had been negotiated and was awaiting signature. This contract has been negotiated with Charles T. Main Co., which is a company that stated to the committee the study of the feasibility of remaining at the present location was not necessary.

Now this is not on the record but I am asking this question to find out if the General Accounting Office knows whether a contract has been negotiated with Charles T. Main Co.

Mr. CAHALEN. No.

Senator PROXMIRE. This should have been phrased as a question and not as a statement of fact because I am trying to explore the matter and find out if it is true.

You don't know what category this would fall into as far as negotiations are concerned or the necessity for requiring three bids to be taken?

Mr. NEUWIRTH. We have not looked into this, sir.

GENERAL ACCOUNTING OFFICE COMPETENCY

Senator PROXMIRE. Let me ask you if you feel that you would be in a stronger position to give us an evaluation of whether the Government is wise in spending this money if you could make a more comprehensive investigation than you have made.

What you did apparently was to check the operating costs, talk with the people in the Printing Office who are the experts, and satisfy yourselves that they were, as far as could be made certain, competent, honest appraisals. But you did not include financial cost such as interest and you did not go into the negotiation angle of it; is that correct?

Mr. NEUWIRTH. Yes; that is so.

Senator PROXMIRE. You could have gone a little further. You could not go all the way, apparently, to answer the question that I asked earlier on whether or not spending $50 million on this kind of building was wise or not.

You say you are not competent to do that?

Mr. NEUWIRTH. There is really not enough information available at this stage.

Senator PROXMIRE. Now before the Congress spends $50 million should we not get that information and make it available? If that information is not available I am wondering how wise we are to proceed with this immense expenditure.

Mr. NEUWIRTH. Generally speaking, I would say that this is a matter of congressional policy. As you know, the General Accounting Office is very happy to do whatever a congressional committee wants to us to do. Most of our work, however, is on a postaudit basis, after a contract has been let and expenditures made. We can make an evaluation of management operations through review of records, documentation, and interviews with agency officials and establish whether the intent of the Congress has been carried out and whether the funds were spent efficiently and economically. We are not in a position to do this in a situation of this type. I believe this is a matter of congressional policy. Senator SALTONSTALL. Would the Senator yield for a question? Senator PROXMIRE. Yes, indeed.

49-381-65——25

BUILDING REPORT BY GENERAL SERVICES ADMINISTRATION

Senator SALTONSTALL. Most respectfully I think the answer to your question would be, if you believe that this question is going to come up again another year if we didn't grant it this year it would be perfectly proper to put in our report or in the form of a separate resolution or part of the bill that the General Services Administration give a report on this subject before the next session. The General Services Administration is the department that does the building and it would have a better method of assessing the cost than the General Accounting Office in my opinion.

Senator MONRONEY. Would it not also be a fact, Senator Saltonstall, that if we abandon the job of the General Accounting Office doing auditing and coming up with specific figures and putting them into the business of estimating we are going to lose a lot of the character of the General Accounting Office?

Senator SALTONSTALL. That would be my feeling.

Senator PROXMIRE. I did not get that, I am sorry.

Senator MONRONEY. That if we abandon the hard rule of coming up with exact, audited expenditures and put them in the business of estimating we will be doing a disservice to their general role in Government. I think what the Senator has said that the building agency of Government is the General Services Administration.

Senator PROXMIRE. Yes. I am not making any case for that. want to determine precisely what this letter meant that they wrote in June 1964, try to put it in the proper perspective so that I can evaluate the information and determine how much weight we can give to it. I think these gentlemen have been helpful.

Senator MONRONEY. To get them to go back and substitute for the General Services Administration in estimating cost would lead to a trend that we want on military installations and almost every kind of new building, like the Patent Office Building and a lot of others. Senator PROXMIRE. Do I understand, Senator Saltonstall, and you, Mr. Chairman, to say that we want this but the way to get it is to have the GAO do it?

BUILDING SQUARE FOOTAGE BREAKDOWN

Senator MONRONEY. To write it into the bill if you want to postpone action this year and for them to come up with a doublecheck as to the cost per square foot. Today we don't know how many square feet will be used by the Printing Section, how much in the warehouse or stock storage, how much in the document storage, and how much in the Superintendent of Documents' office and the shipping rooms that they propose as part of this. I think you would have to have your square footage broken down before anybody could give you very accurate estimation of the per-unit cost out of a four-unit building.

GENERAL SERVICES ADMINISTRATION RESPONSIBILITY

Senator SALTONSTALL. If the Senator will yield, on the bottom of page 2 you see the GAO says that:

Costs of renovating the Government Printing Office building for purpose of the new use have not been determined.

That again in my opinion is the responsibility of the General Services Administration. So that they could estimate the accuracy of the costs of building the new building and putting in the machinery, et cetera, and they could also give an estimate as to the cost of renovating the old building. That is right up the alley of the GSA.

ESTIMATED COST OF MOVING EQUIPMENT

Senator PROXMIRE. May I ask you gentlemen from GAO when you considered this $3 million cost for moving the equipment did you have any basis for appraising the validity of that estimate? You consider that was one of the elements of cost, as I understand it.

Mr. CAHALEN. No. We were strictly reviewing the operating cost. Senator PROXMIRE. I understand that there is a big powerplant in the Government Printing Office so that if the electricity goes off in Washington they can continue to print Government documents. I imagine that could not be moved, you would have to build a new powerplant at the new site if you had the same kind of service. And to move this equipment, of course, $3 million is a whale of a lot of money. There is a terrific amount of equipment which is very, very costly but you did not consider that at all, only the operating cost.

Mr. CAHALEN. Yes.

Senator MONRONEY. That again I think would be in the General Services moving costs rather than in the operating costs which they figured.

LIMITED SCOPE OF REQUEST ON GENERAL ACCOUNTING OFFICE

Mr. KANE. Mr. Chairman, the request that we received for the review was of a very limited scope so we don't want you to think that we are trying to evade giving any answers.

Senator PROXMIRE. No. I am not being critical at all of you gentlemen. I have the highest regard for you. Certainly nothing I said should be regarded as criticism. I want to see what is meant. You have been completely honest. When I was hot and heavy on interest it was not because I thought you were not responsive to the request made of you but I wanted to see what the policy was and you justified it very well.

BUILDING COST, INCLUDING INTEREST, AMORTIZATION

Here again I think it would be up to us with perhaps the help of the General Services Administration because if you are counting $1.5 million for income, it is either not to take credit for the $1.5 million to charge yourself for the interest rate for the new building because you can't have interest free on both buildings.

Senator HAYDEN. In that regard, Mr. Chairman, how long would it take to amortize the cost of the building if interest at 4 percent is calculated on the Government investment? The way you worked out your figures how long would it take?

Mr. NEUWIRTH. What figure was that again, sir?

Senator HAYDEN. If 4 percent interest was charged, how long would it take to amortize the building, add that to the cost?

Senator PROXMIRE. This would be an additional cost as I calculate it of about $1 million a year. That is 4 percent on a diminishing bal

ance of a $50 million total $25 mililon average balance. The chairman said you could put that in the record if you want to.

Mr. NEUWIRTH. Yes.

(The information requested follows:)

General Services Administration has computed the interest cost on the proposed new building at 44 percent to be $11,647,000. Inclusion of this amount would bring the total estimated cost of the proposed new plant to about $58,935,000. Based on GPO's estimated savings of $4,521,000 annually by acquiring the new building it would take about 13 years to amortize this cost.

INTEREST ON ALL DEFICIT APPROPRIATIONS

Senator YARBOROUGH. I don't think you can pick out certain selected items of the Government cost and say we have to figure the cost of that, what interest will be, and not figure the cost on a big missile we build, not figure the cost on the silos we are building for missiles and now abandoning, not figure the cost of interest on all the military construction.

I don't see why one item of Government construction should have the interest charged in and amortized and all the others ignored.

ASSERTION OF PAYMENT THROUGH SAVINGS

Senator PROXMIRE. The answer is that the claim has been made that this building will pay for itself. You are putting all the costs and all the savings down together. Now nobody claims that a battleship or missile or anything like that will begin to pay for itself. This particular building they say will pay for itself.

This particular building they say will pay for itself in 10 years. Maybe with the interest charge it will pay for itself in a longer period

of time.

Senator YARBOROUGH. I think the Government Printing Office is necessary. I don't think it has to pay for itself to have one.

Senator PROXMIRE. That may well be correct. What I am saying is that if you are determining how to expend your money for a printing office one of the things you consider is the cost of the money you have to borrow to build it.

Senator YARBOROUGH. If you are considering that, yes.

Senator MONRONEY. The point I made earlier is that you cannot have it both ways. You can't take credit for $1.5 million income from an investment that you are abandoning and then not pay something for the interest charge on the new quarters.

Senator YARBOROUGH. I see the point.

Senator MONRONEY. One or the other has to be dropped out of the formula. Do you not agree to that?

Senator YARBOROUGH. I was absent in the earlier part of the testimony here. I did not hear that point. Yes, if you are going to claim credit, yes. I assumed in this amortization that there was being considered what it would cost if the Government went out and rented a printing office like that, let some private interest build it and rent it.

Senator MONRONEY. Do you have any further questions?

NEGOTIATED CONTRACT

Senator PROXMIRE. No. I just assume maybe the appropriate agency can find out about this negotiated angle.

Senator MONRONEY. This would be General Services. In the event it is not put in the bill, we decide to postpone it, if that should be the decision of the committee, then we should ask the General Services I think for their report because it would be much more valuable as to the anticipatory cost of the construction and moving and things of that kind.

OPERATIONS AND MAINTENANCE COSTS

I do think it is proper to have the overhead cost such as labor cost come from the General Accounting Office because they are the only ones that have access to that type of figure, the intimate operations of the Government Printing Office. So we have those.

Now we can get the building costs I think and that estimate quite properly and should have it from the General Services Administration. If there are no further questions, we thank you gentlemen very much for coming up here and giving us the advantage of your studies. Mr. NEUWIRTH. Thank you.

OFFICE OF THE SERGENT AT ARMS

TELEPHONE SERVICE

STATEMENT OF WILLIAM S. CHEATHAM, ADMINISTRATIVE ASSISTANT TO THE SERGEANT AT ARMS OF THE U.S. SENATE

FEDERAL TELECOMMUNICATIONS SERVICE

Senator MONRONEY. We would like to go over the matter of the telephone which has been under discussion informally last year and this year and we would like to have Mr. Cheatham explain what could be done to help out on the telephone setup.

Mr. CHEATHAM. I am William S. Cheatham, and I am Administrative Assistant to the Sergeant at Arms of the Senate.

Mr. Chairman, as I understand it, you wish me to present the longdistance material as completely as possible for the record, since little, if any, of last year's discussion went on the record.

Senator MONRONEY. That is correct. We had a proposal last year of the new telephone system, dialing from Washington to your State on the Government-leased line and what do you call it

Mr. CHEATHAM. The Federal telecommunications service. That term includes more than telephone but we are only talking about longdistance telephones.

Senator MONRONEY. It is an expansion, in other words, the Government buys the WATS service from the telephone company.