Mr. BOUTIN. Cutbacks on any of these, would result in defering repairs, which means we would have to come back to Congress in subsequent years and ask for substantially more money or we are going to have to cut back on our cleaning which will mean much higher maintenance costs later on, which will have a bearing on the R. & I. appropriation. In construction, cutbacks are going to put us increasingly in a position we are in right now, we have to go before the House committee tomorrow afternoon on Augusta, Maine, and I have got to ask permission to increase the authorized cost levels there or I can't award a contract.

Senator SALTONSTALL. Where?

Mr. BOUTIN. At Augusta, Maine, and we have had a number of others we have come before this committee on. We have got our figures down as tight as I know how to submit them to this Congress. I don't know how to keep them any tighter and still have a reasonable program.

Senator SALTONSTALL. Mr. Chairman as you know, you and I know, over the years, we have felt, I think, I can say we have felt, that the House keeps these operating and maintenance expenses down to an awfully low level and, personally, I would rather see that figure maintained even if you slow down some of your construction. Senator MAGNUSON. Well, to sum this up.

Mr. BOUTIN. I agree.

SUMMATION OF PUBLIC BUILDING REQUEST

Senator MAGNUSON. To sum this up, operation of public buildings, repair and improvement, construction of new buildings, site and expenses, and payments on the purchase contracts, the whole kit and caboodle run us about $524 million, about a half billion, in round figures, a half billion per year to maintain and continue repair and maintenance, new buildings, and purchase of these other buildings, purchase contracts, site and expenses, around a half billion dollars.

FORWARD LOOK ON AIR CONDITIONING AND CONSTRUCTION

Mr. BOUTIN. And to go right back to the point you made, Mr. Chairman, we are making great strides. In fiscal 1969, we will clean up all of our backlog on air conditioning nationwide. At the level of $200 million a year in new construction we will complete all of our backlog in the early 1970's, then the program can drop down substantially and the funding that is required from the Congress, because we will finally have caught up, but it is during this catching up period that we must have a reasonable level of appropriations or we are just not going to do the job well. We can build a building for $15 a square foot, but it is a building neither you nor the public will be proud of and we will be ashamed of.

VALUE OF PUBLIC BUILDINGS UNDER GSA JURISDICTION

Senator SALTONSTALL. Mr. Chairman, may I ask one more question. Have you any estimate of the appraised value of the public buildings now constructed and under your control?

Mr. BOUTIN. The total, we wouldn't have it on current appraisal but we would have it on cost of acquisition. Mr. Schmidt, do you have that figure? We report this.

Mr. SCHMIDT. We estimate the replacement costs would be three and a half billion dollars, current replacement costs of the Governmentowned facilities we have responsibility for.

Mr. BOUTIN. These are the properties in being, not those under construction, but those in being as of right now, three and a half billion dollars.

COST OF MAINTENANCE, OPERATION, AND REPAIRS

Senator SALTONSTALL. And the operating expenses and the repair and improvement amount to about $325 million. You are spending $325 million to maintain three and a half billion dollars worth of buildings, is that a fair and correct statement?

Mr. BOUTIN. That is a correct statement and a fair statement. Senator ALLOTT. Where did you get the $325 million?

Senator MAGNUSON. When you add operating expenses plus repair and improvement, these two items.

Senator SALTONSTALL. That is what I had in mind.

Mr. BOUTIN. Yes, that is approximately correct. Mr. Griffin just brought to my attention, that included in that, of course, is all the rental we pay. So you could cut that by about a hundred million dollars and be just about on target. So really it is costing GSA about $225 million to maintain, operate and improve buildings with a $3 billion replacement cost. That would be about right, wouldn't it, Mr. Schmidt?

Mr. SCHMIDT. That would be about right.

Senator MAGNUSON. If you want to change these figures for the record, we are talking in general terms, the record will be open. Senator MONRONEY. Could I ask a question on this. Senator MAGNUSON. Senator Monroney?

TOTAL COSTS OF LEASED SPACE

Senator MONRONEY. You mentioned the rental figure in that amount of $250 million or something; is that correct.

Mr. BOUTIN. Well, we are running close, including the operation of rented space to about a hundred million dollars a year, Senator.

Senator MONRONEY. Yes. Does that include the new buildings that are being leased and built especially for the Federal Government? Mr. BOUTIN. Well, we are completely out of that program. We are not in that program.

Senator MONRONEY. Post Office does it, then?

Mr. BOUTIN. Post Office.

Senator MONRONEY. That money comes out of their appropriation? Mr. BOUTIN. That does.

Senator MONRONEY. Your total liability now on rental would be on the programs heretofore entered into, and which still have a long time to run.

Mr. BOUTIN. Yes, sir.

Senator MONRONEY. And that would be about a hundred million dollars, you say?

Mr. BOUTIN. About a hundred million dollars.

Senator MONRONEY. A year?

Mr. BOUTIN. Some of these have 6 months to run, some a month, some nine and a half years.

Senator MONRONEY. Most of them have 15 or 20, the more recent ones; don't they?

Mr. BOUTIN. No. Very few. The long-term contracts are almost completely confined to these six remaining buildings that we have under lease-purchase. Most of the straight leases are short term. Of course, there are a few exceptions. On the highly specialized type facilities, we have the IRS building in Austin, Tex., one in Atlanta, Ga., the FAA buildings out at Oklahoma City. We have three or four Food and Drug labs that are a 10-year lease and 15-year lease, but very few.

Senator MONRONEY. Yes. But nothing is being added now?
Mr. BOUTIN. No. Nothing is being added.

DIFFICULTY WITH CURRENT LANGUAGE PROVISION

However, if I might, Mr. Chairman, take 1 minute. We find ourselves in a very difficult situation at the moment. You are all familiar with the appropriation language which says that GSA, to have a new building built for leasing by the Federal Government, that costs over $200,000 must have a prospectus approved by the appropriate committees, which we have interpreted to be the Public Works Committees.

However, we have cases where we went out for leased space, as we recently did in a community in Texas, and the low bidder happened to be bidding on new construction. We have serious doubts whether we can accept that low bid because it is a new building.

Now, I am sure that this committee and the House committee do not intend that it will cost us more money because of appropriation language. I agree completely with the philosophy that we shall not specify new construction as a violation of this language. But if new construction happens to come in low, I think we would find ourselves in an untenable situation in saying we cannot accept that bid, since we have to go to the next higher bidder because his space is in existence.

So, I would appreciate it if this committee would examine the language, because it is giving us some problems. I am meeting with the Comptroller General at 3 o'clock this afternoon to discuss it. Senator ALLOTT. Is this lease?

Mr. BOUTIN. This is lease.
Senator ALLOTT. This is lease.

CONFLICT UNDER LANGUAGE

Mr. BOUTIN. Now, our philosophy is to provide Government-owned space and we make every effort toward that end, but where we still have to lease space, and the low bidder happens to come in with new property instead of old property, I don't see how we could possibly justify not accepting the low bid. Of course, the Public Works Committees aren't generally in session year round.

Senator SALTONSTALL. Do I understand there is language in this bill that prevents you from doing that?

Mr. BOUTIN. That is correct, Senator.

Senator SALTONSTALL. Is that language submitted by the Budget Bureau?

Mr. BOUTIN. No; that is language that was put in by the Congress. We don't dispute the language or the philosophy behind the language insofar as it intends that the Government will, as a matter of policy, use Government-owned space instead of lease space, but we do have a serious question where it is so confining that we cannot legally accept a low bid that comes in with new space instead of old space.

Senator ALLOTT. Mr. Chairman, I think we ought to put this language in. It is on page 9 here and it provides:

No part of the appropriations

Senator MAGNUSON. Nine where, part 1?

Senator ALLOTT. Yes.

No part of any appropriation contained in this Act shall be used for the payment of rental on lease agreements for the accommodation of Federal agencies in buildings and improvements which are to be erected by the lessor for such agencies at an estimated cost of construction in excess of $200,000 or for the payment of the salary of any person who executes such a lease agreement: Provided, That the foregoing proviso shall not be applicable to projects for which a prospectus for the lease construction of space has been submitted to and approved by the appropriate committees of the Congress in the same manner as for public buildings construction projects pursuant to the Public Buildings Act of 1959.

That is from the Independent Offices Appropriation Act of 1964. Now, I didn't recall this proviso this way but it seems to me that the intent is pretty clear, and your objection, of course, arises out of the same interpretation.

Mr. BOUTIN. I don't want to be personally in violation or have the agency operating in violation of the wishes of Congress. It is not precisely clear when the low bidder comes in with new construction, and you have probably 50 people that make up a voice somewhere along the line in awarding the contracts, and this involves their salary. We could have a lot of hungry kids around Washington. Senator MAGNUSON. This is the House language. Mr. BOUTIN. It is the House language.

REQUEST FOR DELETION OR CHANGE

Senator SALTONSTALL. What you would like to have us do is strike the language out?

Mr. BOUTIN. Well, either strike it or in some way alter it so it would be clear that while we could not specify new space, especially designed for the Government without the approval of the Public Works Committee, we could live with that, fine. If we went out for leased space, which we are doing every day, which we must do, and a low bid comes in that is new instead of old, that we wouldn't have to pay more money to get an inferior product; but it is a source of great concern.

Senator MAGNUSON. We will take a look at that language and if you would submit to us suggested changes in this, becausedid you take this up with the House?

Mr. BOUTIN. No. We didn't take that up with the House because it had not been questioned by GAO. Now GAO has questioned it, and that is why I am meeting with the Comptroller General this afternoon.

Senator MAGNUSON. All right.

Senator ALLOTT. You will have an opportunity to take it up tomorrow then with the House.

Mr. BOUTIN. Tomorrow we are supposed to be there at 1 o'clock and I hope to have the opportunity to talk to Mr. Thomas and the members of his committee about the situation we find ourselves in. Senator MAGNUSON. All right.

EXPENSES, U.S. COURT FACILITIES

Now, "Expenses, U.S. court facilities," you are up $433,400, and there is listed on I-138 furniture for new buildings. There are numerous items in there, and none of them, except the Chicago one for a new judges suite, I think that is new.

Mr. BOUTIN. This is largely brought about by new buildings that are coming into being.

Senator MAGNUSON. The rest of them are scattered over the country and they involve small amounts, I mean different amounts, different people, but they are additional, additional building conditions for the courtrooms in these particular cases, are they not?

Mr. BOUTIN. Yes; and, of course, this includes not only-
Senator MAGNUSON. Repair, remodeling.

Mr. BOUTIN. Yes; and it includes, of course, not only the judges' suites and the libraries and so forth, but it includes the clerks, the referees in bankruptcy, the probation officers and their staffs.

Senator MAGNUSON. Yes; court reporter rooms, attorney consultation rooms, and things that need to be taken care of.

Mr. BOUTIN. This appropriation is limited to that part of those expenses that are for furniture and furnishings and space expansion for the U.S. courts.

The rest of it as far as the physical facilities themselves are either in the R. & I. appropriation or the new construction appropriation. This is strictly for furnishings and equipment and space expansion. They used to budget for this themselves, and they now carry it in our budget.

Senator MAGNUSON. Then in some cases, you have a lot of cases where if the judge retires, but he continues on, he has got to have a working courtroom and you have to change that around a little for him and then fix up the other one for the new judge.

up.

Mr. BOUTIN. Many of them stay on.

Senator MAGNUSON. That is good. They can speed the calendars

Tomorrow we will start with "Operating expenses, Federal Supply Services," unless there are any further questions on these first six items which involve the building operations and programs proper, repair and so forth. We have the list in here of all the new buildings and, as I said, the contract capability, the status of how they are coming along. The list of the new sites and plans and expenses for new sites and planning, and they are all listed and if any members of the committee have any questions on them, we can take them up separately.

Thank you very much. We will meet tomorrow at 8:30 in the morning.

Mr. BOUTIN. Very good. We will be here.

(Whereupon, at 10 a.m., Monday, April 20, 1964, the committee recessed to reconvene at 8:30 a.m., Tuesday, April 21, 1964.)