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As I read the letter i reference was made earli. letter, that the Secretary i. Department in its administi be under the circumstances that was then in the Secreta. prejudicial to the public intei determination at that time.

Am I again correct in interp: the provisions of section 4(b) of

Mr. SILBERMAN. You are, in a add, as I added earlier, however, conducted by Senator Gurney, the vey under the Department of Labu. that factual situation on which he

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rectly characterize it, is still that which he thought it was when he made the judgment.

Mr. DELLENBACK. Again, I commend the Secretary for that. I was going to go on to that particular point. I want it to be established clearly that I think this subcommittee has an obligation and a responsibility and a right to look at the act and to determine whether or not the act is being adhered to. If it is not being adhered to, if there are changes which should be made in it, that is where our responsibility lies.

In the days that I have sat here and listened to testimony relative to this situation, I think confusion has arisen, and I want to pin that confusion down.

Mr. SILBERMAN. I think you have done so.

Mr. DELLENBACK. I see no sign whatever of a failure on the part of the Secretary to act within the scope of the act in his administrative discretion. Subjectively, one or more members of this subcommittee might prefer that discretion had been exercised in another direction. That is not what I quarrel with and I gather it isn't what the Secretary quarrels with, but I think it is important to pin down the fundamental point of the propriety of the Secretary under the terms of the act.

Mr. SILBERMAN. I think you have pinned it down precisely and I appreciate the statement of it. I think you are exactly on the issue. I might say, given the extraordinary legal competency of one of the authors of this act, if it had been intended that collective bargaining agreements were to be per se protected as opposed to prevailing wage standards it wouldn't be difficult to write the statute to put that in.

Mr. DELLENBACK. I was not in the Congress at the time my most competent colleague from Michigan, Mr. O'Hara, was involved in this act. There must have been a reason for the creation of section 4(b). There must have been a reason why instead of making it an absolute flat mandate without any deviations, there was deliberately written in a provision allowing the Secretary a certain amount of discretion, and knowing the sincerity of my colleague, I am sure it wasn't written because at that time there was a different administration in office.'

It was felt that a man charged with administering this law should have some discretionary responsibilities.

I would like to ask a couple of questions along the lines of what you said about Mr. Gurney. I think in the light of the testimony that was turned up just earlier this week from Senator Gurney, that the action and the decision of the Secretary is a sound one. I missed that particular reference, and that, of course, isn't spelled out in your testimony to us, but that it is the Secretary's intention in the light of the new circumstances called this week to the attention of the subcommittee and to your attention, that it is intended to go forward and make another survey of the area to determine the accuracy or inaccuracy of those figures.

Mr. SILBERMAN. That is quite correct.

Mr. DELLENBACK. I do recall, if I remember correctly, Mr. Chairman, that at the time those figures were given to us I questioned Mr. Gurney as to whether or not the full data was available to us as to who made the survey and how broad it was and how recent it was and there was some question as to protecting the confidentiality of sources and so the survey may not have all that data in it.

I think it is important if we are to accept that as evidence that we check the source of those figures. I am sure that you are not just going to take those figures and build on them. You are going to make an independent investigation to corroborate or dispute the accuracy of those figures.

Mr. SILBERMAN. That is quite correct.

Mr. THOMPSON. Senator Gurney's response, as I indicated earlier, was that he obtained this survey through the courtesy of a reliable source or friend of his. When asked by Mr. Dellenback, he said that for reasons best known to him, he couldn't reveal that source, but that he would have answered for us any questions which might arise out of that survey.

Mr. DELLENBACK. In no way am I attacking Senator Gurney or his rationale. I wanted the record to lay clear the fact that we do not have in that survey the full data which would give us on the subcommittee a basis for accepting it as 100-percent accurate. It may be or it may not be.

But I think again that the approach which you outlined, Mr. Silberman, of what you intend to do, to accept it as sufficiently accurate in view of the high credibility of the source to us, mainly, Senator Gurney, that there may be soundness to it and that will trigger the independent survey you intend to make.

Mr. SILBERMAN. You have it precisely, Congressman.

Mr. DELLENBACK. Thank you very much. We appreciate you for coming. I am sure, just as my collegue from Michigan pointed out, we delight in seeing you here whenever you come. You do effectively and well. You help us in our search for investigations of the law and possible changes in the law, which is the function of this subcommittee. I am sure that my reasons may not be exactly the same as my colleague's from Michigan as to why we are delighted to see you here, but I join in being as delighted as he is to have you with us.

Mr. SILBERMAN. Thank you very much.
Mr. DELLENBACK. Thank you, Mr. Chairman.

Mr. THOMPSON. If I may make a comment or so. For perhaps a third reason I am also delighted to see you here. We all have our own reasons. You are a very able and splendid witness in addition to being a very nice person.

With respect to the comments of my colleague from Oregon, relating to section 4(b), my recollection of the history of this act in 1965— and I was intimately involved with it—was that we did indeed intend for the Secretary to have discretion under 4(b), but it is very narrowly defined.

I will let Mr. O'Hara explain what his intent was at that time. It was apparently felt in 1967, because of the then existing circumstances, which appear to be different now, that no wage determination need be made. Indeed, none was necessary in light of the fact that there was a negotiation for a renewal of the contract as distinguished from a letting out of bids.

The new dimension here is that the Secretary in his letter to me says, "A change at this time might be prejudicial to the public interest in the success of the President's economic program to combat inflation."

I happen to be in total sympathy with the objectives of the President because I think they are in the national interest. I can bicker

with such things as the 10-percent surcharge and I can argue with my colleagues on the Committee on Ways and Means for the manner in which they drafted and passed the legislative implementation of at least part of that program.

I don't think, however, that in these circumstances the program to combat inflation would be helped if some of these 12 contractors come in with bids essentially based on wage reductions.

In any event, no matter what they came in with, if it was in excess of what those same people were making on August 14, it would be frozen.

If I understand the program, it would be limited. I don't know what the new structure that the President suggests is going to do. I can say that I am happy that it is being worked out so that organized labor has agreed to take part in it. I think that is necessary to its success.

Mr. SILBERMAN. You are not as happy as I am about that, Congressman.

Mr. THOMPSON. I can imagine.
Mr. O'HARA. I want it clear you are speaking for yourself.
Mr. THOMPSON. Yes, I don't speak for my colleague from Michigan.

My view of this situation is not that we are trying to invoke the successor doctrine. It isn't that at all. My view is that the situation has changed since 1967, and unless on the basis of a survey which you say the Secretary is going to undertake, there is some sort of a determination and in fact a bidding floor for the 12 bidders, inevitably they are going to bid on the basis of the wages and the wages alone. All the other factors are about exactly equal.

I think that it would be tragic if that were to happen. Mr. SILBERMAN. Well, if I might interrupt for a moment, if you haven't finished, Mr. Chairman. I would say it would not be my contemplation no matter what happened that the successful bidder would be basing his wage rates at the minimum. But I would have to defer to the Air Force to see what kind of bidders they had.

Mr. THOMPSON. I am afraid, Mr. Secretary, if it goes as it appears to be going, unless there is a change in direction, that we are going to end up with another tragic Cape Kennedy situation.

Mr. SILBERMAN. Without agreeing with you—and you will forgive me if I don't agree with you that we have had any tragic Cape Kennedy situation-it is certainly the Secretary's concern and his interest in taking another survey to make sure that an inequity is not perpetrated there. We don't believe it has been in the past and we would hope to take such action as to prevent it being developed in the future.

But, again, because you did say it and I don't mean to be quarrelsome, I don't understand the 1967 decision to be based on the fact there was existing a collective bargaining unit which was going to be tampered with. I think it is broader than that.

I think you must look at the language in the act which refers to the prevailing rate for the locality. It does not assume a single collective bargaining agreement applying in a single situation. That would be quite a different law.

Mr. THOMPSON. Well, the basis for the 1967 decision is obviously open to interpretation in different ways by different people.

Mr. SILBERMAN. Fair enough.

Mr. THOMPSON. I don't bicker with you for disagreeing with me or Mr. O'Hara. I won't take too much of your time, but there are other elements with respect to the use of discretion by the Secretary with which I respectfully, but strongly, disagree.

For instance, to get back to Dynamic Enterprises for a moment. In your statement you say in effect that Dynamic Enterprises, notwithstanding its history of 18 violations, has promised to be a good boy in the future. You are reposing your faith in their word.

I wouldn't have that type of confidence. I recognize that the Secretary has the right to say, "Well, they have been very naughty but they really shouldn't be punished. They have been warned and they promise they are going to be a good boy.'

You know, that is just perfectly analogous to my poor mother catching me playing hooks for the fifth day and getting somebody to tan me a bit and then I promised I wouldn't play hooks anymore. In my own mind I added in parenthesis “this week”. The next week I played hooks three times more and got away with it and kept on doing that rather persistently. I was as bad with respect to the truant officials as Dynamic Enterprises.

Mr. SILBERMAN. I think if Dynamic Enterprises behaves in the same fashion you do, Mr. Chairman, we are on fairly safe ground.

Mr. THOMPSON. I got away with a lot of murder and for that reason I am sympathetic with two or three-time violators. I wouldn't give them life, but I would give Dynamic about 5 years out of the business.

I simply say this to illustrate the fact that the Secretary has discretion and he has used it in that case, and the only thing we can do and I assure you I am going to do it-I am going to watch Dynamic Enterprises wherever they are.

Mr. SILBERMAN. I was about to say I cali't think of any company in the United States I would have any greater confidence in obeying the law than Dynamic Enterprises, given the extraordinary attention that company is going to be given by this committee as well as the Department of Labor.

Mr. THOMPSON. Mr. O'Hara.

Mr. O'HARA. Mr. Silberman, let me take care of a few odds and ends with respect to the mail haul contracts. You have described your new system of making determinations. You said that "preliminary figures indicate that the result of the new classification for mailhaul drivers will be an overall increase."

I don't want to go into it now, because I think it is detailed material we don't need to go into at the moment, but I would appreciate it if you could furnish the subcommittee with some of the preliminary figures you base that statement on.

Mr. SILBERMAN. I would be delighted.

Mr. O'HARA. The question of debarment and Dynamic Enterprises, you say on page 6, “When Dynamic Enterprises clearly renounced future challenges to Labor Department rulings, we believed that the major obstacle to a worthwhile assurance of future compliance was removed."

I hope that is the case, and I wonder if you would make a note or have Mr. Menasco make a note that the subcommittee might be notified

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