Mr. THOMAS. We handled it here. They were all Federal funds. Is this construction money or grant money? Mr. TURPIN. $3 million for Federal grants. Mr. THOMAS. This is part of the act which was subsequently amended and took into account this specific hospital on a grant basis. Is that it? It was a 250-bed hospital and the total cost will be $6 million and the Federal Government puts up $3 million? Mr. TURPIN. That is right. Mr. THOMAS. How firm is the figure of $3 million? If the $3 million is accurate the $6 million will be accurate. How firm is this figure? Mr. KNOTT. Total cost of the hospital? This is the limit of our authorization to contribute to this hospital, Mr. Chairman. Mr. THOMAS. Is it on a matching basis? If the other crowd puts in $2 million and you have $3 million left, are you going to put in the $3 million? How will you work it? Mr. KNOTT. The hospital has informed us they have a commitment for construction loans of $4,150,000. That is evidence of their discharge of the obligation which they had to make before we came in with this request for this contribution. Mr. THOMAS. How much of that $4 million do they intend to spend? Mr. KNOTT. We have hospital representatives here. We have Dr. Farley here. CONSTRUCTION COSTS Mr. THOMAS. Have you gone into construction costs? What are you spending per bed, some $20,000? Dr. FARLEY. Close to $23,000. We are at the stage of schematics at the moment and that is the best I can tell you at this time. We picked the best hospital consultant and design consultant we can get. This is based on information from Public Buildings, AHA, plus our own schematics. Mr. THOMAS. Where will it be? Dr. FARLEY. 13th Street and Southern Avenue. It is behind St. Elizabeths Hospital. Mr. THOMAS. What do you think total construction cost and equipment will be? Do the $3 million and $4 million figures include construction and equipment? When you figure $23,000 a bed that is construction and equipment, is it not? Dr. FARLEY. The money we need to build this hospital we have not talked about as yet. We have talked in terms of how much it will cost to bid it and then how much additional it will cost for class 1, 2, and 3 equipment. You are asking for my personal opinion. I can tell you that I think this hospital will cost more than $6 million when it is ready to take 250 beds. Mr. THOMAS. Can you give a thumbnail sketch of the cost estimate of construction as against the equipment? Dr. FARLEY. $23 per square foot construction cost. That is a firm estimate of construction cost per hospital, as far as I can find. This hospital will more nearly resemble Holy Cross in terms of square footage per bed. It will come out to 290,000 square feet. Mr. THOMAS. A good round picture of a completed hospital is $20,000 a room. That is some $5 million. Can you hold it down to that? Dr. FARLEY. I cannot, sir. Mr. THOMAS. $23,000 a room, then? Dr. FARLEY. That would bring it right in the neighborhood of $6 million. Mr. THOMAS. Questions, gentlemen? (No response.) Mr. THOMAS. Thank you, Doctor. We are delighted to have had you, Doctor. OPERATING EXPENSES, FEDERAL SUPPLY SERVICE Mr. THOMAS. Operating expenses, Federal Supply Service. JUSTIFICATION OF THE ESTIMATE Insert pages 21, 22, 23, and 24. (The pages referred to follow :) SUPPLEMENTAL ESTIMATE OF APPROPRIATION, 1962 "OPERATING EXPENSES, FEDERAL SUPPLY SERVICE" APPROPRIATION LANGUAGE "For an additional amount for 'Operating expenses, Federal Supply Service', $1,000,000." GENERAL STATEMENT "This proposed supplemental appropriation is to (1) carry forward the work, in cooperation with Department of Defense, of identifying items for which supply responsibility will be transferred from Department of Defense to the General Services Administration, and (2) accelerate the cataloging of items in civil agency supply systems which are presently not included in the Federal catalog system." (Quoted from House document.) The DOD AIR program objective is to eliminate duplicative items used for the same purpose within the various military services and to increase the number common to all services. Many of these items are common administrative, maintenance, and housekeeping items widely used by civil agencies as well. Without GSA's participation in the DOD AIR program there is no efficient method for insuring that duplicate items between military and civilian agencies will be eliminated. The 1962 budget as presented included $435,400 for participation in the AIR program. With the increase of $540,000 requested herein, $975,400 would be available for 1962. (Per items 2(c) and 3(c) in preceding tabulations.) The additional amounts are urgently needed because of developments which could not be foreseen when the original estimates were prepared, specifically— (a) It is estimated that 1,160,000 items will be processed under the AIR program. Of this total, approximately 278,500 line items of supply will be referred to GSA for item-management decisions incidental to GSA assumption of greater supply support responsibilities. Based on previous experience an estimated 110,000 of the 278,500 items will be eliminated from the supply systems of the U.S. Government. Department of Defense agencies have already referred about 50,000 of these items to GSA. (b) The original 1962 budget had contemplated that GSA participation in the AIR program would continue at least into fiscal year 1964. It is now clear that this work must be completed at the earliest practicable date. The estimate is based on attaining a completion date as close to December 31, 1962, as possible. With respect to point (a) there are 77 Federal supply classes containing items used by military and civilian agencies. Agencies of the Department of Defense will continue to manage items in these classes only if— (a) The item is essential to a weapons system, for example, a specialpurpose handtool that is used only on a particular missile. (b) The item is in the developmental stage and is subject to continuous redesign. (c) The item is required to be stocked for general mobilization reserve in depots located in the continental United States. (d) The item is peculiar to the Department of Defense. The remaining estimated 278,500 items in these 77 Federal supply classes will be referred to GSA for item-management decisions. GSA will analyze these items as offered, to determine whether an item is to be (a) Eliminated by standardization action: As stated above it is estimated that about 110,000 of the items to be offered will be eliminated by directing the use of a closely related standard item. (b) Directed to be procured as needed from local commercial sources, or (c) Supplied through one of the three GSA modes: FS schedules, direct delivery, or depot stock. This will involve a sharp increase in the standards and cataloging effort required. The essentiality of this effort in unifying military and civilian common items of supply and increasing the supply responsibilities of GSA cannot be overemphasized. Substantial savings will result from (1) eliminating the estimated 110,000 items entirely from the supply systems of the U.S. Government as a whole, (2) making rational decisions as to the disposition of residual assets, (3) accomplishing these transfers on a smooth and efficient basis, with a minimum of overlap and supply failure, (4) producing greater uniformity in supply language and procedures, governmentwide, and ultimately, (5) providing for the management of given items or classes within one agency, rather than two or more. The work outlined above involves items referred to GSA by DOD for item management decisions. In addition, GSA must go forward promptly with AIR program work on the other items within the 77 Federal supply classes which are either (a) to be retained by DOD under the criteria outlined earlier or (b) used only by civil agencies. Regardless of who is ultimately to manage the items involved, it is expected that GSA will act as the major coordinator for 3 major Federal supply groups, including all types of furniture, office machines, and data-processing equipment, and office supplies and devices. All users of items in these groups will refer key date to GSA as an assignee, and GSA will make governmentwide decisions as to elimination through standardization action, catalog cleanup (full identification, adequate nomenclature, purging catlogs of items to be eliminated), and inventory cleanup. The latter involves the designation of substitution patterns, possible modification in items, and other steps to achieve maximum utilization of existing stocks of nonstandard items. In addition to the foregoing, GSA will serve as an AIR participant, representing all the civil agencies, for all 77 supply classes used in common by civil and military agencies, and will coordinate the standards, catalog cleanup, and inventory cleanup work in the civil agencies. The target date for the completion of this AIR program is December 31, 1962. Until the work is completed, supply system costs will tend to be excessive due to the many problems outlined above. CONTRACT CATALOGING The other element in this supplemental request involves procuring cataloging services by contract, particularly to meet urgent requirements in the field installations of Commerce, Interior, NASA, Panama Canal, Post Office, and Veterans' Administration. The extension of the Federal catalog program to the civil agencies has lagged badly, because GSA has not had adequate staff to carry on this work. The result is that practically all of the large civil agencies are converted to the Federal catalog system only in part, with a variety of other systems in use. The requirement for these agencies is susceptible of performance by commercial contract, since it is in the field. The contractual services will provide the engineering and technical information required for GSA to expedite completion of the program and to meet the required work schedule for completion of the cataloging system at the earliest possible date. The contractors will provide the necessary research to supply missing technical information, including, if necessary, examination of the items of supply at agency supply activities. The principal commodity areas are Tractors. Bearings. Construction, mining, excavating and highway maintenance equipment. Piping, tubing, and hose valves. Hardware and abrasives. Electrical and electronic equipment components. Metal bars, sheets, and shapes. Valves. It is clearly GSA's responsibility to do the above requested work. Contracting for this activity is necessary since GSA staff as proposed in this supplemental will be hard pressed to take care of its AIR program responsibilities outlined above, in addition to continuing requirements for (a) the extension of the Federal catalog system to civil agencies on a phased basis, (b) working toward the achievement of a current status in Federal standards and specification work, (c) handling new items of supply as they are developed or as agency need arises, and (d) other continuing work. 8. Administrative operations.-The estimate for administrative support to provide for expanded financial, legal, and other services for the increased programs is based on the same experience factor applicable to the present program in 1961 modified downward in 1962 to reflect improved methods and better management. Mr. THOMAS. How much money are you looking for here, Mr. Bean? I see $1 million over this year's budget. How many jobs will you need to spend this $1 million? Mr. BEAN. Eighty-five, sir. ANTICIPATED VOLUME OF BUSINESS Mr. THOMAS. How much business do you think you will do? Mr. BEAN. We have just prepared a 5-year plan in order to have some good estimates of where we think we are going. I shall be happy to give you a copy of this, sir. This past year we have just completed doing over a billion dollars worth of business in toto, and we expect a 15 percent increase only as the result of this additional Department of Defense operation. Mr. THOMAS. You want this extra $1 million and you are going to spend it for two things. One is cataloging and the other is to give some description and identification of the item? How many items are involved? You showed a tremendous figure here. Mr. BEAN. We are now reviewing- |