APPENDIX (This appendix includes correspondence between the Office of the Postmaster General and the subcommittee chairman relative to matters before the subcommittee. In large part evidence for positions taken by the subcommittee during hearings were based on such letters. Also included are various newsstories which sum up subcommittee activity and include matter gathered independently by newsmen after initial coverage of hearings.) U.S. HOUSE OF REPRESENTATIVES, OF THE COMMITTEE ON POST OFFICE AND CIVIL SERVICES, Hon. WINTON M. BLOUNT, DEAR GENERAL: On October 20th, a representative of your office is appearing before my Subcommittee, Postal Facilities and Mail, of the House of Representatives. He will discuss the testimony developed thus far on working conditions in the Postal Service. At that time, I would also like to have discussion on the Secaucus, New Jersey situation about which there has been some controversy. Since this testimony will be lengthy and will include both subjects, I would like to have provided for my Subcommittee staff a written statement containing the answer to the following questions on the 18th of October. Since the situation in Secaucus has been discussed for many months and was touched on by yourself in your testimony before the Full Committee and has been the subject of a General Accounting Office investigation, I do not believe that your staff will have any trouble answering the following questions: Site selection and preparation 1. What was the chronology of events and evaluations made which led the Postal Service to select New Jersey as the location for a bulk and foreign mail facility? 2. Present also justification for the record for building a new facility when a large facility was being constructed about 3 miles away at Kearny, New Jersey. 3. What process was followed in selecting the Penn Central site for the bulk and foreign mail facility? 4. Present also for the record a statement showing site locations and acreage considered, and reasons for eliminating other sites from consideration, dates decisions were, consultants used, how the consultants were selected and costs incurred. 5. Explaion the basis of increasing the size of the site from 80 acres originally needed for the 144 acres purchased. 6. Identify the sites considered by consultants for design of facility and the rationale used by the Postal Service in selecting the Penn Central site. 7. Include also the number of acres currently being utilized for the facility. 8. What was the role of Mr. Ormonde A. Kieb in the selection and negotiations for sites considered and the site ultimately purchased by the Postal Service. 9. Include his affiliation either past or present with the Postal Service and railroad companies. 10. Did Mr. Kieb receive a commission for his service? 11. Cost of piling increased from $4.1 to $6.2 million. Explain the evaluation made before piling contracts were awarded and the reasons for a 50 percent increase over the original cost. Funding 1. Explain the legal basis for using site acquisition funds to acquire the site and award site preparation and design contracts for a Government-owned building. 2. Were the funds expended before or after the prospectus was approved by the Senate and House Public Works Committees? 3. Show dates and amounts. If before approval, explain legal basis for such action. 4. Submit a schedule showing the dates the prospectus was approved and for what amounts and show funds obligated by the Postal Service by dates and relate to amounts in the approved prospectus. 5. If the prospectus amounts were exceeded explain the legal basis for such action. Project costs 1. Explain why the estimated cost of general construction contract increased from $42 million to $84 million. 2. The Postal Service stated that an operational cost savings of $33 million annually could be realized with an investment of $62 million to build a bulk and foreign mail facility in New Jersey. The estimated cost for the facility has increased to about $135 million. Explain how this cost increase effects the estimated savings. Present financial and statistical data to support your explanation. 3. The project was to be completed in October 1971. However, the completion date has been extended to June 1973. What has caused this delay and how does it effect operational savings originally contemplated? 4. Will this facility be constructed by the scheduled date? 5. The construction contractor awarded the contract had difficulty in meeting performance bond requirements. The contract was nonetheless awarded to this contractor. What is the legal basis for such action? 6. We understand that a bid protest has been filed with the Comptroller General by the second low bidder on the general construction contract. What is the status of this protest and what is the Postal Service's position on this matter? 7. Supply a list of contractors that were considered for the general construction contract and their bid prices. 8. Explain the basis for evaluating the bids and for making the award to the selected contractor. 9. Explain the type of investigation made of the contractor before awarding the contract. 10. Has the contract been amended? If so, how many times, dollar amounts and purpose. Also, how do these amendments effect timely completion of project and mail operations? Architect-engineers 1. Explain the basis for selecting L. B. Knight and A. T. Kearney as the architects for the facility design. 2. Explain also why it was necessary to use two architects. 3. Show cost for each and services rendered and used by the Postal Service. 4. What authority did the Postal Service have to award the two competitive design contracts for the facility? 5. Basis for the selection of L. B. Knight. Prior experience of L. B. Knight in the postal environment. What other postal projects is L. B. Knight currently involved in? Parcel sorting machines 1. Explain the rationale for procuring $7 million of machinery from a company that had sales of about $3 million for each of the previous 2 years. Include also the financial and engineering evaluations made of the company before awarding the contract. 2. Present the names of all the companies considered and evaluations made before selecting Speaker Sortation Systems. 3. Explain the legal basis for making sole source procurement of this machinery. 4. Was any development work required to make the machines acceptable for postal use? 5. Have any problems been encountered with the machine? 6. Does the Postal Service plan to use this machine in other bulk facilities? 7. Why was a backup development contract awarded? Although we expect to have the written statement in our office before the hearing on the 20th of October, it may be necessary to continue the participation of the Postal Service on the 27th of October as well. If additional dates are necessary, I will schedule them. I am looking forward to the testimony of the Postal Service representatives on this matter and the matter of working conditions in the Postal Service. Sincerely, (The response received follows:) ROBERT N. C. Nix, Chairman. SITE SELECTION AND PREPARATION Question 2 Present also justification for the record for building a new facility when a large facility was being constructed about 3 miles away at Kearney, New Jersey. Answer The Kearney Facility was designed as a Preferential/Bulk Facility to service Newark and portions of Northern New Jersey. New York Bulk and Foreign Mail Facility was designed to service Manhattan parcels and as a transfer point of New York State; and to process all bulk mail and APO/FPO inbound and outbound from the Port of New York. The requirements of this facility necessitate transportation access and acreage for parking, maneuvering and building. The only adequate acreage fulfilling these requirements is in New Jersey adjacent to Manhattan. Question 3 What process was followed in selecting the Penn Central site for the bulk and foreign mail facility? Question 4 Present also for the record a statement showing site locations and acreage considered, and reasons for eliminating other sites from consideration, dates decisions were, consultants used, how consultants were selected and costs incurred. Question 6 Identify the sites considered by consultants for design of the facility and the rationale used by the Postal Service in selection of the Penn Central site. Answer A complete chronology pertaining to site investigation, site recommendations and site selection is attached and identified as Attachment A. A chronology of Facility Site Progression is also attached and identified as Attachment A-1. These two documents contain answers to questions 3, 4, and 6. In regard to that part of question 4 relating to the use of consultants, the only consultant employed was Mr. Ormonde A. Kieb. Mr. Kieb was selected by the Department's Assistant Postmaster General, Bureau of Facilities. The basis for the selection of Mr. Kieb was his expertise as a real estate consultant, his knowledge of the New Jersey area where the facility was planned, and his knowledge of Postal operations. Question 5 Explain the basis for increasing the size of the site from 80 acres originally needed for the 144 acres purchased. Answer The preliminary estimate of 80 acres did not allow for adequate truck storage, expansion of parking and maneuvering areas and a future motor vehicle facility, all of which have not been provided for, and it was based on the application of a land utilization ratio of 3 to 1 to a building smaller in size than that which was ultimately determined to be needed. Postal land utilization criteria now call for a rati) of 5 to 1, and the decision to acquire a large site reflects the use of this ratio. |