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[Clerk's Note. The following hearings of June 6 and June 10,

relating to House dining facilities, were conducted by a special subcommittee (Representatives Yates of Illinois and Andrews of North Dakota) appointed by the chairman of the Legislative Subcommittee for the purpose of looking into the operations of the House dining facilities:)

THURSDAY, JUNE 6, 1968.
U.S. HOUSE OF REPRESENTATIVES
HOUSE DINING FACILITIES

WITNESSES

J. GEORGE STEWART, ARCHITECT OF THE CAPITOL
PHILIP L. ROOF, EXECUTIVE ASSISTANT
CHARLES A. HENLOCK, ADMINISTRATIVE OFFICER
WILLIAM F. RAINES, JR., ASSISTANT TO THE EXECUTIVE

ASSISTANT
KERMIT COWAN, RESTAURANT MANAGER
BERNARD A. BRADY, GENERAL ACCOUNTING OFFICE

Mr. Yates. We have with us today the gentlemen from the Office of the Architect of the Capitol who have, by virtue of the direction of the Legislative Subcommittee, been conducting a preliminary exploration into the possibilities of having the House dining facilities operated under some satisfactory private concession arrangement.

STATUTE GOVERNING PRESENT OPERATIONS

I think the record should contain at this point a copy of Public Law 812 of the 76th Congress, section 208, and a copy of House Resolution 590, 76th Congress.

H. Res. 590, 76th CONGRESS, AGREED TO SEPTEMBER 5, 1940 "Resolved, That effective October 1, 1940, until otherwise ordered by the House, the management of the House Restaurant and all matters connected therewith shall be under the direction of the Architect of the United States Capitol under such rules and regulations as he may prescribe for the operation and the employment of necessary assistance for the conduct of said restaurant by such business methods as may produce the best results consistent with economical and modern management.

“Sec. 2. The Committee on Accounts after the close of business September 30, 1940, is hereby authorized and directed to transfer to the jurisdiction of the Architect of the United State Capitol all accounts, records, supplies, equipment, and assets of the House Restaurant that may be in the possession or under the control of the said committee in order that all such items may be available to the Architect of the United States Capitol toward the maintenance and operation of the House of Representatives Restaurant."

SECTION 208—Public Law 812, 76TH CONGRESS, APPROVED OCTOBER 9, 1940

“SEC. 208. (a) The Architect of the Capitol is hereby authorized and directed to carry into effect for the House of Representatives, and to exercise the authorities contained in the resolution of the House of Representatives numbered 590, adopted September 5, 1940, and any other resolution of such House amendatory thereof or supplementary thereto hereafter adopted. Such authority and direction shall continue until the House of Representatives shall by resolution otherwise order.

"(b) There is hereby established with the Treasurer of the United States a special deposit account in the name of the Architect of the Capitol for the House of Representatives Restaurant, into which shall be deposited all sums received pursuant to such resolution or resolutions and from the operations thereunder and from which shall be disbursed the sums necessary in connection with the exercise of the duties required under such resolution or resolutions and the operations thereunder. Any appropriation hereafter made from the Treasury of the United States for such restaurant shall be a part of the appropriation 'Contingent Expenses, House of Representatives, Miscellaneous Items', for the particular fiscal year involved and each such part shall be paid to the Architect of the Capitol by the Clerk of the House of Representatives in such sum as such appropriation or appropriations shall hereafter specify and shall be deposited by such Architect in full in such special deposit account.

"(c) Deposits and disbursements under such special deposit account (1) shall be made by the Architect, or, when directed by him, by such employees of the Architect as he may designate, and (2) shall be subject to audit by the General Accounting Office at such times and in such manner as the Comptroller General may direct: Provided, That payments made by or under the direction of the Arəhitect of the Capitol from such special deposit account shall be conclusive upon all officers of the Government.

“(d) The Architect, Assistant Architect, and any employees of the Architect designated by the Architect under subsection (c) hereof shall each give bond in the sum of $5,000 with such surety as the Secretary of the Treasury may approve for the handling of the financial transactions under such special deposit account."

Mr. Yates. These indicate the authority of the Architect of the Capitol to run the House Restaurants.

There will also be added, without objection, the letter of the Honorable George W. Andrews, dated May 22 of this year to the Honorable J. George Stewart, Architect of the Capitol, indicating the decision of this subcommittee to go into this question. (Letter follows:)

HOUSE OF REPRESENTATIVES,
COMMITTEE ON APPROPRIATIONS,

Washington, D.C., May ££, 1968.
Hon. J. GEORGE STEWART,
Architect of the Capitol,
Washington, D.C.

DEAR MR. ARCHITECT: You will recall that early in April this subcommittee had considerable discussion with you and your associates on the fiscal 1969 budget request for financing the rapidly escalating losses incurred in operating the food service facilities under the House of Representatives, including the question of exploring the possibility of leasing the facilities for operation under concession.

The question was discussed further in executive markup sessions and in consequence, the subcommittee today decided to postpone action on the item until the matter could be explored further. I was directed by the subcommittee to appoint a special subcommittee for the purpose, and I have today designated Hon. Sidney R. Yates and Hon. Mark Andrews to seek the cooperation of you and others to this end.

The time schedule for concluding the matter is such that we will need to move with some expedition, and we will much appreciate your cooperation. With every good wish. Sincerely,

GEORGE W. ANDREWS, Chairman, Subcommillee on Legislative Appropriations,

PRELIMINARY PROSPECTUS SENT TO VARIOUS PRIVATE FOOD SERVICE

FIRMS

Mr. Yates. Pursuant to the instructions of this committee, the Architect of the Capitol communicated with various operators of restaurants and suppliers of food to determine whether they would be interested in reviewing the operations of the restaurants and offering suggestions under which they might wish to operate the House restaurants and to receive any proposals they might care to offer.

The tentative prospectus and invitation of the Architect of the Capitol, dated May 23, sent out to such operators and suppliers, will be inserted in the record at this point. (Letter follows:)

ARCHITECT OF THE CAPITOL,

Washington, D.C., May 23, 1968. OPERATION OF THE RESTAURANT FACILITIES, HOUSE OF REPRESENTATIVES,

WASHINGTON, D.C. A subcommittee of the House Committee on Appropriations, having responsibility to recommend funds for operation of the Legislative Branch of the Government, is interested in exploring the possibility of an outside concessionaire operating the House restaurant facilities. The restaurants are now operated by the Architect of the Capitol as an agent of the House of Representatives. Present restaurant employees are personnel of the House of Representatives (U.S. Government employees).

The primary purpose of the subcommittee is to determine whether the restaurants can be satisfactorily run by outside management-if possible without an operating deficit.

The subcommittee has directed that the Architect of the Capitol invite several established firms and/or nonprofit organizations to review the operations of the restaurants and to submit promptly their tentative proposals if they are interested in operating the House restaurant facilities.

You are invited to submit such a proposal. It is to be understood that any proposal submitted will be of a tentative nature and will not be binding on either the firm submitting it or the Government, but we do expect that proposals will be as complete, accurate, and meaningful as the time permits.

Important: Your proposal should be delivered to this office as soon as possible, but not later than Tuesday, June 4, 1968. During the same week, the subcoinmittee will no doubt wish to meet with those firms who are interested in operating the House eating facilities.

The restaurant facilities consist of the following:
In the Capitol:

Main restaurant, House side, located in rooms H-117, H-118, H-119,
H-120.
Members' private dining room, in rooms H-130 and H-131.
Office, room H-129.

Cafeteria-coffee shop, room HB-9 and adjoining areas used for kitchen, etc.

Other rooms are used from time to time for special luncheons, breakfasts, etc. In the Rayburn Building:

Cafeteria.
Buffet room.
Members' private dining room.
Banquet room.

Carryout.
In the Longworth Building:

Cafeteria.

Carryout. In the Cannon Building: Carryout. In preparing tentative proposals, firms should make the following assumptions:

The Government will furnish (without cost to the firm) subject to any limitation on funds that may be fixed by the Congress for such purposes

All fixed and movable equipment and facilities, other than building changes. as may be mutually agreed to be necessary to efficient operation and control of the food service and related functions;

Maintenance, repair, and replacement of such fixed and movable equipment facilities;

Space for operations within the House Office Buildings and the House side of the Capitol (the space now used for such purposes);

Cleaning of walls, windows, electric light fixtures, and all necessary broom cleaning, scrubbing, mopping, and polishing of floors in dining room areas;

Heat, air conditioning, gas, light, hot and cold water, steam, electric current, local telephone service, sewage disposal facilities, garbage disposal service and facilities;

Use of the expendable equipment owned by the House restaurant on the effective date of the contract; and

Inventories of food on hand at the time of the effective date of the contract. The firm will furnish (without cost to the Government)—

Proper food and related services including the sale and dispensing of food, ice cream, candy, gum, nuts, nonalcoholic beverages (beer may be sold), tobacco products, and such other products as may be permitted by the Government to be sold within locations detailed herein, including vending machines in the locations now used for that purpose or as may be approved hereafter by the parties hereto. Such service shall be provided during such periods as the agent of the House of Representatives may determine;

Expendable equipment such as china, crockery, glass and tableware, and kitchen utensils, as they become worn, broken, used, lost, or otherwise disposed of, up to the amount supplied by the Government on the effective date of this contract and any additional expendable equipment required in the operation of the facilities;

Inventories of food, expendable equipment, paper goods, and cigar stand merchandise shall be maintained so that on the date of expiration of this contract the value of such items shall not be less than the value of such items made available by the Government to the contractor. Any deficiency in the value of these items upon the termination of the contract will be paid to the Government by the contractor as a part of the final settlement;

Carry public liability, products liability, and property damage insurance protecting and insuring the Government and the contractor, in such companies and within such limits as may be mutually agreed upon; carry workmen's compensation insurance in the amount required by law;

Compliance, with respect to licenses and taxes, with all statutes, ordinances, and regulations of all Federal, State, county, and city governments and of any of the departments or bureaus thereof, applicable to carrying on of its business under this contract and will secure all necessary licenses and permits that may be required; and

Keep at its principal office accurate records of all receipts, costs, and disbursements of business carried on hereunder and such records shall be available for inspection by the agent of the House of Representatives and/or the General Accounting Office; and such agent and the General Accounting Office shall have the right to have an audit made thereof without expense to the contractor at such times as they may determine. Within a reasonable time after the close of each 6-month period, the contractor shall furnish to the agent of the House statements of all receipts, costs, and disbursements of business conducted by it hereunder. Such statements will include, to the extent practicable, breakdowns reflecting the financial results of the business conducted, on the basis of the separate facilities. All such records shall be kept on file by the contractor for a period of 2 years, during which time the agent of the House, the General Accounting Office, and their representatives, shall have the right at any reasonable time to inspect and examine all papers, bills, vouchers, invoices, records, books of account and sales slips, and the contractor will freely lend its own assistance to making such inspections, examinations,

and audits. The following information is also furnished for consideration of all interested parties:

The subcommittee has in mind providing essentially the same services to the House of Representatives as now provided.

The subcommittee would wish the quality of the service and food be maintained at least at the existing level.

Menu prices would probably be subject to negotiation with the agent of the House of Representatives. Current menu prices are available.

A performance bond would be required.
No liquor could be sold. Beer is sold in certain facilities.

The subcommittee would wish to know what wage schedule or wage policy the contractor would intend using.

The subcommittee would wish to know to what extent the contractor would continue to use existing personnel.

All restaurant personnel, after the effective date of the contract, would be personnel of the contractor and not personnel of the House of Representatives.

The contract would probably be made for 1 year, with provision for extension. The Government would reserve the right to terminate the contract by giving the contractor 60 days' notice in writing.

It is not possible to determine the effective date of the contract at this time.

There are certain standard general provisions, not detailed here, that would be made a part of the contiact.

Due to space limitations and other structural considerations, it is assumed operation of the restaurants will be continued under the present physical building layouts-for example, the kitchen for the restaurants in the Capitol is located on one floor and the dining facilities on another floor.

Operating financial details

Food and beverage sales:

1967 1966.

1965----

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1964.. Cost of sales:

1967.
1966.
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1964.----
Operating expenses (including salaries and wages, employee benefits,
laundry, china, etc.):

1967-1966.. 1965..

1964.-----------
Profit on cigar-stand operations:

1967.-
1966.
1965.

1964.--
Vending machine commissions:

1967.----
1966.

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1965

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1964.

Equipment expenditures:

1967--

1966..

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Net loss.--
NOTE.-The years shown refer to fiscal years.

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350, 000

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