Mr. CAMPIOLI. Those are claims-not authorized change orders. Mr. ANDREWS. You have no control over the action of the contractor when it comes to filing claims? Mr. HENLOCK. None whatsoever. Mr. ANDREWS. It is just like a man suing you, you can't keep him from suing you. But I hope you will fight these claims with all your resources and that you have so informed the contractor. Who represents the contractor and who represents the Architect? Mr. HENLOCK. Our Assistant Architect, Mr. Banks, is in charge of all field construction and our attorney is Mr. Pettibone, a very capable man. Mr. ANDREWS. Is he with the Justice Department? Mr. STEWART. No, he is with us. Mr. ANDREWS. Do you propose to have additional counsel? Mr. HENLOCK. We will have to. However, their services will not be continuous. Mr. ANDREWS. Will you employ civilian lawyers or use Justice Department lawyers? Mr. HENLOCK. We would have to employ our own additional legal help. Usually, we try to get someone who is well versed in contract law. Mr. Pettibone is extremely well qualified in this field of law. Mr. ANDREWS. And, again, we want you to keep the committee informed about the progress and the prosecution of the claims which you say are nearly $5 million on a $12 million contract that was 15 months overdue. Mr. REIFEL. Mr. Chairman. Mr. ANDREWs. Dr. Reifel. Mr. REIFEL. What percentage over the original contract are the claims? Mr. HENLOCK. About 40 percent. Mr. REIFEL. With no end in sight as to what additional claims might be forthcoming? As the chairman said, the action on the part of the contractor is beyond the control of the Architect, but with the Federal Government increasingly spending billions of dollars across the Nation and over the world, this could establish a precedent that would go far beyond this instance, and it ought to prompt the executive branch of our Government and the Congress itself to make a survey of the whole contracting procedures to prevent this sort of thing insofar as it is possible. You say, Mr. Chairman, as a lawyer that you cannot prevent anyone from suing somebody else? Mr. ANDREWS. That is right. Mr. REIFEL. That is in the context of our open society, but from the standpoint of future demands on the country in the area of constructing Federal buildings all over the world and in the United States, we have it also in another form when we authorize the purchase of land for a park, where immediately the land begins to escalate in price. We have it in a little different situation here but it seems to me the motivation is the same, to get all possible from the Federal Government. I am glad we are going to discuss it in executive session. This seems to me to be a dramatic illustration of what is occurring, and if the contractor goes in the Court of Claims and wins, just as in the case of land, what we are really facing here is escalation in cost that goes far beyond what would seem to be reasonable compensation for justifiable claims. Mr. ANDREWS. The gentleman has made an excellent statement and he is eminently correct in my humble opinion. Mr. HENLOCK. Congress has taken certain precautions in this respect. As you probably will recall, several years ago in the legislative branch appropriation bill all expenditures of the Architect of the Capitol were made subject to on-site audits by the General Accounting Office, the same as any other expenditures in the Government, and we also operate under the House Office Building Commission that has the authority to question anything we do. GUARANTEE AGAINST DEFECTIVE WORK Mr. ANDREWS. Did the contractor guarantee that garage would not leak? Mr. CAMPIOLI. That is a requirement of the contract, in that it is covered by the guarantee. Mr. ANDREWS. I am talking about these particular garage structures. They guaranteed they would not leak? Mr. HENLOCK. Yes. All work under the contract is covered by guaranty against defective workmanship. Mr. ANDREWS. Is the building leaking? Mr. CAMPIOLI. It was leaking but repairs have been made to stop the leak. I have no recent reports to indicate otherwise. Mr. ANDREWS. So the answer to my question of the leaking is "No" at this time. Of course, it is not raining at this time. Mr. CAMPIOLI. I assume it was not leaking at the time of the last rain, or else I believe I would have been notified. Mr. ANDREWS. Are there any other question about the underground garages? (Discussion off the record.) Mr. YATES. The next item is for the Capitol Power Plant operation on page 95 of the committee print, and page 116 and following of the justifications. You are asking for $2,927,000, which is an increase, after cranking in the pending wage board supplemental of $20,000, of $65,400, is that correct? Mr. HENLOCK. Yes sir. Mr. YATES. Insert pages 116 through 122. (The pages follow:) 1968 appropriation in annual act_. Wage board pay supplemental___ Total appropriations, 1968– $2,841,600 20,000 2,861,600 DEDUCTIONS Stoker rehabilitation-2d year allotment under 3-year program for replacement of spreader stokers in three coal-fired steam generators Base for 1969_. ADDITIONS -50,000 2,811, 600 Wage-rate increases authorized by Public Law 763, 83d Congress__ Under the provisions of Public Law 763, 83d Congress, 88 laborers and mechanics on the Capitol Power Plant roll are compensated on a wage-board, prevailing-rate basis. Public Law 763 provides that the compensation of such employees shall be fixed and adjusted from time to time as nearly as is consistent with the public interest in accordance with prevailing rates. An increase of $10,800 is requested for 1969 to meet on a fullyear basis the cost of increased wage rates established for these wage-board positions as a result of a general survey of Government and industrial employees' wages in the Washington metropolitan area, conducted during the past year. The new rates went into effect Oct. 22, 1967, in accordance with the provisions of Public Law 85-872, 85th Congress. The increase is necessary in order that the Capitol Power Plant wageboard employees may be compensated on a full-year basis in the fiscal year 1969 in accordance with present prevailing rates. An increase of $4,752 is requested for 1969 to meet the cost of within-grade promotions and other changes falling due in that year, authorized by Public Law 769 under the wage-board system, for employees compensated under that act. Within-grade promotions authorized by the Classification Act of 1949, Normally, it is necessary to provide, annually, for one additional day's pay above the regular 260-basic workdays per year, since usually the extra day falls on a basic workday (Monday to Friday). This allotment is determined by deducting 52 Saturdays and 52 Sundays from the total of 365 calendar days in a normal year. Last year (Leap Year), one additional day fell on a Saturday and the other on a Sunday, resulting in the elimination of the need for this allotment for 1968. For 1969, the additional day falls on a basic workday, necessitating the need for restoration of this allotment for 1969. Increased pay costs due to Public Law 90-206 "Federal Salary Act of 1967", approved Dec. 16, 1967-- Increases authorized by this act went into effect Oct. 8, 1967. The cost for the fiscal year 1968 amounts to $1,100. Due to delay in filling 5 new jobs allowed for 1968, it is possible to absorb this cost for 1968. However, since such savings will not recur in 1969, it is necessary to request for 1969 the full annual cost of $1,580 for next year. $15, 552 448 2,800 1,580 ADDITIONS-Continued Payment to employees' life insurance fund--increased from $2,130 to $3,060 This item is required to cover the cost of the Government's payment to employees' life insurance fund required by Public Law 598, 83d Congress. The increase of $930 is due to additional costs resulting from enactment of Public Law 90-206, which provides for additional amounts of insurance for all Federal employees and establishes a new minimum insurance coverage of $10,000 for those employees whose annual basic salary is $8,000 or less. Contribution to retirement fund-increased from $45,100 to $47,190__ This item is required to cover the cost of Government contribution to retirement fund required by Public Law 854, 84th Congress. The additional cost results from increase in basic pay rates. Purchase of electrical energy-increased from $1,355,000 to $1,400,000 – No increase has been provided under this allotment for the past 3 years. The present allotment was fixed in 1965 prior to completion of construction work and improvements then underway. The cost of purchase of electrical energy for the fiscal year 1967 amounted to $1,331,475, a saving of $23,525. The present rate of expenditure indicates that there will be no savings in the fiscal year 1968; in fact, the expenditures are expected to exceed the allotment by a moderate amount. Expenditures under this allotment have been increasing this year and will further increase in the fiscal year 1969. This increase is due, mainly, to completion and placing in service, this year, of the final phase of air conditioning the Main Library of Congress Building, the House Underground Garages in Squares 637 and 691, and the first phase of remodeling of the Cannon Building which, with improved lighting, heating, and air conditioning, has added to the electrical load. In addition, the remainder of the Cannon Building, under the second phase of the remodeling program, will be completed by the end of this fiscal year and will further increase the electrical load in the fiscal year 1969. The electrical load is also gradually increasing in the various office buildings, from year to year, due to the use of additional business machines and other mechanical equipment. The 1968 estimate is based on the purchase of 112,917,000 kw.hrs. of electrical energy at an average cost of one and two-tenths cents per kw.-hr. The 1969 estimate is based on the purchase of 116,667,000 kw.-hrs. of electrical energy at the same average cost of one and two-tenths cent per kw.-hr.-an increase of $45,000. All electrical energy required for the Capitol, Senate and House Office Buildings, U.S. Supreme Court Building, Library of Congress Buildings, Senate Garage, and Capitol Grounds street, park and floodlighting systems has been purchased under the Capitol Power Plant appropriation from the local Public Utility at rates negotiated by the General Services Administration for use throughout the Washington metropolitan area by Government agencies, generally, since 1951. This increase is urged in order to insure an adequate and uninterrupted supply of electrical energy for the Capitol and other buildings supplied with energy through this appropriation, in the fiscal year 1969. General annual repairs-increase from $85,000 to $100,000– – No increase has been provided under this allotment since 1966, when the present allotment of $85,000 was approved. This allotment has been inadequate to meet actual repair and maintenance costs during the past 3 years. In 1966, we had to expend $108,000 for general annual repairs; in 1967, $104,000; and in the fiscal year 1968, $60,000 to Jan. 31, 1968. There is no means by which this annual expenditure can be reduced if the plant is to be kept in dependable and uninterrupted service. During the fiscal years 1966 and 1967 we were able to meet the excess expenditure through savings in the allotment for purchase of electrical energy. Those savings materialized due to the fact $930 2,090 45, 000 15,000 |