Mr. ROUSH. Regional Commissioners of the Public Buildings Service are responsible for obtaining data and advice from the regional offices of the Department of Housing and Urban Development.

Mr. ROBISON. What provisions are made for reviewing the compliance of the regional offices?

Mr. ROUSH. Compliance is monitored through central office review of regional project development reports and site investigation reports. Mr. ROBISON. What provisions are made for evaluations of the housing situation following agency relocation?

Mr. ROUSH. This would be part of the Department of Housing and Urban Development responsibility under the Federal fair housing law (Title VIII of the Civil Rights Act of 1968) for administering the programs and activities relating to housing and urban development in a manner to affirmatively further the policies of the Civil Rights Act.

Mr. ROBISON. What are the affirmative action responsibilities of GSA?

Mr. ROUSH. GSA shares with HUD the responsibility to develop necessary affirmative action plans whenever HUD determined that an area or site indicates that the supply of low- and moderate-income housing on a nondiscriminatory basis is inadequate to meet the needs of the personnel of the agency involved.

Mr. ROBISON. What are the procedures under affirmative action plans for remedying inadequacies in housing situations?

Mr. ROUSH. Affirmative action plans will provide for commitments from the communities involved to initiate and carry out all feasible efforts in obtaining a sufficient quantity of low- and moderately-income housing available to the agency personnel on a nondiscriminatory basis with adequate access to the location of the building and space. Mr. ROBISON. What are the criteria for assessing affirmative action plans and for monitoring compliance with those plans?

Mr. ROUSH. The criteria for assessing affirmative action plans is included in the HUD/GSA Memorandum of Understanding and state that GSA and HUD will develop an affirmative action plan designed to insure that an adequate supply of housing will be available before the building or space is to be occupied or within a period of 6 months thereafter.

The plan should provide for commitments from the community involved to initiate and carry out all feasible efforts to obtain a sufficient quantity of low- and moderate-income housing, available to the agency's personnel on a nondiscriminatory basis with adequate access to the location of the building or space. It should include commitments by the local officials having the authority to remove obstacles to the provisions of such housing, when such obstacles exist, and to take effective steps to assure its provision. The plan should also set forth the steps proposed by the agency to develop and implement a counseling and referral service to seek out and assist its personnel to obtain such housing. As part of any plan during, as well as after its development, HUD agrees to give priority consideration to application for assistance under its housing programs for the housing proposed to be provided in accordance with the plan. In the event of noncompliance, HUD and GSA shall undertake appropriate action to secure compliance.

Mr. ROBISON. What action will GSA take if affirmative action plans are not developed, or if they are insufficient or inadequately executed? Mr. ROUSH. GSA will delay award of a construction contract. Mr. ROBISON. Which high-level persons have been assigned the responsibility for coordinating activities under the agreement?

Mr. ROUSH. The Executive Director, Public Buildings Service, has been assigned this responsibility.

Mr. ROBISON. Are any of these persons connected with the Office of Civil Rights? What are their roles?

Mr. ROUSH. No. Advice and recommendations are received from the Office of Civil Rights.

Mr. ROBISON. What kind of training program does GSA have for its staff to aid in implementation of the GSA/HUD agreement?

Mr. ROUSH. Training was given at a conference held in June 1972, attended by Acquisition Branch personnel from all 10 GSA regions. Participants were provided with copies of the GSA regulations and procedures and Department of Housng and Urban Development procedures, and detailed discussions were conducted by central office staff who were instrumental in development of these regulations and procedures. Operational planning officers, together with Housing and Urban Development officials from headquarters and their Philadelphia regional office were given comprehensive training in September 1972. As future conferences are scheduled, similar sessions will be planned. When HUD issues their handbook, additional GSA training will be conducted.

Mr. ROBISON. What time limitations were set up for adherence to the GSA/HUD agreement?

Mr. ROUSH. No time limit was set for the life of the agreement. Mr. ROBISON. Is GSA required to inquire about data for housing which is not federally funded?

Mr. ROUSH. Not specifically.

Mr. ROBISON. In order for HUD to follow the terms of the agreement by providing complete information in its reports, will GSA's general request for information, without specific delineation of the areas to be investigated by HUD, be sufficient under the agreement? Mr. ROUSH. Yes.

Mr. ROBISON. What, if any, are the followup duties of GSA to obtain materials and information which the HUD report failed to provide?

Mr. ROUSH. The HUD reports must contain an evaluation of the sites being considered. HUD must make the judgment and make recommendations to GSA, as to the adequacy or inadequacy of housing available on a nondiscriminatory basis. The GSA regional offices must include the HUD conclusions in their recommendations to GSA central office.

Mr. ROBISON. Who is responsible for the development of an affirmative action proposal?

Mr. ROUSH. PBS regional officials working with HUD, the involved Federal agency and the community are responsible for the development of an affirmative action plan.

Mr. ROBISON. What types of counseling service does GSA provide for relocated employees?

Mr. ROUSH. None. This is the responsibility of the relocating agency.

MAINTENANCE REPAIRS

Mr. ROBISON. With regard to page I-52, we get into details here of the repair and improvement program, itself, indicating maintenance repairs at a nationwide average of 0.21 cents per net square foot for general office type space, and 0.06 cents for warehouse type space. Those are pretty good figures. Is there an explanation why you don't spend as much on warehouse maintenance work?

Mr. GALUARDI. Warehouses don't require air-conditioning, nor as much lighting or plumbing. They don't require as much alteration work as other buildings.

Mr. ROBISON. Then we get to I-54. Let me have some explanation of this table. If I read it right it indicates you have a tremendous backlog of work in the way of repairs and improvements.

Mr. GALUARDI. We do.

Mr. ROUSH. There is no question about that. That is true.

Mr. ROBISON. Under the repair and improvement program, it seems as though the backlog is just a bit greater than it is in the current fiscal year.

FEDERAL BUILDINGS FUND

Mr. GALUARDI. We have undertaken a survey which determined that many of the existing buildings are in urgent need of repairs and improvements. The problem is that many of our older buildings have deteriorated over the years. We have not included that as an immediate requirement, but have placed it in our backlog. Since we will operate under the Federal buildings fund next year, agencies will pay us for the space they occupy and we must be in a position to provide them with the kind of space they are expecting for the money they will pay us. We have determined that there are many alterations required to bring the space up to a standard level.

Mr. ROBISON. Once you acquire space the tenants will demand better facilities. Will the rent they pay go up, correspondingly, if they get those better facilities?

Mr. ROUSH. We believe that the Federal buildings fund and the rates established under the Federal buildings fund will help eliminate this backlog and provide adequate and suitable space for the agencies. However, if they require specialized services above and beyond the standard level, then they would be asked to make reimbursable ar rangements with us.

Mr. MYERS. Since you are on this subject I have had several complaints in Indiana showing where Farmers Home Administration has had a contract for leasing property over a number of years. You come along now and almost double the contract price for the same facilities. Can you explain why they must pay considerably more? Is it because of this new aarrangement?

Mr. ROUSH. Several reasons. Our Executive Director, Mr. Friedlander, may speak to part of that.

Mr. FRIEDLANDER. The rate GSA proposes to charge under the Federal buildings fund is based on a rate which is estimated to approximate commercial charges for comparable space and services in the fiscal year for which that rate is applicable. Under the provision of the law, the commercial equivalent rate does not relate the actual

costs we incur on any one building. It has nothing to do with what we are leasing that space for. The amount assessed agencies relates to the commercial equivalent rate for such space. Based on market surveys in 58 cities, we have calculated what we expect the rate to be, based on the type and quality of the space and the level of services we will provide. Every building has a quality rating in the GSA system. through a complicated computer program

Mr. MYERS. It is complicated. That is for sure. I will tell you what you have done, too. You have driven the price too high. Those things were negotiated out in the field. You have now told the landlord that he is not wise to rent it for $4, they should be getting $6. You have not saved a nickel with your shenanigans. It has very much disturbed

me.

Mr. ROUSH. There are other factors which must be considered. We will reduce the repair and improvement backlog. We will also require in that fund, reserves for the replacement of buildings as they become obsolete. There are other factors to be considered over and above what we are actually paying for the lease itself. It is totally impossible to compare what we are paying the landlord now with what the space will be worth during the fiscal year when the Federal buildings fund is implemented.

Mr. MYERS. The taxpayers took a shellacking on it because it will cost them more. You have just come along and raised the rent on them in almost every instance. Maybe there has been a slight drop in one or two, but the 10 or 12 I have looked at so far are all higher. I want to find out why you have increased the price so dramatically.

Mr. ROUSH. We will be glad to provide you with further information.

Mr. ROBISON. You have established a backlog totaling $1,116 million? Mr. ROUSH. Yes, sir.

Mr. ROBISON. How are we going to pay for this over the years ahead? Mr. GALUARDI. The Federal buildings fund will derive revenues for this purpose from the rentals we obtain from other agencies.

Mr. ROUSH. There is a considerable backlog of space in our inventory which needs repair. Funds for this purpose are included in the Federal buildings fund rates.

PAYMENTS, PUBLIC BUILDINGS PURCHASE CONTRACTS

Mr. ROBISON. I am at a loss to understand the table shown on page I-82 which states "Payments, Public Buildings Purchase Contracts." Mr. GARDNER. That is the old purchase contract authority. Those are the last five projects not yet fully paid.

Mr. ROBISON. Will you acquire these one of these days?

Mr. GARDNER. Eventually. Those interest rates are running at about 4 percent. It makes no sense to pay them off.

Mr. ROUSH. If you note the rate of interest column, column 4, because of the rate of interest, it is definitely not to our advantage at this point in time to acquire those projects by prepayment.

Mr. GARDNER. They will be Government owned at the end of the payment period.

Mr. ROBISON. So that the record will make some sense, would you submit a supplementary statement describing what the buildings are. the interest rate, and the payoff date?

[The information requested follows:]

5 PURCHASE CONTRACTS AUTHORIZED IN THE PUBLIC BUILDINGS PURCHASE CONTRACT ACT OF 1954

Mr. ROBISON. The next table, page I-83, shows payments, "Public Buildings Purchase Contracts." These are the new ones?

Mr. ROUSH. That is right.

Mr. ROBISON. The first table shows the old program.

Mr. GARDNER. The Public Buildings Purchase Contract Act of 1954. Mr. ROBISON. And here are the new buildings under the new program, including the one at Essex Junction which you hope will be completed in the next few months.

Mr. ROUSH. It will be completed, sir.

GOVERNMENT OWNED VERSUS LEASED SPACE

Mr. BEVILL. Based on your experience as the largest civilian manager of general purpose space in the United States, how does the ownership of buildings compare with rental space generally? I realize it is different in different areas. With regard to the taxpayer and from the standpoint of economy what is the situation?

Mr. ROUSH. In each case we do an economic analysis. That is done in our Executive Director's Office. Mr. Friedlander might address a few remarks to that.

Mr. FRIEDLANDER. On all projects which we are about to undertake, we do a present value economic analysis, comparing the three alternative methods of acquiring space-direct Federal construction, purchase contract construction, or leasing. Based on the results of that analysis and other considerations, we make recommendations as to how projects should be financed.

Mr. BEVILL. When you make this study, then, you are in a position to determine whether it is in the best interests of the taxpayers to build the building or lease space?

Mr. FRIEDLANDER. That is correct.

Mr. BEVILL. You obviously are finding that more and more is being paid off and we are better off to own our own buildings?

Mr. FRIEDLANDER. Economic analysis shows purchase contract to be more advantageous than direct Federal construction and both of these methods are ownership propositions.