Since May 5, 1971, similar offers have been made to GSA, both in meetings and by correspondence.

By letter, dated June 17, 1971, the Postal Service reiterated in the following terms the offer initially made in my May 5 letter, and repeated in a meeting with the Commissioner of the Public Buildings Service on May 26, 1971.

I would read again from that June 17 letter:

I hereby restate our verbal proposal for the Postal Service to build these facilities for joint tenancy and lease to GSA non-postal space for use of other Government tenants. Of course, this proposal assumes that GSA and the Postal Service will wish to review each of these projects on an individual basis.

I do not believe that GSA has responded to any of these offers. Thus, the Postal Service is in the position of having offered, without response from GSA, initially to continue in the joint projects if it could obtain a commitment of some sort that the projects would be built in the reasonably near future, and, failing that, to construct joint-occupancy facilities itself and lease the non-postal space to GSA. What the Postal Service has declined to do is to refrain from going ahead with its own plans for badly needed and long overdue postal facilities in those localities where a joint GSA/POD project is proposed to be built only at some uncertain future date.

I think this is an eminently reasonable position. Withdrawing from the joint projects and going ahead with the construction of singleoccupant postal facilities appears to be the only acceptable alternative open to the Postal Service, barring a firm commitment by GSA either to go ahead promptly with the joint projects or to authorize the Postal Service to include space for other Government agencies in multioccupant buildings to be constructed by the Postal Service in the localities where the joint projects were to have been built.

If GSA will commence construction of the projects in the reasonably near future, and if it promptly makes a firm commitment to do so, the Postal Service expects to participate in most, if not all, of the projects, subject to the reservation that some revisions may have to be made in the size and configuration of the Postal Service's space, and parking and maneuvering area. These adjustments would be necessary to assure compatibility with the new mail processing systems being implemented by the Postal Service.

If GSA will authorize the construction of these projects by the Postal Service on a prompt basis, the Postal Service expects to commence construction in fiscal year 1972 of most, if not all, of the projects.

In this event, since the buildings would be Postal Service buildings, it would be anticipated that the sites and designs already acquired by GSA would be transferred to the Postal Service.

If the Postal Service constructs the facilities, it is anticipated that the construction agency executing the rest of the Postal Service's construction program, the Army Corps of Engineers, will contract for, manage, and supervise the construction.

The Postal Service wishes to cooperate to the fullest in achieving the early construction of the facilities in question. The Postmaster General has made this absolutely clear. It will only be if the projects cannot be commenced in a reasonably short period of time that the

Postal Service will unilaterally undertake to construct its needed postal facilities in the affected communities.

This concludes my prepared statement, Mr. Chairman. I shall be happy to respond to any questions the committee may have.

Mr. GRAY. Thank you, Mr. Lehne. Counsel.

Mr. CONSTANDY. Mr. Lehne, you pose the problem or the question that if the GSA can proceed expeditiously with the construction, you would be agreeable to becoming tenants of theirs.

However, I think the conclusions you drew, and the correspondence that we read earlier, leads me to believe that you have already made the conclusion that they will not be able to proceed with them in the time-frame that you must have them.

Is that true?

Mr. LEHNE. Well, Mr. Constandy, as far as we know at the present time, the legislation authorizing this lease construction has not been introduced. At least, we have not received any copies of such authorizing legislation.

Mr. CONSTANDY. It has been encumbered, because if it were introduced, there are 18 of them which the Post Office wishes to withdraw from participation, so we are talking about the other 27, which does not concern you.

Mr. LEHNE. Well, as far as I can understand, the GSA authority to build these buildings, and lease them back, has not yet been introduced, whether it is 18 buildings or 45 buildings.

Mr. CONSTANDY. It has been the subject before the committee. It has been sent to the Speaker, has it not?

Mr. LEHNE. I was not aware of the fact that it had been sent to the Speaker. Legislation, as far as I know-I was not aware of that fact. Mr. CONSTANDY. As legislation?

Mr. LEHNE. Yes, sir.

Mr. CONSTANDY. Well, we come down to this.

In the earlier part of this same year, you people had drawn a conclusion that GSA would not likely proceed that route fast enough to accommodate your needs, true? That is contained in your letter withdrawing from participation in these projects.

Mr. LEHNE. Yes, sir. Some of these projects have been outstanding for over 10 years.

Mr. CONSTANDY. Has anything happened since you wrote the letter, withdrawing from the project? Do you think GSA has a better way to get underway with these projects now than you thought then?

Mr. LEHNE. I do not know of anything that would lead us to that conclusion, except you people are being very active in this field, and maybe something would happen.

Mr. CONSTANDY. Maybe. I think we can conclude that the expressions you made in your letter withdrawing them were just as pertinent today as they were then, as far as anybody knows.

If that is true, you are in the position, then, of saying since this is true, you can proceed with these projects of your own.

Mr. LEHNE. We are trying to say, and I think the Postmaster General has made it clear that we are not trying to take unilateral action in this matter. We strongly believe that the mail has to be delivered, and in delivering the mail, we have to have modern facilities to do

that, if we are going to move the mail, and the facilities program has to be supporting our operational program.

Mr. CONSTANDY. The fact remains, I believe it was in May that you withdrew from the 18 projects, and nothing has happened since then that GSA has a better chance now than they had then to pursue these projects?

Mr. LEHNE. Since that time, we have indicated we are willing to wait a reasonable period of time. I made that apparent to Mr. Sampson personally, and Mr. Isaacs reiterated that proposal in June. We are not taking unilateral action to consider these projects.

Mr. CONSTANDY. What do you consider a reasonable period to be in the delivery

Mr. LEHNE. We are hoping these buildings could be under contract in fiscal 1972.

Mr. CONSTANDY. Any of them?

Mr. LEHNE. All of them, or the majority of them could be under contract in fiscal 1972.

Mr. CONSTANDY. BY GSA?

Mr. LEHNE. By somebody; yes, sir.

Mr. CONSTANDY. No. What is the time that you would consider reasonable for GSA to make such a decision as to enable you to be satisfied with the production of the buildings?

Mr. LEHNE. Well, GSA, unfortunately, is unable to make that decision by itself. I mean, they have to have other legislation introduced for this type of activity to have that.

Mr. CONSTANDY. You recognized that in the letter at the time you withdrew from the projects?

Mr. LEHNE. Yes, sir.

Mr. CONSTANDY. I am only trying to establish the fact that nothing appreciably has changed since then, other than that you have made an offer for them to be a tenant in your buildings after they are built. They are in the same position today that they were in May when you withdrew from the project, are they not?

Mr. LEHNE. Well, 60 days have gone by, but nothing has happened. And I do not know what will happen.

Mr. CONSTANDY. The point is that this is the first area of the dispute between GSA and the Postal Service.

Now, the suggestion has repeatedly been made that these would be resolved as they represent the Treasury and the taxpayer, and the Postal Service as you represent your mission.

Mr. LEHNE. Yes, sir.

Mr. CONSTANDY. It begins to suggest just in these 18 projects that the resolution of those problems may not be so easy as suggested, and other matters.

Here we have one which I will say, again, is an impasse. They cannot go forward because going forward requires something to be done by Congress over which they have no control.

Mr. LEHNE. Well, as you used the word "impasse," as I was sitting in this morning, I did not like the word the first time you used it.

I think this problem can be resolved. The problem is certain of its intent, and that is that buildings occupied more than 55 percent by the Postal Service should be transferred to the Postal Service.

We offered in our initial discussion earlier this year to build the buildings that would be occupied by more than 55 percent. I thought that was a reasonable offer, by using Post Office funds we could have done a lot of work between January and March, when the Postal Service came into being, and many of these buildings could be under construction now, because the plans were available, and the sites, and for some reason, these things were not resolved.

It takes two things happening

Mr. CONSTANDY. It takes two people who are equal to

Mr. LEHNE. I do not know if they have to be equal. They have to want to resolve the problem.

Mr. CONSTANDY. I am sure GSA wants to resolve them, and I am sure you want to, and since your May letter, the problem is 2 months older.

Mr. LEHNE. Well, we know a lot of work went into these projects, developing them to the point that we did. We studied the projects very carefully before withdrawing, and we did offer to build each of the 18 buildings, although we were the minority occupant in quite a few of those buildings.

Mr. CONSTANDY. In one of them you only have 16 percent of the space.

Mr. LEHNE. That is right. And that is the one that Congress has carried forward, and we considered that, and it is carrying out the good faith on the part of the Postal Service, to be willing to go ahead and construct those projects.

Mr. CONSTANDY. But, nothing has changed, though? You are still willing to do it, and they are unable to do the contrary?

Mr. LEHNE. We are waiting for some answers, yes, sir, hoping to resolve the problem.

Mr. CONSTANDY. I would suggest to you that between the Postal Service and GSA, they function in their negotiations at a considerable disadvantage, and that is one of the things we want to inquire about in these hearings. They are not free to make decisions as you were free to make decisions.

If their delay continues, you are going to go ahead and put up projects as you need them to satisfy tthe requisites of your responsibility; is that true?

Mr. LEHNE. Certainly Congress, in the Postal Reorganization Act, has given the Postal Service a tremendous amount of freedom. There is no argument about that. And I assume the Congress, in the debates that took place, recognized that freedom was needed to improve the mail service.

Mr. CONSTANDY. It may have been debates to increase the ability of the mail service. There was very little consideration given the policies overall before passing the act.

Mr. LEHNE. Well, I do not think Congress just freely gives the Postal Service the authority to go out and use $10 billion of money without a fair consideration in the discussion

Mr. CONSTANDY. You put me at a serious disadvantage. I will not agree with you, but in the testimony before Congress, prior to the passage of the Postal Reform Act, can you tell me whether there was any testimony given that suggested that the Army Corps of Engineers would be employed to construct the Post Office buildings?

Mr. LEHNE. I know of no such understanding.

Mr. CONSTANDY. Well, this was under consideration in advance of the passage of the act.

Mr. LEHNE. There had been some discussions between the Postmaster General and the Chief of Engineers prior to passage of the act. That is true, sir.

Mr. CONSTANDY. But, let me go further and say discussions took place just shortly after he assumed office in 1969.

Mr. LEHNE. I was not party to those discussions at that time, sir. I did not arrive here until April 1969.

Mr. CONSTANDY. Well, he may have had discussions with the Army, but Congress was not privy to them. And if a construction program was looked at that time and considered as necessary for the Post Office Department, it should have been a matter to have been discussed relative to the Postal Reform Act.

Mr. LEHNE. I am sorry. I cannot comment on that.

I thought if it was thought that there was a significant item, he would have brought it to the attention of the Congress.

Mr. GRAY. On that point, did you recommend to Mr. Blount that he transfer the responsibility of building Post Office buildings to the Corps of Engineers?

Mr. LEHNE. Sir?

Mr. GRAY. You cannot speak for Mr. Blount, but you can speak for Mr. Lehne.

Mr. LEHNE. I was not asked for my recommendation.

Mr. CONSTANDY. The only point I wanted to establish was there are other matters where the Postal Service will be in conflict with the goals of GSA. This is one of them. This one has not been resolved.

The Postal Service is very generous in being willing to construct the projects, but you have to conclude, too, that the Postal Service wants to do the thing the way they want to do it.

GSA cannot change the rules under which it functions, and we do have an impasse. I know the word is repugnant to you, but until there is some suggestion that something else can come along to resolve the problem we have between the two of you, both sides have consistently maintained the same position. There is nothing else they can do, and you have offered what you have offered.

Mr. LEHNE. I think you are doing the same thing the Postal Service did after quite a few years.

The Postal Service could not change its rules unilaterally either. Congress had to change the rules, and Congress saw fit to change those rules. I assume Congress may see fit to change these other rules some time.

Mr. GRAY. Just a minute. Are you talking about changing the rules? You do not deny the fact that with any building under $200,000 in value you had 100 percent authority to go construct without any authority from Congress or any appropriation from Congress? Mr. LEHNE. Mr. Gray, I think that is not true.

Mr. GRAY. Tell me how it differs.

Mr. LEHNE. I think the authority is if we are going to build a building that is over 20,000 square feet in size, that we have to submit a statement to the Senate and to the House, indicating our desire