TRANSFER OF RESPONSIBILITY (SANITIZED) FROM THE GENERAL SERVICES ADMINISTRATION (GSA) TO CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87-00352R000200090002-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 22
• Document Creation Date: December 22, 2016
• Document Release Date: March 24, 2009
• Sequence Number: 2
• Publication Date: June 12, 1981
• Content Type: MEMO

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MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
Deputy Director for Science and Technology`
Comptroller
FROM: Harry E. Fitzwater
Deputy Director for Administration
SUBJECT: Transfer of Responsibility from
the General Services Administration to CIA
Mo
Y
1. Paragraph 4 of this memorandum contains a recommendation
for your approval.
2. For years now, CIA has been dissatisfied with the
operations and maintenance support provided by GSA
Efforts to obtain improvements in service have been unsuccessful
until February 1981, when the GSA Regional Administrator for the
National Capital Region (NCR) agreed in principle to grant us a
use permit for the building and turn over total responsibility
for its operation to CIA, including the protective function.
Such action requires the approval of the Administrator, GSA,
which the Regional Administrator believes would be granted upon
receipt of a request from CIA. The question before us is, do we
make such a request? We have examined the problem on a promise
that CIA would contract out those operation, maintenance, and
protective functions now performed by GSA and have concluded that
a transfer is practicable. The resultant staff study is attached
(Attachment A). After further examination, however, we have
concluded that CIA is better served by retaining the present arrange-
ment with GSA Federal Protective Service for the physical protection
Advised of our desire to retain the GSA guards in
Regional Administrator reiterated his
preterence that we assume all building responsibility, including
the protective function. He noted that the deterioration of resource
levels that first prompted him to offer us the building has
worsened. While the Regional Administrator would not agree to retain
just the protective function, he expressed no objection to CIA
making such a request to the Administrator.
3. There are significant resource implications sociated
with a CIA takeover of responsibility Assuming
implementation in FY-1982, the analysis in Attachment B indicates
a cost increase of $2.0 to p2.S million, depending on whether we
retain GSA guards, provide staff guards, or obtain guards on a
service contract. The recommended approach, using GSA guards on
777
OL / .
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STAT
STAT
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SUBJECT: Transfer of Responsibility) ]from
the General Services Administration-(GSA)--to CIA
a fully reimbursable basis, increases cost $2.3 million. Addressing
only the custodial and maintenance segments of support, we expect
service to improve 20 to 50 percent over levels currently provided
by GSA.
4. Despite the increased cost to CIA, I believe it is
essentia we assume responsibility for the maintenance of
to ensure the reliable support necessary for the
continue operation of this vital national intelligence center.
GSA has not provided the responsiveness CIA is seeking and has
stated they cannot do so in the future. I seriously question
GSA's ability to continue to support us at present levels, given
the continued erosion of their resources. Accordingly, it is
recommended that (a) you sign the attached letter (Attachment C) to
the Administrator, GSA, requ g that the 0 erations and
maintenance responsibilities7t-iR
be assigned to CIA
under a revocable permit with GSA retaining the protective
responsibility on a reimbursable basis, (b) we rely to the maximum
extent practicable on contracted services to carry out our new
responsibilities, and (c) management and budget responsibility for
support operation be given to the National
Photographic Interpretation Center (NPIC).
/j/
Harry E. Fitzwater
Attachments:
A. Staff Study
B. Analysis of PY-1982 Cost
C. Letter for your signature
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SUBJECT: Transfer of Responsibility) from
the General Services Administration (GSA) to CIA
Comptroller
Orig
1 - DCI
1 - DDCI
1 - ER
2 - DDA
1 - DDS$T
1 - Compt
1 - D/Sec
1 - D/NPIC
- Return
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---,- Clellyu CL Deputy it c or nd Technology
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SUBJECT: Transfer of Responsibility from
the General Services Administration SA) to CIA
ORIGINATING OFFICE:
Director o' Logistics Date
Di.s_tribution Withheld:
- OL Files
- D/L Chrono
Cl May 1981)
Retyped: OI. (2. June 1981)
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5 MAY ?2x911
MEMORANDUM FOR: Director of Logistics
FROM:
SUBJECT:
from the General Services Administration
(GSA) to CIA
Transfer of Responsibility
1. This memorandum presents the results of a study of
the implications of CIA taking over responsibility for
operating Paragraph 11 contains the conclusions
reached in the study.
2. Introduction: For years C tisfied
with the quality of support provided by GSA.
Repeated requests to GSA to augment or dedicate their work
forces or to'permit CIA to take over operations
have been rejecte . its past February, in response to
another CIA request, the GSA Regional Administrator expressed
his willingness to transfer all responsibility for the
building to CIA. The change in GSA's position reflects
their deep concern over continuing reductions in financial
and personnel resources that are now limiting their capability
to provide support. Since February, we have worked with GSA
to ascertain the feasibility and cost of a transfer. Summarized
below are discussions of costs, benefits, alternatives, and
implementing considerations.
3. Scope: A working assumption of the study was that
it would be unrealistic to expect approximately 100 new
positions to carry out building operations and that CIA
would contract for the services being provided by GSA. The
methodology adopted, then, was to compare operations as they
exist now under GSA control with operations under CIA control,
utilizing a single Operations and. Maintenance (O&M) contractor
to provide custodial, maintenance, and protective (guard)
services. The Office of Security has determined that
commercially hired guards should not-be used and that the
guards must be either CIA staff or contract staff employees.
Costs, which are presented in FY-1981 dollars for comparison
purposes, reflect the use of a single OE,M contract. Adjustments
necessitated by the use of staff or contract staff guards
are noted. The study does not cover any aspect of the
construction and operation of the addition to the building
now being designed. Additional CIA resources will be required
for operations when the building is completed, regardless of
whether CIA or. GSA is in control.
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SUBJECT: Transfer of Responsibility from
the General Services Administration SAjto CIA
4. Operating Cost: Although the GSA accounting
system does not accurately track costs FY-1981
operating costs are estimated at $5.7 million (Attachment A).
CIA payments to GSA Standard Level User
Charge (SLUC) and reimbursable work total $6.3 million.
Under CIA control and contracting for all services, the
estimated cost of operations is $7.2'mi.llion, plus $.5
million in one-time start-up expense (Attachment B). The
increase in total outlays by CIA is attributable to an
increase of 15 percent in staffing levels, more attractive
pay scales to ensure a stable work force of competent contractor
employees, and a provision to pay contractor employees
awaiting security clearance (10 percent of labor costs).
An analysis of contract costs (Attachment C) reveals that
personal services provided by an overall O&M contractor will
cost $4.2 million,'double personal. services costs presently
incurred by GSA. The use of staff or contract staff employees
as guards can be expected to reduce the overall cost to CIA
by about $480,000 (Attachment D).
5. Capital Cost: There are two categories of capital
cost, programmed an n grammed, associated with the
operation Both can have a sizable impact
a. Programmed: GSA presently programs and funds
routine, predictable major repairs and improvements,
such as.the replacement 1200-ton chiller now being
installed and the second chiller slated for funding (at
$420,000) this year. Unfunded requirements totaling
more than $1 million have been identified by CIA and/or
GSA (Attachment E). With the utility system
now exceeding its original design life, CiA as
identified a requirement to refurbish the system in FY-
1985/6 at a cost of $2 million each year. Smoothing
these requirements indicates an average annual cost for
major capital. expense in excess of $600,000. To some
extent, programmed capital expenses are reflected in
the Repair and Alteration (R&A) portion of the Operating
Budget (Attachment A). However, REA requirements are
usually underfunded in GSA budgets.
b. Unprogrammed: A very real, but undetermined,
cost of CIA assuming responsibility from GSA is the
loss of what amounts to an insurance policy for the
physical plant. The GSA R$A program is responsible for
correcting failures, drawing on pooled financial and
manpower resources established for that purpose. CIA
has no such "shared risk" pool with which to augment
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SUBJECT: Transfer of Responsibility) from
the General Services Administration (GSA) to CIA
operating resources when major failures unexpectedly
occur. Given the age 40 years) and
the plant equipment (20 years , major failures should
not be unexpected. The construction of a Metro subway
line adjacent to the building will increase the risk of
catastrophic failure to the structure. Lacking a
contingency fund to cover this type of low-probability,
high-cost occurrence, CIA must be prepared to cover
such costs from annual.operating budgets.
6. Operational Considerations:
a. Security: The Office ecurity has determined
-that guar U ervice must be provided by
either the GSA Federa rotective Service or staff or
contract staff CIA employees. GSA has stated that we
assume all building responsibilities or none, eliminating
the possibility of using GSA guards and a CIA OE4M
contractor. Both staff and contract staff guards
require positions within the CIA ceiling.
b. Concessions: Cafeteria, barber shop, and
vending machine services are presently provided by
Government Services) Incorporated (GSI), under the
terms of an agreement between GSA and GSI. Cost and
staffing analysis in this study are predicated on
retaining concessions on a self-supporting basis separate
from the OEM contract.
c. Reimbursables: There are in excess of $1
million in outstanding reimbursable work orders obligated
on CIA records..Funds for work not accomplished when
operating authority shifts to CIA can be refunded to
CIA by GSA and used for the originally intended purpose,
fiscal year limitations notwithstanding.
d. CIA Staffing: No increase in CIA logistics
staffing is anticipated as a result of a shift from GSA
to an overall O&M contractor. If, however, the security
segment is accomplished by staff or contract staff
employees, 34 new positions will be required.
e. Programming of Projects: A valuable feature
of GSA involvement in uil ing operations is that funds
transferred to GSA by CIA for repairs and alterations
are considered obligated by CIA. It is not necessary
for-work to be under actual contract to avoid loss due
to fiscal year limits. Within GSA, R&A funds carry no
fiscal year designation:.:..-.By taking over the building,
CIA loses a great. deal of the flexibility GSA has to
accommodate other Government agency funds without
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SUBJECT:. Transfer of Responsibility) (from
the General Services Administration (GSA) to CIA
respect to fiscal year limitations. Great care will
have to be exercised to ensure that design and construction
funds are available and obligated on schedule. In
particular, the ability to utilize end-of-year funds
will be impaired.
7. . Benefit: By taking over responsibility)
and relying on an O&M contractor, CIA can expect to
min (1) a service organization dedicated to CIA requirements,
(2) better qualified and motivated personnel, and (3) more
personnel. With the combination of higher employee productivity
and increased productive hours worked, we-anticipate a
minimum of 20 percent and a possible 50 percent improvement
in service levels. The effectiveness of the O&M contractor
should be reflected by a rapid reduction in backlogged
maintenance and a visible improvement in the appearance and
condition of the facility. Once the building is in the
condition desired by CIA, the amount of effort required to
maintain the building should drop. Any surplus of contractor
employees thus generated should be absorbed by the operating
requirements of the new addition. The use of staff or
contract staff guards will add an intangible 'better security'
to the above benefits.
8. Timing: If a decision is made to take over
operations, we do not expect 'a contractor to be prepared
ror full responsibility within 12 months. In the operation
of the utility plant in particular, the contractor may not
be fully staffed for 18 months, based on recruiting experience
of one of our facility contractors. Time frames to commence
operations include three months to let a contract, five
months for recruitment, and four months to obtain security
clearances for over 100 persons. During initial staffing,
we also expect a high failure rate during background investigations,
especially among entry-level and guard-force employees. A
staff or contract staff guard force may advance the start
of the security segment somewhat because of the elimination
of the three-month contracting phase.
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SUBJECT: Transfer of Responsibility) from
the General Services Administration to CIA
9. Alternatives: There are few viable alternatives
to.an O&M contract with or without staff/contract staff
guards.
r., tha Avent CIA decides not to take responsibility
GSA intends to continue to maintain
the facility at its present level of effort. In the
face of further budgetary pressures, maintenance of
existing service will be a very real challenge to GSA
management. They have made clear their inability to
increase their commitment to CIA. Conversely, CIA
maintains that the present level of support is unacceptable.
b. Suggestions that GSA retain their present
responsibilities under SLUC, allowing CIA to contract
independently for CIA-funded requirements were judged
unacceptable to GSA. Potential problems of fragmenting
operating responsibility for the building are readily
apparent.
c. CIA could take over the building and fund an
O&M contract at the level of present payments to GSA.
A scaled-down effort is possible, but reductions are
limited by the high proportion of fixed utility costs
to total costs and by certain added costs necessitated
by CIA security requirements. At lower staff levels,
the contractor will be expected to sustain the plant at
its present (unacceptable) condition. Upgrading the
plant to CIA standards will require separate, one-time
contracts to eliminate the backlog of requirements and
correct years of gradual deterioration.
10. Administration Within CIA: The reason CIA is
interested in operatin is a belief that more
responsive service can e o alne y assuming control from
GSA. It follows that the occupants are
better able to manage their operation and allocate their
resources. In addition, the program organization (National
Photographic Interpretation Center) will be better able to
justify and defend resource requests as part of a vital
national intelligence asset. If CIA takes over the building,
it is ro osed that budget and management authority rest
with ccupants. Directorate of Administration
personnel qualified to manage the building operation are
presently on assignment there.
11. Conclusions: The level of support provided by GSA
is unacceptable to occupants, and GSA is unable
to divert more resources to support the building. For an
estimated $7.8 million in recurring operating and capital
costs, which represents a 24 percent increase over our
present payments to GSA, CIA can expect to get from 20 to 50
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SUBJECT: Transfer of Responsibility) ]from
the General Services Administration (GSA) to CIA
percent improvement in service levels. Additionally, CIA
can expect $515,000 in first-year start-up costs. An
indirect cost of moving away from.. GSA is that CIA accepts
full liability for unprogrammed expenses due to failures.
We do not anticipate any insurmountable problems in operating
the building, although there are many elements which require
further negotiation. Based on the inability of GSA to
foresee an improvement in their support. it is ended
that CIA request a revocable permit with
authority to operate and maintain it. The precepts on
which a delegation would be based are identified in Attachment F.
It is recommended that CIA rely primarily on an OEM contractor
to perform custodial and maintenance services. The Office of
Security maintains that the guard segment be accomplished by
staff or contract staff employees, which will require the
provision of staff positions. Whether a single O&M contractor
is used, or an OFM contractor with staff/contract staff
guards, it is recommended that all required resources and
management be made the responsibility occupants
(National Photographic Interpretation Center).
I
Attachments:
A.
cost o operations
B. Comparison of Costs (GSA E
Con.trattor erations)
C. Proposed
Incentive-Type Contract
(FY-1981 Dollars)
D. Comparison of Guard Cost (OE1M
Contractor vs. Staff)
E. Major Repair/Alteration Costs
F. Precepts
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AttacnmefL L
Page 1
PROPOSED INC.ENTI"VE.,TYPE CONTRACT
FY-1981 DOLLARS
(Thousands)
Direct Labor
Indirect Labor (Management)
Total Labor*
General and Administrative (25%l
Incentive Fee C10%).
068
767
$3,835
383
ESTIMATED CONTRACT COST $4,218
* Labor includes allowances for Benefits and
Premium Pay in lieu of Overhead.
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PRECEPTS
PROPOSED AGREEMENT BETWEEN CIA AND GSA
TRANSFERRING OPERATIONAL RESPONSIBILITY
1. GSA will issue a revocable permit (delegation)
authorizing CIA to operate the facility in the
At an nCT-reed upon time, GSA will
cease to provide all support as outlined
'in paragraph 2 below. CIA will cease al C payments and
reimbursements to GSA associated with the operation
2.
Responsibilities being transferred to CIA include:
Protective services at and inside the
outer perimeter
Fire prevention and protection
Compliance with occupational safety and
health requirements
Custodial services for the building and grounds
Utilities service
Operation and maintenance of the facility,
including the outer perimeter
Repairs and alterations within and including
the perimeter
- Construction of new facilities
- Operation of concession facilities.
3. Transition from GSA to CIA will be accomplished within
the following guidelines:
a. GSA support functions are categorized as
custodial, facility operations, and guard; each of these
segments may be transferred individually.
b. GSA will continue to provide the current level of
support to until such time as a CIA contractor
is prepared to assume operational responsibility for a
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particular segment. CIA will attempt to have a
contractor in place in all segments by April 1982.
c. Beginning 1 October 1982, CIA will assume
direct-responsibility for payment of utilities with
corresponding reductions in SLUC payments. CIA will
make quarterly payments to GSA for SLUG and overtime
labor for utility service. If CIA assumes responsibility
during a quarter, pro rata adjustments in payments will
be made. Only emergency work orders will be levied on
GSA during the transition period. Authority to contract
for maintenance, repairs, and alterations in-the building
will remain with GSA until the facility operations
function is transferred to CIA.
4. As legal. owner GSA will apprise
CIA of any restrictions imposed-from outside GSA that may
limit or alter the use of any of GSA's
facilities; CIA and GSA will cooperate ng representations _Ln before local planning and regulatory bodies such as the
National Capital Planning Commission.
5. By mutual agreement between CIA and GSA, GSA will
perform construction design and management services for
11
major projects on a reimbursable basis.
6. GSA will identify those of the following repairs
and alterations that GSA will. fund and pursue to completion
GSA construction schedules will be coordinated with the CIA
building manager.
a. Chiller Replacement: Walkway:
Platform Ventilation
PCN 88377 - Estimated Cost $443,737
b. Fire Protection Improvements
PCN 98273 - Estimated Cost $376,366
c. Building Inspection
PCN 07037 - Estimated Cost $4,000
d. Completion of
died Cost - $29,000
e. Installation of stair treads
Works inventory number 0052
Estimated Cost - $10,000
f. Chilled water and steam line insulation
Works inventory number 0089
Estimated Cost - $17,000
g. Energy conservation study
Works inventory number 0106
Estimated Cost - $33,300.
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7.. GSA will attempt to complete all minor GSA-funded
and reimbursable work orders outstanding prior to the effective
transfer of operating authority. Funds for all reimbursable
work not commenced or completed by the transfer date will be
returned to CIA with identifying work orders.
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- . Central Intelligence Agency
The Honorable Gerald P. Carmen
Administrator
General Services Administration
Washington, D.C. 20405
Dear Jerry:
For some time the Central Intelligence Agency (CIA) has
sought to take over responsibility from the General Services
As an cility tooperation
Administration (GSA) for the custodial and fa
ort of
an important national intelligence program,[ errands
a high degree of responsive support to ensure reliable -acility
operations and provide an environment that contributes to an
effective motivated work force. Because-of the stringent
security requirements governing access to our building and GSA's
inability to dedicate more resources to our operation, support
response has diminished over the years. On the other hand, CIA
is in a better position to identify requirements and allocate
resources within the building.
The situation has been discussed at length with Mr.
Walter V. Kallaur, Regional Administrator, National Capital
Region, and his staff. Mr. Kallaur has indicated that if the
request of the CIA to assume responsibility for the maintenance
.and operation of the building is granted, then the CIA should
assume responsibility for the protective function as well.
However, while we desire to assume the operations and maintenance
functions, we would prefer GSA continue to provide a Federal
Protective staff for the building on a reimbursable basis.
Accordingly, it is requested that a revocable permit be issued
intenance
d
ma
authorizing CIA to assume the operations an
responsibility, as described in the enclosure, for the operation
ls of
l
eve
and that GSA agree to.provide current
FPO support on a reimbursable basis..
tel. i i~~9
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The Honorable Gerald P. Carmen
Harry Fitzwater, our Deputy Director for Administration,
and James McDonald, our Director of Logistics, are available
to discuss this matter with you and your staff and to work
out a mutually acceptable transfer date.
Yours,
S
William J. Casey
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The Honorable Gerald P. Carmen
Distribution:
Original - Addressee
DCI
DDCI
ER
DDSf T
Compt
DDA
D/Sec
D/NPIC
D/L (Official)
Director o. gis ics
Distribution Withheld:
OL Files
D/L Chrono
1 - RECD
(To be. filed in P$PS)
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