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market and attempt to buy by the bid process $370 average jobs, you are in trouble. The number of jobs we bought that amount to $97,409,000 was about 71,170.

Mr. ANDREWs. 71,170 contracts for $97 million of work?

Mr. HARRISON. Yes, averaging about $1,368 per job. This bears out the fact that we are doing the short run, short schedule jobs in the plant and we are buying the big jobs, which gives the commercial printer a chance to make it worth while to bid.

Mr. ANDREWS. How much of the $79 million that you did was directly connected with Congress?

Mr. HARRISON. All the congressional work was done in our plant. Mr. ANDREWS. How much would that be of the $79 million?

Mr. HARRISON. $21 million or $22 million.

Mr. ANDREWs. About one-fourth of it?

Mr. HARRISON. That is right.

Mr. ANDREWs. Now let me ask you this: That $22 million of the $79 million was done for Congress?

Mr. HARRISON. Yes, sir.

Mr. ANDREWS. That is when time is of the essence?

Mr. HARRISON. Yes.

Mr. ANDREWS. So you did about $57 million for other Government agencies?

Mr. HARRISON. Yes.

Mr. ANDREWS. How do your rates on the $57 million compare with the rates on the $97 million-plus that you farmed out?

Mr. HARRISON. It is difficult to make a comparison in the bids at a given time. An individual plant may bid lower than anybody. It depends on the condition of their orders in the plant.

Mr. ANDREWS. Whether they need business?

Mr. HARRISON. Yes. If they do not have enough work to keep their presses rolling they will cut deep just to pay their actual expenses. But by and large our prices are very favorable when compared to the general prices in private industry.

COST OF PAPER

Mr. ANDREWS. What experience have you had in inflation in the last 2 years?

Mr. HARRISON. You mean in our commercial procurements?

Mr. ANDREWS. In your operations, the purchase of paper, ink, material?

Mr. HARRISON. It is a peculiar thing, but the price of paper to us has actually decreased over the past few years.

Mr. ANDREWS. To what do you attribute that?

Mr. HARRISON. A number of years ago we did not have so many mills. They have increased their plant capacity and put in new machines so that they have extended to the point--I would not say they have overextended, but it may be that.

Mr. ANDREWS. Do you buy all of your paper from the United States? Mr. HARRISON. Yes, we do.

Mr. ANDREWS. Canada furnishes a lot of newsprint paper in the United States, do they not?

Mr. HARRISON. Yes.

Mr. ANDREWS. They sell a lot in the United States?

Mr. HARRISON. Yes, but our papers are domestic papers, including our newsprint.

Mr. YATES. Will the gentleman yield?

Mr. ANDREWS. Yes.

Mr. YATES. You stated the Government rates were more favorable than private rates yet you did not give any basis for the comparison. How do you know that?

Mr. HARRISON. From our estimators in dealing with jobs that we purchase. Very often when we receive bids for jobs we will find the lowest bid is considerably higher than our estimators estimated we could do the work. Sometimes we throw them out and rebid the job. Seldom do we find the low bid is under our estimated cost of furnishing the service required. I think that is the best answer I can give you. Dealing with the 71,000 jobs we buy, many of which are estimated in our own plant we know we are getting a fair bid or if not we go out and rebid the job.

LINOTRON MACHINES

Mr. ANDREWS. What is the useful life you are assuming for the Linotron in your depreciation figures?

Mr. HARRISON. We plan the savings will pay for those machines in 2 years provided the software-and here I don't know the full details of that term either, but that is the know-how our men have to use in programing it.

Mr. ANDREWS. Do the manufacturers of the Linotron train your men?

Mr. HARRISON. They have two men aboard and one will be on hand at least a year.

Mr. ANDREWS. You paid roughly $1 million for each machine?
Mr. HARRISON. $769,763.

Mr. ANDREWS. I thought you said $2 million for two?

Mr. HARRISON. Yes, but that included the machines and the software that went with it and that is almost as expensive as the equipment itself.

Mr. ANDREWS. The machines cost roughly $1 million each?

Mr. HARRISON. No, sir. The contract that was let for two machines

and the software that goes with it.

Mr. ANDREWs. How much was the contract?

Mr. HARRISON. $2.1 million.

Mr. ANDREWS. For two machines?

Mr. HARRISON. For two machines and the programs, the software.

Mr. ANDREWs. The two machines with the know-how would run

$2.1 million?

Mr. HARRISON. Yes.

Mr. ANDREWS. Or $1,050,000 each?

Mr. HARRISON. Yes.

Mr. ANDREWS. How long do you think that machine will last, 10 years, 15 vears, 20 years?

Mr. HARRISON. Yes. Of course I have this feeling, that within 5 years the machine probably will be outmoded and there will be other

machines that will be so much faster and so much more adaptable to this work that we will have to renovate this machine or get another machine, but I doubt we will ever wear it out.

Mr. ANDREWS. And you say it will pay for itself in 2 years?

Mr. HARRISON. Yes, we estimate 2 years.

Mr. ANDREWS. Any questions on printing and binding?

Mr. LANGEN. Yes. I note you said there was a $320,000 saving on the first job you did on the Linotron.

Mr. HARRISON. Yes.

Mr. LANGEN. Does that saving show up in the budget?

Mr. HARRISON. This was not for Congress so it is not a budget item. Mr. LANGEN. It should show up somewhere.

Mr. HARRISON. The billing to the agency who ordered the job would show the saving. They handle their own printing budget. The only printing budget we attempt to handle is for Congress.

Mr. LANGEN. And that machine will be used only for printing of that kind and has no relationship to the budgeted item that is before us?

Mr. HARRISON. You mean the congressional budget? Not at this point. One of the committees we are working with hopes to put the index to congressional hearings on tape so we can use the Linotron. The Library of Congress will use it in their title listings. We have on tape the listings of their titles and we composed the last one by use of Linofilm, which is slower than the Linotron. The last one had been printed 6 years before-it took 2 years to prepare and compose the present one. Now we can update it through our computers daily if we need to and we can update and print and have this book completed within 30 days.

Mr. LANGEN. Anyhow, the savings from the use of this machine should be accounted for in work done for the respective other Government agencies over the years to come, is that right?

Mr. HARRISON. That is right.

Mr. LANGEN. What about the amortization of the cost of the machine? Is that also calculated on the basis of the billings and over what period of time is that accomplished?

Mr. HARRISON. It will be written off completely in 5 years, Mr. Langen, these two machines.

Mr. LANGEN. $2 million in 5 years would be about $400,000 a year. Mr. HARRISON. Yes.

Mr. LANGEN. At the end of 5 years there should be about another $400,000 saving in the printing to other agencies?

Mr. HARRISON. Except at that time we anticipate there will be new machines on the market that we will have to buy.

Mr. LANGEN. I appreciate that and that is the reason I asked the question because I have seen so many of these figures of savings and when it comes to the end of the page the figure is always bigger. That is why I was trying to identify where the savings will show up.

What is the total cost of this order where you saved $320,000? Mr. HARRISON. I do not have the total billing figure on this. I can supply that for you.

Mr. LANGEN. Will you do that?

Mr. HARRISON. Yes, the total billing cost on this job.

(The information follows:)

The total billing charges to the departments for all work performed in the Government Printing Office and procured from commercial contractors amounted to $348,132.

Mr. LANGEN. The percentage of saving is what?

Mr. HARRISON. We saved 60 percent in bulk. I do not think the 60 percent would apply across the board but there was sufficient saving to amount to $320,000. This is over the next most economical way to do the job.

Mr. LANGEN. I just want to see it in the budget somewhere when the final accounting is made.

There are a couple more little items I have noticed in the various expenditures.

First, in connection with the budget increases, I do not know if you have a document like this, but it is on page 11 and I notice three additional book stores outside of Washington. Where are those book stores?

Mr. HARRISON. That comes under the Document presentation and the Superintendent of Documents will talk on that.

Mr. LANGEN. We will wait on that until his presentation, then.

REASONS FOR INCREASED PRINTING AND BINDING REQUEST

With regard to the total budget and the added $4.5 million involved in this request, what constitutes the major part of that increase? How much of that is salary?

Mr. HARRISON. You mean what would be the increase in labor cost for that year?

Mr. LANGEN. Yes.

Mr. HARRISON. Our labor costs have gone up about 5 percent.

Mr. LANGEN. So that the labor cost involved as compared to last year is about 5 percent more than the year before?

Mr. HARRISON. Roughly, yes.

Mr. LANGEN. And that in turn would be a part of the $4.5 million increase?

Mr. HARRISON. Its proportionate share.

Mr. LANGEN. What is your labor cost?

Mr. HARRISON. We would estimate about one-quarter of a million dollars would be for increased labor.

Mr. LANGEN. For about the same number of personnel?

Mr. HARRISON. Yes.

Mr. LANGEN. You do not expect any increase in personnel?

Mr. HARRISON. No.

Mr. LANGEN. So the same number of people are involved?

Mr. HARRISON. Yes. These are the regular wage increases that have been taking place.

Mr. LANGEN. And the rest of the increase represents a heavier workload?

Mr. HARRISON. That is right.

Mr. LANGEN. We made reference several times to the increase and I note that since 1960 or 1961 or 1959 we are almost tripling the total appropriation.

Mr. HARRISON. Yes.

Mr. LANGEN. During that period of time, what about the workload? Do you have the same comparison?

Mr. HARRISON. You mean just for Congress?

Mr. LANGEN. In the $31,200,000 that you are requesting now?

Mr. HARRISON. I cannot give you a flat percentage figure for all these items. The Congressional Record, as an example doubled in the number of pages. In 1961 we had 22,000 pages and at the present time it is 44,000, double.

Mr. LANGEN. The reason I am asking, we saw a bit of this the other day. We keep pointing to the increases in the various departments and the increase in the cost of Government and the growth of the Government and the growth of the work done, but all of that is not growth. There is a substantial percentage of it that has come about because of what we generally refer to as inflation, a higher cost of doing the same thing.

Mr. HARRISON. That is right.

Mr. LANGEN. And I imagine if you were turning out the same work today as in 1960 or 1961 there would still be a substantial increase in

cost.

Mr. HARRISON. There is no doubt about it.

Mr. LANGEN. So all that increase does not necessarily represent a growth in your department or in total Government.

Mr. HARRISON. A percentage of that would show in any figure from 1961 to the present date.

Mr. LANGEN. In cost of labor, postage, and everything else. Does the increase in postage rate affect you?

Mr. HARRISON. Yes. It affects our Document Division substantially. Mr. LANGEN. And that item of increase is also included in here?

Mr. HARRISON. Yes. And in a manufacturing plant such as ours you find a sizeable increase in equipment. You either have to spend more for maintenance work or you have to buy new machinery. We bought our three Record presses 19 years ago for $1 million. They would cost $1 million apiece conservatively today.

Mr. ANDREWS. Off the record.

(Discussion off the record.)

BASIS FOR EVALUATING COMMERCIALLY PROCURED PRINTING

Mr. LANGEN. One further point: I do not know if I understood completely the comparison of the printing that you do in your shop and that which you farm out to outside business. Did I understand you to say you estimated in your shop what each of these jobs would cost as a guide in determining if the bid price was right?

Mr. HARRISON. We usually do that unless it is a repetitive job that we have bought over and over.

Mr. LANGEN. On the basis of that, wouldn't that give you an analysis as to the difference in the cost of one as compared to another?

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