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

Mr. Roof. Mr. Cowan testified the other day before your committee that he did not consider 1.4 to be out of line; that was in line. I do remember that testimony.

Mr. GYORDA. It does not seem as though it is possible that your figure could be accurate, just seeing the period of time I spent down here.

Mr. YATES. Are there any other points in there you want to make to the committee ? Any other questions that you have?

Mr. GYORDA. The management payroll júst received a large increase in February of this year; I believe it is somewhere in the area of $193,000 at the present time. Quite a few of these employees apparently, per Mr. Cowan, were increased not only steps in grade but entire grades. This just does not seem

Mr. YATES. Is this true, Mr. Roof?

Mr. Roor. Yes, sir, to a degree. These increases grew out of a petition signed by more than a hundred members of the House. They were approved by the Speaker. Our prime concern was that such increases be on a fair and equitable basis and I think we accomplished this.

PROPOSALS ABOUT SERVICE FOR EVENING SESSIONS Mr. Yates. Let me ask you this: What changes if any would you contemplate making in the service? We don't know from day-to-day whether we will have evening sessions. On a day like Monday you can pretty well be assured you won't have an evening session because the bills are generally minor ones and we will wind up fairly early in the afternoon. Later in the week you may have some important bills and you may be able to know what is going on. Later in the year you run into many more evening sessions.

Would you propose to run the same way it is run now in this respect ?
Mr. Lyons. No; we would not.
Mr. Yates. What would you do?

Mr. Lyons. I am sure with the overwhelming amount of statistics that are available that you could determine participation at these sessions. It would be our recommendation, so you wouldn't hold up the House Members, say go to this buffet style. It would speed up the process because if you are waiting for your calls and so forth-whatever the events, this would certainly enhance the operation. You wouldn't need that many idle waiters.

The idleness—and this is off the record. (Discussion off the record.)

MARRIOTT PROPOSAL REGARDING EMPLOYEES

Mr. YATES. In your letter you say you would have complete responsibility for and authority over the employees working in the House restaurant facilities. That is item B. This means that you want to have complete charge over payrolls and promotions, and so forth.

Mr. Lyons. Yes, sir.

Mr. YATES. Mr. Roof, what pay raises do restaurant employees now receive?

Mr. Roor. We have two kinds of employees here: Management people who are entitled to the same rates of increases that your other

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legislative employees would receive. Then there are the food workers themselves who are under the Wage Board system. They would get the same automatic increases as the District Wage Board people.

Mr. YATES. Do you know about that?
Mr. Lyons. Yes.
Mr. YATES. This is satisfactory?
Mr. Lyons. No problem.

SUPPLY SOURCES Mr. YATES. Your point C was that “we have jurisdictional use of supply sources of our own choice.” This is with respect to the purchase of food ?

Mr. Lyons. Yes, sir. Which I think is in effect right now. I think from the system we have seen, they have their own purchasing and procurement forms. They have bid forms and they send the bids out and call for bids on the phone.

QUALITY OF FOOD Mr. YATES. I am told that the restaurant now purchases only topquality meats and produce and eggs and the beef used is choice. Would you lower the grades?

Mr. Lyons. This is off the record.
Mr. Yates. Yes.
(Discussion off the record.)
Mr. YATES. On the record.
Mr. LyoNs. Quality would not be reduced.
Mr. YATES. As a matter of fact, it might be improved ?

Mr. Lyons. Yes. But we know they are buying good quality food downstairs.

Mr. YATES. Do you know this?
Mr. Lyons. Yes; we have seen this.
Mr. YATES. You have seen their buying practices ?

Mr. Lyons. We have seen some of the buying practices. We cannot say completely every time they buy down there it is the best quality, but the items that we have been able to see we would say they are buying good quality.

Mr. ANDREWS. The preparation and handling?
Mr. Lyons. That is something else.

Mr. YATES. Hamburger is now made from U.S. Choice chuck. This is a big seller here. Hamburgers. Is there a quality cut Choice chuck?

Mr. GYORDA. Off the record.
Mr. YATES. Yes.
(Discussion off the record.)

ELIMINATION OF DEFICIT Mr. Yates. What do you mean by the statement, “Needless to say, at this volume ($1.5 to $1.7 million), a profit would be realized by the House" ?

Mr. GYORDA. Your deficit would be eliminated.

Mr. YATES. The deficit would be eliminated. You are not talking about making money available to the House as well ?

Mr. Lyons. You could make money.
Mr. YATES. At the prices we are charging now?

Mr. LYONS. At the prices you are charging now, if you let the contractor have complete control over the people, if he did his own buying and purchasing and he tries to convince the House Members there are other modes of service that could be provided more efficiently than provided at the present time.

PERFORMANCE BOND

Mr. YATES. You mentioned a performance bond. Would you think it is required ?

Mr. ANDREWS. The point is, if we take a step to advise the House, let us say, to lease out these eating facilities, what backstop would we have that the person who came in was going to be around in a year or 2 years? In other words, is it common in a case like this there is some type of performance bond that says, “Yes; we will provide the eating facilities for 2 or 3 or 4 years," so that we don't have somebody come in and at the end of 6 months throw up his hands and say, "It was not like we thought it was," and disappear down the trail ?

Mr. Lyons. I don't think that you need a monetary performance bond. This is common in the industry in different situations. I think just the reputation of the corporation that comes in here and puts their name on the line is the only performance bond required. This is a big move for any corporation to make.

Mr. YATES. Would this be operated by Marriott or a subsidiary?

Mr. Lyons. It would be operated by a division of the Marriott Corp.

Mr. YATES. That is financially responsible ?
Mr. Lyons. Yes, sir.

IN-DEPTH STUDY SUGGESTED Prior to contracting out the facilities you should make a complete study of the operations. In effect, before I make any proposal to you, you could call in Booz, Allen & Hamilton, or one of the other consulting firms and let them make a study of the facility so that you can define your solicitation for bid. Unless your solicitation for bid is defined, you will not have the operation that you desire.

Mr. YATES. Thank you for that suggestion. I think it is a good one.

Mr. Lyons. There are other consulting firms. I know of Booz, Allen & Hamilton from other experiences. I have another one listed here that is Harris, Kerr & Forster & Co. that is a restaurant-hotel accountant and consultant. They publish indices, and other data for the industry.

Mr. YATES. Would the food be cooked on the premises ?
Mr. Lyons. Certainly.
Mr. YATES, Not in any commissary?
Mr. Lyons. On the premises.
Mr. YATES. Any further questions?

Mr. ANDREWS. In summation, you think that about at the price levels we are paying for food and with the present employees being paid about the wages they are being paid now, subject to attrition and redefinition of jobs, and other things you brought up, you could put this on a no-loss basis, even possibly on a paying basis in a period of time!

QUESTION OF EXCESS NUMBER OF EMPLOYEES Mr. Lyons. I would qualify that statement, Mr. Andrews, to say not the present number of employees, because I don't think that you could put it on a paying basis with the present number of employees as utilized. That is my main qualification.

Mr. ANDREWS. With a 40 percent turnover in a period of 1 year, or a year and a half, you get to the point where you would have an efficient running establishment and a contract or something could be drawn up by the House to adequately protect the workers that we now have their pension rights, benefits, and the rest, while they go through this switch over to the type of operation you or some other outside contractor would envision?

QUESTION OF MANAGEMENT FEE BASIS Mr. Lyons. I think that people are the key to the operation we have discussed. I think that you could operate your facilities on a management fee basis, certainly making money after say a 6-month startup period. I think this is another consideration.

Mr. YATES. That includes management employees? Mr. Lyons. No. I think that you would find the management employees would have to be on the contractor's payroll. They could be defined. There would be no conflict.

MANAGEMENT EMPLOYEES

Mr. Yates. What do you mean by management employees? Mr. GYORDA. You have 32 management employees reporting to me. Mr. YATES. What are they? What is a management employee? Mr. Lyons. What we classify as managers, assistant managers, dining room managers, above the first-line supervisor, which could be classified as a chef. Some people classify the chef in commercial restaurants as a management employee. He has certain responsibilities not only for food production but also for purchasing. This is not the system which we work under in this division.. .

Mr. YATES. What about cashiers?
Mr. LYONS. A cashier is an hourly wage employee.

PROTECTING BENEFIT RIGHTS OF PRESENT EMPLOYEES Mr. Gyorda. Frank, I believe Congressman Andrews was asking you about protecting the present employees from the standpoint of retirement benefits, and so forth. A lot of negotiations would have to take place before we could possibly assume such a responsibility financially because you have long-time employees and they have a different type of benefit program. They couldn't come into our organization on our payroll and be guaranteed the same rights they have right now.

I believe that is the point you had ? Mr. ANDREWS. What I am driving at is perhaps some legislation. because you cannot do it now, that would retain these employees as

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