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CONTENTS

Hearings held in Washington, D.C.:

January 27, 1964..

January 29, 1964..

January 30, 1964.

March 16, 1964..

Text of bills:

H.R. 1678.

H.R. 6088.

Statement of

Holland, Chaz, Chief of Labor Relations, USAF; accompanied by

Col. H. J. Dumont, Chief, Contract Methods Branch, USAF;

Karl E. Johnson, contracting officer, Fort Wayne, Detroit, Mich.;

L. W. Hockheimer, Continental Army Command, Procurement

Policy Control; Frank Capps, Director, Operations Division, Office

of Buildings Management, Public Buildings Service, General Services

Administration; and Herman Moore, Chief, Contractual Services

Branch, Operations Division, Office of Buildings Management,

Public Buildings Service, General Services Administration..

McCart, John A., operations director, Government Employes'

Council of the AFL-CIO..

McGahey, James C., international president, accompanied by Winston

L. Livingston, general counsel, United Plant Guard Workers of

America (independent), Detroit, Mich..--

Meiklejohn, Kenneth A., legislative representative, AFL-CIO -

Pelly, Hon. Thomas M., a Řepresentative in Congress from the State

of Washington..

Peterson, Hon. Esther, Assistant Secretary of Labor; accompanied by

Seth Zinman, Solicitor's Office, and Miss Carol Cox, Solicitor's

Office, U.S. Department of Labor...

Sullivan, David, president, Building Service Employees International

Union, AFL-CİO; accompanied by Thomas R. Donahue, assistant

to Mr. Sullivan; and Aaron Benenson, Esq., counsel, Building

Service Employees International Union, AFL-ČIO..

Statements, letters, supplemental material, etc.:

McCart, John A., operations director, Government Employes'

Council of the AFL-ČIO, prepared statement of...

McGahey, James C., international president, United Plant Guard

Workers of America:

Appendix A..

Invitation, bid, and award.

Supplement to statement, dated March 6, 1964..
Meiklejohn, Kenneth A., legislative representative, AFL-CIO, letter

to Chairman Thompson, dated April 15, 1964---

Peterson, Hon. Esther, Assistant Secretary of Labor:

Executive order by President John F. Kennedy-

Statement of..

Tobriner, Walter N., President, Board of Commissioners, District of

Columbia, letter to Chairman Powell, dated March 26, 1964.

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101

SERVICE CONTRACTS ACT OF 1963

MONDAY, JANUARY 27, 1964

HOUSE OF REPRESENTATIVES,

SPECIAL SUBCOMMITTEE ON LABOR
OF THE COMMITTEE ON EDUCATION AND LABOR,

Washington, D.C. The subcommittee met at 10:10 a.m., pursuant to call, in room 429, Cannon Building, Hon. James G. O'Hara presiding:

Present: Representatives O'Hara, Sickles, and Griffin.

Staff members present: Dr. Deborah P. Wolfe, education chief; Robert E. McCord, director; and Philip R. Rodgers, minority counsel for labor.

Mr. O'HARA. The Special Subcommittee on Labor will be in order.

The purpose of the meeting today and the hearings that will be conducted over the next week or two is to consider two bills introduced by me, H.R. 1678 and H.R. 6088. If there is no objection, I would ask that the bills be printed in the record of the hearings at this point.

(The bills referred to follow :)

[H.R. 1678, 88th Cong., 2d sess.) A BILL To provide wage standards for persons engaged by Federal contractors or

subcontractors to furnish services or maintenance work to Federal agencies, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the “Service Contracts Act of 1962”.

SEC. 2. As used in this Act:

(a) The phrase "contract which provides for the furnishing of services, including janitorial, custodial, or cleaning services, or maintenance work to a Federal agency" shall include all such contracts except

(1) contracts subject to either the Act of March 3, 1931 (46 Stat. 1494), as amended, or the Act of June 30, 1936 (49 Stat. 2036), as amended;

(2) contracts for the carriage of freight or personnel by vessel, airplane, bus, truck, express, or railway line where published tariff rates are in effect;

(3) contracts for the furnishing of services by radio, telephone, telegraph, or cable companies, subject to the Communications Act of 1934;

(4) contracts for public utility services, including electric light and power, water, steam, and gas; and

(5) employment contracts providing for direct services to a Federal agency by an individual or individuals. (b) The phrase "persons engaged to perform services or maintenance work” shall include all persons engaged to perform such services regardless of any contractual relationship agreed upon, but shall not include persons engaged in an executive, professional, or administrative capacity, as such terms are defined and delimited by regulations of the Secretary of Labor.

(c) The term "employment benefits” shall include vacations, holidays and sick leave, sickness and accident benefits, accidental death and dismemberment benefits, hospital care, surgical and medical care, pensions on retirement or death, life insurance, unemployment benefits, or other similar benefits provided directly or indirectly by an employer for the benefit of his employees, their families and

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dependents, by means of insurance or fund programs or other appropriate means as specified by regulation of the Secretary of Labor.

(d) The term "regular rate” shall have the same meaning as provided by section 7(d) of the Fair Labor Standards Act of 1938, as amended.

(e) The term “Federal agency" means the United States, the District of Columbia, and all executive departments, independent establishments, administrative agencies, and instrumentalities of the United States and of the District of Columbia, including corporations, all or substantially all of the stock of which is beneficially owned by the United States, by the District of Columbia, or by any of the foregoing departments, establishments, agencies, and instrumentalities.

(f) For the purpose of geographical definition, the "United States” shall include any State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, Outer Continental Shelf lands defined in the Outer Continental Shelf Lands Act (ch. 345, 67 Stat. 462), American Samoa, Guam, Wake Island, and the Canal Zone, but shall not include any other territory under the jurisdiction of the United States or any United States base or possession within a foreign country.

SEC. 3. Every contract made and entered into by a Federal agency, whether negotiated or advertised, which provides for the furnishing of services, including janitorial, custodial or cleaning services, or maintenance work to a Federal agency and is in excess of $10,000, and all bid specifications for such contracts, shall contain the following representations and stipulations :

(a) That the contractor and any subcontractors shall pay all persons engaged to furnish services or maintenance work within the United States in performance of the contract, at least twice a month and without subsequent rebate or deduction except such deductions as the Secretary of Labor may by regulation permit, not less than the minimum wages which the Secretary of Labor has determined to be prevailing for persons in corresponding employment classifications who are performing similar work in the city, town, village, or other civil subdivision of the State or territory where the work is to be performed;

(b) That for all persons engaged to furnish services or maintenance work within the United States in performance of the contract, the contractor and any subcontractors shall provide additional employment benefits similar to and no less than the minimum benefits which the Secretary of Labor has determined to be prevailing for persons in corresponding employment classifications who are performing similar work in the city, town, village, or other civil subdivision of the State or territory where the work is to be performed ;

(c) That for all work in excess of eight hours in any one day or in excess of forty hours in any one workweek, persons engaged by a contractor or subcontractor to furnish services or maintenance work within the United States in performance of the contract shall be paid not less than one and one-half times their regular rate of wages ;

(d) That on the date when the person is first employed, and not less than quarterly thereafter in conjunction with a regular pay, the contractor or subcontractor shall distribute to each person engaged to furnish services or maintenance work within the United States in performance of the contract, a notice of the wages and benefits required under subsections (a) and (b) of this section and the compensation for excess hours required to be paid under subsection (c) of this section, on a form prepared and in accordance with regulations prescribed by the Secretary of Labor, unless a prominent and easily accessible place is available where the work is performed and a notice of the required rates is posted at such place;

(e) That no part of the services or maintenance work furnished in the United States pursuant to the contract will be performed in buildings or surroundings or under working conditions, provided by or under the control or supervision of the contractor or any subcontractor, which are unsanitary or hazardous or dangerous to the health and safety of persons engaged to furnish the services ;

(f) That there may be withheld from the contractor so much of accrued payments due on the contract, or any other contract between the same contractor and a Federal agency, as may be considered necessary by the contracting officer to pay to persons engaged by the contractor or any subcontractor to furnish services or maintenance work within the United States in performance of the contract, the difference between the wages and compensation for excess hours required by the contract and the amount actually paid ;

(8) That the investigation report and findings of the contracting officer shall be submitted to the Secretary of Labor or his authorized representative who shall consider in connection therewith such additional evidence or arguments as the contractor or subcontractor may present pursuant to procedures to be established by regulation of the Secretary of Labor; and that the decision of the Secretary of Labor as to underpayments or other breaches of contract shall be conclusive upon all Federal agencies and, if supported by substantial evidence, conclusive in any court of the United States;

(b) That in the event it is found by the Secretary of Labor that any person engaged by a contractor or subcontractor to furnish services or maintenance work within the United States in performance of the contract has been or is being paid less than the wages, benefits, and compensation for excess hours required by the contract, or that a breach or violation of any of the other representations and stipulations required to be included in the contract has occurred, the contracting officer may, by written notice to the contractor, terminate his right to proceed with the work or such part of the work as to which the violation has occurred, and prosecute the work to completion by contract or otherwise, and the contractor and any sureties shall be liable to the Government for any excess costs occasioned the Government thereby.

SEC. (a) The Comptroller General of the United Stat hereby authorized and directed to pay directly to the persons underpaid, from any accrued payments withheld under the terms of the contract, any wages and compensation for excess hours which the Secretary of Labor has found to be due pursuant to this Act; and the Comptroller General is further authorized and directed to distribute a list to all agencies of the Government giving the names of persons or firms that the Secretary of Labor has found to have breached or violated any of the representations or stipulations required to be included in a contract pursuant to this Act. Unless the Secretary otherwise recommends, no contract of the United States shall be awarded to the persons or firms appearing on this list or to any firm, corporation, partnership, or association in which such persons or firms have a substantial interest until three years have elapsed from the date of publication of the list containing the names of such persons or firms.

(b) If the accrued payments withheld under the terms of the contract are insufficient to reimburse all persons with respect to whom there has been a failure to pay the wages and compensation for excess hours required pursuant to this Act, the Secretary of Labor may bring an action against the contractor, subcontractor, or any sureties in any court of competent jurisdiction to recover the remaining amount of underpayments.

SEC. 5. The Secretary of Labor is hereby authorized and directed to administer the provisions of this Act and he, or his authorized representatives, shall have power to make investigations and findings as herein provided and prosecute any inquiry necessary to his functions in any part of the United States. The Secretary of Labor is further authorized to make, amend, and rescind such rules and regulations as may be necessary to carry out the provisions of this Act.

SEC. 6. Upon a written finding by the head of the contracting agency that the inclusion in the proposal or contract of the representations or stipulations set forth in section 3 of this Act will seriously impair the conduct of Government business, the Secretary of Labor shall make exceptions in specific cases or otherwise when justice or public interest will be served thereby. Upon the joint recommendation of the contracting agency and the contractor, the Secretary of Labor may modify the terms of an existing contract respecting minimum wages and benefits and compensation for excess hours as he may find necessary and proper in the public interest or to prevent injustice or undue hardship. The Secretary of Labor may provide reasonable limitations and may make rules and regulations allowing reasonable variations, tolerances, and exemptions to and from any or all provisions of this Act respecting minimum wages and benefits and compensation for excess hours or the extent of the application of this Act to contractors, as hereinbefore described.

Sec. 7. In the event of a national emergency, the President is authorized to suspend any or all of the representations and stipulations contained in section 3 of this Act.

Sec. 8. If any provision of this Act, or the application thereof to any persons or circumstances, is held invalid, the remainder of the Act, and the application of such provisions to other persons or circumstances, shall not be affected thereby.

SEC. 9. This Act shall apply to all contracts entered into pursuant to negotiations concluded or invitations for bids issued on or after ninety days from the effective date of the Act.

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