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Mr. CONSTANDY. Now, I notice you say that as long as the corps is going to put up the buildings, GSA could not go along with it. How about if they agreed

that GSA erect the buildings, they would still be owned, would they not, by the Postal Service?

Mr. KREGER. I think, Mr. Constandy, implicit in this memorandum is that the GSA would have control of the buildings and would provide postal space.

That is the way I read this.

Mr. CONSTANDY. It was not just the construction authority. You people wanted to continue with your projects and provide them with space as they needed it?

Mr. KREGER. Right. Or we might possibly build it for the Post Office Department, as we build buildings for another agency of special purpose space.

Mr. CONSTANDY. You would be taking the place of the Corps of Engineers, in that case.

Mr. KREGER. Right. In this instance, yes. Mr. CONSTANDY. It gets into a strange relationship, does it not? They seem to be going into the GSA business.

Mr. KREGER. Well, it appears that they are trying to construct as many buildings as possible as fast as possible under the postal revision.

Mr. CONSTANDY. Where does the offer stand now, Mr. Kreger?

Mr. KREGER. We have not accepted the offer of the Post Office Department. It is still the subject of negotiations.

Mr. CONSTANDY. At the moment, there is an impasse, is there not?

Mr. KREGER. Well, since the problem has not been resolved, I guess it is an impasse

Mr. CONSTANDY. Well, I say it this way for this reason, the only issue is who will own the buildings. They have said they will, and you have said you will.

Unless the situation gives, I think it is an impasse.

Mr. KREGER. We are continuing our negotiations in hopes of coming to some agreement.

Mr. CONSTANDY. OK.

I think this is significant for another reason other than just whether the 18 buildings get put up or not.

This is one item which has come up in your relationship with the Postal Service, and it does not have an easy resolution, we can see. We look ahead to some of the other matters that we will discuss later, and we may find ourselves looking at the same kinds of situations, and we will find there that those things can be resolved between the Postal Service and GSA, but, as we find that as each agency tends to its own business, it is very difficult to get that resolution.

Mr. KREGER. I do not believe it is beyond hope. It is difficult. I do not believe it is beyond hope of resolution.

From my discussions with people in the buildings service, they do hope to resolve these options.

Nr. CONSTANDY. Would you tell us what options you have to consider?

Mr. KREGER. I think we have the option of stopping the building entirely and going out and leasing space. We have the option of taking over the construction of the building.

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Mr. CONSTANDY. If they agree to it.
Mr. KREGER. Right.

Mr. CONSTANDY. Could it be said simply that either you come to terms under your proposal, or theirs, or you each go your separate way?

Mr. KREGER. That is right. If we do not come to terms, we will have to proceed with the construction of the buildings.

Mr. CONSTANDY. Then that raises the prospect, does it not, of buildings being erected by each entity for its own purpose?

Mr. KREGER. It raise the prospect, but, on the other hand, it raises the possibility of these being resolved in each case in a different manner.

Mr. CONSTANDY. Well, for variations.

Mr. KREGER. And perhaps, in a case where the Post Office has a large amount of space in the building, we would deem it unwise to go ahead with a building, and we would solve the needs of any other Government agencies with leased space.

Mr. CONSTANDY. In their building? Possibly?

Mr. KREGER. Possibly in their building, but possibly from a private party.

Mr. CONSTANDY. We have the balance of that sheet, and I wonder, rather than going into each of them, can we not state that of the 18, 15 of them, minus the two which have been provided for by congressional action this year, Oxford, Miss., and Elkins, W. Va., leaving 12, more or less, fall in that same category as being under study?

Mr. KREGER. Right.

Mr. CONSTANDY. On three of them, Houston and Pearsall, Tex., and Essex Junction, Vt., we have to consider further that in those instances, if the Post Office withdraws from the projects, those projects will be abandoned, will they not?

Mr. KREGER. They could very well be abandoned. The decision has not been made to definitely abandon them.

Mr. CONSTANDY. That is a likelihood if the Post Office and you are not able to come to terms on a joint tenancy?

Mr. KREGER. That is a likelihood, yes, but not a firm decision.

Mr. CONSTANDY. We have covered some of the other material that we planned to cover this afternoon earlier this morning.

Mr. Gray. Do you want to defer some of those until Commissioner Sampson comes ?

Mr. CONSTANDY. Yes, we should do that.

Mr. Gray. We will hold some of these until Commissioner Sampson comes on the 20th.

I would like to ask a few questions before you leave, Mr. Kreger.

As you know, I have great respect for you and Administrator Kunzig, and your associates, and I think you are all very dedicated public servants, but, as Chairman of the Subcommittee on Public Buildings and Grounds, most directly affected, I would be derelict if I did not ask some questions.

First of all, how many buildings do you have under your jurisdiction now?

Mr. KREGER. I would think somewhere around 6,500, or 7,000. That includes buildings that are federally owned

Mr. Gray. Before the Post Office Department removed some 2,100 of them.

Mr. KREGER. We have about 7,000 of the 10,000, including leases.

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Mr. GRAY. And it is my understanding that the Post Office has 38,000 buildings; is that correct?

Mr. KREGER. I do not know, but I am sure that is probably correct.

Mr. GRAY. When our committee held security hearings, it was testified that the Postal Service had about 38,000 buildings under their jurisdiction.

You stated: Mr. Chairman, I might add that, in view of the time it takes GSA to complete a federally financed building under present procedures, the Postal Service's decision to withdraw from these projects and to exercise its broad and new authority under the Postal Reorganization Act is understandable.

Now, the point I am leading up to, Mr. Kreger, is the fact that on page 2, you state that GSA, in its entire history, since this law was enacted, has constructed 389 buildings at a cost of nearly $1.1 billion.

Now, if you take the total of 48,000 buildings, we are talking about approximately 1 percent of the total Federal buildings, and if you take just the 10,000 under your jurisdiction, we are talking about 4 percent.

Now, the whole thrust of the argument that is going to be made by Mr. Lehne later, and was made on the floor is that the Congress is sluggish in providing necessary authority, and the necessary funds to build public buildings.

Even Mr. Blount was on television this last Sunday, and repeated that same old, wornout argument; “Congress has been sluggish. We want to move forward with our capital improvements program.

Now, I think we are seeing the tail wagging the dog here. Statistics do not lie. If you take every single building that has been authorized, it is only 1 percent of our total space needs in the country.

So, how could the Congress be responsible for any real delay when we have only been requested for such a small amount of funds ?

Now, second, as you know, any Post Office building that is less than $200,000 in cost does not require either congressional appropriations or congressional authorization, per se.

In my district of 22 counties in southern Illinois, we have over 150 Post Office buildings. Four of them fall in the category of needing congressional anthorizations: 146 of them can be built tomorrow, sold tomorrow, renovated tomorrow, without any congressional appropriation or authority; 146 out of 150.

Now, the one that has been authorized out of that four that falls in the $209,000 category was authorized in 1966, five long hard years ago, and in 1966, the General Services Administration--and this is not your fault, you were not in office at the time—the Administrator of General Services Administration delegated the authority to the Post Office to build that facility in Carbondale, Ill. It works mail for 100 towns in southern Illinois.

The post office has never been built to date.

Now, who are you going to blame that on? Five years later. The GSA delegated the authority to build a facility in Carbondale, Ill. and it still has not been built today by the Post Office.

Mr. Lehne will be along shortly, and he can answer that question, but the point I want to make is that GSA has been made the whipping boy by the Post Office Department, because they say we want to divorce you because you cannot move fast enough and they have turned the project over the Army Corps of Engineers, who have awarded a contract 5 years later. .

Now, let us face facts. We are here, in my opinion, and this is my opinion, to which I am entitled, as chairman of the subcommittee, considering one of the greatest monstrosities that has ever come down the pike of two Federal agencies competing with one another at the cost of the taxpayer.

My opinion is that the real estate that GSA has lost by congressional act is worth more than $4 billion to $5 billion, not $1.6 billion as estimated by Mr. Blount.

All of us know that in the last 3 to 4 years, appreciation values of land and all has gone up to where you yourself have recently paid, in Grand Rapids, Mich., almost $700,000 per acre for a site for a Federal building.

My personal opinion is, for whatever it is worth, that this act, passed by the Congress, and signed by the President last year, has done two things. It has taken several billions of dollars—in this case, about $150 million a year-out of the budgetary limitations, so the American public cannot tell what these buildings are costing, because they are not in the budgetary process, and, secondly, it has given the Postal Service a free hand to waste money like it is going out of style, and when Mr. Lehne comes on, I will give some specific examples of projects where over $100 million has already been lost to the American taxpayer because of poor planning, and because of no oversight by this committee, and the Congress of the United States.

Think of that. That would build 100 million-dollar hospitals, or pave 100 miles of Interstate highway, at $1 million a mile. Because of losing this control, that money has been lost.

I wanted to make that general statement as chairman of the subcommittee, because I know that GSA is between a rock and a hard place. You are sitting here. You are supposed to be the real estate agents for the Government. All your real estate is being taken away from you. And you need money to do things, but I want to state unequivocably that my information, and certainly after a long study of this matter, shows that GSA has not been derelict in its duty, and GSA bears no responsibility for poor mail service and, certainly, when you look at the statistics, if you built every project tomorrow that the Post Office asked you to build, it is still only 1 percent of the buildings in this country.

I want to commend GSA, and I hope we can get the authority back that belongs to you, because I think you are far more eminently qualified to manage buildings than the Corps of Engineers or the Postal Service.

With that statement, I want to thank you gentlemen for coming. Does counsel have anything additional ?

Mr. CONSTANDY. That series of letters that we read into the record, I would like to make an exhibit, to be retained in the committee's files.

Mr. GRAY. Without objection, they will be marked "Exhibit No. 4" and retained in subcommittee files.

Mr. CONSTANDY. There is another document, in two parts, showing the total real property owned and that leased by GSA and the Postal Service for the period between January 1, 1960, and 1970. That will be exhibit 5.

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Mr. GRAY. Without objection, that will be made a part of the record,
at this point.

(The material referred to follows:)

EXHIBIT 5

SCHEDULE OF REAL PROPERTY LEASED BY GSA AND USPS FOR 10 YEAR PERIOD 1961-70

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Total..

7,369

26, 330 47, 369, 368 76, 437, 123 140, 317, 502

67, 103, 182

1 Includes cost of land, buildings, structures, and facilities.

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