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vehicles were bought at about $300 less than you would have to pay for a Metro or a Divco, which was the only thing available when we went out to get the Twin Coaches. We spent about $800,000 less on the 2,000 than we would have for Divco.

I think the difference in cost was around 2,300, and we paid just a little less than $1,900 to Fargo for them.

Mr. CHRISTENSEN. What is that, for the 250 ? It is a different vehicle.

Mr. Banton. But for the 250 we never would have had these 2,000. Would we, Mr. Schlegel ?

Mr. SCHLEGEL. That is correct. I have a picture of the trucks, and I think it would be of interest to compare them as to their size.

Mr. PLAPINGER. I don't think we need that, Mr. Schlegel.

Mr. Goff, were there any legal opinions rendered on the purchase on a negotiated basis or acquisition of the 250 vehicles ?

Mr. Gorf. I don't remember that there was, as far as the negotiated purchase. I think the only opinions were in connection with the findings that were made.

You see, there are certain findings, that there have to be certain facts exist before you can negotiate. When those findings were made I think there were some opinions on those.

Mr. PLAPINGER. When were those findings submitted to the General Accounting Office as required under the Federal Property Services Act?

Mr. KALLIO. As a part of the contract.
Mr. PLAPINGER. When was that, Mr. Kallio?

Mr. KALLIO. I don't recall. They were attached to the contract itself, and then followed through our regular procedure of payment, and then put through the files, and then the General Accounting Office reviews those contracts, and then, of course, a report is submitted every 6 months or so to the GSA on all of the negotiated contracts.

Mr. PLAPINGER. I am talking about the GAO now.

Mr. KALLIO. The GAO had personnel in our building full time to go over those contracts. The contracts were available to them.

Mr. PLAPINGER. Are you aware the Federal Property and Administrative Services Act requires submission of the findings to the GAO?

Mr. KALLIO. The findings are part of the contract which is furnished them.

Mr. PLAPINGER. When were the findings on these contracts furnished?

Mr. KALLIO. I would have to check with our Bureau of Finance to see when that was done.

Mr. MINSHALL. You asked about a legal opinion. Was there any legal approval necessary on the part of your

office? Mr. GoFF. Yes, as a matter of department procedure there are findings approved.

Mr. MINSHALL. And you approved in each case ?

Mr. GOFF. Yes. At this time I would like to have permission to insert in the record the complete transaction in each case: the letters, the findings which are attached of my approval, and the contract. In each of these cases.

Mr. MOLLOHAN. We would be glad to have them. Without objection, they will be entered.

(The material referred to follows:)

MARCH 7, 1956. Mr. MADISON W. BANTON, Chief Industrial Engineer,

Post Office Department, Washington, D. C. DEAR MR. BANTON : In accordance with your telephone communication yesterday with Mr. Christensen, of the subcommittee staff, I would appreciate receiving certain additional information relating to the Post Office Department's use of 250 sit-stand vehicles purchased from the Twin Coach Co., of Kent, Ohio.

According to the summary report on this subject, which was submitted to me on February 27, 1956, by N. R. Abrams, Assistant Postmaster General, the Post Office Department realized an average annual savings of $700 per vehicle. I would appreciate receiving a complete breakdown of that $700 figure showing the precise elements of which it is composed. If, as you stated, elimination of personnel accounts for a substantial part of the $700, I would like the specific details relating thereto, such as where and when employees were replaced by these vehicles, what type of postal routes were involved, etc.

In addition, I would like detailed information, if available, over and above information from data and records kept in the normal course of business on all trucks operated by the Post Office Department, concerning the performance of these 250 vehicles. This should include the dates, nature, and results of any tests to which these vehicles were put, a description of the conditions under which such tests were conducted, copies of special records kept concurrently with the tests, and any other pertinent data.

I would appreciate receiving this information at the earliest possible date.
With all best wishes, I am
Sincerely yours,

ROBERT H. MOLLOHAN.

Post OFFICE DEPARTMENT,

Washington, D. C., March 9, 1956. Hon. ROBERT H. MOLLOHAN,

House of Representatives. DEAR CONGRESSMAN MOLLOHAN: This is to acknowledge receipt of your letter of March 7, requesting additional information relating to the Post Office Department's use of 250 sit-stand vehicles purchased from the Twin Coach Co.

Much of the information requested is not readily available and will require some time to assemble and it is possible that some is not even available from our records. Sincerely yours,

M. W. BANTON, Chief Industrial Engineer.

Post OFFICE DEPARTMENT,

Washington, D. C., March 30, 1956. Hon. ROBERT H. MOLLOHAN,

House of Representatives. DEAR CONGRESSMAN MOLLOHAN : Reference is made to your letters of March 7 and 8, 1956, addressed to Mr. Banton of this Department and myself, respectively. Attached, in compliance with your request to Mr. Banton, are exhibits which show the test results and breakdown of savings resulting from the Department's use of 250 sit-stand vehicles purchased from the Twin Coach Co!,

In an effort to comply with your request for data relating to the negotiation of the Twin Coach vehicle contracts, this office has gone over the assembled files of the departmental bureaus which might contain such material. A review of these files discloses no correspondence with or memorandums of conferences with the Twin Coach Co. pertaining to the vehicle contract negotiations. It appears that the negotiations were oral in nature, consisting of meetings and telephonic contacts between departmental and company representatives. Sincerely yours,

ABE MCGREGOR GOFF,

The Solicitor.

STATUS AND ESTIMATED SAVINGS

This is the status of the 250 experimental right-hand sit-or-stand-drive functional Twin Coach trucks purchased for test in the Cincinnati region : On mounted city-delivery routes--

208 Unassigned reserves now being used for collection and other service-

4 On mounted route at Flint, Mich--

1 On mixed parcel post, relay, and collection routes at Philadelphia, Pa---- 12 In experimental service to determine the feasibility of and to what extent

small functional 4-wheel trucks economically can be used on various type foot routes

25 From the information furnished by the regional engineering manager, it is estimated that the gross annual savings on 208 vehicles now on mounted routes should be approximately $340,102 and the net savings $149,158, an average of $717 per vehicle. Details follow in a later paragraph. Contract savings, estimated : Contracts for other vehicles which were canceled -

$189, 689. 00 New mounted routes or rural routes converted to mounted

routes, estimated at $1,072 per route (average cost of con-
tract service at selected cities in northeast Ohio)---

80, 400.00

270, 089. 00

Total..
Less annual cost of operation and amortization of 208 Fageol

Twin Coach trucks, at 50 cents per hour, 6 hours daily-
$3X 306=$918 X 208

190, 944. 00

79, 145.00

Net contract savings. Carrier time savings, estimated :

30 minutes daily, 306 days, at productive man-hour cost of $2.20 per hour—153 hours X208 X $2.20----

Total net carrier and contract savings annually--Rounded

$149,158 divided by 208 per vehicle--

70, 012. 80

149, 157. 80 149, 158. 00

717. 00

FAGEOL VEHICLE COSTS

Fifty cents per hour is the cost used in determining the Fageol Twin Coach truck costs. In a recent study the Division of Cost Analysis estimated the costs at:

Cents per

hour Akron...

39. 2 Canton.-

44. 6 Youngstown

54. 7 The estimate states: “Calculations of vehicle costs on the test routes includes direct operating costs, depreciation (based on estimated useful life of 6 years), and shop overhead."

Vehicle reports under the new accounting system show that the cumulative hourly costs of 211 Fageols from the time they were placed in service through December 1954 were 43 cents per hour, based on 181 hours per vehicle per month.

CARRIER SAVINGS ESTIMATED

Our experience indicates that from 30 minutes to 1 hour can be saved in carrier time when a functional right-hand-drive vehicle replaces a conventionaldrive vehicle, depending on the type replaced. The general superintendent of mails at Cincinnati, Ohio, reported to the district manager that wtih the Willys right-hand-drive trucks estimated savings of 30 to 45 minutes daily had been averaged. The Fageol vehicle is more functional and more efficient and has a torque drive, requiring no gear shifting. In contrast, the Willys requires shifting at each stop, and there has been excessive clutch trouble. It would seem that our estimate of 30 minutes is conservative and should easily be “captured. We have requested the region to take steps to see that the savings really are realized.

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TWIN COACH VEHICLE COSTS AT NAMED OFFICES
The attached report shows vehicle costs of the three-quarter-ton sit-stand
Twin Coach in use at various post offices, principally in Ohio and the Cincinnati
region. The offices named reported vehicle costs individually.

Column 1 shows the number of vehicles in use at a particular office for the reporting month, except that on page 6, under the “Accumulated averages" designation, it shows number of vehicle-months.

Column 2 shows the average mileage per vehicle.
Column 3 shows the average hourly use per vehicle.

Column 4 shows the total cost per mile per vehicle. Total cost includes all items of expense chargeable to a vehicle-gas, oil, repairs, service, labor, depreciation, overhead.

Column 5 shows the total cost per hour per vehicle.

Column 6 shows the accumulated total cost per hour per vehicle since the first reporting month.

Column 7 shows the operating cost per hour per vehicle. Operating cost includes all items chargeable to a vehicle, except depreciation and overhead.

Column 8 shows the maintenance cost per hour per vehicle. Maintenance cost includes all operating cost items, less gas and oil.

Column 9 shows the accumulated maintenance costs per hour per vehicle for all months prior to the reporting month.

Column 10 shows the accumulated maintenance costs per hour per vehicle through the reporting month.

Column 11 shows the accumulated average total monthly cost per vehicle through the reporting month.

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August 1954:
Florida: Miami.

3

897
September 1954:
Florida, Miami.

3

281
October 1954:
Florida: Miami..

2

101
Ohio:
Akron.

23

419
Canton.

10

419
Warren

11

365 Youngstown.

33

378
November 1954:
Florida:
Miami.

2

449 Jacksonville.

1

409 St. Petersburg

1

741
Ohio:
Akron.

29

420 Canton.

20

540 Warren

26

294
Youngstown.

446
Cleveland

396
December 1954:
Florida:
Miami.

2

1,015
Jacksonville

1

772
St. Petersburg -

1 3,609
Ohio:
Akron.

29

710 Canton..

20

689 Warren,

26

456
Youngstown.

46

582 Cleveland

90 1,042 No depreciation or overhead charged against these vehicles in October 1954. 2 Figures stated are averages of 1 vehicle from July through October 1954.

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