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Mr. MOLLOHAN. As far as you are concerned, he was the principal ? Mr. GUNTHER. That is correct. Mr. PLAPINGER. Were you aware that the GSA considered the price of the Twin Coach vehicle excessive?

Mr. GUNTHER. No, sir.

Mr. PLAPINGER. Were you aware that they considered the specifications restrictive?

Mr. GUNTHER. No, sir.

As a matter of fact, I thought that they were not restrictive. Anyone could make this truck that had the facilities to make it. It has all the major components, which were open to anybody that wanted to buy them.

Mr. PLAPINGER. That is at complete variance with the GSA finding.

Mr. GUNTHER. I believe these components are manufactured, as I stated earlier, and anybody could buy them if they wanted to.

Mr. CHRISTENSEN. What you are saying is that while Dodge could not use its own motor, it could have gone out and bought the motor.

Mr. GUNTHER. Yes, sir.
Mr. CHRISTENSEN. In that sense, it is not restrictive.
Mr. GUNTHER. Yes, sir.
Mr. MINSHALL. Mr. Plapinger, what were the bids you referred to?

Mr. PLAPINGER. The Divco bid was $2,264.52; the International Harvester bid was $2,379.14; the Twin Coach bid was $2,865; the Willys bid was $3,010.72; and Marco, which has no manufacturing facilities, bid $4,860.

Mr. MINSHALL. In other words, Twin Coach was $600 over th lowest bid, and $2,000 under the highest ?

Mr. PLAPINGER. They were more than that, if you compare Marco and Twin Coach. But the difference between Twin Coach and Divco bids was $150,000.

Mr. MOLLOHAN. This experiment didn't really get underway until after you had terminated your relationship with the Post Office Department, Mr. Gunther. I am accepting, as you suggest, that 12 months would be a reasonable period over which this experiment should spread. Actually, the most you could possible be in it was for a period of possibly 4 or 5 months, at the most.

Mr. GUNTHER. Counting test-track experimentation, I would say that is approximately right.

Mr. MOLLOHAN. That was for a very limited period, which you considered to be highly unsatisfactory and not very revealing?

Mt. GUNTHER. Our work dated back to 1953, and there were other vehicles besides this that we were testing. We had procured other vehicles than Twin Coach.

Mr. MOLLOHAN. We are only talking about Twin Coach, of course, here today.

Mr. GUNTHER. Our original tests on this vehicle started in 1953, I believe, in Miami, on the test track.

At the time we left, we had almost 100 of these vehicles. It was a limited time.

Mr. MOLLOHAN. What sort of vehicle did you use on this test track?

Mr. GUNTHER. We used various types of vehicles. We used a quarter-ton 5-horsepower vehicle made by Cushman. We used a Willys vehicle, made in Toledo; a Reo, Chrysler, Ford, and Nash.

Mr. MOLLOHAN. How were they procured? Who set up specifications for them?

Mr. GUNTHER. The specifications were set up by the engineering department. The procurement was through the regular channels.

Mr. MOLLOHAN. Of the Post Office Department!
Mr. GUNTHER. I wouldn't know.

Mr. PLAPINGER. The engineering department wasn't Heller & Associates ? That was the Post Office Department?

Mr. GUNTHER. Post Office Department procured the vehicles. Mr. MOLLOHAN. They already had them available? Mr. GUNTHER. Some of them had been procured prior to our arrival. Mid-American, Nash, Reo. Those yehicles had been procured prior to our arrival.

Mr. MOLLOHAN. What was your incentive in procuring those ? Was it your recommendations of 1949 to the Hoover Commission!

Mr. GUNTHER. Yes; they had taken those recommendations and tried to develop them along lines

Mr. MOLLOHAN. All the vehicles you used on the test project had been acquired prior to your coming into this contract?

Mr. GUNTHER. Not all of them; just part of them. Nash and Willys had been procured prior to our arrival. The balance were procured after our arrival. Some of the vehicles

Mr. MOLLOHAN. Were they all sit-stand vehicles ?

Mr. GUNTHER. No, sir. Some of them were plain sit. Mid-American produced a sit-stand vehicle; Willys and Nash produced a plain sit vehicle.

Mr. MOLLOHAN. The pattern for this program had been laid prior to your coming with the Department, and you came in, really, to supervise and implement the recommendations you had made to the Hoover Commission!

Mr. GUNTHER. That is right.

Mr. MOLLOHAN. Actually, you came in as a director, really, because you had already made your findings and made recommendations to the Hoover Commission?

Mr. GUNTHER. That is correct. Mr. MOLLOHAN. Partly, the Post Office Department, in 1950, 1951, 1952, and into 1953, had endeavored to put into action some of the recommendations?

Mr. GUNTHER. That is correct.

Mr. MOLLOHAN. Now, you are coming in for the purpose of supervising the recommendations you had previously made?

Mr. GUNTHER. Yes.

Mr. MOLLOHAN. There were no additional surveys or analyses made by you; your function was to come in and supervise the experiment?

Mr. GUNTHER. There were additional studies and analyses made. It was primarily supervision and direction and consultation.

Mr. MOLLOHAN. I believe you stated a while ago that there were 11 men on the project?

Mr. GUNTHER. That is right.

Mr. MOLLOHAN. That takes in other experiments you were making, in accounting and surveying and studying, in trying to help the Post Office Department adjust.

But, there were 3 men in this engineering phase of it, which is the one we are concerned with now?

Mr. GUNTHER. Yes, sir. Ei

Mr. MOLLOHAN. And the contract amounted to approximately $450,000, which would suggest that we are paying to you somewhere between $125,000 and $150,000 for supervising this experiment; would that sound reasonable to you?

Mr. GUNTHER. Yes, sir. Mr. MOLLOHAN. You stayed for approximately 4 months, during which this experiment was being carried on, with reference to the 250 vehicles ?

Mr. GUNTHER. That is correct.

Mr. MOLLOHAN. Only a small number of the vehicles were in use, during your stay?

Mr. GUNTHER. Yes.

Mr. MOLLOHAN. Have you had any consultations with the Post Office Department since then?

Mr. GUNTHER. No, sir.

Mr. MOLLOHAN. No consultations as to the results that may have been achieved for the determinations that may have been found?

Mr. GUNTHER. No, sir.

Mr. MOLLOHAN. In your opinion, was the Post Office Department entirely satisfied and in agreement with your findings! Were they satisfied with your experiment, and were they in agreement with your optimistic feelings about them?

Mr. GUNTHER. Yes, sir; they were.

Mr. MOLLOHAN. Do you know whether or not they have abandoned the hopscotch experiment?

Mr. GUNTHER. I have learned just today that they have discontinued the two-man teams.

Mr. MOLLOHAN. That would suggest to you that they have found through constant usage over this period that you have suggested previously as being desirable—that is, over 12 months—that the hopscotch was found to be unsatisfactory!

Mr. GUNTHER. Yes; I believe they have gone to a one-man rather than two-man operation.

Mr. MOLLOHAN. Are there any further questions?

Mr. CHRISTENSEN. Mr. Gunther, at the time you wound up your experiment, could you have pointed to specific instances where you had eliminated personnel and identify them as to route and station and what had happened to the men, just exactly how you backed up these figures you gave us?

Mr. GUNTHER. Yes, sir. I believe the figures are available in each of the cities that I have mentioned-Youngstown, Canton, and Akron. The stations are noted here in the final report, and they have all the records in each post office in each one of those cities.

Mr. CHRISTENSEN. You speak only as of the day you left?
Mr. GUNTHER. Yes, sir.

Mr. MEADER. Mr. Chairman, I think that this testimony wouldn't be too good unless we have these exhibits in the record. I don't know if you want to put the entire summary in, but it might be a good idea.

Mr. MOLLOHAN. Without objection, let's place in the record the excerpts from Robert Heller & Associates, the final report, dated December 31, 1954. That includes much of the statement Mr. Gunther made, as well as the figures.

(The excerpt from the final report of Robert Heller & Associates, dated December 31, 1954, is as follows:)

EXCERPTS FROM ROBERT HELLER & ASSOCIATES INC., FINAL REPORT,

DECEMBER 31, 1954

DELIVERY VEHICLES OF FUNCTIONAL DESIGN

Delivery vehicles of functional design which were developed in the course of this assignment are now being used in two areas. The three-fourth-ton sitstand vehicles are being used in the Ohio area and one-fourth-ton three-wheel scooters are in use in the Florida area. Ohio area

Savings accomplished on mounted and former foot routes are shown in exhibit 4. These savings were realized before the Christmas season in Akron, Canton, and Youngstown. Savings in Warren were not calculated, because vehicles were not yet available to mechanize a complete station, but estimates indicated savings comparable with those in Youngstown.

If similar results were achieved on a national basis, savings would reach an estimated net of about $40 million annually, as follows: Type of route:

Annual net savings Curbside delivery and combination curbside and house delivery-- $4, 184, 000 House delivery---

35, 951, 667 Contract routes other than curbside or house delivery.

892, 000

1

Total_---

41, 022, 467 Calculations are shown in detail in exhibit 5.

By December 1 two hundred and fifty 34-ton vehicles of functional design had been assigned to city delivery routes in the Ohio area : Cleveland.-89 | Canton-

46 Youngstown. 40 Other smaller cities_.-

20 Akron..

29 Warren.de

26
Total ----

250 Installations are to be checked after the Christmas season to be certain of proper application and realization of potential savings.

The three-fourth-ton sit-stand vehicles have proved to be well-designed and versatile delivery trucks. They are being tested on all types of routes—curbside, house delivery, parcel post, special delivery, relay and collection, and depot and intersection runs. Trucks of similar design are now being tested by bakeries. These trucks may well become widely accepted for all types of light delivery service.

Application of the new trucks on curbside routes has been found to be a relatively simple procedure of replacing present trucks with the new vehicles. Routes are then adjusted, using velocity rates and procedures shown in exhibits 6 and 7.

Application on former foot routes is more complicated because patterns for serving houses must be mapped in detail, considering movement of both vehicles and carriers. This can be accomplished best by using two-man teams and adjusting routes according to velocity rates and procedures shown in exhibits 8 and 9. Potential savings on former foot routes are generally greater than savings on mounted routes.

Maintenance and operating costs for the new trucks are now being analyzed in the Ohio area, using the procedures of the new motor vehicle accounting system. Results to date indicate approximately 10 percent reduction in truck operating and maintenance costs. Florida area

Results in Miami indicate manpower savings averaging about 1 hour per day per vehicle. Dollar savings accomplished in the Florida area are shown in exhibit 4. Routes have been adjusted by adding parcel post and additional deliveries to accomplish the savings, using velocity rates and procedures shown in exihibits 6, 7, 8, and 9.

Three hundred 14-ton three-wheel scooters are scheduled for use in Florida, earmarked as follows: Miami..

180 Tampa

60 St. Petersburg-

60

Total-----

300 Miami has progressed more rapidly in the proper application of scooters than have Tampa and St. Petersburg, because of more intensive work by local supervisors and industrial engineering personnel. As of December 14, 90 scooters were in service in Miami, 34 in Tampa, and 34 in St. Petersburg.

Contracts with outside service organizations are now in effect for maintenance of scooters in Miami, Tampa. and St. Petersburg. Operations, maintenance, and depreciation costs are expected to average 35 cents per hour as compared with the lowest 4-wheel vehicle costs of 50 cents per hour. Checklist of tasks remaining

1. Appoint a qualified project leader to develop a program for extending the application of new vehicles of functional design, setting up the numbers of vehicles needed, and the rates at which they can be applied.

2. Procure additional vehicles in accordance with specifications prepared by the chief industrial engineer which represent the features needed for most efficient service.

3. Establish a program for training regional engineers and local post-office personnel in the application of new vehicles.

4. Allow local post-office supervisors to use their own initiative in solving local problems; after they are fully conversant with the basic program, they should be encouraged to appraise suggestions of carriers and to direct the vehicle program within their own areas.

5. Use established procedures and targets to check results in each post-office

area.

6. Provide headquarters with reports of savings using the system already developed for measuring and reporting savings.

7. Apply the improved program for parking and maintaining vehicles in each area where vehicles are installed.

8. Broaden the use of new functional vehicles on applicable types of routes throughout the postal service, thus obtaining maximum economies through standardization.

We will be glad to elaborate further on any of the data contained in this report. Very truly yours,

GILMAN B. ALLEN,

Vice President. EXHIBIT 4

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1 Based on cost calculations for 2-week periods prior to installation and comparable cost calculations for 2-week periods after installation,

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