Mr. BROOKS. I understand.

Mr. WARREN. Or any other partition company bid.

Mr. BROOKS. What I am asking you is did any of the other contractors make an agreement with the subcontractor, O'Brien, or with the subcontractor, Henges, to provide partitions under the general contract which they were submitting, a total overall bid?

Mr. WARREN. It was not brought to my attention. There was nothing brought to my attention to indicate that other than those two did. Mr. BROOKS. Do you know anything about a rumor that another company, a general contractor, rather than Hercules, would have been low if they had used a bid from the O'Brien Co. ?

Mr. WARREN. Yes, sir; that was talked about quite a bit; some weeks after the award of the contract.

Mr. BROOKS. What was the story on it?

Mr. WARREN. The story was that there was one company that was grinding their teeth a little bit down there. They told me the name of the company at the time but it was something that I didn't think was something that I had to take cognizance of, so I didn't take note of it. They would have been low

Mr. BROOKS. Was it the Stocker Co., Stocker Construction?

Mr. WARREN. That sounds familiar.

Mr. BROOKS. Their bid was $184,949.

Mr. WARREN. Yes, sir; that is the company. But I hadn't tried to remember the name of the company.

Mr. BROOKS. And the story was that they would have been low had they gotten the partitions from O'Brien?

Mr. WARREN. Yes, sir. Those facts can be definitely established. Construction companies don't throw their estimates away.

Mr. WALLHAUSER. So far as you were concerned this was a rumor and not a fact?

Mr. WARREN. Yes, sir. I have no firsthand knowledge of it at all. Mr. BROOKS. Was it because the company didn't put faith in paragraph 217 that you cited about equal products being acceptable? Mr. WARREN. Sir

Mr. BROOKS. Is that the reason they didn't get a bid from O'Brien? Mr. WARREN. I would say that. And so many companies, too few companies, read the specification conditions in a contract.

There is a paragraph in our specification conditions, paragraph 2-17, which is put in there specifically to insure that through inadvertence a proprietary specification is prepared, that the integrity of competition can be preserved. This paragraph 2-17 is put in there for that specific purpose. We put it in a number of years, and I understand the rest of the country is using it-many other regions—are using the same. It was adopted by the central office.

Mr. BROOKS. We have a copy of that specification here. It is just a substitution for equal product materials.

Mr. WARREN. Sir, the intent is that if a proprietary or restrictive specification is made there, it gives the contracting officer discretion to preserve the spirit of competition.

Mr. BROOKS. We will put this in the record.

Mr. Moore, would you read this?

Mr. MOORE. This is from special conditions to the invitation to bid. It is paragraph 2-17, brand names:

Reference in this specification to any article, device, product, material, fixture, form, or type of construction by name, make, or catalog number shall be interpreted as establishing a standard of quality and shall not be construed as limiting competition, so that the contractor might use, at his discretion, any article, etc., which in the judgment of the contracting officer is equal to that specified. Mr. BROOKS. As the Government contracting officer, you felt that was clear enough to cover that situation?

Mr. WARREN. Definitely.

Mr. BROOKS. Did you hear that the Henges Co. wanted to drop their bid to the amount of the Hamilton bid after the deadline set by the general contractors?

Mr. WARREN. Yes, sir. Rumors came to me that the Henges Co. was really up and alive and driving hard to get this job, and that they had gone to the Hercules Construction Co.-which is a practice not unusual, to go and try to sell your product and to try to get the contractor to change his mind and use yours instead of the original figure be used, and so forth and so on. That is not uncommon.

Mr. BROOKS. Go to the general and try to cut out the subs that he based his bid on?

Mr. WARREN. That is right.

Mr. BROOKS. Just a nice friendly cutthroat operation that happens occasionally.

Mr. WARREN. That is competition.

Mr. WALLHAUSER. I think this is the usual practice, the witness testified. Isn't that so?

Mr. WARREN. When I say usual, it is a practice that the whole industry is trying to discourage.

Mr. BROOKS. They have a deadline now established, don't they? Mr. WARREN. It is like payola. It covers quite an area of the construction morality.

Mr. BROOKS. I think it is true that it is not just subcontractors that occasionally do that. I have heard rumors even in my own area, actually, that some general contractors have shopped their subs. It is hard to believe.

Mr. WARREN. They shop with their subs and then have a hard time geeting good subcontractor's figures.

Mr. BROOKS. Did you hear anything about a bribe in the interest of getting this particular sub?

Mr. WARREN. Sir, this contract was one of the most gruelling that I ever handled. I heard-yes, I heard rumors but I don't-don't pull me in on that. This other, where I am not concerned, I would rather not comment on that.

Mr. BROOKS. Would you tell us about any unusual difficulty which followed the award? We will get to this matter of attempted bribery

later.

Mr. WARREN. After the award, the picture, as I saw it, was that the Hercules Construction Co., submitted the O'Brien partition for approval. I had to go to paragraph 2-17 to see whether I was authorized and had the discretion to approve their partition, if I thought it was equal in quality to the Henges partition. We went into it very

thoroughly with Mr. Bevan and Mr. Kunze, the principal on it. I think Mr. Rankin, the chief of design, was in on it some, too. I finally made the decision and approved the O'Brien partition. As soon as I did, all hell broke loose, it seems like. The Henges Co., began to put the pressure upon Mr. Jay and Mr. Lund, and Mr. Lund began to put the pressure on me that, because the specification was tight on the Henges partition, that I couldn't do anything but move toward approving the Henges partition, and at that position our relations began to retrograde quite a bit.

I held my position. They seemed to not give up and want to-they put bumps on my head and I guess my head is pretty hard, and I just wouldn't give in. And so that was the beginning of the time. And during the conduct of the contract, the bitterness and recriminations that were built up during this contract were very singular in my whole 30 years experience.

Mr. BROOKS. We have copies of those letters of complaint from the Henges Co. The first is dated June 25, 1959, addressed to the regional commissioner, Mr. Thomas Jay, signed by Mr. J. Gordon Henges, of the Henges Co., St. Louis office. The other is dated July 10, 1959, addressed to the regional commissioner, Mr. Thomas G. Jay, and it is signed by R. J. Henges, the Henges Co., Inc., of Kansas City.

And we will put these in the appendix to the record.

What was the general attitude, Mr. Warren, of Mr. Jay and Mr. Lund in discussing this matter?

Mr. WARREN. Sir, when those two letters came in, then is when there followed, I would say, I would guess-I know of 4 or 5, and I would guess of 8 or 10, of what I would call cloak and dagger sessions with Mr. Jay, Mr. Lund, and Mr. Henges. And in spite of the fact that I was in the contracting

Mr. BROOKS. With you?
Mr. WARREN. No, sir.

Mr. BROOKS. You mean

Mr. WARREN. Cloak and dagger sessions held with those three.
Mr. BROOKS. Mr. Jay, Mr. Lund, and Mr. Henges?

Mr. WARREN. Yes, sir; and in spite of the fact that I was the contracting officer and was responsible personally, because the contracting officer is like the mesquite bush on the prairies of western Texas, he is all by himself when he makes a decision, he stands responsible for it. Mr. Floete can't help him.

Yet though I was responsible as contracting officer in this thing, these cloak and dagger sessions went on for a period of several weeks, or a month, a month or two, without me even being given the courtesy of a single word on it. While this was going on, that is when I gave the warning that I spoke to you, Mr. Wallhauser, that I did issue a warning on this thing.

It was during that period.

Mr. WALLHAUSER. These letters from the firm of Henges, what was the gist of their letters? I haven't read the letters. They are in the record, but what did they complain of?

Mr. WARREN. Principally that they still contended that there had been an interpretation placed upon the specifications which was entirely wrong, and that they held the ground, and I suppose when you are a businessman it is certainly an excusable thing for them to hold,

they held the ground that only their partitions would satisfy the specifications.

Their letters, I believe, as I recall now-it has been literally a year ago since I looked at the letters-their letters brought in different faults and picked to pieces as much as they could the O'Brien installation.

Mr. WALLHAUSER. They were familiar with the "or equal" clause in the specifications, weren't they?

Mr. WARREN. Sir, I can't speak for them on that.

Mr. WALLHAUSER. Their main contention was that it had to be their partition, or no partition? Was that their main contention?

Mr. WARREN. Yes, sir; because we had a new engineer, and in the hurried deal that we wrote these specifications, he wrapped them pretty tight around the he wrapped them very tight around the Henges product and make.

Mr. WALLHAUSER. It was a general clause which said, "or equal?" Mr. WARREN. Yes, sir.

Mr. WALLHAUSER. So they could not hang their hats specifically on that one point, could they?

Mr. WARREN. Sir, I must not read their minds for them.

Mr. BROOKS. Was it about this time that you did not reject the O'Brien partition, and thereby give an exclusive to the Henges Co., that dissension started building up to a peak, apparently, between Mr. Jay, Mr. Lund, and yourself?

Mr. WARREN. Yes, sir.

Mr. BROOKS. Those letters of complaint from the Henges Co., along with other documents relating thereto, will be appended to the record. They are pretty long, and I am glad that you have paraphrased them for Mr. Wallhauser and the people attending here.

When you were advised of these letters and the point raised in them, what did you do?

Mr. WARREN. I made a rather complete report in writing to Mr. Lund, in answer to them.

Mr. BROOKS. We have a copy of this memo dated July 28, 1959, to the regional director, PBS, from the Chief, Design and Construction, Division, the subject of which is, "Henges Co., Partition, Mart Building, St. Louis, Mo." Is this the answer that you prepared, dated the 28th of July 1959 [handing to witness]?

Mr. WARREN. Yes, sir.

Mr. BROOKS. We will put it in the record. (The material referred to follows:)

To: Regional director, PBS (Lund).

JULY 28, 1959.

From: Chief, Design and Construction Division (Warren). Subject: Henges Co., Inc., complaint-Partitions, Mart Building, St. Louis, Mo. Reference is made to the correspondence of the Henges Co. in connection with the partition problem at the Mart Building construction contract now being finished. I refer specifically to the Henges Co. letters of June 25, 1959, and July 10, 1959, addressed to the Commissioner.

Following instructions issued by you on July 27 on a routing slip, attaching a copy of official and pertinent correspondence with respect to the partition problem at the Mart Building, which concerns Mr. Henges and his complaint that we have approved partitions made by the O'Brien Co., which do not comply with the specification requirements, and that his partitions should have been submitted by the contractor and approved by this office. For your information the following comments are submitted on Mr. Henges' letter dated June 25, 1959.

I agree with the comments made by Mr. Henges in paragraph 3 of his letter. In fact we have been in contact with one another at various times for the past several years, with respect to partition problems of GSA in this region.

I do not agree with the statement made by Mr. Henges in the fourth paragraph of his letter in which he states, "We were asked by Mr. Warren if we could assist in writing specifications for that job." Why I should have asked Mr. Henges to assist us in writing specifications on partitions is a little puzzling, because I feel as though the engineers in this office are fully competent to prepare specifications without specifically requesting manufacturers to write them for us. As I recall I believe that I specifically asked Mr. Henges to discuss the problem of the partitions at this particular job with us to ascertain if his company had materials on hand and facilities in their organization to accomplish a rush job. A similar conference was held with the O'Brien people to ascertain if they had partitions in stock and if they had facilities to accomplish a rush job. I was merely trying to in advance get such information as would insure a satisfactory working arrangement with any possible low bidder that after the contract was awarded materials would be obtainable for which we would specify. So I concur wholeheartedly with the comments and statements made by Mr. Henges in the fifth paragraph of his letter.

While I did not participate in discussions described in paragraph 6 with Mr. Henges, I can well imagine that Mr. Rankin did participate in such a discussion and I recall very clearly that Mr. Henges did make statements to us as indicated by him in the seventh paragraph of his letter.

In connection with paragraph 8, I wish to emphatically state that Mr. Rankin, Mr. Glassbrook nor myself asked Mr. Henges to write his specifications for the partitions for us. I have discussed this paragraph also with Mr. Rankin and I wish to emphatically state that Mr. Rankin nor myself discussed the finalized form of the specifications with Mr. Henges.

I can see no pertinency for comment at this time on paragraphs 9 and 10. There is some truth and some salesmanship and some inadvertent misrepresentation.

In connection with paragraph 11, Mr. Henges is 100 percent wrong when he stated that I had indicated to him that I had modified my thinking.

Paragraph 12 is a representation made by Mr. Henges which has no particular pertinence to the controversy in question. I wish to merely add that his statement that he had visited the construction job at the Mart Building in St. Louis on numerous occasions is slightly an understatement. Reports reaching me are that he was there so many times he was somewhat of a nuisance to the contractors performing their work.

I am not at this time submitting comments with connection to paragraphs 13 to 20 inclusive.

As you have stated you and Mr. Jay are visiting the job on Wednesday and Thursday, and I believe the job will speak for itself more eloquently than I can in this memorandum.

I also feel that any comments that I could make at this time on paragraphs 21, 22, and 23 would be of little help to you and Mr. Jay in your inspections at this time.

After you and Mr. Jay have completed your conferences and the inspection trip to St. Louis with Mr. Henges, if you desire a complete and full presentation covering the motifs for my actions, I shall be more than glad to defend myself, as I feel now as I felt then, that my decision was legal and was in the interest of fair play in handling construction work for region 6, GSA.

I have ever been of the opinion that the preservation of the spirit of competition is one of the major policies that must be followed by Public Buildings Service, General Services Administration.

I am also making no comment at this time in connection with the Henges Co. letter of July 10, 1959, as I feel most of the matters in that letter are covered by their letter of June 25. If there are any specific items in that which have not been covered, I will cover in my final report after you and Mr. Jay have completed your investigation.

Mr. BROOKS. What happened after your statement to Mr. Lund? What happened then?

Mr. WALLHAUSER. Excuse me. Could he in two sentences give me the general gist of what this letter or memorandum said?