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clusive if supported by substantial evidence on the record considered as a whole. On review the Board may modify or affirm the determination (or redetermination) of the Secretary, or it may set aside and remand the case to the Secretary. The decision of the Board shall be final and not subject to review by any other agency or court.

"(j) Upon receipt of a certification from the head of a Federal agency that in his opinion review by the Board of a determination (or redetermination) of prevailing wages by the Secretary under a statute which the agency head administers would cause delay in construction, alteration, or repairs which are subject to this Act or which are subject to the labor standards provisions of any of the statutes mentioned in subsection (h), which would seriously impair the national defense or welfare, the Board shall decline to review such determination or, if the proceedings for review have begun, shall forthwith discontinue such proceedings. Notwithstanding the preceding sentence, the Board may, notwithstanding such a certification, begin or continue a proceeding for the review of a determination (or redetermination) of the Secretary if it believes that a determination of the issues involved is important to the administration of this Act and that all viewpoints will be adequately represented in such proceeding. The Board, in such a proceeding, shall publish an advisory opinion on the issues involved, but may not modify the determination (or re determination) of the Secretary.

“(k) For purposes of this section, the term 'interested person' means, as determined by the Board by rule, regulation, or decision, (1) a contractor, or an association representing a contractor, who has entered into, or has demonstrated a bona fide interest in entering into, a contract concerning which a determination is reviewable under this section, or (2) any laborer or mechanic, or any labor organization which represents a laborer or mechanic, who is, or is likely to be, employed on a project concerning which a determination is reviewable under this section.

"Sec. 12. Except as provided in section 11, interpretations by the Secretary of this Act shall be binding upon each agency responsible for the administration of any provisions of this Act.

“Sec. 13. For purposes of this Act

“(1) The terms “laborer' and 'mechanic' do not include persons whose work is primarily professional, administrative, supervisory, clerical, or otherwise nonmanual in nature.

“(2) The term ‘Secretary' means the Secretary of Labor."

Sec. 8. The amendments made by this Act shall become effective one hundred and twenty days after the enactment of this Act.

Mr. ROOSEVELT. The subcommittee will come to order, please.

This morning, the General Subcommittee on Labor is beginning hearings on the administration of the Davis-Bacon Act.

Our first witness will be our old friend, the Solicitor of Labor, Charles Donahue. The Solicitor has been invited to testify before the committee for the purpose of elaborating on the recently issued regulations of the Department of Labor. These regulations, which were published in the Federal Register on January 4, 1964, seek to improve the administration of this act.

It is my intention that this first session with the Solicitor shall be limited to an analysis of the new regulations. In subsequent hearings we shall hear from witnesses with respect to specific proposals to amend the Davis-Bacon Act and to provide for a statutory review procedure and other administrative changes which have been proposed and some of which are in legislative form, by bills introduced by Mr. Goodell and by myself.

In 1962, the committee conducted extensive hearings into the administration of the act. It is not our intention to repeat the testimony of earlier hearings, but rather to consider specific, concrete proposals for legislative changes in the Davis Bacon Act.

Future witnesses will be asked to present as concise and well considered recommendations as is possible. Such recommendations

should be offered for the purpose of assisting the committee in developing sound legislative proposals and in considering, of course, all proposals which the witnesses may care to place before us.

Mr. Donahue, on behalf of the committee and myself I want to welcome you again and to say that we look forward very much to your discussing with us the regulations to which I have referred.

Happy to have you with us this morning.



Mr. DONAHUE. Thank you very much, Mr. Chairman and members of the committee.

Before commencing, I would like to introduce to you a gentleman whom you already know-many of you—Mr. E. Irving Manger, who is my associate administering the Davis-Bacon Act and related statutes determining prevailing wages for the construction industry and for Government contracting in that industry.

Mr. ROOSEVELT. We are certainly very happy to have Mr. Manger with us this morning.

Mr. DONAHUE. Thank you, sir.

As you know, and as always, we in the Department of Labor have been seeking every way we can within the framework of the present law to improve and perfect the ways in which we administer it.

As one step in that direction-one large step in that direction-we have just recently published, effective February 3, changes in regulations for the administration and enforcement of the Davis-Bacon Act and related statutes.

These changes have not been made without due meditation; in fact, we have considered them very carefully over a period of the last 2 years and during the period that this committee has been looking into the administration of the Davis-Bacon Act.

For the most part, they follow recommendations which we made to this committee in the course of its prior hearings in 1962. For the most part they follow proposed regulations published in the Federal Register something more than a year ago.

They have been carefully tailored in the light of the comments given to us by all of the various public and private agencies and groups interested in these regulations, and they are the refinement which is the result of this process of review in the light of comments we have received.

I will go over them briefly; not necessarily in the order of their importance, but in the order as they occur to me.

First of all, we have directed our attention toward trying to get better wage data than we ever have had before, and, with that in mind, we have made a change in the regulations to require the contracting agencies, at the beginning of each year, to outline for us their construction programs in terms of when, where, and what they are building throughout the Nation, so that we can anticipate their demands for wage determinations by securing, in advance, wage data from the areas where their construction is projected for the current year.

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I believe that this process will make it easier for them and easier for us in the course of the wage determining process.

A second change of importance—and this, by the way, as well as the others, are changes which I believe have been endorsed by a majority of this committee, for which I commend this committee -in regulations suggested by the committee relates to the complete disclosure to the public of all of our basic wage data, with one exception only; and that is, where contractors have told us in advance that they do not want to have their identity revealed, in which case the source of the wage information will not be disclosed, but the information itself will be disclosed.

Another recommendation, equally endorsed by this committee, is to lengthen the period of effectiveness of a wage determination from 90 to 120 days.

This is a move which has been long recommended by many procurement agencies and which we believe will give them greater flexibility and maneuverability in the course of their construction contract procurement.

Another move which I think will recommend itself to the committee and which we think is a definite advantage to us and to the administration of the statute is making area rather than project wage determinations.

At the present time we are making somewhere between 45,000 to 50,000 wage determinations in the course of a year. We are making that many because we are making them on a project basis.

The agency decides that it is going to let a construction contractinvite bids. "Their first step is to come to the Department of Labor, describe the work, and say to us: “We would like to have wage rates for this type of work at such-and-such a place," whereupon the Department of Labor issues wages and classifications for that project only.

Now, there are many parts of the country where there is no doubt what the wage structure is in the construction industry. Manhattan, in New York City, is one example; the Los Angeles area of southern California would be a second example; Chicago would be another example, in which wage rates are negotiated for various crafts and classes of workers between contractors and their associations and union members and their organizations, and that, once negotiated, is regularly paid in accordance with the terms of the contract in the area covered by the contract.

We can determine with certainty both the wage rate and the area to which it applies; which is, the territorial jurisdiction of the union negotiating the rate.

We propose, wherever this certainly exists—and it does exist in at least a hundred cities throughout the country, and we will broaden it out as we find that it may exist in more communities through the country--for those areas, we will send to the contracting agency on a regular recurring basis an area wagerate for the type of work.

If it is building and construction work, we will give a rate for that. If it is heavy and high way work, at a different rate, but with certain heavy and highway work identified in relation to different types of projects, then we will publish that to the agency, or conceivably—we have not worked this out completely as yet-in the Federal Register, if the agencies completely agree with that procedure.

That will do away with literally thousands of wage determinations, literally thousands of pieces of paperwork that come from the contracting agency to us and go from us to the contracting agency, and also from us to the various contractors' associations and to the various unions, informing them what the wage rates are, and also from the contracting agency's central office down to its branch offices.

An awful lot of that paperwork will disappear and eventually it is our hope and desire that this process will reduce by approximately a third the workload of the Davis-Bacon division.

I am not making any promises, because I just do not know how much it is going to reduce, but certainly it is going to decrease the complexity of the work and the amount of time necessary to cover these areas where the wage rates are well known by everybody well in advance of any project wage determination at the present time.

Mr. ROOSEVELT. How long does that publication apply?

Mr. DONAHUE. A maximum of 120 days. If, however, there should be a wage change within that period which is called to our attention by a contract change, either in an escalator clause or in a negotiation of a new contract, and then those new wage rates are paid, and we get evidence of it, we will place into effect a modification of the wage rate within the 120-day period.

But the maximum period would be the same period as with regard to an individual project determination; that is, 120 days.

Now, one minor change which we have put into effect, which, again, I believe, eases the path of the contracting agencies, where the wage rate determination is something less than complete, is this: Many times they describe a project; give us the list of the classifications of workers which they believe will be employed in that project; and they will find that they have not included all workers in all classes who would thereafter be needed in the performance of the work.

In that case, at the present time, the agency will ask us to provide additional classifications of workers. In order to ease their path in doing that, we would authorize the contracting officer locally to-when he needs a new class of worker, in order not to hold up performance of the job-establish what the wage rate is for that class and then inform us that he is taking that action.

We would post review instead of preapprove the action taken by the contracting officer.

At their request we are doing this in order to—as I say—ease the performance of the work.

So far as enforcement is concerned
Mr. ROOSEVELT. May I interrupt you for 1 second?

What happens to the contractor who disagrees with the local determination thus made?

Mr. DONAHUE. He can and would protest to the contracting agency in the first instance about either the classification or the rate determined for it, but very frequently the request for the classification will come from the contractor, with his recommendation to the contracting officer in the first instance, and then if he disapproves anything that the contracting officer does at that stage, he can raise that question with our Wage Determination Division, and has done so in the past.

Mr. ROOSEVELT. But it goes into effect as if it was made by your office as soon as the determination is made by the local contracting officer!

Mr. DONAHUE. That is correct, it it not, Mr. Manger?
Mr. MANGER. That is correct.

Mr. DONAHUE. So far as enforcement is concerned, Mr. Chairman, we are making an effort to reduce the amount of paperwork that the contracting agencies must go through in reporting to us, and with that in mind we have changed the reporting requirement on enforcecases so that the contracting agencies, where they now have to report any case where there is a violation in the amount involved of $200 or more-would change that so that they would only have to report those cases where the violation and the restitution amounts to $500

or more.

In place of the more detailed individual reporting requirements, we would substitute a seminnual report, so that we would be able to pick up the history of enforcement of the agency during the course of the year and advise them and assist them in perfecting their enforcement processes.

Mr. ROOSEVELT. Does that change from $200 to $500 mean that there will be considerably fewer number of cases that will be adjudicated?

Mr. DONAHUE. No. It would not have that purpose. It would mean there would be a fewer number of cases which would be handled by the Department of Labor, but it would not have the effect, in our intention, anyway, of reducing the number of cases handled by the contracting agency. They are responsible in the first instance for enforcement of the statute.

Mr. ROOSEVELT. How do you become sure that the contracting agency does not simply assume, because he does not have to report to you any case that is $500 or less, that he will automatically close his eyes to any violation which does not amount to the $500 figure?

Mr. DonalUE. I do not think we have any firm assurance that they are going to do that.

Mr. ROOSEVELT. Would you make that plain to them, however, that that is not your intention, that your intention is merely to help them in their reporting form and not relieve them of any duty to still enforce the act fully?

Mr. DONAHUE. We would certainly have every intention of calling that to their attention.

Although it is not spelled out that way in the regulations, they still would have a standing duty to enforce the statute in accordance with its terms and in accordance with the payroll records submitted by the employers.

The employers have to submit payroll records on a weekly basis to the contracting officer, and those records are supposed to be reviewed by the contracting officer and his agents.

Of course, the semiannual report, moreover, would be a report which would not be confined to those violations over $500, but would include all cases of restitution and all cases of reported violation by the agency.

A change which is not related to the Davis-Bacon Act, not directly related to the Davis-Bacon Act, but which we have made, and which is of importance, is a simplification of the anti-kickback regulations under what is known as the Copeland Act.

At the present time, there are many types of standard deductions from wages, which are normally and customarily made by employers with the consent of the employee, not limited to union dues, but in might

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