Arrangements on Postal Facility Construction and the Management Responsibility Over Postal Buildings After July 1, 1971

Published by the Government Accountability Office on 1971-11-03.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             Dear Mr.     Chairman:
               By letter       dated June 2, 1971, you requested                 information
       concerning      the transfer           of the construction         and facility       pro-           23
!   Y- gram from the Post Office                Department       to the Corps of Engineers.                 3 /?sr
       The Department         became the United           States    Postal     Service    on
       July 1, 1971.           In our letter        of June 28, 1971, we confirmed                            i-,2-t
                                                                                                                 I ;-
       the agreement         made with your office             that we would provide          in-
       formationon          (1) the-arrangements            between    the Department        and
       the Corpson         postal     facility      construction
                                                      ___ ___--.-__.~ activities       and (2)
       the management--res-pon%YbiXty%f                   the Service,     over postal
       buildings      after      July 1, 1971! .
                     The Postal     Reorganization          Act,   approved August 12, 1970
              (84 Stat.   719; 39 U.S.C.           lOl),    provided,     among other things,
             for the transfer         to the Service          of all contracts,      records,
             and documents       relating      to the operation          of the departmental
             service    and the postal         field     service     of the former Post Office
             Department.       Thus, when the agreements               discussed   herein     indi-
             cate responsibility          attaching       to the Department,       the Service
             would have assumed these responsibilities                     on July 1, 1971.
                     On March 11, 1971, the Department                 entered     into two agree-
             ments with the Department             of the Army, transferring                 postal
             building       site   acquisition     and construction           responsibilities        to
             the Corps.          Each'agreement     covers a 3-year period.                  One agree-
             ment was a "broad umbrella             type,"      signed by the Postmaster
             General       and the Secretary       of the Army, covering             basic prin-
             ciples     and policies.          The other agreement,          signed by the Post-
             master General          and the Chief of Engineers,             established         the
             responsibilities,           terms,   and conditions          under which the Corps
             would furnish         the required     site    acquisition         and construction
             services.                              ___I_------        .-

                     Under these agreements           the Corps would be assigned        postal
             building     projects     costing     over $2 million    or containing      over
             50,000 square feet.            Responsibility      for construction    projects
             falling    below this      criteria     would generally     be assigned     to the
             Post Office       Department's      regional   offices.      On May 20, 1971,
c           n



    5               B-172186

                    however,     a third     agreement,     signed by an Assistant       Postmaster
                    General    and the Director         of Military    Construction,     Corps of
                    Engineers,     transferred      the responsibility         for the total   postal
                    facilities     acquisition,       design,     and construction    program,    in-
                    cluding    lease construction,          to the Corps for an indefinite
                           In addition,    the third        agreement      provided       for the trans-
                    fer by July 1, 1971, of approximately                  600 employees          from the
                    postal   headquarters     and regional         offices       to the Corps.            By
                    a transfer     order effective        June 27, 1971, about 460 employees
                    were transferred;      the balance,         approximately         140 employees,
                    had been previously       separated       through      retirements,         resigna-
                    tions,    or transfers    to other agencies.               As a result        of this
                    agreement,     the Department,        for all practical           purposes,         does
                    not have an in-house        capability       to acquire        postal     facilities.
                            Another      agreement       between the Department          and the Corps,
                    effective        June 28, 1971, assigned           to the Corps specific           re-
                    sponsibilities          and established        funding    procedures       for the
                    Department's         leasing      program.     The agreement       also provided
                    that the Department             deliver    to the Corps the lease files               and
                    related      documentation         and that the Corps execute            the leasing
                    program in accordance              with the Department's         leasing      authori-
                    ties,     policies,       guidelines,       and determinations.
                            The Department      rented      space on either           a rental-agreement
                    or a lease-agreement          basis.       Pental       agreements     concerned
                    space rented     in existing         privately        owned buildings,         and lease
                    agreements    covered space in facilities                   built    under a lease-
                    construction     program.        Under this         latter     program the Depart-
                    ment contracted      with private           industry       for the lease of build-
                    ings to be constructed           according        to the Department's           speci-
                    fications    on sites     either      owned or controlled             by the Depart-
                            The lease-construction        contracts   specified   the annual
                    rentals    to be paid by the Department          over the periods    of the
                    leases    and usually      provided   for renewal    options  by the Depart-
                    ment.     As of June 30, 1970, there were 15,737 rental             agree-
                    ments with annual rentals           of about $15 million     and 11,985
                    lease agreements        with annual rentals      of about $125 million.
                             Under the June 28, 1971, agreement,                the Corps,    among '
                    other things,      will    maintain       the  Department's     lease  files;
                    obtain     new leasehold      space or renew existing           leases when re-
                    quested     by the Department;          represent      the Department     in nego-
                    tiations      and discussions       concerning       lease terms and fulfill-
                    ment of the lessors'          obligations,        including    needed repairs;


‘l             B-172186

            and monitor   and challenge    all excessive    or unwarranted   in-
          , creases   in State and local    real property    tax assessments
            when the Department     is responsible    for the payment of all or
            part of such taxes.
                 When space in        Department-leased     buildings   is excess to
           Department   needs,      the Corps will,      when requested   by the
           Department,     sublet     space and act as the Department's        agent
           for the collection         of rentals     and for other dealings    with
           the sublessees.
                      The Department     is responsible    for rental  and leasehold
               improvement    contract     payments   for space leased by it.     The
               agreement   provides    that the Department     may examine Corps

                  After    enactment     of the Postal   Reorganization     Act, the
           Service     reorganized     its headquarters'     offices    and depart-
           ments by combining         a number of them into three major operat-
           ing groups --Mail       Processing,   Customer Services,       and Support.
           Each of these groups is headed by a Senior Assistant                 Post-
           master General.
                    The Mail Processing          Group, which has responsibility        for
           the Service's         mail processing       operations,   has been assigned
           the responsibility         for policy       direction   and oversight    of the
           Corps'     construction      efforts.       A Program Management Office,
           staffed     with 32 employees,          has been created      for this  purpose.
           The Mail Processing          Group has been assigned          also the respon-
           sibility     for custodial        services      and for maintenance    and re-
           pair services.
                  Organizationally          the responsibility        for these services
           has been assigned          to the Industrial        Engineering     Division    of
           the Logistics        and Engineering        Department.       The acting     mana-
           ger of this      Division      told us that the Division           had the re-
           sponsibility       also for developing          standards     to be followed      by
           the postal     regions       in administering       the Service's      programs
           at the local       levels.       He told us also that the Division             did
           not have a permanent           staff    for these programs        and that,    after
           the reorganization          had been completed,         no more than two or
           three employees         would be associated         with these programs.
                   The responsibility       for guard services      is divided     between
           the Office      of Security    of the Postal    Inspection     Service,     which
           reports    directly      to the Postmaster   General,      and the local


                 postmasters.         For the 50 largest         postal     facilities,         the Office
                 of Security      is developing        a 5-year program concerning                  security
                 measures.       For other facilities          the guard services              are respon-
                 sibilities      of the local      postmasters.         The Office          of Security
                 is also responsible          for guard services          for the Office            of
                 Management and Budget's           coordinated       program.           This program
                 requires     the Service       to provide     guard service            (other    than in
                 courtrooms)       for postal     buildings      which house Federal              courts.
                 A staff     of 12 employees       in the Office        of Security          administers
                 these responsibilities.
                        The extent      to which the Service             has a direct        responsibil-
                 ity for providing          a postal     facility       with maintenance           and re-
                 pair,    custodial,      and security         services      depends on the basis
                 on which the Service           occupies       the facility.          For rented       space
                 in privately        owned buildings,          the terms of the rental              agree-
                 ments state whether          the Service         or the lessor         is to provide
                 the services.         The Service       is directly         responsible       for pro-
                 viding    them for buildings          occupied        under the lease-construction
                 program,     for Government-owned             buildings       constructed       for the
                 Service,     and for all but 61 of the approximately                      2,800 build-
                 ings transferred         to it from the General               Services    Administration
c,                      GSA will       service     the 61 buildings    on a temporary    basis.                13
                 The Service      is negotiating         an agreement   with GSA for these
                 services   until       the Service      can assume the responsibility.          We
                 have been told that the agreement                will run for about 6 months
                 and that,   on termination,           the transfer    of responsibility      to
                 the Service      will     involve    also the transfer     to the Service      of
                 about 600 to 700 GSA employees.

                         The enclosed       statement,      which I presented           on July 14,
      . ?-       1971,    before   the     Subcommittee      on Investigations           and Oversight         cllL-O'

of the Committee          on Public    Works, House of Representatives,
provides       additional    details    on certain matters  discussed     in
this   letter.

                                                Comptroller   General
                                                of the United   States

The Honorable     Gale W. McGee, Chairman                   $ igLCJu..,
Committee     on Post Office and Civil   Service
United    States  Senate