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ANTICIPATED INCREASE IN VOLUME OF BUSINESS

In other words, you are going to impound your money until you get to $215 million and when you get above that we are going to let you have it; is that correct? How far are you away from it now, Mr. Turpin You have to go from $180 million to $215 million.

Mr. TURPIN. That is correct.

Mr. THOMAS. You anticipate doing $50 million from the Department of Defense.

Mr. TURPIN. We did $182.5 million in 1961, but each month's business was higher than the same month of the preceding year, so we are now going at a rate that approaches the $215 million.

Mr. Thomas. Well, you have to go $30 million and then when you get $30 million you get a little money. You are anticipating doing $50 million.

Mr. TURPIN. Mr. Chairman, when that language was put in

Mr. THOMAS. So that is 60 percent, isn't it? Sixty percent of $2.5 million is how much? $1.5 million?

Mr. TURPIN. That is correct, sir. Mr. THOMAS. Is it? Sold, $1.5 million. Is that correct? Mr. TURPIN. I didn't follow it that closely, Mr. Chairman. Mr. BEAN. Mr. Chairman, we are actually running at a rate which will slightly exceed this $215 million right now. We just wound up last month with sales in excess of $17 million for this operation.

Mr. TURPIN. At the time that language was put in, we did not have all the facts which are now available to us. Subsequent to the time when the Bureau proposed that language, the agreement with the Department of Defense has actually been concluded and submitted to the Bureau.

Mr. THOMAS. Let us work out your figures here.
Store Activities. For store operations you want $510,800 increase.
Space and related costs, $170,000.
Buying operations, $688,200.
Inspection operations, $510,100.

Interagency supply coordination--and here comes the “Turpin fund” for $600,000 in there. Mr. TURPIN. 'Yes, sir; and we are in a bad way now.

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LEGAL SERVICES

Mr. THOMAS. You have all the lawyers over there who are overworked and underpaid. What are you going to do with this $600,000 ? You are not going to pay those lawyers anything like what they are worth?

Mr. TURPIN. The lawyers will get a little bit, but not very much. Mr. THOMAS. They will get very little. Mr. TURPIN. Mr. Chairman, we are having difficulty right now in handling the business we have. In three regions we are in trouble and we are building up backlogs day by day.

Mr. THOMAS. Where are the three regions ?

Mr. TURPIN. San Francisco, Dallas, Atlanta-there are four-and New York.

INCAPACITY TO HANDLE VOLUME OF BUSINESS

Mr. THOMAS. How are you in trouble, on space or what?

Mr. TURPIN. No, sir, in not having the capacity to handle the business, with our computers and EAM punch card equipment. We have reached the saturation point in San Francisco. We will reach it in Dallas in December and we have to make plans right now for obtaining additional facilities to handle it.

In New York we have already ordered some additional equipment to try to alleviate the difficulties we are having there in handling this increased volume.

Mr. THOMAS. Your store operations for equipment? Not personnel!

Mr. TURPIN. I was speaking only of the Administrative Operations part.

Mr. Thomas. You mean you are talking about the old fund?

Mr. TURPIN. Yes, sir. And we handle all of the data processing for all of the services, including Federal Supply.

STORE OPERATIONS COST

Mr. THOMAS. Well, tell us about your store operations cost. How are you going to spend that $510,800 for that? What is your trouble there, Mr. Bean?

Mr. BEAN. Well, increased business.
Mr. THOMAS. That is all salaries?
Mr. Bean. This is primarily salaries.
Mr. THOMAS. How many jobs ?
Mr. Bean. We will probably be going up about 5 percent

SPACE AND RELATED COSTS

Mr. Thomas. What do you mean by "related costs”-“space and related costs”? Do you mean you need more square footage at $170,000? How many jobs do you have to have in your buying operations? You know one buyer can buy more in 1 week than 10 stores can sell in at least a year.

Mr. Bean. Since we have taken over a great deal of buying from the Department of Defense, we are now operating at the rate that we are asking for here, which is $6.6 million. We have recently taken over all of the furniture, both household and office furniture, from the Department of Defense. We have taken over an additional 2,500 items which we are buying and issuing, including handtools for all the services.

Mr. Thomas. I see it costs you here about $1.39 per hundred on your purchase.

Mr. Bean. That is right.
Mr. Thomas. Nonstore buying, $1.11.

Value of orders placed against FS schedules, $713.5 million. How many jobs do you have in your buying?

Mr. BEAN. Altogether in "Expenses, supply distribution" we would have in the department and in the field 258 new people.

Mr. THOMAS. Can you break them down? How many are in store sales and how many in your buying?

Mr. Bean. There are 78 for stores and 103 for buying. Mr. THOMAS. All your buying is done in the District of Columbia and in your New York office?

Mr. Bean. No, sir; it is also done in all the 10 regions as well.
Mr. Thomas. How many do you have buying in the regions?
Mr. Bean. We are requesting 83 buying positions in the regions.

INSPECTION OPERATIONS

ment.

Mr. THOMAS. Why is your inspection operations up?

Mr. Bean. We are now shipping on a worldwide basis for the military, and that has stepped up very considerably since the President's gold decree. Many of these people now have no sources overseas and are purchasing from stateside and we have to inspect prior to shipMr. THOMAS. These are all jobs. How many jobs?

Mr. BEAN. Yes, sir; 75 jobs. We have to do the inspection here before it can go overseas to the other locations, because when we assume responsibility for these items then the military cancels all of theirs.

Mr. Tuomas. How many jobs are involved here, Mr. Bean?

Mr. Turpin, have you figured out what you are going to do with this money for "Interagency management", what is that for?

Mr. TURPIN. $20,900 is for the individuals who handle the relations with the other agencies, including the Department of Defense.

Mr. THOMAS. How many jobs are involved?

Mr. TURPIN. I believe there are only two involved in the increase here.

Mr. Thomas. Do you want to pass this "Administrative operations” up now?

Mr. TURPIN. No, sir; I would like to talk about that to demonstrate how badly we need some help.

Mr. Thomas. If you won't tell us, you will just have us all crying here, Judge. We will just have to pass you up. You folks are lucky to have Brother Turpin. We have a healthy regard for him. He works hard and he is level headed. So when we tease him in here, do not take it seriously, Mr. Moore. We value him, just like you do, very highly.

Mr. TURPIN. Mr. Chairman, I would like to add one thing. With this additional money indicated for supply distribution, the total we would have available in 1962 to handle the estimated business would be equal to a unit cost per hundred of business of $1.44, which is cheaper than we have been able to do in any other year.

Mr. THOMAS. What is that $1.44 for?
Mr. TURPIN. That is per hundred dollars of business.
Mr. Thomas. Do you mean the administrative cost?
Mr. TURPIN. Yes, sir.

EXPENSES, FEDERAL TELECOMMUNICATIONS SYSTEM

JUSTIFICATION OF THE ESTIMATE

Mr. THOMAS. Tell us about the telecommunications service. Put pages 32, 33, 34, 35, and 36 in the record.

(The justifications follow :)

SUPPLEMENTAL ESTIMATE OF APPROPRIATION, 1962—"EXPENSES, FEDERAL

TELECOMMUNICATIONS SYSTEM"

APPROPRIATION LANGUAGE

For necessary expenses, not otherwise provided for, of management and operation of a Federal Telecommunications System, including services as authorized by section 15 of the Act of August 2, 1946 (5 4.8.C. 55a), $900,000: Provided, That the unexpended balances of funds appropriated for telecommunications purposes in the appropriations for the current fiscal year for 'Operating cæpenses, Public Building8 Service', in an amount of not to exceed $523,000, and for 'Operating expenses, Transportation and Public Utilities Service', in an amount of not to exceed $47,000, may be merged with this appropriation."

GENERAL STATEMENT

"The proposed appropriation and transfers are to provide for supervision and initial operation of a unified telecommunications system for the civilian agencies of the Government now being established by the General Services Administration and planning and engineering for further implementation of the system.” (Quoted from House document.)

As the result of recommendations developed during the 1958 Operation Alert, a “plan for a Federal civil agencies communication system” (Cabinet Paper 59 91/2) was presented to the President and approved by him on November 27, 1959.

Pursuant to certain questions raised by the President, GSA made a detailed study of estimated costs of the system and its compatibility with military sys. tems. The results of the study were included in GSA's report of June 24, 1960, entitled “Study of a Federal Telecommunications System."

In a letter dated January 17, 1961, to the Administrator of General Services from the Deputy Director of the Bureau of the Budget, GSA was advised that as a result of these studies the questions raised at the time of the earlier Presidential decision had been resolved, and GSA was advised that the estab lishment of the proposed telecommunications system could go forward.

Responsibility for the new unified Federal telecommunications system to he administered by the General Services Administration has been assigned to the Deputy Administrator. The new system will connect some 8,000 Government offices in approximately 1,750 cities and towns in the 50 States and the Commonwealth of Puerto Rico, and the Virgin Islands. It will make extensive use of direct distance dialing, using multichannel routing with switching centers strategically located so that messages can bypass probable target areas. It will be the maximum in automaticity, and will be capable of rapid expansion.

The Deputy Administrator and the telecommunications group under his direction will be immediately concerned with evaluation of existing capabilities and upgrading the present system, coordinating current and future civil agency requirements, and planning and design of the new system. This will apply to five major categories: (1) Telephone-voice transmission; (2) teletypewriter service; (3) telephoto and facsimile; (4) data transmission; and (5) crypto. graphic service.

No interruption of existing telecommunication operations of GSA will take place during the transition to the new system. Immediate advantage will be taken of all possibilities for economical consolidation of facilities, including terminal equipment and of technical developments by the telecommunications industry. The present system will continue to be operated through the GSA buildings management fund for the immediate future. Authority for a separate working fund for the FTS will be requested of Congress along with a request for the appropriation of minimum working capital requirements.

It is estimated that a total staff of 133 will be required at the central office and regional offices for planning, design, development, and operational supervision of the new unified system. Integration of the present staff and recruitment of additional employees required is expected to be completed by June 30, 1962.

The new program had on board 4 employees as of April 5, 1961, 13 as of June 30, 1961, and employment of 47 is expected by September 30, 1961. The new personnel to be recruited during this period will be comprised almost entirely of electronic engineers. By June 30, 1962, an additional 27 employees, about half of whom will be engineers, will be recruited.

The present telecommunications staff, resources and activities of the Public Buildings Service and the Transportation and Public Utilities Service will be merged into the new program. This will transfer approximately 23 employees at the central office level, and 30 employees at the regional office level from PBS and 3 positions in the central office under TPUS. Funds included in the independent offices appropriation bill for 1962 for the above-mentioned services are proposed for transfer and consolidation with the new appropriation for "Expenses, Federal Telecommunications System."

During the course of the hearings on GSA's budget for 1962 before the Independent Offices Subcommittee of the House Committee on Appropriations, the committee was advised that GSA was proceeding with the planning phases of the new integrated system. At that time the committee was advised that as soon as GSA had sufficient plans completed they would appear before them again with a further statement on the System, and a request for the necessary funds for 1962. This testimony appeared on pages 843–846 of the hearings.

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1. General supervision

Average employment

Amount

Department

Field

Total

1962 budget. Change

1962 revised.

$48, 500 +50, 500

5.0 +5.3

5.0 +5.3

99,000

10.3

10.3

HIGHLIGHT

Provides for overall supervision of the FTS, including the development and operation of the new integrated system, coordination with DOD, establishment and administration of internal policies and procedures, and continuous liaison with other Federal agencies, communications carriers, and telecommuni. cations-electronics industry.

1962

1961

Budget

Revised

Increase

Total cost or estimate.

$41,000

$48,500

$99,000

$50, 500

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