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And so forth.
I would like to ask Mr. Ahart if he is in possession of later information than that that would indicate to him that you and the Department of Labor are giving further consideration to this question, or were you not aware of this decision?
Mr. AHART. As I mentioned in the statement, Mr. O'Hara, we did bring these questions to the attention of the Department. I think for clarification of Mr. Moran's letter to you, I would like to quote what has been characterized as a recommendation by Mr. Moran, from page 3 of the letter which was sent to Assistant Secretary Fletcher in August 1970, which stated as follows:
"As a possible solution for correcting the apparent inequities in the bases used for determining wage rates for Star Route contracts, we believe that consideration should be given by the Department to establishing Star Route drivers as a separate class of service employees for minimum wage determination purposes."
This is a common practice in the course of our work. During our review certain questions or suggestions come to our mind which we want to bring to the attention of the proper people in a department or agency for their consideration. It is up to them from that point on to determine what they want to do and in turn how they wish to respond to us.
Mr. THOMPSON. Mr. Ahart, you said "as a possible solution, consideration should be given” and so on, and it is obvious from the letter received by Mr. O'Hara that they took that as being rather more than a suggestion but in effect a decision on your part. Is that a fair interpretation?
Mr. AHART. I would suspect from the characterization there that at least they are advising Mr. O'Hara along these lines. We have discussed this with them since we sent the letter to them. I do not think that there is a misunderstanding as to the nature of the suggestion.
Mr. THOMPSON. They have considered your suggestion and have decided to implement it even though it was just a suggestion, and then have notified you that, having given thought and consideration to it, they made a decision to implement it.
They have not so informed you? Mr. AHART. We have not received a formal response to our August 31, 1970, letter that was sent to the Assistant Secretary of Labor. We are aware that they have given consideration to this matter. They have talked at great length with the Post Office Department people.
I know they are in the process of performing a survey or gathering data which they think might be helpful in setting up a separate class for the Star Route drivers. I also know they have some problems in dealing with that and I think some of the comments which Mr. Parrish made here earlier as to how you would define this as a separate class and what basis you would use and still give effect to the intent of the Service Contract Act troubles them as I think it would trouble us because it is not an easy thing to do.'.
Our reason for raising the question in the first place was that the Department was taking the regional rates, I think they are called, from the Master Freight Agreement, and were applying them without making a determination that these were the dominant rates for the type of drivers involved here; that the rates were in fact the prevailing rates in the area, without recognizing what differences there might be between duties performed by Star Route drivers and duties performed by people to which this rate applied under the master freight agreement.
It is my understanding, and I would like my colleagues to check me on this, that these rates which are regional in nature or area in nature, are not necessarily controlling on the supplemental agreements which might be negotiated by individual employers and individual local unions for wages under their particular contracts; that there are modifications of these rates depending on, what type of vehicle is driven, what type of freight may be hauled, what duties the driver may perform in addition to driving the vehicle itself. .
Mr. THOMPSON. I see. Mr. O'Hara?
Mr. O'HARA. Well, I would think in connection with that I don't think I want to get into that except to say my own little experience, and I don't know much about it, with mail haulers, is that the driver does everything but put the mail in the slots at the post office.
Unlike a lot of places where the driver does not touch anything on the dock and all of that sort of thing, the driver in a lot of these cases does everything but deliver the mail from door to door.
Nevertheless, I think from what has happened here, Mr. Chairman, it is apparent that the Labor Department, because it liked this suggestion, seized upon it and grabbed it and said, “Aha, the GAO has told us to do it this way and obedient servants of the Congress that we are, we are going to do it that way.”
Mr. Ahart, do you find that the Department always gives your suggestion that kind of weight?
Mr. AHART. Well, I think what you are talking about, is that the Department of Labor, the Post Office Department or any other department of the Government, make up their own minds as to what they think about our suggestions or recommendations.
Mr. O'HARA. I can recall one fairly recently. The Department promulgated the Philadelphia plan, and as I recall, GAO issued an opinion on the Philadelphia plan suggesting that it did not feel the Philadelphia Plan was in keeping with the law as it saw it. May I simply ask without going into the details of the Philadelphia plan, do you recall that the Department immediately accepted that viewpoint and cancelled that proposal ?
Mr. AHART. I think in that particular case the Department as well as numerous others had some problem with the Comptroller General's decision.
Mr. O'HARA. The point is that their practice is to take those of your opinions and suggestions that they like and ignore the ones they don't like, isn't that right?
Mr. AHART. I think that in this particular case, in all fairness to the Department, Mr. Chairman, we did offer this as a suggestion for their consideration. They have considered it. They have not responded to us but I think that in the final analysis, the specifics of what they come up with under the Service Contract Act where they do have a considerable amount of discretion, is going to be a matter for the Department's determination.
I would like to underscore one thing. Our question was not a frivolous one. We did feel that there was serious question as to whether the procedures which the Department was following in making these wage rate determinations were giving the proper effect to the Service Contract Act.
Mr. Parrish or one of the other gentlemen who testified here placed a considerable amount of emphasis on GAO's making savings for the Government. We do like to do that but only within the intent of the statute that is involved. It could well be that by establishing a separate class they might end up with higher rates in some cases.
For example, what they were doing, as I understand the situation, on short haul rates was making their wage surveys in a given area and adding up all of the rates they could find and taking the mean of these rates and this became the rate determined for the short haul Star Route drivers.
This may result in high or low rates depending on what kind of criteria you want to apply. We did say that there is a possible potential here for savings to the Government if determinations were made on a proper basis, that it was important that they give thorough consideration to this since contracts were coming up for renewal on July 1st, as I understand it, and that something should be done to get this on a proper basis by that time.
Mr. O'Hara. Mr. Ahart, I am not saying that the way they used to do it was perfect and it may be that their earlier determinations did not take into account certain classes of drivers that were not covered by teamster union master agreements, and so forth. That may in fact be the case. I don't know. It is entirely possible that the earlier method of determination had flaws. I don't know about that. But I know in your opinion in response to the Air Force and in regard to other questions that you had recourse to the legislative history in sustaining the opinion of the Air Force, the opinion that you submitted to the Air Force about whether or not you take prospective wage increases into effect in terming the prevailing rate.
In fact you quoted then from the hearings I think before the Senate Committee on that question—from the testimony of the former Solicitor Mr. Donahue. Now I want to ask you if in making your recommendation to the Labor Department and Post Office Department with respect to Star Route carriers, if you gave consideration to legislative history and went into the hearings, and if so, what you found there, that might have sustained the suggestion that you made to the Department ?
Nr. AHART. We try Mr. O'Hara, in all of our work where we are taking a look at the administration of any act, to define as best we can what the intent of the language was, from the language of the act itself as well as the legislative history before it.
I think we did that in this case. The act does say the determinations will be based on prevailing rates in an area. We felt that the basis that the Department of Labor was using for its wage determinations were not such that it could be concluded that these represented pre
vailing rates for this type of employee in that area and this is why we raised the question.
I think the tendency of the Department over the years has been to use union rates because they are more easily obtainable. We have found, for example, under Davis-Bacon Act determinations that they sometimes used the union rates where in fact the union rates were not the dominant factor in the area ; the non-union rates were prevailing, I think the Department has come around on that and is making a distinction there in picking up prevailing rates particularly for residential housing. We do feel that if the Congress had wanted union rates to be used in all cases, they know how to write the law to say that union rates will be used.
Both the Davis-Bacon Act and Service Contract Act used the language "prevailing in the area" and this is the language which we use as criteria in evaluating the administration by the Department of Labor of its responsibilities under the act.
Mr. O'HARA. I am sure that is so Mr. Ahart. We did not say union rates and if we had meant union rates, that is what we would have said. We mean all rates, union and non-union. We never suggested otherwise. But I think it is rather difficult to find in the legislative history, if you will permit me, any basis for discovering that perhaps the Congress meant you to determine the prevailing wage for Star Route drivers by looking only at what Star Route drivers were then receiving.
The legislative history in fact is quite clear the other way. I call your attention particularly to the testimony of Mr. Donahue before this subcommittee in the House on the Service Contract Act of 1965, the questioning thereon, dated Thursday, August 5, 1965, and I call your attention to page 11 thereof when we talked specifically about Star Route drivers and I set forth some of my concerns, page 12 and page 13.
I call your attention as well to the House Committee report, House Report 948, 89th Congress which indicates that the one single amendment we made in the law was to strike out the exemption for accounts for the carriage of mail and I think it is very clear from the legislative history that no one ever suggested in there that they were trying to keep the Star Route drivers getting what they were already receive ing. Rather the intention was to pay them wages comparable to those received by other drivers of freight or what ever it might be in that particular area. I would welcome your examination of that. I am glad to see that you are still examining the matter.
I would hope, in accordance with your statement, the Department is also still examining the matter, but in accordance with your statement on page 6 that you are now giving further consideration, I hope that you will look into that history and I will try to get you some other aspects of the history and statements made on the Floor of the House, and statements made in the hearings on the same bill in the earlier Congress in which we make it clear that one of the particular intentions of the Act was to bring up the wages of Star Route drivers to a wage comparable to that paid other truck drivers in that area.
In fact that was what called my attention to the problem in the first place, as I set forth here in the statements I have referred to, a
prospective strike I have referred to on a Star Route between Detroit and Port Huron, Michigan, that was called to my attention as the Member of the Congress then representing that District.
That was what got me interested in this and why I sat down and wrote the bill and how we got going on this. Let me go on because I want to hurry on the next matter I wish to bring up and that is the Air Force decision and again it is a question of legislative interpretation,
In your opinion with respect to prospective wage increases, page 2 of your letter dated September 19th, which appears at 49 Comp. Gen. 186, at the bottom of the second paragraph you point out that with respect to Davis-Bacon “no provision is made for any modification or adjustment of such advertised minimum wage rates and since there is no authority for considering as 'prevailing a rate which is not in fact being paid at the time", and so forth, "and since the minimum rates are required to be fixed in advertised specifications ... we held in 47 Comp. Gen. 754 that the Davis-Bacon rates be based on the prevailing rates existing at the time the contract is advertised."
Now then you turn to the service contracts and you give the language used in the Service Contract Act, the exact same meaning and in doing so, you say in support of this view the statement made by the then Solicitor of Labor, Charles Donahue, as reported on page 11 of the hearing before the Senate subcommittee and you quote this part of the statement, "At the threshold I have been told that there is some curiosity as to why we did not take Davis-Bacon Act and extend it so that it would cover service contracts as well as construction contracts.
Another answer to that question is that in principle, without mentioning it, we have followed the Davis-Bacon Act. I address myself to the provisions on page 2 of the bill as it was reported in the House of Representatives, paragraph number 2, which provides for determination of prevailing wage rates by the Secretary of Labor on the basis of those prevailing for service employees in the locality.”
I agree with that. I think you have hit on it because not only Mr. Donahue's statement but the statements of many of us at the time said, “we mean what we are doing here is filling the gap.” We have WalshHealy applying to supply contracts. We have Davis-Bacon applying to the construction contracts and we want to apply this statute to the service contract and we are following the pattern of Davis-Bacon and we intend these wages be set in the same way.
I would agree with that part of it. Okay. Now, as a matter of legislative interpretation, interpreting that intent, here in 1965, we said we enacted a law that said we want prevailing wages determined in the same way they are under DavisBacon. Let me ask you, how were wages determined in 1965 under Davis-Bacon?
Were prospective wage increases taken into account?
Mr. MILLER. I am not sure I know the answer, but I can say that to the best of my knowledge they were not taken into account at that time. "To the best of my knowledge” means that if they were being computed on that basis GAO had no official notice of it.
Mr. O'HARA. Well, it is my understanding and perhaps I am mis. taken, that at that time, if a contract was being let under Davis-Bacon. in setting the wage rate, they would look at, let's take a town that was