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TESTIMONY OF RALPH G. WARREN, CHIEF, DESIGN AND CON

STRUCTION DIVISION, PUBLIC BUILDINGS SERVICE, GENERAL SERVICES ADMINISTRATION, REGION 6, KANSAS CITY, MO.

Mr. BROOKS. Be seated and give us your full name and state your position with GSA.

Mr. WARREN. My name is Ralph G. Warren, Chief of the Design and Construction Division in region 6, Public Buildings Service, and as such I have been delegated overall and sweeping—complete authority as contracting officer for all construction work.

Mr. BROOKS. Who are your supervisors, sir?

Mr. WARREN. My immediate supervisor is Mr. E. H. Lund, Director of Public Buildings Service of the region, and Mr. Thomas Jay, Commissioner, GSA region 6, and Mr. L. L. Hunter, Assistant Commissioner for Design and Construction in the central office.

Mr. BROOKS. Will you tell us briefly of your past Government service and experience which miglit qualify you for this position you now hold?

Mr. WARREN. I have passed an examination and entered into services for the Government as an engineer over 30 years ago. I have been progressively promoted to my present position. I am licensed to practice engineering in private industry in the States of Kansas and Missouri, and am registered as such.

Mr. BROOKS. The subcommittee investigator while in the GSA regional office talked with you several times, did he not? Mr. WARREN. Yes, sir.

Mr. BROOKS. In addition to your name being mentioned in the files, which we were looking over, on a couple of cases that we were reviewing, I believe you were referred to by Mr. Jay as a disgruntled employee. So naturally we wonder why you were disgruntled. I wonder if you would please tell us what caused this viewpoint in Mr. Jay's mind.

Mr. WARREN. Sir, I believe a more accurate description of that situation would be that I'm confronted with two disgruntled supervisors. Their disgruntlement seemed to become acute and somewhat heated during the early handling of the award of a contract to the Hercules Construction Co. in St. Louis, and during the supervision and operations of that contract.

Mr. BROOKS. With regard to this removable partition manufacturer, I wonder if the Henges Co. and the O'Brien Co., which both apparently installed partitions, had ever competed as equal products on any Government job prior to the Mart Building.

Mr. WARREN. In this region, in the GSA, they have been competing on a basis of equality in quality of their product for several years, and there have been many, many cases, and I am informed with the U.S. Engineer Corps and in private business they have been competing for years on that basis.

Mr. BROOKS. Would you just give us briefly for background purposes the circumstances regarding the remodeling of the Mart Building and the action taken by the GSA in that remodeling process?

Mr. WARREN. That was a pushup job that had a great deal of urgency because Mr. Floete had indicated that he wanted the Archives and Records Building, new construction building award in St. Louis,

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on schedule. And in order to have procedures for that contract to be awarded and the building on the site to be removed-to wit: the old Marine Hospital building was one of them-it was necessary to vacate the armed services recruiting services from the old Marine Hospital building. So he gave down very strict orders—and we respect Mr. Floete very highly and his word. When he wants something he wants it and we try to deliver.

Mr. Brooks. I might add that he is pretty widely respected in Washington. Mr. WARREN.

Thank

you. Mr. BROOKS. He is a dedicated servant of considerable ability. Mr. WALLHAUSER. I agree with that.

Mr. WARREN. I received instructions from Mr. Lund, very evidently through Mr. Jay, that even though there was a very short time, we must get the quarters in the old Mart Building remodeled for the occupancy of the Armed Services Building completed in order that when the contract is awarded there would be no delay in the demolition and razing of the buildings on the site for the new Archives and Records Building.

It was a very push job. As a matter of fact on about February 25 is when we started to work on plans and specifications and investigations of what the needs of the agency were in accommodating themselves in the building,

The project was a rather complicated project in that it had medical services, it had X-ray rooms, lead-lined rooms, it had many electrical facilities which were unusual to normal office occupancy. It was not an easy ordinary job of remodeling.

In spite of that fact, on March 13 we had in a hurried fashion, and always with certain calculated risk, completed the plans and specifications and had them ready for duplication, and they were mailed on the market on March 16.

We cut down the advertising time some in order to push it along. Bids were opened on April 6 and then an unusual feature of it, too, was you will note, that we awarded the contract 2 days later, which is pretty fast moving for a contract of $177,000, when you have many ramifications of investigation of the quality-I mean of the competency of the contractor and such.

Mr. BROOKS. Yes, it is.
Did the Henges Co. assist GSA in drafting these specificatons ?

Mr. WARREN. The Henges Co., like many other manufacturers and material people, volunteered their services and help in preparing the specifications. While they did not give me any particular advice, they did, I understand, help the design branch, people in the design branch, in this hurried preparation of these papers for the contract.

Mr. WALLHAUSER. Mr. Chairman.
Mr. BROOKS. Mr. Wallhauser.

Mr. WALLHAUSER. Are you complaining about the award of the contract ?

Mr. WARREN. Sir, I don't know that I am complaining about anything. Would you clarify your

Mr. WALLHAUSER. You say this was a rather hurried award, 2 days time. Is the implication that this should not have been awarded ?

Mr. WARREN. No, sir; there is no implication. Mr. Floete gave orders which were logical. It is perfectly logical that a new building as large as that one is, that our construction program should proceed. Many times circumstances are beyond the control of all of us. Mr. Floete gave those orders. We have many others. My goodness

Mr. WALLHAUSER. This was not an isolated case?

Mr. WARREN. No, sir. We have many, many cases in which people talk and talk and talk on how they want to do something, and then spend 2 or 3 months on whether they decided to do it, then come to us and want it done the day before. We get paid for that. That is our salaries.

Mr. BROOKS. The specifications for the partitions were included as part of the general contract ?

Mr. WARREN. Sir?

Mr. BROOKS. Specifications for the removable partitions were included as part of the specifications of the general contract?

Mr. WARREN. Yes, sir.

Mr. BROOKS. A copy of those specifications for the partitions and the addendum thereto as contained in the invitation to bid is to be placed in the appendix to the record.

The invitation to bid was dated, as you say, March 16, and the bids were opened 2 days later?

Mr. WARREN. No, sir; they were mailed to the public for advertising. Put on the market on March 16. Bids were opened on April 16, which is 21 days later.

Mr. BROOKS. April 6 or 16?
Mr. WARREN. April 6. And then the contract awarded 2 days later.

Mr. Brooks. When and how did you first hear that there was some question about specifications being restrictive?

Mr. WARREN. A day or two before. It was on a weekend, a few days, a short time. It was a very short time. On Saturday morning, , at home, I got telephone calls from two contractors in St. Louis. They were very concerned and somewhat alarmed, particularly Mr. Benoist, who had served with the Government in, I think, the Civil Aeronautics in previous years, and he knows Government practices. He said that the Henges Co. people in St. Louis were emphatically stating to contractors in the whole contractors fraternity in St. Louis that only the Henges partitions would be approved. On that same day, probably an hour later, I got a call from Mr. Kaye of the Kaye Construction Co. He reiterated the same statement. That answers your question, doesn't it?

Mr. BROOKS. Pretty well. What did you tell them when they asked you about it. What, concisely?

Mr. WARREN. I told them that it had always been, and as far as my supervision was effective, the integrity of competition would always be preserved, and that we did not at any time put out a specification of a proprietary nature, and that if it appeared so, there were provisions in the specification which permitted consideration and competition.

Mr. BROOKS. Did this clear up the matter with the general contractors? Did they feel free to go on then?

Mr. WARREN. Sir, at that time I thought that it did. But later I found that there was a number of contractors who had never done business with GSA before. Afterward I found that it wasn't really clarified with them. Had I known that at that time of course this is hindsight now-had I known that at that time I would have broadcast telegrams to all prospective bidders. But I didn't appreciate what the situation developed. I didn't appreciate it quite fully at that time.

Mr. BROOKS. After the word was passed to the general contractors through Mr. O'Brien, there were still doubts about the GSA wanting competition?

Mr. WARREN. I believe so. I heard you know the men in the construction industry are as bad on gossiping as women at a quilting bee.

Mr. BROOKS. Let's not say anything about women derogatory, because I am devoted to them. I have a bipartisan nature in this regard.

Mr. WARREN. Word spread, undoubtedly, and it got to Mr. O'Brien, undoubtedly, and naturally as an interest of his he probably spread the word in defense of selling his product, that he thought that that was not true. But how effective that was—I don't think it was completely effective, no, sir; because the time was too short.

Mr. BROOKS. Did they report it as any disadvantage to you if GSA accepted a partition other than the Henges Co. ?

Mr. WARREN. Sir, I don't get the import of that question.

Mr. BROOKS. Did anybody say that they would fire you or transfer you, that you were under any pressure? Was that reported, or was that hearsay or what are the facts ?

Mr. WARREN. Yes, sir; those rumors came pretty hot and fast. I got a telephone call from a contractor who was not bidding on the job, who apparently respected me and had some affection for me. He called me. It was reported also by an engineer who, as I recall, visited St. Louis and heard the talk there. There was quite a bit of talk that it was considered that the Henges Co. specification-I mean the specification so tightened itself with the Henges product that it was imperative that I approve only that and that if I didn't I would be separated from the service. Yes, sir; that rumor was quite widespread in the construction fraternity in St. Louis.

Mr. WALLHAUSER. Did you pursue this with those in authority ?
Mr. WARREN. At a later date I mentioned it; yes, sir.
Mr. WALLHAUSER. At the time did you?

Mr. WARREN. Momentarily I didn't, because, sir, we have lots of rumors. Until a rumor becomes something of import or meaning

Mr. WALLHAUSER. In other words-
Mr. WARREN. At the moment I didn't. No, sir. I did later.

Mr. WALLHAUSER. In other words at this point they were basically rumors as far as you were concerned ?

Mr. WARREN. At the start; yes, sir. Sir, I can't evaluate a rumor. If a rumor comes in over the phone, I can't immediately—I have no crystal ball to give it substance. It later made a pattern.

Mr. WALLHAUSER. The point is that you were not so disturbed that you went to your

superiors ? Mr. WARREN. I was very disturbed about it; yes, sir. Mr. WALLHAUSER. But not enough to go to your superiors?

Mr. WARREN. I did go to my superiors at a later date. Not very much later.

Mr. BROOKS. Did you tell the Henges Co. that they weren't the only people who could provide partitions that would be available under this contract ?

Mr. WARREN. I have never told any company, any person, that they have proprietary rights under contract business that I conduct with the Government. In 30 years, sir, not once.

Mr. BROOKS. Did you make clear then to the Henges Co. that they were not the only people who were being considered ?

Mr. WARREN. I don't know that I made it clear. They have done business with us for several years, and up to this time I might say our business was on a very high level and amicable.

Mr. BROOKS. With the same-
Mr. WARREN. With the Henges Co. up to that point; yes, sir.

Mr. BROOKS. As I understand it, the general contract went to the Hercules Construction Corp. for $177,000 ?

Mr. WARREN. Yes, sir.

Mr. BROOKS. Do you know how many other general contractors provided for an O'Brien-type partition?

Mr. WARREN. The only one I know, sir, is Mr. Kaye, who called me on the morning, at the time Mr. Benoist called, on a Saturday morning, and I assured him that competition was going to be preserved, and I presumed that these two partitions are the principal partitions on an equal level of quality that are competed for in this central part of the United States, and their products both are so good that they are spreading out into greater territories, and I assume O'Brien was his main competitor; yes, sir.

Mr. WALLHAUSER. Could you please identify the names of the two partitions used?

Mr. WARREN. One partition is one of the competitors is known as the Henges Co. And they fabricate and manufacture and distribute office partitions, warehouse partitions and so forth. The other is the O'Brien. The exact title I can't tell. It is the O'Brien Partition Co.

Mr. WALLHAUSER. The point I was getting at is that these are not manufactured and then distributed by these concerns. They are actually manufactured

Mr. WARREN. They are actually manufactured and I think they have some distributing facilities also.

Mr. BROOKS. We have a list of the abstract of the bids. I notice that the Hercules Co. and the Kaye Co., which you list as using this O'Brien-type partition, are the apparent low bidders, being in the neighborhood of $177,000 for Hercules, and

for Kaye $177,826. There are eight additional bids running from $178,000 to $196,000.

Did they all specify O'Brien partitions, or did they all specify Henges partitions, or was it mentioned ?

Mr. WARREN. Sir, I believe the terminology there is not clear, because a general contractor bids the work. Before he bids the work, when he is making up his estimate, he goes to different manufacturers, material people, Westinghouse, O'Brien, Henges, and everybody else, and gets their figures; electricians, subcontractors, and all. Then when he gets all those figures, the competitor's figures with him, he sits down and adds them up. Sometimes the contractor will take the highest subcontractor figure if quality and performance is in the picture.

So the question of bids with respect to Henges and O'Brien was a private affair exclusively to the Hercules Construction Co., or Kaye, or whoever wanted to use their bid or Henges bid.

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