STATEMENT OF BRIG. GEN. GEORGE A. REBH, CORPS OF ENGINEERS

Mr. Chairman and Members of the Subcommittee, I am Brigadier General George A. Rebh, Chief of the Corps of Engineers Postal Construction Support Office which has been established in the Office, Chief of Engineers to oversee the services to be provided the Postal Service. I am very pleased to have this opportunity to appear before you to present information regarding the real estate, design, and construction services to be provided by the United States Army Corps of Engineers in support of the Postal Service. First, I would like to discuss chronologically the principal events which transpired between the Corps of Engineers and the United States Post Office Department preceding the signing of the two agreements on 11 March as well as the principal events which have taken place since that date. Thereafter, I shall discuss several subjects and questions which have been raised at various levels and at various times during the past several months concerning the services to be provided by the Corps. I hope such a discussion will provide useful information to the Committee.

Early Contacts

CHRONOLOGY

Returning to the first of these two broad topics, the chronological development of events, the first contact between the U.S. Post Office Department and the Corps of Engineers was on 18 March 1969. Representatives of the Post Office Department contacted the Office, Chief of Engineers and. on an informal basis, discussed the Postal Public Building Program as well as the possibility of Corps participation. As a result of this meeting, the Corps prepared a brochure dated 27 March 1969, which was presented on that date to the Postmaster General. The brochure outlined the organization of the Corps; programs, completed and underway; capabilities; other agencies for whom the Corps performs or has performed work; and the general way in which the Corps accomplishes its work. In early January, 1970, a Post Office Department representative contacted the Office, Chief of Engineers to discuss two matters: (1) the preparation by the Corps of a draft agreement establishing the kind of relationships which would exist in the event the Corps were to provide real estate, design, and construction services for the Post Office Department, and (2) the development by the Corps of detailed site plans for a post office at Fort DeRussy, Hawaii. The development of detailed site plans for the post office at Fort DeRussy was acceptable to the Corps, and the Corps thereafter issued instructions to the Division Engineer of the Pacific Ocean Division. located in Honolulu, to proceed with such site plans. Also, a draft agreement patterned after the one which existed between the Corps of Engineers and NASA was developed and submitted to the Post Office Department on 13 January 1970. The next contact was in May, 1970 when the Post Office Department asked the Corps if it would undertake the design of the Fort DeRussy post office (sometimes referred to as the Waikiki Post Office). The Corps was agreeable to undertaking the design of this project, and a project agreement was developed between the two agencies. Erchange of Letters between the Postmaster General and the Secretary of Defense

On 26 September, 1970, the Postmaster General wrote the Secretary of Defense requesting use of the Corps in providing real estate, design, and construction services in support of the Postal Public Building Program. The Postmaster General indicated that he thought a definitive agreement could be worked out covering the services to be provided and the procedures to be followed for controlling costs. The Postmaster General also indicated that there would be a short-term construction program of approximately $750 million which would take place during the next 2% to 3 years. The Postmaster General closed his letter by asking the Secretary of Defense to authorize appropriate personnel to begin negotiations with members of his, the Postmaster General's staff. The Secretary of Defense replied on 8 October informing that he had discussed this matter with the Secretary of the Army and that the Corps of Engineers would be able to undertake the work as outlined in the Postmaster General's letter without adverse impact on other Corps programs. The Secretary of Defense thereafter authorized the Secretary of the Army to proceed with negotiations to develop a definitive agreement.

Negotiation of Agreements and Assignment of Projects

As a result of the exchange of letters, two major actions resulted. First, two agreements were developed. One agreement was between the Postmaster General and the Secretary of the Army setting forth general principles and policies. The other was between the Postmaster General and the Chief of Engineers setting forth relationships, responsibilities, general procedures, and terms and conditions. The two agreements were signed on 11 March 1971. Secondly, pending the finalization and signing of these two agreements and consistent with the general principles of these agreements, several individual agreements were developed for projects under construction and for which the Post Office desired the Corps to assume responsibility. Between 13 October, 1970 and 1 March 1971, the Corps assumed responsibility for five construction projects. These are at Kearny, New Jersey; Memphis, Tennessee; St. Louis, Missouri; Northern Virginia; and Baltimore, Maryland. The Corps' responsibility was to provide supervision and administrative services for the construction underway. On 1 March, the Corps was assigned responsibility for the New York Bulk Facility located in Hudson County, New Jersey. Additionally, between 1 March and 8 March, the Post Office Department assigned to the Corps the responsibility for five projects under design. These are located at Roanoke and Charlottesville, Virginia; Carbondale, Illinois; Akron, Ohio; and South Bend, Indiana. Finally, on 3 and 4 March, respectively the Corps was assigned responsibility for advertising and awarding projects at Tucson, Arizona and Tallahassee, Flordia. These projects had been previously designed by the Post Office Department. Office of Management and Budget Letters

On 27 March, the Director, Office of Management and Budget sent letters to the Secretary of Defense, the Postmaster General, and the Administrator, General Services Administration informing that a review was being undertaken of the agreement which had been signed recently between the Department of the Army and the Post Office Department. He also requested that the agreement be suspended until such time as the review had been completed. The purpose of the review was to determine the desirability of having the Corps engaged in the Postal Public Building Program. The suspension was interpreted to apply to the start of new contracts, i.e., the Corps would not advertise nor award any new design or construction contracts during the time the Office of Management and Budget was reviewing the agreement, but not to apply to work underway. The design and construction in progress was permitted to proceed on the basis that to do so was in the best interests of the Government. To have stopped work would have been costly in at least two respects: Suspension of work would have meant increased costs to be paid the construction contractors and the architect-engineer firms under contract as well as delays in completion schedules resulting in the loss of operational savings. In any event, if it had been determined that it was not desirable for the Corps to continue this work, it would have been simply a matter of turning over the work to the agency designated as successor; hence, no real purpose was to he served by suspending the design and construction work in progress. Since the Divisions and Districts of the Corps were involved only with on-going projects, no directives or instructions were sent to them on this matter. While we did not issue any invitations-to-bid or requests for proposals. we did open the requests for proposals on the New York Bulk Mail Facility. Prior to receipt of the Director, OMB's letter, the Corps had requested proposals for a major construction contract for the New York Bulk Mail Facility. We opened these proposals on the 28th of April. The opening of these proposals was permitted to take place since the act of opening the proposals did not commit the Government in any way nor did it have any impact on the Corps in the event the Corps' role in the postal construction program was not subsequently approved. The award of the contract, however, was not made until after the suspension was lifted.

The Secretary of Defense responded to the Director, OMB's letter on 12 April and on 5 May, the Director wrote the Secretary of Defense stating that a review of the agreement had been completed, there was no objection to the agreement, and the suspension was therefore lifted.

Regional Postal Facilities

Up to this point. I have discussed only the Corps' relationship to the Postal Service major facilities program. Subsequent to the 11 March agreements, it was indicated to us that the Postmaster General also desired the Corps to

undertake the real estate and construction responsibilities being performed by the regional headquarters. This resulted in a 20 May agreement between the Post Office Department and the Corps which assigns to the Corps responsibility for real estate and construction services associated with the small facilities program. To the best of my knowledge, this agreement was not submitted to OMB for review since it was considered to be in extension of the general principles of the 11 March agreements. The last significant actio ntook place on 28 June when an agreement was reached by which the Corps became responsible for the Postal Service's leasing and lease servicing program.

This completes the chronology of the principal events which have taken place leading-up to the Corps' becoming responsible for the real estate, design, and construction functions of the Post Office as they relate to both the large facilities program and the small facilities program.

REMARKS REGARDING CERTAIN SUBJECTS AND QUESTIONS

I shall now move on to the second part of my remarks: A discussion of specific questions and subjects relating to the Corps' role in support of the Postal Service.

It has been stated that one of the reasons the Postmaster General turned to the Corps of Engineers for real estate, design, and construction services was that he did not want to undertake a short-term, sharp build-up of Post Office Department personnel to accomplish the accelerated postal construction program and that the same would hold true for GSA, if that agency were assigned the task. The question follows: Would not the Corps of Engineers have the same problem?

Comment. The Corps would have the same kind of problem but not to the same degree, primarily because the Corps has a larger base upon which to operate. At the present time, the strength of the Corps is approximately 40,000 people. We estimate that, when the postal program is at its peak, the Corps will need an additional 1,000 civilian personnel. The Corps has demonstarted through its experience with the NASA and ICBM programs that it is able, because of its size and diversity of technical talents, to manage efficiently and effectively the build-up and phasedown of personnel associated with the execution of large, additional programs.

Attention has been drawn to the fact that many of the FY 1971 projects have a construction period of approximately 12 months irrespective of the size of the project. Questions have been raised: Is this realistic? What will be the effect on the project cost estimate if projects are completed within this time frame? Does a "crash" program cost more?

Comment. For certain of the FY 1971 projects, a 12-month construction period, considering that the size of the projects ranges from $2,500,000 to $8,000,000, is possible but would be more costly. Construction costs would increase in the order of 15% to 25%, if the 12-month schedules were adhered to. "Crash" programs will usually cost more with the increase in cost depending on the degree of urgency imposed. There is a point beyond which, however, wherein expediting construction serves no useful purpose. In fact, a site may become so saturated with men and equipment that the commitment of additional resources is counterproductive. I can say that the U.S. Postal Service has, in general, lengthened construction periods when we have called specific projects to its attention.

It has been indicated that serious slippage in completion dates has already occured in connection with fiscal year 1971 projects, and it is suggested that there will be the same experience with some of the FY 1972 projects. The questions raised include: To what extent has there been slippage in the completion dates? If there has been slippage, what has been the cause? What would be the effect on the Corps in efficiency, staffing, and overhead costs? How could slippage affect estimated project costs?

Comment. On the subject of slippage in completion dates and with regard to projects under design, there are several projects in the FY 71 program on which the schedule has been extended by two to three months. Also, there has been rescheduling in the completion dates of several of the FY 71 projects under construction. And, it appears that this will be true for some of the FY 72 projects. Certain of the FY 1972 preferential facilities will slip up to four months with the bulk mail facility extension of completion dates averaging about six months.

Rescheduling has been due to two main causes; first, there has been the adoption of the new concept of having separate facilities for handling parcels and letters, i.e., the Bulk Mail Facilities Systems and the Preferential Mail Facilities System. This has meant that projects which were under design or construction have had to be changed to conform to the new concept. For example, the design of the Charlottesville and Roanoke projects was suspended. The St. Louis and Memphis projects which were under construction, and which were to provide for the highly mechanized processing of letters and parcels, had to be redesigned to accommodate only letter processing mechanization since Bulk Handling Facilities are to be constructed in the environs of each of these cities.

Secondly, development of the bulk mail facility concept was delayed at one stage due to revised planning approaches in order to secure the advantages of standardization with the resultant economies in design, construction, and operation and maintenance. This delay in concept development has affected the design and construction schedules for 19 of the 21 bulk facilities. However, it is still expected that the entire bulk mail system will be operational in FY 1975 as originally contemplated.

The general effect of schedule extensions on the Corps will be to increase support costs along with less efficient utilization of personnel at all levels. However to date, the magnitude of schedule changes has not been so great as to have an effect on Corps costs.

The impact of schedule slippages on project costs will be generally to increase these costs because of the seemingly never-ending escalation of construction costs. It has been said that awarding construction contracts in the fall of the year in the northern sections of the country would seem to be impractical. Has USPOD assigned projects to the Corps for construction in these areas with schedules to commence in the winter? What is the result on completion dates?

Comment. Several of the projects located in the northern part of the country, which are now assigned to the Corps, have design completion scheduled for this fall with construction award scheduled for late fall or early winter. Under this kind of scheduling, little effective work on the initial phases of construction such as earthwork, general site work and foundation excavation, and concrete placement can take place under unfavorable weather or seasonal conditions. These initial construction operations should be accomplished when weather and soil conditions permit, such as, during the spring, summer, and early fall. Completion dates for FY 71 projects, located in the northern sections of the country and scheduled to start in late fall or early winder, will have to be extended to allow for adverse weather and soil conditions during that part of the year, if allowances have not been made.

It has been said that there were five FY 1972 projects which were to be assigned to the Corps for the start of design during May and June 1971. Has the request to the Corps been delayed on four of them requiring design services due to the inability of USPS to furnish functional specifications?

Comment. It is true that the functional design specifications for these four projects were not delivered to the Corps as originally scheduled. It is understood that the delay was due to the loss of personnel through retirements as well as to the adjustments in organization resulting from the establishment of the Postal Service but more importantly due to the changed criteria of these facilities resulting from the new postal facilities concept based on the separate bulk mail system. The development of a modern mailing system, especially one which strives to take advantage of modern technology. has to be a dynamic program and, as such. changes in functional design specifications are to be expected and. hence, the resultant impact on scheduling until such time as concepts are finalized and adjustments made.

The question has been asked: To what extent will standard plans be utilized in the design of the FY 1972 bulk facility?

Comment. One must be careful to differentiate between standard plans and standardization. Standard plans involve repetitive, carbon copies; items are identical, such as, the same model of an automibile. Because each of the bulk mail facilities must satisfy a different set of requirements in terms of volume of mail to be processed, the number of destinations involved during the sorting of the mail at a given facility, etc.. these bulk facilities cannot be made from the same mold. They will differ in building configuration and amount of mechanization. Although size and layouts vary, the possibility exists of standardizing the build

ing system and certain aspects of mail flow. The basic studies developing a mechanization standardization concept were undertaken by the Post Office Department. This concept has been established by the Post Office Department and forms the basis for the design of the bulk facilities which is currently underway. Standardization will apply not only to the 1972 bulk facilities but also to those which are in the 1971 program, except for the New York and Chicago bulk facilities. Thus, standardization is to apply to 19 of the 21 bulk facilities.

Questions have been raised concerning the Corps' experience in designing and constructing facilities of the nature comprising the postal construction program. For these same kinds of facilities, what has been the Corps' cost experience in providing the same types of service to be performed for the Postal Service (exclusive of site selection and acquisition)? For work of the same nature of work done for other agencies, what has been the Corps costs charged to those other agencies? What changes in elements included in Corps costs have been made, i.e., has the Corps assigned some items of cost to construction that had formerly been accounted for as support costs?

Comment. During FY 72, the total Civil Works workload will be $1,715,000,000 of which $1.1 billion is construction. The total FY 72 Military workload will be $1,009,000,000. The total for both programs is approximately $2.7 billion. These programs provide for all types of construction ranging from dams, powerhouses, ammunition plants, barracks, roads, bridges, academic and administrative buildings, airfields to hospitals. These facilities range from simple structures to the most complex. It is difficult to be precise as to the proportion of projects of these programs which could be called similar-type facilities because the postal buildings themselves range from very simple to very complex facilities. A fair estimate would be that 10% of the Civil Works program, which is equivalent to $110 million, and 90% of the Military Construction program, which is equivalent to $900 million, involve projects comparable to those in the total postal construction program. As you probably know, the Corps constructs all postal facilities for Army posts and Air Force bases and has, upon the request of GSA, provided supervision and inspection services for the renovation and construction of civilian post offices.

Actually, when one raises the question of "comparable structures" or the "same kinds of facilities" one should be really focusing on the complexity of design, the complexity of construction, and the complexity of management involved in the program since the projects of no two programs are completely identical. The really important thing is having the capability-the reservoir of technical, managerial, and support talent-that is able to handle complex design, construction, and managerial problems. It is considered that the facilities of the postal program do not approach the complexity of those which the Corps constructed for the Atomic bomb project, the ICBM program, the NASA program, and the Safeguard program. In fact, these programs were "pioneering programs" in the sense that projects of this scale and complexity had never been attempted before in this country. Shortly after the detonation of the Atomic bomb over Hiroshima, the work of the Manhattan District of the Corps of Engineers was hailed as one of mankind's greatest engineering achievements. The District had been responsible for the design and construction of the facilities which produced the fissionable material as well as the research and development which lead to the first atomic weapon. The atomic program was followed in the late fifties by the "crash" program to construct the highly complex and extensive intercontinental ballistic missile system. In the early sixties, the Corps was called upon to design and construct facilities for NASA to include the Vehicle Assembly Building at Cape Kennedy which was, at the time of construction, the world's largest building in terms of volume. In the late sixties, the Corps was charged with the task of designing and constructing the Sentinel-now the Safeguard-facilities. These are unique structures in that they are the first free-standing facilities designed to withstand the effects of a nuclear explosion to include ground shock, air blast, nuclear electro-magnetic pulse, nuclear radiation, and thermal radiation. These facilities involve many "firsts" in design and construction.

Additionally, it is to be stated that many of the industrial plants and arsenals, which constitute the military production base and for which the Corps is the Department of Defense responsible agent, are highly automated involving sophisticated material handling equipment, electronic controls, and computers, the principles of which are applicable to the kinds of facilities the Corps will