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and the Postal Service. During the negotiations we have repeatedly stated that GSA has a competent technical staff in place to service Postal needs. Moreover, we have stated that we would establish organizational components in our Central Office and our ten regions whose sole responsibility will be servicing of Postal needs, both for new construction and repair and improvements projects.

We would designate project managers for special postal projects who would have the delegated authority to make decisions quickly in order to expedite projects. If the proposed agreement is implemented, GSA's existing technical staff would have to be duplicated by the Corps of Engineers. Moreover, GSA': workforce would have to be curtailed substantially if the Corps of Engineers andertook construction activities which GSA has heretofore performed.

You also asked for our comment concerning the cost to the Federal Government if GSA were to provide the type of services covered by the agreement. Based on experience during the three-year period, 1966 through 1969, for new construction projects similar in size and scope to the proposed major postal facilities under consideration, the cost of GSA services would be approximately 8 to 9 percent of the total project costs. This would include costs for all services related to site selection and acquisition, design, administration, and construction supervision. We feel that GSA is in a superior position to provide the services desired by the Postal Service in a timely manner and at a lower cost than could the Corps of Engineers.

To briefly summarize, we are firmly convinced that GSA can effectively and economically construct Postal Service facilities. We recognize the urgent and priority need of the Postal Service for modern, sophisticated mail handling facilities. We feel that, if implemented, the agreement between the Postal Service and the Corps of Engineers will result in a serious proliferation of construction authority for public buildings and that this will be both economically unsound and unnecessarily duplicative of existing capabilities in the Executive Branch of the Government.

We appreciate the opportunity to comment on this matter and will be pleased to meet with you or members of your staff at any time to discuss the matter further. Sincerely,

ROD KREGER,

Acting Administrator. NOTE.-Final version of this letter based upon coordination of draft reply with Messrs. Kreger, Norton, Johnson and Barth and reflect comments and suggests from these officials.

THE POSTMASTER GENERAL,

Washington, D.C., May 4, 1971. Hon. GEORGE P. SHULTZ, Director, Office of Management and Budget, Washington, D.C.

DEAR GEORGE: The Corps of Engineers opened bids last Wednesday, April 28, 1971, on contracts for the remaining work on a major bulk and foreign mail facility in the metropolitan New York area.

As you known, the Post Office Department solicited bids on this project some time ago, and asked the Corps to readvertise the work because the lowest bid was far in excess of the amount available under the Department's appropriation,

The bids received by the Corps are about $20 million below the lowest bid obtained in the earlier competition. This looks like about the best the Government can do, from a price standpoint, and both the Post Office Department and the Corps are anxious to place the work under contract promptly.

Since we have received no further questions from you concerning our replies to your letter of March 27, we assume that you have no problem with our proceeding to implement the March 11 agreement whereunder the Corps of Engineers will serve as a construction agency for the Post Office Department. Accordingly, we are moving forward under that agreement. Sincerely,

WINTON M. BLOUNT,
DAVID PACKARD.

EXECUTIVE OFFICE OF THE PRESIDENT,
OFFICE OF MANAGEMENT AND BUDGET,

Washington, D.C., May 5, 1971.
Hon. WINTON M. BLOUNT,
Postmaster General,
Washington, D.C.

DEAR MR. POSTMASTER GENERAL: I appreciate your prompt reply to my letter of March 27, 1971, providing information concerning the agreement between the Department of the Army and the Post Office Department pursuant to which the Corps of Engineers is to serve as a construction agency for the Post Office Department.

Our review of the agreement has been completed, and there is no objection to it becoming operative. Accordingly, the suspension of the agreement which I requested is hereby terminated. Sincerely,

(Signed) GEORGE P. SHULTZ, Director,

MAY 5, 1971, Hon. MELVIN R. LAIRD, Department of Defense, Washington, D.C.

DEAR MR. SECRETARY: I appreciate your prompt reply to my letter of March 27, 1971, providing information concerning the agreement between the Department of the Army and the Post Office Department pursuant to which the Corps of Engineers is to serve as a construction agency for the Post Office Department.

Our review of the agreement has been completed, and there is no objection to it becoming operative. Accordingly, the suspension of the agreement which I requested is hereby terminated. Sincerely,

(Signed) GEORGE P. SHULTZ, Director. Identical letter has been sent to the Postmaster General.

EXECUTIVE OFFICE OF THE PRESIDENT,
OFFICE OF MANAGEMENT AND BUDGET,

Washington, D.C., May 5, 1971.
Hon. ROBERT L. KUNZIG,
General Services Administration,
Washington, D.C.

Dear Mr. KUNZIG: 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 Department of the Army which provides for the Corps of Engineers to serve as a 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. Sincerely,

GEORGE P. SHULTZ, Director. Mr. WRIGHT. The subcommittee, when it adjourns today, will adjourn to meet at 10 o'clock on Tuesday next.

The committee would express its appreciation to Mr. Nathan and Mr. Benton for having spent this much of the morning with us. Perhaps if it had seemed at times that our questions were hostile, both of you gentlemen will understand that this was not a personal adversary relationship, but that it stemmed essentially from the frustration of Congress in discovering after the fact that negotiations had proceeded in an atmosphere of high secrecy within the executive branch between two agencies of the Government, at least for a long time prior to the enactment of the Postal Reorganization Act.

Our frustration is further compounded by the fact that the Congress did not have any knowledge of exactly what was proposed by way of this relationship between the Post Office and the Army at the time it enacted that law, although those discussions had proceeded rather far as between those agencies at the time.

A further compounding factor in the frustration of the Congress is the fact that on March 11 only one—and the shorter and less comprehensive one-of two agreements was made available to a congressional committee at its request.

The other agreement was not made available to the congressional committee by the Postal Service or the Post Office Department at that time. Beyond that our frustration in attempting to get at all these facts in order that we might weigh their impact on other Federal programs over which we continue to have jurisdiction is compounded by the impediments which have been deliberately erected under the direction of the Postmaster General to any communications that the Congress may wish to conduct in these matters with other representatives of Government agencies affected by the agreements.

If you put all those in their perspective, perhaps you will understand how we on this committee have been to such great pains to try to elicit as much information as we possibly could.

With that explanation and understanding, we thank you for your appearance here today, and the committee will be adjourned until 10 o'clock Tuesday next.

(Whereupon, at 12:55 p.m., the subcommittee was recessed, to reconvene at 10 a.m., Tuesday, July 20, 1971.)

IMPACT OF POSTAL BUILDING PROGRAM ON FEDERAL

AGENCIES

TUESDAY, JULY 20, 1971

Sworn.

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT
OF THE COMMITTEE ON PUBLIC WORKS,

Washington, D.C. The subcommittee met at 10:35 a.m., pursuant to recess, in room 2251, Rayburn House Office Building, Hon. James C. Wright, Jr. (chairman of the subcommittee), presiding.

Mr. WRIGHT. The subcommittee will be in order. At the subcommittee's request, Mr. Arthur F. Sampson, Deputy Administrator for Special Projects and Commissioner of Public Buildings Service of the General Services Administration, has come to answer questions of the subcommittee.

Mr. Sampson, I believe you have two people with you, and I wonder if you might identify them at this point and then all three will be

Mr. SAMPSON. Mr. Chairman, on my right is Wilbur H. Sanders, who is my deputy. He is Deputy Commissioner for the Public Buildings Service in GSA. On my left is Mr. Barth. He is the Deputy General Counsel of GSA.

Mr. Wright. Very good. Thank you for being with us. Would you be sworn at this time.

Do you solemnly swear that the testimony you will give to the subcommittee will be the truth, the whole truth, and nothing but the truth, so help you God?

(Messrs. Sampson, Sanders, and Barth answered in the affirmative.) Mr. WRIGHT. I believe Mr. Constandy has some questions, arising out of earlier testimony that has come to the subcommittee, that he would like to pose. Inasmuch as you have not come with a prepared statement today, I believe that might be the point at which we would begin.

TESTIMONY OF ARTHUR F. SAMPSON, DEPUTY ADMINISTRATOR

FOR SPECIAL PROJECTS AND COMMISSIONER OF PUBLIC BUILDINGS SERVICE, GENERAL SERVICES ADMINISTRATION; ACCOMPANIED BY WILBUR H. SANDERS, DEPUTY COMMISSIONER FOR PUBLIC BUILDINGS SERVICE, GSA; AND HERMAN W. BARTH, DEPUTY GENERAL COUNSEL, GSA

Mr. SAMPSON. Very good, sir. Mr. CONSTANDY. Speaking first of the Postal Service Agreement with the Corps of Engineers to build postal facilities, reference was

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made earlier in the hearing to a letter dated April 17, 1969, from Mr. Kunzig to Mr. Peter Flanigan, regarding the Post Office Department's use of the delegation of authority to have the corps construct postal buildings. I believe some mention was made of the letter at the time it was introduced as an exhibit. Do you want to say something further about that?

Mr. SAMPSON. Yes. The letter was written at that time to Mr. Flanigan because he has been designated in the White House as the man that Mr. Kunzig goes to in terms of direction for GSA, and the letter itself clearly indicates that the subject of redelegation, the legality of redelegation was discussed, and they had come to the conclusion that it was legal. I think we should also add that the delegation of 1966, the language in that delegation, clearly indicates that it was being delegated to be redelegated at the discretion of the Postal Department at that time.

Mr. WRIGHT. Did Mr. Kunzig interpret it that way? Did he understand the right to delegate as spelled out in that earlier agreement to permit the kind of horizontal delegation, outside the Post Office Department, rather than to be the necessary vertical delegation within the Post Office Department?

Mr. SAMPSON. I cannot, unfortunately, today speak for Mr. Kunzig. I have not talked to him about the content of the letter. The statement I made just a moment ago is from the content of the letter itself. Now, whether or not Mr. Kunzig, when the letter was prepared, had checked counsel on this is not known to me at the present time.

Mr. CONSTANDY. I notice in paragraph 2 of the letter it makes mention, and I quote: We solve all major legal problems. I may delegate

I and the Post Office may legally use the Corps of Engineers. Smaller technical, legal problems, and the phraseology of actual delegation will be worked out quietly in the future between our appropriate legal staffs.

I wonder what the reference to the major legal problems were. Do you know, Mr. Sampson?

Mr. SAMPSON. Again I am not aware and have not had an opportunity to discuss it with Mr. Kunzig.

Mr. CONSTANDY. There has been some discussion during the hearngs on that letter, that delegation of authority as provided for in the act, and I think you have a statement relative to it that you would like to give.

Mr. SAMPSON. Yes, Mr. Chairman.

I think it would be appropriate to read section 15 of the Public Buildings Act of 1959, 40 U.S.C. 614, to the subcommittee:

The performance in accordance with standards established by the Administrator of General Services of the responsibilities and authorities vested in him under this act shall, except for the authority contained in section 4, upon request be delegated to the appropriate executive agency where the estimated cost of the project does not exceed $100,000 and may be delegated to the appropriate executive agency where the Administrator determines that such delegation will promote efficiency and economy. No delegation of responsibility or authority made under this section shall exempt the person to whom such delegation is made of the exercise of such responsibility or authority from any other provision of this Act.

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