Investigation of the Closing of the St. Louis Field Office, Eastern Area, Military Traffic Management and Terminal Service

Published by the Government Accountability Office on 1971-05-20.

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

    stigation Of The Closing Of
The St. Louis Field Office,
Eastern Area, MilitaryTraffic
  anagement And Terminal
Service  B-171602


                          COMPTROLLER      GENERAL     OF      THE       UNITED   STATES

                                         WASHINGTON.    D.C.         20548

B-171602                                                                                   D9
Dear Mr.       Price:                                                              -'P

         In your letters             of December 4, 1970, and February                        8 1971,
you requested            our comments on statements                     made by one of your
constituents            concerning         the cy_Os~of~~~~~.$t....Louis,                  Field      Of-
fice,      Eastern .,.,,2.,,
                         ."i - - +&itary            Traffic      Management         and Terminal
 .=*I .-
         We have reviewed             personnel          data,    technical         shipping      in-
formation,        and cost estimates                 concerned         with the closing.              We
have also discussed                the closing           with officials           of the Mili-
tary Traffic            Management and Terminal                  Service.         On the basis of
information         developed,           we believe          that the transfer            of the
St. Louis,        Missouri,          office       functions       will     result      in signifi-
cant economies             without       impairing         the overall        traffic      management
ability      of the Military               Traffic       Management'and           Terminal      Service.

       We believe        that the technical            competence          of the transpor-
tation    personnel        is the critical          determinant          of their       effec-
tiveness.        The Eastern          Area Office      has a staff          of qualified
transportation         personnel,         and information          we developed          indi-
cates that the Eastern                Area Office      staff     will      be augmented by
the transfer         of qualified         personnel     from the St. Louis office.
Most of the positions              to, .he.ab.o.~is~h.ed as a result
                      ____ln,^__.-l."^                                             of the clos-
ing of the St. Louis office                  are considered           nontechnical.            Also,
our review       showed that the Eastern               Area Office           staff     had been
handling      the vast majority            of the traffic           within       its jurisdic-
tion and that the staff--augmented                     by personnel            from the
St. Louis office--           should have little           difficulty           in absorbing
the work load of the St. Louis office.                          We believe          that the
physical      location       of the personnel          should make little               differ-
ence in their         effectiveness.

       The Bulk Liquids          and Rail Fleet Management Division                   of
the St. Louis Field           Office     does have a unique mission             within
the Military        Traffic    Management and Terminal              Service.      If the
transportation         personnel      experienced       in these important          func-
tions    did not transfer          to the Eastern        Area,    it would be pos-
sible    that management         effectiveness        might    suffer     until   new
personnel       gained     the necessary       experience.        Our study showed,
however,      that more than half           the technical       staff     of that

                                  50TH   ANNIVERSARY                 1921-1971

division   had indicated     that they would transfer      to Brooklyn,
New York, N.Y.      This cadre of experienced      people    should pro-
vide the continuity      necessary   for effective    management of the

      Details   of our finding     follow   in the order      established
in your constituent’s      letter.      We shall  be glad     to discuss
this matter   with you or members of your staff.

       As agreed by your staff,   we are         today furnishing     Senator
Stuart    Symington a copy of our reply          to you.    The correspon-
dence you enclosed    with your initial          inquiry  is returned     as

                                     Sincerely      yours,

                                     Comptroller   General
                                     of the United   States

The Honorable  Melvin    Price
House of Representatives

                          SPECIFIC    COMMENTS





     Following   are the comments of the General Accounting  Of-
fice (GAO) on the points   raised by Mr. Harry E. Hampe in let-
ters dated December 2, 1970, and February 3, 1971, to Congress-
man Melvin Price.    Our comments are numbered to correspond  with
the numbered enclosures   to Mr. Hampe's December 2, 1970, let-

     1. Authorized     and actual    strength

        The enclosure      submitted      by Mr. Hampe showed that 176
        positions     had been authorized          and 156 had been filled.
        According     to the official         weekly strength      report    of
        the Military      Traffic    Management and Terminal           Service
         (MTMTS), however,        the civilian       strength    of the
        St. Louis Field Office          on November 20, 1970, was 191
        positions     authorized     and 179 filled.          MTMTS officials
        informed     us that some of the positions             were located
        physically      in Chicago,     Illinois,       and other points      but
        were assigned to the St. Louis office                 for administra-
        tive purposes.         Mr. Hampe's listing          may not have in-
        cluded the positions         outside      the St. Louis area, which
        fact would account for the discrepancy                  in the number of

     2. Estimate     of savings

        The $1.06 million      savings reported        by MTMTS would not
        be in salariesralone        but would include      other costs.
        There are 63 civilian        positions      to be abolished;    13 of
        them are at Eastern Area, MTMTS, and 50 are at the
        St. Louis Field Office.          Of the 50 positions        to be
        abolished     at the St. Louis office,         32 are considered
        nontechnical.       The following      table shows the 50 civil-
        ian positions      to be abolished       at the St. Louis office.
          Office        istra-                        Traf               Data
             of           tive                          fit       BLG  proc-
           Com-           ser-          General       ser-        RFM   ess-
Grade     mander          vice          freight       vice    (note a)   ing            Total

GS-14                                                    1                                 1
GS-13                                                                                      1
GS-12                                                                                      1
GS-11                                                                                      2
GS-10                                                    2                                 8
GS- 9                       1                                                              3
GS- 7                       1                                                    2         4
GS- 6                                                    1                                 1
GS- 5             1         5                                                    4        13
GS- 4                       2                           1          2             2        10
GS- 3        -            - 1                          -1         -1            -3        -6
Total        I 1          10                           =6           3
                                                                  rz=zZZ        _1_1.

aBulk   Liquids       and Rail     Fleet      Management      Division.

          The estimated      net savings    of $1,060,000    to be achieved
          by closing      the St. Louis office     is made up of the fol-
          lowing   items,    including   the savings    from the 50 posi-
          tions   shown in the above table.

                                 Item                                          Amount

    Labor                                                                  $    682,022
    Benefits                                                                     70,162
    Supplies                                                                      9,005
    Temporary  duty (TDY) travel                                                 51,110
    General and administrative     (GEIA) overhead                              208,448
    Contracts,  space charges,   telephone                                       39,253

         Total                                                             $1,06O.Oa-

          Our analysis    of the grade levels        and the number of
          positions    to be eliminated    indicates     that the esti-
          mated labor and benefits      cost savings       are reasonable.

          The GGA cost saving      consists     of the amounts that were
          budgeted   for support    of the St. Louis Field         Office
          offset   by an estimated     increase    in such expenses       at
          Eastern   Area, MTMTS. These expenses          consisted      of such

   nonmission      functions      as administrative          services,     fi-
   nance and accounting,           judge advocate         services,      and per-
   sonnel    services.

   The maximum one-time       closing         costs estimated   by XTIXTS
   were $231,000,     depending     on      the number of employees
   who transfer   to Eastern       Area,       MTMTS, or other Govern-
   ment agencies.      The savings          that would be realized     dur-
   ing the first    few months the            St. Louis office   is closed
   would more than offset        these        one-time   costs.

3. Relocation    of Eastern  Area, MTMTS,
   from Brooklyn    to Bayonne,   New Jersey

   The plan to relocate            Eastern      Area, EITbITS, was approved
   by the Congress,          but no funds have been provided.
   MTMTS officials         advised      us that it would take at least
   18 months to complete             the move after           funds became avail-
   able.    The move, when implemented,                  will     result     in the
   abolishment      of certain         administrative,           guard force,
   and base engineer          positions.         MTMTS does not plan to
   reduce any positions            in traffic        management,         and, since
   the St, Louis personnel              are in that field,            none should
   lose their      positions       as a result         of the Brooklyn-
   Bayonne move.

4. Use of    transit     rates

   Investigation        of the movement described          in the enclo-
   sure (a statement         from Mr. A. P. Newton)          showed sev-
   eral dissimilarities           between the information         of Eastern
   Area, MTMTS, and that furnished            by Mr. Newton.
   Mr. Newton stated         that the transit       operator     at Naval
   Ammunition      Depot, McAlester,      Oklahoma,       had requested
   routing      by Eastern     Area, MTMTS, on approximately
   4,485,OOO pounds of ammunition            to Sunny Point,        North
   Carolina,      and had given transit        references.

   Eastern     Area Office        records     on this movement showed
   that the request        for routing         was for 3,359,OOO pounds
   and that no transit            references      were cited.      The East-
   ern Area Office       acknowledges          that   (a) it did not con-
   sider   the use of transit             in connection     with this move-
   ment,    (b) transit      billing        was on hand which should
   have been applied,          and (c) substantial          savings   would

         have resulted.      The Eastern     Area Offrce       agrees   that an
         error    was made in this    instance   but considers        it an
         isolated    human error   and not represe       tative     of its nor-
         mal operations.

    5. Excess charges            attributable
       to poor traffic            management

        The enclosure             covering        this matter        was a letter         for-
        warded to GAO. The letter                        stated     that,   on Government
        bills    of lading            (GBLs) covering            numerous    shipments          made
        under export           releases         furnished        by Eastern      Area, MTMTS,
        Eastern      Area cited           rates       from a published         tariff       in-
        stead of lower rates                  published        for the Government             in
        what are known as section                       22 quotations.         The letter
        stated     that,       of 35 shipments              on which the GBLs cited
        the higher         tariff       authority,          30 had been properly              billed
        and paid at the lower                   section       22 quotation       rate and
w       five    had been billed               and paid at the higher               tariff       rate.
        Thirteen       other        shipments        were listed         on which the pay-
        ment basis was not known.                        GAO was asked to recover                 the
        excess freight              charges       paid on the five          shipments         and on
        any other         shipments         listed       which were billed            at the
        higher     tariff         rate.

        Our Office      has completed       the audit      of the five       ship-
        ments and has taken action             to recover      from the carriers
        the overcharges        of $1,685.50.        The 13 other         shipments
        listed   are being       developed,      and recovery       action    will
        be taken on any that were improperly                 billed      at the
        higher   tariff    rate.       We have also,       in our normal        audit-
        ing procedures,        taken recovery       action     on additional
        GBLs covering      similar      shipments    which were not listed
        in the letter.

    6. Bill-of-lading           review

        The St. Louis Field         Office      has reported      finding      impor-
        tant excess costs as a result              of its bill-of-lading             re-
        view.     Our study shows these findings               are attributable
        primarily      to the fact      that many ammunition           depots    are
        located    within    the St. Louis review           area.      Ammunition
        is a very high-cost         complex commodity          to ship,      and the
        potential     for technical        errors    in making such shipments
        is great.

     The Eastern     Area,    MTMTS, has its           own bill-of-lading           re-
     view program.        Since     there    is a large      number       of experi-
     enced personnel       available       to the Eastern           Area,     we have
     no reason    to believe        that   the transfer         to the Eastern
     Area,   NTMTS, of the review            of bills     of lading         for  these
     ammunition     shipments       should     adversely     affect       the detec-
     tion  of excess      costs.

7.   Carriers’       complaints

     The letters        from several           carriers         protesting        the clos-
     ing of the St. Louis               Field     Office        seem to focus           on the
     theme that        skilled      traffic       people        are going       to be re-
     placed     by untrained          and unskilled             individuals          in the
     Eastern     Area Office          and at added expense                  to the Govern-
     ment.      MTMTS records           showed that           33 St. Louis           Field   Of-
     fice    personnel         had indicated           that     they would        transfer
     to the Eastern            Area Office        and that,           in the one special-
     ized technical            area   (the Bulk Liquids                 and Rail       Fleet
     Management        Division),          nine of 17 technical                staff      members
     had indicated           that   they would           transfer.

     We have no reason            to believe       that     one MTMTS office          has
     more skilled         traffic      management       personnel     than another.
     In the one specialized               area that       the St. Louis        Field
     Office      has handled        exclusively,        the nine    transferring
     technical      staff       members     should    furnish     a capable       nu-
     cleus     to continue        an efficient        operation.

8.   Overhires

     As used by the Eastern         Area Office,      the term “overhire”
     means hiring     a replacement      in Brooklyn      for a nontrans-
     feree    in St. Louis    and carrying       both on the rolls      for
     a period    of time.

     The Eastern       Area Office           planned     to hire     replacements
     for the St. Louis            office       technical      personnel      operating
     in a functional           area      (the Bulk Liquids          and Rail       Fleet
     Management       Division)         who did not choose            to transfer,
     The plan     included        temporary        duty at the St. Louis              of-
     fice     to enable      the replacements            to study       and learn       the
     specialized        job.      In his letter,           Mr. Hampe is concerned
   about the aclditio;lc-!b salary, per diem, and ::ir fare
   costs that wo~~ld be incurred    by halring the overhires
   on TDY for up to 00 days while      being trained  in
   St. Louis*

   Our study showed that only eight                    individuals       were over-
   hired     and that these individuals                were to replace         the
   eight     technicians         iii the Bulk Liquid          and Rail Fleet
   Management function              who did not choose to transfer                to
   Brooklyn.         Since the overhire            procedure       should result
   in a more rapid           and orderly      training        process    for this
   specialized         technical       work, we believe          that the addi-
   tional      costs incurred          are justified.           Further,    the
   costs      (estimated      $13,000 maximum) are not significant
   in relation         to the overall        savings      to be achieved.

9. Cost   reduction      and cost        avoidance

   In enclosure  9 to the constituent's        letter   of Decem-
   ber 2, 1970, and in the enclosure         to his letter   of Feb-
   ruary 3, 1971, cost reduction       savings     and cost avoid-
   ance by the St. Louis Field     Office     were emphasized.

   Headquarters,     MTMTS, furnished     us a breakdown   of the
   $1.4 million     validated    cost reduction   savings  actions
   submitted     by Eastern   Area, MTMTS, for fiscal     year 1970
   and advised     us that none were reported      by the St. Louis
   Field   Office.

   Cost avoidance         (traffic     management economies)           of
   $48.4 million        reported      by MTMTS for fiscal          year 1970
   included    approximately          $2 million      attributable      to the
   efforts   of the St. Louis Field              Office      in the area of
   transit  utilization            and its Low Cost Mode program.

  These contributions      of the St. Louis Field             Office      to
  good traffic     management are commendable,             but the trans-
  fer of the St. Louis office       functions        to Eastern         Area,
  MTMTS, should not impair       the overall       traffic       management
  competence    of MTMTS. Eastern      Area, MTMTS, has already
  been handling     the large volumes of traffic,              and the ad-
  dition   of the St. Louis office      area traffic           activities
  should be absorbed with little        difficulty          under the
  plans advanced by MTMTS.

10. Eastern    Area,    MTMTS, Circular        No. 10-4

    Although     the Bulk Liquids          and Rail Fleet Management
    Division     of the St. Louis Field Office              is unique in
    its mission,       it is under the supervisory             control
    of the Directorate          of Inland     Traffic,     Eastern Area,
    MTMTS, and will        continue      under that office         after  the
    move.      MTMTS records show that nine of 17 technical
    personnel      have indicated        they will      move with their
    functions.       We believe       that this should provide           an
    adequate nucleus for handling              this function        and, in
    conjunction      with the planned training             program for ad-
    ditional     personnel,       should result        in an efficient      op-
    erating     group.


    Mr. Hampe states in his letter         that the time avail-
    able to conduct business with west coast customers
    will   be reduced to only 3 hours a day after           the move.
    This was attributed      to the difference      in time zones.
    Since St. Louis is in the central          time zone and
    Brooklyn    is in the eastern     time   zone and since there
    is only a l-hour     time difference      between them, the
    move can reduce the workday by only 1 hour.               Because
    there is a 3-hour time difference          between the east and
    west coasts,     the workday for conducting        business with
    the west coast will      be 5 hours instead       of the present
    6 hours.

    We believe       that,      since Headquarters     and Eastern Area,
    MTMTS, have been conducting             business with the west
    coast on a 5-hour day, the loss of 1 hour for the
    transferred        activities     will  not significantly     affect
    their    operations.

    In his letter,       Mr. Hampe stated    that Wide Area Tele-
    phone Service       (WATS) was used extensively    to conduct
    the business      of the St. Louis Field Office.       He fur-
    ther stated     that Eastern Area, MTMTS, did not have ac-
    cess to this communications         network and that commer-
    cial long-distance       lines would have to be used at day-
    time prime rates.

An official      at I-!eadquarters, MTMTS, informed   us that
Eastern     Area, MTMTS, had access to all Department        of
Defense     (DOD) communications    systems and that he could
foresee     no need for WATS. He added, however,       that,    if
such service       should become necessary,   it could be read-
ily obtained.

Mr. Hampe expressed     concern about St. Louis office
personnel    employment  entitlements     not being observed
because MTMTS had created        a new function   and had hired
two individuals     from outside     of MTMTS to perform   this

The two employees           recently      hired by Headquarters,                 MTMTS,
were placed         in the Negotiation           Division,       Directorate
of Inland        Traffic,     and they required            special      qualifi-
cations.         One required        an Interstate         Commerce Commis-
sion (ICC) practitionerPs               certificate         and/or     a trans-
portation        law background,        whereas the other required
a completed         course in ICC and/or            transportation           law.
Since none of the available                 personnel       at the St. Louis
Field     Office      was qualified       for these positions,              quali-
fied applicants           were hired      from outside         DOD. Headquar-
ters,     MTMTS, has informed           us that it will            continue       to
give priority           to qualified     available         St. Louis person-
nel for vacancies           in Washington,          D.C.

U.S.   GAO   Weeh.,   D.C.