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Mr. CONSTANDY. How many were anticipated to be completed within 12 or 13 months ?
Mr. AHART. Well, let me see, 19, I guess, out of the 22 would be about 13 months.
Mr. CONSTANDY. Is there anything to suggest that that is not realistic?
Mr. AHART. I think Mr. Zimmerman has some more detailed information on this, but I think the reaction which we have gotten in our discussions with the Corps people is that if you have a major project and try to compress it within too tight a time frame and they consider some of these too tight—that, number one, it is very unlikely that you will be able to live with that time frame because of the unforeseen difficulties that you have, and secondly, you will have a major acceleration of your construction costs. We do have information, our analysis that was mentioned by Mr. Staats this morning, concerning the Jacksonville Post Office facility, prepared for the district engineer in Savannah. The chief of the Jacksonville district's construction division prepared an analysis of what would happen if he tried to build that particular project within a 12-month period, and he estimated an additional cost of $2.6 million. He concluded that his estimate for additional costs is based upon a rational approach. However, it is known from experience that we never receive what we pay for when we do construction work on a crash basis, and that not only will the cost be higher, but it is doubted that the time savings will be realized regardless of the amount of effort exerted to keep the contract on schedule.
We did talk to officials in the Baltimore district to see whether or not they had ever completed a comparable project within a 12-month construction period, and they were unable to identify for us any comparable projects which had been completed within 12 months, with the exception of one, I believe, which was done at the Aberdeen Proving Grounds, to support the Vietnam conflict, on a crash basis, which was accomplished in something like 205 days.
Mr. CONSTANDY. May we have the letter pertaining to the Jacksonville project as an exhibit?
Mr. AHART. Yes.
DEPARTMENT OF THE ARMY,
Jacksonville, Fla., May 7, 1971.
1. It is understood that the Jacksonville Post Office facility will have 250,000 square feet of usable space, will be similar in design to the Tallahassee Post Office, and is estimated to cost about 7 million dollars.
2. It is believed that a reasonable construction time without overtime operations and considering lead time for materials and equipment is 18 months. This estimate is partially based upon the following experiences :
(a) A research building similar in design of 200,000 square feet constructed at Patrick Air Force Base was originally scheduled to be completed in 12 months. Actual construction time under crash conditions was 16 months. The cost of the work escalated to represent price levels is 542 million.
(b) An office building of about 350,000 square feet constructed at Patrick Air Force Base was originally scheduled to be completed in 12 months. Actual construction time under crash conditions was 21 months. The cost of the work escalated to represent 1971 price levels is 942 million.
(c) The Headquarters, Major Command, building at MacDill Air Force Base which was constructed in 1967–68 is 180,000 square feet in area. The contract construction time was 15 months, but there was an overrun of 7 months in actual construction time. The cost of the work, escalated to represent 1971 price levels is $5,030,000.
3. If it is essential that the work be completed on a crash basis in 12 months construction time, it is estimated that the increased cost will be as follows: (a) Estimated labor, 18 months schedule, regular time:
250,000 square feet x 1.7 man-hours per square foot 425,000 man-hours. (6) Reduction in efficiency, crash conditions = 20%.
(c) Number of man-hours required under crash conditions equals 1.2X 425,000=510,000.
(d) Average per week=510,000:-52=9,800 man hours.
(e) Average number of people who can work efficiently in available space 150.
(f) 9,800:150=65 hours/person/week. Say 60 hours.
Average all trades, U.S.=7.61.
Plus profit, 19%=8.26. Say 8.25.
330 20 hours (20X2.424 x 8.25)
(Means, page 157). 730:-60=12.00 per hour. (i) Cost of labor :
Crash basis (510,000 X 12).
$6, 100, 000 3,500,000
2, 600, 000 4. This estimate of additional costs is based upon a rational approach. However, it is known from experience that we never receive what we pay for when we do construction work on a crash basis, and that not only will the costs be higher, but it is doubted that the time savings will be realized regardless of the amount of effort exerted to keep the contract on schedule. For the District Engineer.
, Chief, Construction Division.
May 6, 1971. Subject: Additional Cost for Building Fort Lauderdale Post Office on a Crash
$7. 61 99 percent factor for Miami area-
7. 55 Plus 15 percent taxes and insurance_
8. 68 Plus 15 percent overhead--
10.00 Plus 10 percent profit---
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
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 (14.60X510,000).
$7, 450, 000 Total labor.--
7, 450,000 abor, normal construction -
4, 675, 000
2, 775, 000
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.
COMPARABLE PROJECTS CONSTRUCTED BY THE CORPS OF ENGINEERS AND REVIEWED BY GAO
Overrun in construction time (days)
542 512 290 287 250 239
Armed Forces Institute of Pathology, addition, Walter Reed Hospital, District of Columbia..
208 135 130 109 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. 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.
Nr. 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