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November, 1968. His previous employment was with United Engineers and Constructors, Inc., the M.I.T. Lincoln Laboratory, and the Real Estate and Construction Operation of the General Electric Company.

(d) The matrix contractor will assemble data on climatological variations, geographic areas, building and zoning codes issues, and housing market conditions for a number of areas in the nation. One of the requirements is that the proposer explain to us how they intend to gather, analyze and display the data in order to have an accurate representation of the various conditions across the nation. The results will be collected and decisions made by HUD as to which areas provide the best mix of demonstration possibilities. It is estimated that the contract will cost approximately $250,000.

(e) The matrix contractor will establish communications with General Electric and InterTechnology Corporation, the two ERDA Phase I contractors. Recognizing that the residential building process and market are different from the commercial, the two matrixes, therefore, serve somewhat different functions. We will require the residential contractor to follow closely the work of General Electric and InterTechnology Corporation, in order that the work not be duplicated and to insure a coordinated approach between the residential and commercial programs. Question 4. Could you please provide for the record a copy of the chart you used to illustrate HUD's several-part, several-stage demonstration program? (The chart is referred to at page 204, line 25 of the transcript.)

Answer. A copy of the chart is enclosed.

Question 5. Could you also please provide for the record a copy of the Program Opportunity Notice (referred to on page 205, line 2, transcript) that you are sending to solar manufacturers? We should like to have you identify for the record the author or authors of the PON, and/or the professional background(s) and principal prior business connections of those persons.

Answer. As in response to Question #2, ERDA has primary responsibility for the PON and we, therefore, defer to Dr. Teem for response to this question.

Question 6. Please provide a list describing the classes of solar manufacturers to whom the PON mentioned in question 5 has been or is being mailed, and indicate on the list the number of members of each class receiving the PON. Two of the classes we should like you to include on this list are big business concerns and small business concerns, and as sub-classes within each of those categories, "Companies presently or previously marketing solar systems, subsystems or appliances" and "Companies not presently or previously marketing solar systems, subsystems and appliances."

Answer. As in response to Question #5 and Question #2, ERDA has the lead responsibility for the PON. However, the PON has not yet been issued.

Question 7. At pages 203 and 207 of the transcript, you and Mr. Sherman discussed a Request for Proposals (RFP) for an integrated project "a turnkey project offer"-that you will be sending out in June. Mr. Sherman said that this RFP will seek to identify—“projects where a lot of work, has already gone on. The builder has gotten to the would-be solar equipment manufacturer or mechanical engineer and is ready to offer to us on an immediate basis an integrated project, one that is already ready to start construction on." (Transcript, p. 207, lines 4-8.) (a) May we have for inclusion in the record a copy of this RFP?

(b) Could we have a list identifying the classes of organizations-small-business builder/developers, big-business builder/developers, architects, etc.-and the number of members of each class to which the RFP is being mailed?

(c) Could you identify the person or persons, and/or the professional background(s) and prior business connections of the person or persons, that drafted the RFP?

(d) In a summary way, please describe how the integrated project will be developed, on what timetable, and at what cost?

(e) Will HUD enter into more than one contract and launch more than one integrated project at an early date, under this RFP? And if not, why not?

Answer. (a) The RFP on Integrated Projects is in draft form and is not yet approved for release. We hope to have it available by the end of June and we will be sure to send you a copy at that time.

(b) As stated above we have not completed the RFP and, therefore, have not mailed it. In addition to sending the RFP to all people who have expressed interest in the past we entend to send it to anyone who requests it as a result of a notice in the Commerce Business Daily and a HUD press release.

(c) Mr. Sherman and Mr. Moore have the primary drafting responsibility. (See answer to Question #3 (c))

(d) Projects submitted for consideration must be ready for construction, and HUD awards will provide some additional funding to assist in the construction process. The earliest awards are expected to be made in early fall (September or October). Final cost figures have not been established and will be the subject of the proposal. Budget planning has been based on a figure of approximately $15,000 per unit.

(e) We expect to award a number of integrated project contracts in this first cycle. The exact number will depend upon funding available and the quality of proposals which we receive.

Question 8. In our above questions numbered 3 (b), 6 and 7 (b), we have requested identification of the classes, and numbers of members of each class, receiving certain RFP and PON from HUD. Please describe in some detail the procedures by which and the sources from which you developed these mailing lists. In particular, we are interested in the steps that HUD took to identify and notify all builder-developers and manufacturers with a prior interest-and especially those with a long-standing prior interest-in solar energy utilization and development.

Answer. The primary source of the names on the HUD mailing list are from individuals and companies who have written to HUD as a result of the announcements of the Solar Heating and Cooling Demonstration Program. As to the specifics of the homebuilder involvement, we had negotiations with the National Association of Home Builders Research Foundation with the aim of having them identify prime candidates to implement portions of the program.

We are also working closely with the Solar Energy Industries Association in order that they may keep their members abreast of the latest program actions. In addition, the program has been described in the various energy news letters which report on government action in the energy field.

Question 9. At pages 208-209 of the transcript, there appears a colloquy among Senator Hathaway, Mr. Sherman and you on the subject of retrofitting. Your and Mr. Sherman's testimony was to the effect that some retrofitting will be included in the integrated-system part of your demonstration program, but that no percentage or numerical quantity of retrofit installations has been established.

(a) Will the RFP for the experimental matrix include a request that proposals be included for experimental programs in retrofitting solar systems? (If so, please indicate where in the RFP-a copy of which you will be furnishing us pursuant to question 3 (a), above the reference appears. If not, please explain why not.) (b) If solar energy is to make an early and significant contribution to the reduction of our dependence on foreign oil, will it not be necessary for HUD and ERDA to give fairly heavy emphasis and encouragement to retrofitting in the demonstration program? If you disagree, please explain why. If you agree, please state with more particularity how HUD will provide the needed emphasis and encouragement.

Answer. (a) The experimental matrix contract as you can see from the enclosed copy, is a contract designed to assist in determining where to place projects acrossthe-country and does not attempt to determine the specific project type.

(b) The Phase O studies conducted for the National Science Foundation indicated that retrofit of solar heating or heating and cooling of buildings does not seem to be feasible on a large scale. Variables which could affect the success of a retrofit project include the orientation of the building with respect to maximum solar radiation, roof design (both as to slope and as to structural strength), trees or other shading of solar radiation during peak insulation hours, and insulation and weatherstripping in the structure which can minimize the heating demand. In recent testimony before the Subcommittee on Energy Research, Development and Demonstration of the House Committee on Science and Technology, Mr. John P. Eberhard of the American Institute of Architects Research Corporation indicated that the market for retrofit applications could be limited to approximately 15%-20% of the total market. Current information leads us to believe that effective energy conservation measures such as insulation, caulking, double glazing and weather stripping will be more cost-effective in existing housing than will solar energy retrofit systems installed without providing for such energy conservation measures.

I have enclosed a HUD publication which we are planning to disseminate widely to homeowners which should assist them in making their homes more energy efficient. The title of the publication is "In the Bank or Up the Chimney, A Dollar and Cents Guide to Energy-Saving Home Improvements".

We do expect, however, to encourage the retrofitting of domestic hot water systems with solar energy and we will be working with other agencies in an attempt to develop standards which will assist in the approval of the necessary hardware. Question 10. In response to Senator Hathaway's questioning (transcript, pp. 218-219), you promised (transcript p. 219, line 14) to supply for the record the precise number of units that would be included in HUD's demonstration program in Fiscal 1976. You indicated that you could also break this number down by housing types, or at least break out the number for mobile homes. We should like to have the fullest itemization of numbers of units, by type and by fiscal year or years in the future, as is presently available. If the list is available by State or region, that would also be of great interest and assistance. It would also be helpful to have numbers of units, by class of housing, under each part of your program-the experimental matrix demonstration plan, the integrated systems plan, or other part.

Answer. At the present time it is our thinking that approximately 100 to 150 units of housing will be constructed directly under this portion of the program in FY-76. We cannot break down the types of housing at this time since a great deal depends on the hardware that is determined to be available and how this specific hardware is deemed applicable to the various housing types. As far as the location of units, we intend to get much of this information from the matrix contractor. In addition the location of units depends a great deal on the available hardware in a given location. We do not wish to force a manufacturer of hardware into a market area where he does not intend to eventually market his product. Question 11. As in the case of retrofitting, you testified that most of the demonstrations involving mobile homes would be covered under the integrated system portion of HUD's program (transcript, p. 219, lines 17-19). Are you also having some mobile home demonstrations in the later experimental matrix part of the program?

Answer. The integrated system portion of the program is recycled approximately yearly as is the site system portion and, therefore, mobile homes will be accepted throughout the duration of the program.

Question 12. Would you please amplify your testimony (transcript, p. 212) on the extent to which low-income housing could or will be included in HUD's residential demonstration program? Under what part or parts of the program might low-income housing best be included-the experimental matrix, the integrated systems, or both? If you know now-as you did not when you testifiedplease tell us approximately how many public housing units might be solarequipped in HUD's demonstrations? How many new and how many retrofit? Are solar grants to low-income families contemplated under any part of your program?

Answer. Low-income, or publicly-owned housing (state or local housing authority) are indeed part of the program. States and localities will be specifically requested to submit proposals under the program. We have not set specific numbers of units for public housing, low-income housing or any of the housing types. Much of this depends on hardware availability, the location suggested by the experimental matrix and the availability of projects at the time the hardware is available in a given location.

Question 13. You testified (transcript, p. 212) that HUD's demonstration grants will cover the difference in initial (not life-cycle) costs of solar units and conventional units for heating and cooling? In calculating these differentials, will you use the most expensive types of conventional systems, the lowest-cost types, a median, an average, or a combination?

Answer. In general, the solar differential cost will be determined on the basis of a comparison with an equivalent, conventionally-equipped unit produced by the same developer. Where no such control exists, estimates will be made of the normal equipment types used in that type of housing in the demonstration area. In any event the differences in the costs of the various conventional sources will be small in comparison to the cost of the solar equipment.

Question 14. Would you please amplify (by reference to one or more of your RFP's, if possible) your remarks on HUD's plans (transcript, p. 212) to encourage builders, owners and lenders to think in terms of life-cycle rather than initial costs when considering the installation of solar systems.

Answer. We will be issuing RFP's for studies of current financial practices and possible alternatives. Copies of these will be provided to the Committee when issued later this year. We would like to have the lenders consider "shelter cost" as a percentage of take-home income in determining mortgage and loan feasibility.

Question 15. Under what circumstances, and under what rules (minimum property standards? other?) can regional officers or employees of HUD advise builder-developers, lenders, purchasers or other interested parties not to use particular products of named companies in the heating, ventilating and air conditioning (HVAC) industry? Is there any procedure for formal or informal "redlining" of particular HVAC companies or products, at either the regional or national level? If so, please submit for the record the rules and regulations setting forth the procedure, and the procedures by which an adversely affected manufacturer can be briefed on his product's problems or appeal from a decision he considers erroneous or unfair.

Answer. HUD/FHA's position is that the Architect and/or the sponsor will determine which companies or products are named in the specifications of a HUD assisted project. When it is necessary for an architect to specify a product by brand name or manufacturer, HUD encourages the architect to include at least two and preferably three products of equal quality in his specifications. There are no rules or regulations for formal or informal "redlining" of particular companies or products at the regional or area office level, unless unacceptable performances were previously experienced by the field office.

Question 16. It has been suggested to committee staff by an HVAC manufacturer that a system for HVAC might be disapproved by HUD inspectors for failure to meet noise or other criteria, when the reason for the failure may be improper installation of the system. When HUD inspectors disqualify or disapprove a system, do they make any effort to ascertain whether it has been properly installed, in accordance with the manufacturer's specifications?

Answer. A HUD inspector may and should disapprove a HVAC system which failed to meet noise or other criteria related to improper installation of the system. The HUD inspector should always ascertain that the system was installed in accordance with the approved specifications prior to determining acceptability.

Question 17. Are all reports by HUD inspectors of HUD-insured projects made in writing? Are such reports made easily available to the parties-builder/developers, system manufacturers, lenders, etc.-having an interest therein? How long and where are such reports retained on file?

Answer. All HUD project inspection reports are completed in writing by the inspector on HUD Form 5379, "HUD Representative's Trip Report". A copy of each report is submitted to the sponsor's architect, or in public housing projects, the local housing authority. The inspection reports are available to the builderdeveloper and the lender. The systems manufacturers should request copies of the inspection report from the contractor as desired. All inspection reports are maintained in the architectural section of the area or insuring office until one year after the date of substantial completion. Inspection reports are then disposed of at the discretion of the Chief Architect.

Question 18. Has HUD received any representations critical of solar heating and cooling from industrial interests-gas or electric utilities, fuel suppliers, etc.— who might be primarily concerned about the possible adverse impact of solar systems on themselves? If so, are such representations on the public record? Could examples be provided for this hearing record?

Answer. We have discussed the problems and opportunities facing utilities with the Electric Power Research Institute, the American Gas Association, and a number of individual companies. These discussions have been informal and not recorded and if anything seem very positive towards the use of solar energy.

Question 19. At the request of Dr. Teem during his question period, you joined him at the witness table to assist in answering a question about the groups ERDA and HUD had consulted in arriving at the estimates for numbers of units and costs per unit at the various possible levels of the National Plan for Solar Heating and Cooling (ERDA 23). You mentioned (transcript, page 171. lines 10-13) the National Association of Home Builders and the American Institute of Architects as among the groups you had consulted, and you offered to supply for the record a complete list. We would like to have that list. We should especially like to know the companies and associations, outside the construction industry itself, that you consulted.

Answer. Early in the development of the national plan HUD called a meeting to discuss the planning involved in the Solar Demonstration. Enclosed, is a sheet we used to have each representative at the meeting represent his presence. In addition, the NAHB and AIA Research Foundation were called in separately for consultations on specifics on how the builder and architect involved themselves

39. REPRESENTATIVES AT MEETING CALLED BY HUD ON DECEMBER 5, 1974, To DISCUSS PLANNING INVOLVING THE SOLAR DEMONSTRATION PROGRAM

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