burn Building and in the Longworth Building and here in this building.

TURNOVER RATE

Mr. YATES. Mr. Roof, what is the attrition rate for employees of various kinds?

Mr. Roof. You mean the turnover?

Mr. YATES. Yes.

Mr. Roof. It is pretty high in the lower grades. Overall it is about 40 percent.

Mr. YATES. I don't believe you are talking about the lower grades, porters, and so on?

Mr. Roof. That is overall. We include management in that 40 percent. That is computed by comparing the number of W-2 tax forms with the number of positions we have, and we have about a 40-percent turnover overall.

WAGE RATES

Mr. YATES. Are your wage rates comparable with those we pay our employees?

Mr. LYONS. That depends on where they fall on the scale. Our cooks would be at the high end of the scale and I am sure your cooks are at the high end of the scale downstairs.

Mr. YATES. What about waiters? Your specialty is cafeterias rather than restaurants; is it?

Mr. LYONS. Our specialty is really the broad spectrum of services. It would include restaurant-style service and cafeterias, the whole spectrum.

Mr. YATES. Does my memory serve me correctly, are restaurants under the minimum wage of $1.60 per hour?

Mr. LYONS. Yes.

Mr. YATES. And that is the minimum wage you pay your employees?

Mr. LYONS. Yes.

MARRIOTT TURNOVER RATE

Mr. YATES. What is your turnover rate?

Mr. Lyons. Our turnover rate is high among the lower paid employees. We would like to think we are doing a better job of training and are spending a lot of money in training, but it is hard to compete in the Washington, D.C., market for this type of employee. And, off the record.

(Discussion off the record.)

Mr. ANDREWS. Does your turnover compare with this 40 percent figure that was given? Is it more or less?

Mr. LYONS. It is somewhat the same. I am sure we are between 30 and 40 percent, depending on the division. We have, I think, one of the finest benefit programs in the industry today.

FRINGE BENEFITS

Mr. YATES. You mean fringe benefits?

Mr. LYONS. Yes. We have retirement benefits that our employees participate in after 3 years, and we have insurance programs. All in

all we have a very solid group of employees in Washington, D.C. For instance, I just attended the 25th anniversary of one of our employees at the Treasury Department facility which we operate. She has been there 10 years.

Mr. ANDREWS. You operate the Treasury Department cafeteria? Mr. LYONS. Yes, the Treasury Building and the Bureau of Public Debt.

Mr. ANDREWS. In operating the facilities at Smithsonian and the Treasury Department, do they give you a subsidy?

Mr. LYONS. No, there is no subsidy at all.

Mr. ANDREWS. In other words, they provide the facilities and you do everything else?

Mr. LYONS. You can't compare the Smithsonian Institution with the Treasury Department. Off the record.

(Discussion off the record.)

COMPARATIVE WAGE SCALES

Mr. YATES. Have you had occasion to obtain from Mr. Roof the rates of pay that our employees get?

Mr. LYONS. Yes, Mr. Roof has given us all the information we requested.

Mr. YATES. I notice with respect to some of the testimony of Mr. Roof put in the record by our committee earlier, there seems to be a significant variable between the wage scale paid by us and by commercial restaurants. Were you aware of that? For example, bus help, according to the scale Mr. Roof put in the record, is from $1.60 to $1.91, and the union commercial rate is from $1.45 to $1.60, and nonunion it is 90 cents to $1.70.

Head cooks are paid by the House of Representatives from $2.62 to $3.02. Union commercial rates are between $1.60 and $2.40, and nonunion commercial rates are from $1.55 to $3.50.

As you have examined these figures, is it your impression that the scale of wage rates for union commercial and nonunion commercial are as represented by Mr. Roof, or is he high or low?

Mr. LYONS. I would say the minimum to maximum is probably represented correctly. I am sure the average would lie somewhere in the middle. Most of the chain operations I know of pay higher than the minimum, and this is where I am sure we would fall. You would have to compare the average of these scale to what you are paying here.

Let me say this: Even in Washington, D.C., in the different areasNorthwest, Southwest, Northeast, and Southeast-you will have a different scale. It is a supply and demand situation. You would have to look at the individual operations and see what they are being paid. If we were to come in here and make a more thorough analysis we would want to know what each employee is being paid by name and by position.

Mr. ANDREWS. You feel the wage rate supplied for head cooks, from $2.62 to $3.02 an hour, is not beyond what they would be worth?

Mr. LYONS. No, it is not beyond what they would be worth, as it applies to the operations of the House restaurant facilities.

Mr. ANDREWS. In other words, you would have no hesitation in paying these rates?

Mr. LYONS. No. What you have to look at is the job description. Some people would require the cooks to do one thing and another would require something else. So the only way you can make a meaningful analysis is by taking the job description and seeing that everybody is calling a cook a cook or if somebody is calling a cook a chef. This takes further analysis.

Mr. YATES. You run the Hot Shoppes; do you not?

Mr. LYONS. No; I am the director of the Business Food Service Division.

Mr. YATES. But the Marriott Corp. runs the Hot Shoppes?
Mr. LYONS. Yes.

VENDING MACHINES

Mr. YATES. As I remember, they have personnel that sell cigarettes and cigars?

Mr. LYONS. In the commercial cafeterias they have vending machines for cigarettes and that is all. In our motels we have a cigar stand built into the gift shop. So we handle it differently in different situations. We have what we call a sundry shop in our International Business Machines operation in Maryland.

NONUNION SHOP

Mr. YATES. Are you a union or nonunion shop?

Mr. LYONS. We are nonunion.

Mr. YATES. All the way through?

Mr. LYONS. Yes.

EMPLOYEE MEALS

Mr. YATES. Do you give the employees their meals in addition to their pay?

Mr. LYONS. Yes; one meal for four hours, for part time, and two meals for 8 hours.

BASIS OF MARRIOTT RESPONSE

Mr. YATES. In submitting your proposal, have you based the statements on the provisions and assumptions contained in the Architect's statement to you of May 23, 1968, as well as your personal inspection? Mr. LYONS. Yes. Our proposal is somewhat indefinite or the submission of the bid was certainly indefinite.

Mr. YATES. I notice in subparagraph (a) of your proposal it is stated as one of the basic assumptions:

That we have complete control over all food and vending services provided in the House restaurant facilities.

What does this mean?

Mr. LYONS. Why don't we go off the record for a minute.

Mr. YATES. All right.

(Discussion off the record.)

HOUSE DINING FACILITIES LOSS-FISCAL YEAR 1968

Mr. GYORDA. There are several things I was wondering about. One is your miscellaneous operating loss of $203,631.

Mr. YATES. What items go in this miscellaneous operating loss!

Mr. LYONS. That is page 344.

Mr. YATES. Of what?

Mr. LYONS. Of your previous testimony.

Mr. ROOF. Mr. Chairman, that is a rather meaningless figure. It is the total loss minus these mandatory fringe benefits-retirement, employees' health benefits, life insurance, and expenditures for equip

ment.

Mr. YATES. Did you want to ask any questions about that?

Mr. GYORDA. We see the total loss is $236,000, so your miscellaneous operating loss is quite large.

Mr. YATES. What items make up the miscellaneous operating loss? Mr. Roof. That is the total loss we are talking about.

Mr. YATES. That is the sum total of all the restaurants.

Mr. ROOF. Yes.

Mr. YATES. What is the underlying figure for that? Is that in the hearing too?

Mr. GYORDA. I didn't find that when I was reviewing it.

Mr. ROOF. Mr. Chairman, that is the total loss of the restaurants from July 2, 1967, through February 10, 1968.

Mr. YATES. On page 345 you have a net loss from operation of $243,000.

Mr. ROOF. That is for 1967, the previous year.

Mr. YATES. Are you saying you cannot break down the miscellaneous operating loss any more than that?

Mr. ROOF. Oh, yes. You remember the big charts we brought here? We have a complete breakdown.

Mr. YATES. What are the subtotals under the $203,631 miscellaneous operating loss?

Mr. Roof. I am reading from a later statement, through the 11th accounting period rather than the seventh period. The total loss was $318,000.

Mr. YATES. Compared to the $236,000?

Mr. ROOF. Yes. That statement was only up to February 10. This one is through May 4.

Mr. YATES. What are the subtotals that make up this amount? Can it be broken down to show losses attributable to each cafeteria and dining room and so on?

Mr. Roof. Yes.

Mr. YATES. Is that in the record?

Mr. Roof. Yes, in the hearing last Thursday, June 6.

Mr. YATES. Have they seen it?

Mr. Roof. No, sir.

Mr. ANDREWS. This is just updating your losses, in effect?

Mr. Roof. Yes and shows the distribution of losses to the various units.

Mr. ANDREWS. And now we have a bigger loss since you operated 2 more months?

Mr. ROOF. $318,000.

Mr. ANDREWS. And if we operate a couple of more months it will be greater?

Mr. ROOF. Probably $354,000.

Mr. YATES. This has been updated through May 4?

Mr. Roof. Mr. Chairman, these gentlemen were given these state

ments.

Mr. GYORDA. We have these statements.

In reference to this particular matter, your only profitable operations are the Longworth Building carryout and the Cannon Building carryout. As Mr. Lyons mentioned, it seems apparent from what a couple of the managers have told me that not all these food transfers are being recorded by your present accounting methods.

Mr. YATES. I did not know that.

Let Mr. Roof answer that for me.

Mr. Roof. I am not sure that I can answer it. I am not sure it is pertinent. You are interested in the total cost of this operation. What he is talking about is how cost is distributed through here. If you want that type of information you have to get Mr. Cowan, the manager, up here.

Mr. GYORDA. One other question. In these reports, the statement of operations that we have here, your miscellaneous expense is 1.4 percent of the sales for the 11th accounting period. April through May 4, 1968. Your replacements on your china, glassware, silverware, and kitchen utilities is 1.4 of sales.

I noted in watching your operations you have a number of people who where walking out the cafeteria themselves with the china, glassware, and everything else, on trays to their offices. Is this SOP? Is this just a bad habit that has been established and no one has done anything about?

Mr. YATES. Would you like to answer that, Mr. Roof?

Mr. RooF. Yes, sir. It is true china and silverware are sometimes taken from the restaurant facilities with food to the various offices. In both the House and Senate restaurants, restaurant personnel go through the buildings several times a year to gather up any plates. cups, forks, et cetera which have not been returned to the restaurants. Mr. YATES. That is a large figure, 1.4?

Mr. GYORDA. 1.4 percent is a good sized figure of total sales anyway you look at it. Another 1.4 percent for miscellaneous expense. There is no answer to that.

Mr. YATES. What does miscellaneous expense mean?

Mr. ROOF. I do not know the breakdown, Mr. Chairman.

Mr. YATES. Who would know that?

Mr. Roof. I will furnish it for the record.

(The information is as follows):

Miscellaneous expense includes payments to contractor for regular extermination of insects and pest, rentals by catering department, Brinks service, locks and keys, freight and shipping, offices supplies, equipment repairs, deodorizers and insecticides, sharpening of knives and other kitchen tools, and small equipment purchases.

Mr. GYORDA. These figures are on your combined operations. They are broken down as reflected on your different operations there. It seems pretty hard to me to be able to pinpoint exactly where this would be. It struck me that you would have a very high loss on your china. The guards also informed me of this. They informed me they found it frequently in the trash, and so forth. Everything is thrown out or carried home. This is a very costly operation.