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that in FY 1974 Budget, the

ICC is requesting additional funds for the completion of the study. What happened? Did the Allott contract bust the budget?

The question of the total projected cost of the studies in connection with these investigations was raised in the hearings before both the House and the Senate Appropriations Committees. In both hearings, it was pointed out that we thought we could conclude the studies for the $1,460,000. However, in both hearings, no assurances were made that this amount would be sufficient to complete the entire investigation. (See House hearings, page 1196, and Senate hearings, pa ge 935.)

The Commission is requesting an additional $450,000 for Fiscal Year 1974 to fund economic studies which were not, and could not have been, contemplated when we appeared before the Appropriations Committees. As a result of increased emphasis on the environmental issue, it is necessary to expand our present studies to consider more fully the question of how the demand for rail transportation of recyclable materials might respond to changes in rates. In addition, the Commission staff has in progress an initial study of rail service characteristics. In developing the specifications for this study, it was found necessary to encompass a wider range of service considerations to provide a closer focusing on the rail service performance in relation to the demand for service.

The contract let for the Special Counsel had no impact whatsoever on the additional funding request. In fact, the request for additional funds was initiated in the regular budget process for Fiscal Year 1974 which began last September.

20. We understand that Mr. Allott has already hired a staff director. If that is true, what functions will be carried out by Mr. Allott for $60,000 per year; Would you provide us with a copy of the work statement?

The performance of a lawyer's function as an impartial participant in any case is well known to Mr. Allott, both from his prior practice of law and his participation in Senate hearings on various legislative matters. The marshalling and presentation of evidence, analysis of the evidence submitted by other parties, possible areas of cross-examination of witnesses, and the presentation of arguments or statements of position on the issues require the unique aptitude of a lawyer with a broad knowledge of economic problems and policies of national scope. The decision as to what form the above matters are to take is within the sole discretion of Special Counsel. As with any case of the magnitude of the pending ICC investigations, a staff of attorneys, economists, tariff and rate experts and clerical help will be required to complete the documents necessary to carry out the directions and decisions of Special Counsel. Of course, a staff director will assure completion of his directions within the time limits demanded by the schedule of the proceedings. Additionally, the staff director will serve as a sounding board for ideas generated by Special Counsel, aid Special Counsel in research, preparation of necessary pleadings, and the formulation of policy that will direct Special Counsel's approach to the overall problems exposed during the hearings.

Your attention is invited to Section A of the Letter Contract pertaining to the nature and scope of service to be rendered.

(Exhibit A]



1 The proposed procurement will provide the nonpersonal services of “Specia Counsel” and staff recommended by several parties during the course of the Ex Parte Nos. 270 and 271 proceedings, which recommendation was concurred in by the Interstate Commerce Commission subject to the availability of funds. After conferences with the Office of Management and Budget and hearings before the Senate and House Appropriations Committees, FY 1972 funds were released and FY 1973 funds were appropriated for this purpose. Such funds were to be used only to acquire the services by contract and could not be used to support additional positions on the Commission's staff.

Parties to the above referenced Ex Parte Nos. 270 and 271 hearings were aware of the fact that the tasks to be carried out by Special Counsel would be among the most urgent and complex ever undertaken by the Interstate Commerce Commission; that they could impact heavily upon the rail transportation industry and thus upon the general economy of the Nation. The responsibilities involved call for (i) the selection of a person highly esteemed by Government and parties to the proceeding, (ii) a person with broad knowledge of national economic problems and policy, (iii) a person trained in the law, of unquestioned integrity, of judicious temperament, of national prominence and without past identification with special interests involved in the proceedings, and (iv) a person who would ensure that all aspects of cases are impartially reviewed, considered and recorded, and that any aspect of such cases which, in his judgment, requires further investigation or emphasis will be investigated or emphasized before a decision is made by the Interstate Commerce Commission.

Procurement of the services of Special Counsel by means of formal advertising is neither feasible nor practical because the nature of the requirement cannot be set forth in a descriptive specification or any other adequately detailed description for the solicitation of bids. It is only possible to specify ultimate objectives that are not sufficiently detailed to communicate a definitive requirement. The final implementation of particulars can only be done as work by Special Counsel progresses.


By reason of the foregoing findings, I hereby determine:

1. The proposed contract is for services for which it is impractical to obtain competition by formal advertising.

2. The contract may be negotiated with Gordon Llewellyn Allott pursuant to Section 302(c)(10) of the Federal Property and Administrative Services Act of 1949, 63 Stat. 393–4, as amended by 4i U.S.C. 252(c)(10).

ELIZABETH K. DALGLEISH, Contracting Officer, March 6, 1973.

[Exhibit B]

FEBRUARY 21, 1973. Hon. ROBERT HAMPTON, Chairman, U.S. Civil Service Commission, Washington, D.C.

DEAR CHAIRMAN Hampton: Some time ago, we discussed with General Counsel Mondello and his staff the appropriateness of the Interstate Commerce Commission's contracting for the independent and impartial participation by an attorney as Special Counsel in the most comprehensive investigations ever conducted by this agency into the railroads' freight rate structure, freight services, rate base and rate of return.

We are fortunate to have former Senator Gordon Llewellyn Allott of Colorado negotiating with us. However, as a Federal annuitant he desires from the Civil Service Commission a clearance or assurance that his Federal retirement pay will not be jeopardized or affected in any manner if he undertakes the role of Special Counsel under contract with this Commission. A copy of the proposed contract in draft form is enclosed for your information.

Since time is of the essence, may we please have the Civil Service Commission's views with respect to the question presented as promptly as possible. Sincerely,


Vice Chairman

[Exhibit C)

Washington, D.C. February 26, 1973.
Vice Chairman,
Interstate Commerce Commission,
Washington, D.C.

DEAR MR. BREWER: This is in reply to your letter of February 21, 1973, enclosing a proposed Letter of Contract between your Commission and former Senator Gordon L. Allott with respect to matters relating to Ex Parte 270 and related cases.

The draft of the proposed contract indicates that Senator Allott will function as an independent contractor and not as a Federal employee as defined under


section 2105 of title 5, United States Code. Accordingly, Senator Allott's Civil Service annuity would not be affected in any manner by the proposed agreement. Sincerely yours,




February 26, 1973.

Sir: The purpose of this document is to enter into a preliminary contract in order that you may proceed immediately with those tasks required to initiate your efforts in performing the services of Special Counsel set forth in the attached Contract Schedule.

It is understood by your acceptance hereof that you will undertake, without delay, to enter into negotiations with the Interstate Commerce Commission looking to the execution of a definitive contract and to furnish all cost and price information requested by the Contracting Officer. It is also understood that the disbursement to the Special Counsel referred to in the Contract Schedule, exclusive of compensation for any necessary staff and other expenses, will not exceed $60,000 a year. The form and provisions of the definitive contract which the Interstate Commerce Commission intends to use as the basis for negotiation are set forth in the Schedule.

This letter, when accepted by you, will constitute a Letter Contract bearing the contract number above indicated, whereby you, as Contractor, agree to furnish to the Government the services set forth in the attached Contract Schedule in accordance with the terms, conditions, and administrative provisions set forth in the Schedule and the attachments thereto, and such forms, if any, as are referenced herein, all of which are attached hereto and made a part hereof. This letter, Schedule, and the attachments are submitted to you in quadruplicate.

If you agree to the terms set forth in the attached Schedule and in the attachments, please indicate your acceptance by signing and returning the original and two copies to the Contracting Officer who signed this letter on behalf of the United States.


Contracting Officer.
Enclosures: 1. Schedule, 2. General Provisions.

Special Counsel.




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Title A.

Statement of the Nature and Scope of Services. B

Direction to Proceed. C.

Period of Performance. D

Place of Performance. E

Definitive Contract. F

Consideration and Payment. G

Clauses Incorporated. Η.

Allowable Costs. I.

Government Furnished Office Space, Equipment,

Supplies and Services. J.

Liability to Third Persons and Litigation Costs. K.

Equal Employment Representation. L.

Nonsegregated Facilities. M.

Alterations in General Provisions.

Advance Payments.
Also attached and made a part of this Letter Contract are:
A. Cover Letter.
B. General Provisions for Cost-Reimbursement Type Contract with Other
Than Educational Institutions.


The Interstate Commerce Commission, having begun its most searching investigation of the railroad freight rate structure, freight service, and the rate base and rate of return in Ex Parte No. 270, Investigation of Railroad Freight Rate Structure, Ex Parte No. 270 (Sub-No. 2), Investigation of Railroad Freight Service, and Ex Parte No. 271, Net Investment, Railroad Rate Base and Rate of Return, needs a Special Counsel to provide for an independent, impartial participation in these proceedings to assist the Commission in formulating an adequate record upon which it may make findings and decisions. In view of the already broad participation by numerous parties representing many conflicting interests, the Special Counsel's mission and task, within the funding proscriptions provided for in this Letter Contract and the definitive Contract to be agreed upon, will be to assure that all interests are considered during the course of these proceedings without sacrifice of the public interest.

Special Counsel, hereinafter also referred to as Contractor, shall enter an appearance and participate before the Interstate Commerce Commission in the above proceedings for the purpose of producing such evidence and pleadings within the scope of these investigations as he deems appropriate, necessary, and practicable for the development of a full record for decisions by the Commission respecting the issues of these proceedings.

Special Counsel shall obtain, compile and analyze available information and data and present the results of his analyses during the course of the proceedings. He shall formulate and present for Commission decision such issues as he concludes are consistent with the objectives of the investigations. He shall develop and present evidence relating to these issues and upon analysis of the entire record, including his own participation in the hearing process, he shall take a position on the issues presented for decision with a full statement of his views and supporting reasons therefor.

Special Counsel is authorized to engage in all activities related to the proceedings not inconsistent with the Commission's Rules of Practice, applicable provisions of the Administrative Procedure Act, and all other relevant rules, regulations and statutes. He may seek from, or exchange with, members of the public or parties to the proceedings information on a voluntary basis and may request the Commission issue such orders as may be necessary to produce information or documents he deems required for the investigation. He may consult with all members of the public, public officials and specified Commission staff. Among other matters of consultation with Commission staff shall be the plans for and the results and details of economic or other research, related to these proceedings, conducted by the Commission's staff or contractors to the Commission engaged for such research.

SECTION B-DIRECTION TO PROCEED The Contractor is directed, upon his acceptance of this Letter Contract, to proceed immediately to commence performance of the services called for herein and to employ the necessary staff, consultants and subcontractors, to pursue such work with all diligence to the end that the services called for under SECTION A of the Schedule will be delivered or performed in accordance with the Schedule and all other terms of this Letter Contract.


The estimated period of performance of the definitive contract contemplated by this Letter Contract shall begin on the date of acceptance of this Letter Contract and continue until the investigations are ended contingent upon the provision of funds by the Congress.


The work under this Contract shall be performed at such location or locations as may be mutually agreed upon.


The Definitive Contract will be negotiated and executed on or before April 1, 1973, unless such date is extended in writing by the Contracting Officer. The maxi

mum initial amount of the Definitive Contract shall not exceed $650,000 which includes the amount herein obligated.

It is contemplated that the Definitive Contract will be negotiated on the basis of the clauses identified in the schedule of this Letter Contract and such additional clauses as are appropriate to the subject matter of this Contract. However, the parties are not hereby committed to the negotiation of this type of contract.


The maximum amount for which the Government will be liable if this Letter Contracted is terminated is $55,000, and any expenditure or obligation in excess of that amount, in furtherance of performance hereunder, shall be at the Contractor's own risk.

Invoices or public vouchers for payment of cost shall be prepared in triplicate, will include a reference to this Letter Contract and be forwarded to the Contracting Officer.

The Government will pay to the Contractor's account identified as “Gordon L. Allott, Special ICC Account” upon submission of invoices or public vouchers, his costs for the performance of this Letter Contract determined by the Contracting Officer to be allowable in accordance with Part 1-15, Subpart 1-15.2 of the Federal Procurement Regulations as in effect on the date this Letter Contract, and any special provisions concerning the allowable costs or payments set forth in the schedule of this Contract. Such payments shall be made by check payable to the Contractor and be marked for deposit only in the Special Bank Account identified as Gordon L. Allott Special ÎCC Account," as provided in SECTION N of the Contract.


There are incorporated by reference in this Letter Contract all of the clauses contained in the General Provisions for Cost-Reimbursement Type Contracts with Other Than Educational Institutions, attached hereto, and including any other clauses referenced in the schedule as applicable to this Letter Contract except for the following clauses, which are deleted for the purposes of this Letter Contract:

1. Allowable Cost, Fixed Fee (if any) and Payment 2. Limitation of Cost


In lieu of payment for any indirect costs including Overhead, and General and Administrative Expenses, in the performance of this Contract the following items of cost will be considered allowable under this Contract insofar as they do not exceed the prescribed limitations and are otherwise allowable in accordance with Part 1-15, Subpart 1-15.2 of the Federal Procurement Regulation.

Not to Exceed.
(To be agreed upon and incorporated in the Definitive Contract)



The Government shall furnish to the Contractor, as available, on a no-chargefor-use-basis, suitable office space, furniture, equipment, supplies and services. In the event the Government is unable to provide the foregoing, in a timely manner, such office space, equipment, supplies and services required in the performance of this Contract may be procured by the Contractor.


1. The Government shall reimburse the Contractor for civil liabilities to third persons arising out of the performance of this Contract and other related reasonable expenses including attorney's fees actually and necessarily incurred by the Contractor in connection with the defense of an action, suit or proceeding, whether or not caused by the Contractor except:

a. to the extent reimbursed by insurance or otherwise,

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