at the time, the Division geologist would be made available to the District. In this case, the geologist's services would be charged as a direct charge against the project rather than as a Division support cost.

(c) Office, Chief of Engineers. OCE costs are charged to specific programs executed by the Corps of Engineers. This means that the costs of the Directorate of Civil Works are paid for by Congressional civil works appropriations. The Directorate of Military Engineering costs are covered by the Operations and Maintenance appropriations of the Army. The Directorate of Military Construction costs are assigned to the Air Force, NASA, Army, and other programs which the Directorate supervises. Thus, the costs of technical personnel are charged against their respective programs. Additionally, each program is assigned its proportionate share of the OCE executive, administrative, and advisory staffs; this cost is currently computed at 32.5% of the technical staff costs.

b. Historical Design and Construction Costs. Indicated below are cost figures which the Corps has experienced in the past.

(1) NASA. In the case of the NASA program, costs for accomplishing design and construction from fiscal year 61 through fiscal year 68 as related to a total program of $1,012,669,000 were:

(a) E&D-7.8 percent of direct construction costs (includes A-F fees). (b)*S&A-5.8 percent of direction construction costs.

This gives a total of 13.8 percent of direct construction costs.

(2) Fiscal year 1970. The following cost figures pertain to the Corps military construction effort administered during the entire year of fiscal year 1970.

(a) Supervision and Review (S&R). Costs for S&R were $3,306,000 involving A-E design contracts of an accrued value of $14,567,000; this gives a ratio of 22.7 percent. Relating the S&R costs to the estimated cost of construction of these A-E contracts gives a percentage of 1.03.

(b) Supervision and Inspection (S&I). These costs relate to CONUS districts (excluding Huntsville; Alaska, and CEBMCO) and total $16,520,000. When related to the value of work placed, which was $351,553,000, a ratio of 4.7 percent was experienced.

(c) Overhead.

1. District support costs for supervision and review of A-E contracts were tabulated as $788,000, which relates to the estimated cost of construction designed of $320,643,000 as .25 percent. For District support costs associated with construction, $3,967,000 were expended, which, when related to value of work placed of $351,553,000, gives a percentage of 1.13. Thus, District support for 1970 totaled 1.38 percent of value of work placed.

2. Division and OCE support costs expressed as percentages of value of construction and as submitted to Congress in the Section 704 reports for fiscal year 1970 for completed Army construction, were as follows:

The value of construction completed was $239.9 million. 3. Thus, the total overhead costs for the military construction program during fiscal year 70 was 2.78 percent of value of work placed.

(d) Summary. The total costs comprising S&I, S&R, and support costs were (a) S&R. Costs of $1,301,000 for Supervision and Review of A-E contracts amounts.

(3) First Half Fiscal Year 1971. For the first two quarters of 1971, the costs experienced for 1970 CONUS districts (excluding Huntsville and Alaska) were: (a) S&R. Costs of $1.301.000 for Supervision and Review of A-E contracts were associated with A-E design contracts with an accrued value of $6,634,000: this is a ratio of 20 percent of accrued value of A-E contracts. The ratio of costs for S&R of A-E contracts to estimated cost of construction of the plans and specificatins developed by these A-E cntracts was .88 percent.

(b) S&I. S&I costs were $6,461,000 with work placed valued at $165,795,000 giving a ratio of 3.9 percent.

(c) Support Costs:

1. The District overhead support costs for S&I, which were $1,459,000, when applied to the value of construction placed, which was $165,795,000, gives a percentage of .9.

2. District overhead support costs o the Supervision and Review of A-E contracts were $179,000, when related to the estimated cost of construction designed, $147,277,000, a percentage of .1 results.

3. Divisions and OCE. There are no derived data from the first two quarters of FY 1971, since these data are developed only on an annual basis. The Division and OCE support factors currently used are those developed for fiscal year 70.

*S&A costs are composed of S&I costs plus overhead costs.

(d) Summary. Based on total costs to data for fiscal year 71 the percentage of Corps in-house costs (excluding A-E contract costs and Division and OCE support costs) to value of work placed is 5.78. Using 1970 Division and OCE support costs, the cost ratio is 7.18.

c. Design and Construction Costs for Postal Public Building Program. (1) Conceptual Approach. It has been suggested that the Corps establish a program percentage rate as a firm cost for accomplishment of the Postal Public Building Program.

(a) Impact of the Law. Statutory references which preclude this approach are as follows:

1. 31 USC 686 provides that an agency may be required to pay estimated costs of work performed by another, but that proper adjustments must be made on basis of actual costs.

2. 31 USC 628 provides "Except as otherwise provided by law, sums appropriated for the various branches of expenditure in the public service shall be applied solely to the objects for which they are respectively made, and for no other."

3. 633 USC 576 provides that the CE revolyving fund may furnish services for other agencies, as authorized by law, and receive reimbursement for costs of services furnished.

Based on the above, the Corps may not provide a predetermined unadjustable rate or amount for performing Post Office work because, if such rate or amount should prove to be less than actual costs, the Corps has no appropriation or fund which could legally be charged with the deficit. (b) Difficulties in Estimating a Program Percentage Cost. The Corps accounting system provides for costing for support services provided by the Corps for each program and the appropriate billings thereto. In any program, the numerous factors which contribute to the cost of providing Corps design and construction services are subject to variance throughout the life of the program, thus, precluding precise estimation of their magnitude. Additionally, regarding the Postal Public Building Program, while general information is available, many details required for estimating purposes are lacking. For example, the number of projects in the entire program is not known. Likewise, composition of the program is not known, i.e., number of preferential vs bulk facilities. Another item that influences cost is the construction period which has not been, and cannot be, established at this time because most of the facilities have not been designed; construction periods determine the period over which Government costs are incurred. Other items influencing construction periods are strikes, weather, criteria, and design changes, which, in turn, affect Government costs. Additionally, there is the fact that the Corps has little experience yet in working with the Post Office Department. It is possible that administrative costs involved in furnishing reports, the handling of Congressional inquiries, etc., may vary from those the Corps has experienced in executing other programs.

(c) Summary. In view of the many factors of unknown dimensions, it is considered that the only practicable approach is to establish a range of values for the estimated total program costs for Corps design and construction services. This range can be established based on historical costs and taking into consideration the general characteristics of the Postal Public Building Program,

(2) Supervision and Review (S&R). Based on the Corps recent experience, the S&R rate for other Corps composite military programs has been in the range of 0.88 to 1.03%. Considering what is currently known of the Postal Public Building Program, it is estimated that the program S&R rate will range from 0.8 to 0.88%. The actual S&R costs will depend on the factors involved in project design, to include accuracy and completeness of criteria, complexity of design, mechanization interface, site conditions, the design schedule, and extent of standardization.

(3) Supervision and Inspection (S&I). Based on the Corps recent experience, the S&I rate for other Corps composite military programs has been in the range of 3.5 to 4.7%. In view of the apparent nature of the Postal Public Building Program with concentrated, high value projects, it is estimated that the program S&I rate will range from 3. to 3.9%. The actual S&I cost for individual projects and the total program will depend on the factors involved in project execution to include size and location of project, complexities, strikes, weather, and change orders.

(4) Support Costs. (a) District.