The problem would arise here: We have a shortage of court space in Los Angeles. We could use this space either to relocate the post office out of the present post office and courthouse building into this space and then convert that space to court space. The courts are now in the post office. But the court and post office space call for an entirely different kind of design and it would cost us a substantial amount of additional money for redesign. I don't know how much additional cost would be, but it would also cost us 6 months delay in awarding a construction contract. That delay would be costly in the rents that we would continue to pay.

PROJECT READY FOR BIDS

Mr. JONAS. One other question along that line. How far along are you with the project?

Mr. KNOTT. We are ready to go on the market right now.

Mr. JONAS. You mean you are ready to go out for bids?

Mr. KNOTT. Yes sir.

Mr. JONAS. All the designs and specifications are ready and you are ready to advertise for bids?

Mr. KNOTT. Yes, for the building as designed.

Mr. JONAS. Do we have any real estate in Long Beach or would we have to acquire some?

Mr. KNOTT. We would have to start from scratch with an authorization and design.

Mr. STRUBINGER. We would most vigorously oppose any move to transfer all our operations to the Long Beach area. We feel it would be unfair to deprive the people of Los Angeles of any service whatsoever. A compromise solution might be to move part of the operation down there and to give the people in the Long Beach and Wilmington area a service they do not now have, but we think it would be most unfair to force all the people to go 22 miles to do business with us.

SEPARATION OF OPERATIONS BY FUNCTION

Mr. RHODES. Is it possible to separate your operation by function! Mr. STRUBINGER. Yes, it is.

Mr. RHODES. Could you move the warehouse to the port area and leave the office uptown? I am assuming, of course, that the people who deal with customs deal with the office people and not with the appraisers?

Mr. STRUBINGER. They deal with both, sir. We have thought of this, of course, and we feel that a practical solution, if it is decided that there must be a compromise and that the needs of Long Beach and the Wilmington area are such that they should have a facility down there, on the basis of a preliminary survey we feel we would need in the neighborhood of 75,000 square feet in the Long Beach area, and we would then contemplate giving the appraisers' building to the new Long Beach Customhouse.

We would also establish in the Long Beach Customhouse an entry division, a cashier's division, and we would recommend that we abandon our operation in San Pedro and move the marine division there and also transfer the enforcement section to the Long Beach Custom

house. Then we would have in the area of Long Beach, in effect, a subport which would serve the Long Beach and Wilmington people. Mr. THOMAS. What would you leave in the Los Angeles area? Mr. STRUBINGER. It would deprive the Los Angeles area of only the appraisers' store. This would not entail any additional

personnel. Mr. RHODES. In other words, there would be a division by function that would be feasible and at no additional expense to the Government?

Mr. STRUBINGER. I am not advocating this but it would be a solution if it is decided to split it up.

Mr. YATES. What would be the cost?

Mr. STRUBINGER. My estimate is we would need in the neighborhood of 75,000 square feet.

Mr. YATES. What would happen to the basement of the Los Angeles project?

Mr. HUNTER. It would be converted to general office space. Mr. JONAS. How many square feet would you then need in Los Angeles?

Mr. STRUBINGER. The difference between 75,000 and 137,000.

EFFICIENCY OF SPLIT OPERATION

Mr. JONAS. You have covered every point, I think, except you have not discussed the efficiency of the split operation as against one central location. What is your comment on that?

Mr. STRUBINGER. I think so far as customs is concerned there would be some loss of efficiency by separating the appraiser from the collector's office. However, this is not unnatural. We have that situation in many ports, in New York, for instance.

Mr. JONAS. Do you like to have them in one building?

Mr. STRUBINGER. We do where we can do it.

Mr. JONAS. You think it makes for more efficiency?

Mr. STRUBINGER. Yes; there is daily contact between the appraiser and the collector and the farther they are separated the more difficult is communication between them.

Mr. RHODES. Could that communication be by telephone?

Mr. STRUBINGER. It can be, but it is easier for a man to walk from one office to the other.

Mr. YATES. Thank you, Mr. Strubinger. I would like Mr. Hunter or someone to give us some idea of what it would cost to construct a building of the type that has been suggested as a compromise in the Long Beach area of 75,000 square feet.

Mr. HUNTER. We will put that in the record, sir.

Mr. YATES. All right.

Mr. MOORE. Does anyone know how much rent they are paying for customs?

Mr. HUNTER. No, sir.

Mr. YATES. You can put that in the record too.

(The information requested follows:)

RENTAL COST FOR CUSTOMS SPACE IN LOS ANGELES, CALIF., AND PRELIMINARY COST ESTIMATES FOR CONSTRUCTION OF FACILITY FOR CUSTOMS USE

Present annual rental costs for customs space in Los Angeles is $107,253, the appraiser's space costing $62,000 and the collector's administrative office space costing $45,253.

Further study by General Services Administration and customs indicates a net space requirement of approximately 92,000 square feet (128,000 gross square feet) for a suitable facility, in lieu of the 75,000-net-square-foot figure previously discussed, for the Wilmington-Long Beach area. Preliminary cost estimate for this requirement follows:

Site, design, etc..........

-$1,010, 000 Construction, 128,000 gross square feet (without fallout shelter)---- 2,240,000

Total____

3,250,000

The above building would provide necessary space for the appraiser of merchandise including the customs laboratory activity and for consolidation of customs activities which are now occupying approximately 7,200 net square feet of space in the post office and customhouse in San Pedro.

Construction of the above facility in the harbor area would not obviate the need to provide for approximately 57,000 net square feet of space in the presently authorized Federal building to be constructed in downtown Los Angeles. This space is required for administrative offices of the collector of customs, the customs agency service, and for the customs mail examination division.

It is estimated that the total cost, including land acquisition, design, et cetera, for a facility in the harbor area in which to house all customs activities now contemplated in the proposed Los Angeles Federal building, would be approximately $5 million.

PERSONAL PROPERTY ACTIVITIES, GENERAL
SERVICES ADMINISTRATION

WITNESSES

CLARENCE D. BEAN, COMMISSIONER, FEDERAL SUPPLY SERVICE J. W. FLATLEY, ASSISTANT COMMISSIONER, PROPERTY MANAGEMENT

J. A. GARVEY, ASSISTANT COMMISSIONER, UTILIZATION AND SALES

LOREN L. LEEPER, ASSISTANT COMMISSIONER, SUPPLY MANAGEMENT

GEORGE W. SAUNDERS, DIRECTOR, STORES MANAGEMENT

L. L. DUNKLE, JR., DIRECTOR, NATIONAL BUYING
CLIFFORD J. MILLER, BUDGET REPRESENTATIVE

1 Includes capital outlay as follows: 1960, $29,000; 1961, $13,000; and 1962. $16,000.

GENERAL STATEMENT ON FEDERAL SUPPLY SERVICE

Mr. YATES. Mr. Bean, we are glad to see you.

Mr. BEAN. Thank you, Mr. Chairman.

Mr. YATES. Do you want to tell us something about the Federal Supply Service and its operation over the last year before we get to the specific appropriations?

Mr. BEAN. Yes, sir. I have a short statement which might be helpful.

Sales from stock, warehouse, fuel yard, and retail stores, in the first 9 months for fiscal 1961 were $133 million. This is an increase of $22 million or 20 percent over the corresponding period of last fiscal year.

For the past 16 months, each month's sales have been higher than those for the same month for any previous year.

As a matter of fact, we just now have March figures which are 31 percent higher than March of last year, the highest volume we have ever had in any single month.

These increased sales do not include any additional support to the military agencies, and so far the President's restrictions on oversea purchasing for both the military and ICA have not greatly affected our volume. However, we do expect a substantial increase in the fourth quarter.

Historically, the distribution pattern of sales from stock has been about 72 percent of the volume in the first 9 months and 28 percent in the last 3 months. The application of these ratios to actual sales indicates that annual sales from stock for fiscal 1961 will be at least