I have sort of the initial policy responsibility, which is why I am here, but quite a few officials of the OMB who have policy responsibilities for matters which we decide also reviewed this.

Mr. WRIGHT. All right. I was going to ask a question relating to whether or not the Director of the OMB had indicated to those involved in the review that he wanted it speeded up and would like for you to accommodate the wishes of the Post Office Department. Mr. NATHAN. I do not remember his ever saying that.

Mr. WRIGHT. Fine. And you feel that it is unprofessional from the point of view of the OMB to divulge information as to who was involved in just what actions to the Congress, so we will respect that. Mr. NATHAN. I appreciate that, sir.

Mr. WRIGHT. As a matter of fact, it sometimes is quite difficult for the Congress to secure information from the Office of Management and Budget. It has been somewhat difficult for us today in these hearings to elicit direct responses to questions.

I

Mr. NATHAN. We do the best we can in matters like this. We were glad to come up and accommodate you, sir. I feel that the description gave of the way the Office operated in this matter does give you quite a lot of information about how we handle things, and it does permit you to identify most of the major actors, as it turns out. Mr. WRIGHT. Mr. Terry, do you have any questions?

Mr. TERRY. No questions.

Mr. CONSTANDY. I have to say for myself, with the familiarity I have of the transactions, that I do not feel your testimony was responsive, Mr. Nathan. It gets down to a circle at times. There is no question about what the letter that Mr. Shultz addressed to Mr. Blount and to Mr. Laird says. It says very clearly that it would have a result on the role and mission of the corps.

You might now wish it had been written differently, but that is what it says. There is no question that you made the request that the agreement be suspended and that no action be taken. Not that no contract be let but that no action be taken pursuant to the terms. It did not suspend any actions as a matter of fact, to my own knowledge. The contract about which Mr. Blount wrote in his letter of May 4 simply referred to a contract that in the normal course of time was then ready for letting, and he would like to have the release of the suspension to execute it.

The other actions, and I think they are just as important as letting a contract for construction, that is, the normal day-to-day business between the Post Office Department and the corps and the corps headquarters and its division and district offices, continued in spite of the fact that you requested a suspension.

To give it any other characterization, I think, is to treat lightly the facts.

We took the trouble yesterday deliberately to put into the record the names of the projects on which significant action was taken. It was intended to be illustrative. There are many more of them. In fact, no advice went from the corps headquarters to its field offices to suspend the agreement or to take no action pursuant to its terms.

Mr. TERRY. Mr. Chairman, so that the counsel's comments will not be construed as the unanimous feeling of those Congressmen present this morning, I feel that the testimony by Mr. Nathan stated that they felt that the fact that bids were not let or advertised was, in effect, a suspension, and that the other items were not a result-were not irrevocable and, therefore, the OMB construed any interim agreements, transfers, letters, et cetera, to be not in contradiction to the letter by Mr. Shultz to suspend.

Now, whether or not the term "all" as contained in his letter gives us a different construction is something else, but I think that was the testimony which Mr. Nathan offered.

Mr. CONSTANDY. May I clarify what I said?

Under the terms of the agreement, the Corps of Engineers was expected to perform certain services. In the course of the performance of those services, they are incurring expenses. Their own in-house and overhead expenses and the other expenses that related to construction, inspection of projects then underway, that related to the review of designs on the design contracts that had been entered into before that— in other words, during that period of 6 weeks, the corps incurred considerable expense.

Mr. TERRY. Absolutely, but on the question of nonresponsiveness, the witness this morning has stated that they-I presume he is speaking on behalf of Mr. Schultz and the other Assistant Directors did not construe those activities, even though we may feel differently about it, as being in contradiction to the suspension order as issued by Mr. Shultz.

Mr. CONSTANDY. We do not know whether, during the 6-week period, they knew whether the agreement had been suspended or not. They are looking at it now after the fact.

Really, the question is whether they expected the suspension at the time they invoked it would have been as it was written in the letter, that they would take no action.

Mr. TERRY. That is true, but in retrospect he is saying that they construed the fact that bids were not let to be the predominant factor here rather than the

Mr. CONSTANDY. They are kind of left with that.

Mr. TERRY. Right.

Mr. NATHAN. Mr. Constandy, I could make an observation.

Mr. CONSTANDY. Please proceed.

Mr. WRIGHT. Surely.

Mr. NATHAN. It seems to me the most pertinent part of our testimony is that we did view this matter very carefully, and we did it on the basis of law and policy that applies, made a careful decision-and this is our law-which was that the agreement was an agreement to which we would not object.

Now, the observations you are making about our procedures, the expense that you feel on the basis of your investigation of this matter could have been such that we would have been able to make this decision earlier, but the important point, and the one we would want to have stand out in the record, is that we did look at this carefully, we did enter into this matter, and we did make what we think is the right determination.

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We did issue a suspension which, as in many matters of this kind with the kind of personnel which the OMB has, which is only Washington personnel, we did not police every process involved in the implementation of that suspension.

As a point of fact, during the period of the suspension, we were much more engaged in the work of reviewing the policy descision than in policing the suspension. We were concerned that the suspension was respected, and we certainly are appreciative of and will review the materials that your committee put in the record on this point.

Mr. CONSTANDY. One other thing. The Acting Administrator submitted a three-page letter which I think takes exception to the contract between the Postal Service and the Corps of Engineers, and in it they express why.

The response to them, which was also dated May 5, is reduced to a two-paragraph letter which does not relate to the issues that they had raised relative to the review-and, if you will forgive me, neither have you-but simply says:

I appreciate your prompt reply to my letter of March 27, 1971, transmitting your views concerning the agreement between the Post Office Department and the Corps of Engineers, which provides for the Corps of Engineers to serve as construction agency for the Post Office Department.

Enclosed is a copy of our letter to the Postmaster General informing him of the results of our review of the agreement. An identical letter has also been sent to the Secretary of Defense.

It does not particularly seem responsive to the issues they raised in the letter to you, OMB, dated April 15.

Mr. NATHAN. I would say on that matter that, again, the staff level contacts with the agency are going on all day long. Our people who are in contact with the GSA, or on the telephone with them, work with them very closely. Our reasoning on this matter was—it may not be satisfactory to explain by your standards in the correspondence that you have obtained, and I don't think is necessarily a controlling fact.

I tried, to the best of my ability, in the testimony to give our rationale and to the extent that it falls short of satisfying the standards of the committee, that is a matter I can only regret.

Mr. CONSTANDY. We both can regret, Mr. Nathan.

Mr. WRIGHT. Let me ask a question with respect to a comment in your prepared statement.

You have said and I quote:

In view of present uncertainties concerning future postal requirements in Federal Office Buildings, GSA has at our request suspended the award of site and design contracts for projects with postal space, pending a confirmation of plans from the Post Office and a determination of whether the projects should proceed as planned, be redesigned or abandoned, or other alternatives in meeting Federal space requirements.

Does this mean that all those multipurpose buildings that have been approved by the Congress are now being suspended, all those that contain any postal space are being suspended, and that the GSA has been stopped from proceedings with construction of any of those multipurpose buildings?

Mr. NATHAN. Mr. Chairman, this is an action taken by GSA. I am sure you raised this matter with Deputy Administrator Kreger.

I would say that this is one of the areas in this whole array of issues in which the OMB has a very great interest. We have written to the

parties and have worked with them through our staff in the hope that I should say more than a hope-in the expectation, as my statement indicates on page 7, that we will work out a set of criteria and a set of understanding by which the GSA and the Postal Service will be able, even under this new structure of the Postal Service, to work together and to build joint facilities.

We intend to exert our influence in an important and constructive way to get such an agreement.

Mr. WRIGHT. Yes.

Back to my question. Does this mean that all those multipurpose buildings which have been approved by Congress for construction by GSA in which the Postal Service will use any of the space are stopped and cannot proceed, pending a lifting of this suspension?

Mr. NATHAN. There are two, Mr. Chairman, that have already been removed from that suspension list. That is one point I would make.

Another is that I would say that this is an action taken while we reviewed the matter. One might characterize it as a pro forma action in the expectation that we will work out arrangements for these projects to proceed.

Now, as the Postal Service testified, their concern is timing. Their concern is moving ahead on these facilities.

Mr. WRIGHT. Do you not think the GSA has a concern with regard to time and the need for space for other Federal operations?

Mr. NATHAN. There are some parts of the process of approval and implementation of decisions to construct buildings over which GSA, unfortunately for them, I imagine, in their view, does not have control. They would like to be able to move faster just as the Post Office would like them to be able to move faster.

Mr. WRIGHT. When you made your review of the March 11 agreement, what was your view of the restraint placed by those agreements upon the corps in discussing any proceedings under the program with Members of Congress?

Mr. NATHAN. Mr. Chairman, I am not sure I understand your question. You say were we restrained from discussing this with the Congress during that period?

Mr. WRIGHT. What was your view in looking over the March 11 agreement of the restriction which that agreement imposes upon the Corps of Engineers against any direct responses to Members of Congress respecting this program?

Mr. NATHAN. I am not knowledgeable in detail on that part of the process. I do recollect that the agreement contains in it a provision which applies to relations with the Congress. That probably is part of what you are thinking about when you raise that question. That is a matter for agreement and discussion between the affected agencies, in this case the Postal Service and the corps.

At that time, I did not even have knowledge of this question as an important question. I was not aware during the review of this matter of what was transpiring between the two agencies on this point.

It is possible at some point a congressional clerk in the White House does have some supervisory responsibilities on matters of this kind. This was, as far as I know, not ever called to his attention either. Mr. WRIGHT. For your information, and to refresh your memory from page 3 of the March 11 agreement, I shall quote these words:

Congressional liaison relating to any matter covered by this agreement will be the exclusive responsibility of the United States Post Office Department. And it goes on to say:

Congressional inquiries received by the Corps regarding all work performed under this agreement will be sent to the Post Office Department Congressional Liaison Office for disposition.

Subsequent to this, the corps had developed elaborate procedures at the urging of the Post Office Department-Postal Service-spelling out in great detail how it is to avoid answering any questions that might be posed to it by Members of Congress. It seems to me that this is a very significant policy question involved in the agreements, and yet you were not aware of it and did not consider it to be an important part of the agreement, according to what you just said.

Mr. NATHAN. Mr. Chairman, I think that one has to regard the Postal Service as having policy responsibility for these buildings, and that would include responsibility for explaining to the public-and very importantly to the Congress, since their law was passed by the Congress how they are carrying out that responsibility, and corps is an agent in this case of the Postal Service, and they determined that they should operate on that basis.

While it may be questioned by some Members of the Congress, it seems to me that from our point of view, we have no reason to intercede in that division of responsibilities.

Perhaps the Congress will, but that is not something that we regarded as an area we should enter.

Mr. WRIGHT. The construction of multipurpose buildings, the occupancy of multipurpose buildings, the use of multipurpose buildings, involve a great many Federal agencies, and their capacity to operate efficiently. Those matters are the concern of Congress and, particularly, in view of the gag order earlier imposed by the Postmaster General upon all of his own employees, it seems to me of singular significance that it now is transferring that gag order so as to make it applicable to these activities of the corps which do have a bearing upon other Government activities, the activities of other agencies that have to come to Congress for authorization and for appropriations, and which operate under directives passed by the Congress.

For that reason, it seems to me that it is a matter of extreme impor

tance.

Mr. NATHAN. Mr. Benton reminds me there has been some history of this and that the Appropriations Act for the Post Office, in fact, has a provision in it that speaks to this concern of many in the Congress and prohibits the Postmaster General from withholding information to the Congress.

My response to the question about this being a policy responsibility of the Postal Service, I would stand on. I would make one addition, and that is to say that insofar as multipurpose buildings are concerned, the spokesman for that project would be the agency that, based on the discussions that were held in planning, was selected to be the major agency responsible for the construction of that project.

Mr. WRIGHT. Mr. Constandy?

Mr. CONSTANDY. Mr. Nathan, do either you or Mr. Benton have a copy of the June 28 document with you?

Mr. BENTON. No.