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Mr. Racusin. We are acutely aware of that, Mr. Chairman. To the extent, sir, if it is necessary, I say if it is necessary, to grant an extension, it must be done with full recognition of the time constraints that would be necessary for evaluation and phasing in of a new contractor if that should be the case.

Mr. THOMPSON. Thank you very much. We had a third witness scheduled. I regret to inform those here that Mr. O'Hara and I are urgently needed in the full committee and that the House is now in session. I hope that Mr. McGahey will accept our apologies and submit his statement as if written. I see no alternative.

Mr. O'HARA. Mr. Chairman, might I suggest, if we take a 5-minute recess, at least I will be able to return and hear Mr. McGahey.

Mr. THOMPSON. We will take a 5-minute recess for that purpose. I will not be able to come back. Mr. O'Hara will come back and preside.

(A brief recess was taken.) Mr. O'HARA. The subcommittee will resume its hearing and the witness will be an old friend, Mr. James McGahey, president of the international union, United Plant Guard Workers of America.

Mr. McGahey, I am going to let you speak for yourself, and you may just go ahead and give us your testimony.



Mr. McGAHEY. Mr. Chairman and members of the committee, I am James C. McGahey, president of the international union, United Plant Guard Workers of America (UPGWA), and with me today I have the general counsel of our international union, Mr. Gordon A. Gregory of the law firm of Gregory, Van Lopik & Higle of Detroit, Mich.; Mr. Jack Russell, my assistant; Mr. Bruce Burns, our international representatives at the Cape and Mr. Robert Honart, president of local 127, UPGWA, located at Cape Kennedy, Fla.

On behalf of the union, and its members, I wish to express our appreciation to the committee for inviting my appearance here today and accepting a written statement of views concerning the administration and enforcement of the Service Contract Act of 1965.

Although it is a privilege and honor to appear before this distinguished subcommittee, I must state that I regret and am appalled by the circumstances which make these hearings necessary.

On January 27, 1964, I appeared before a similar House subcommittee to offer testimony and evidence in support of the Service Contract Act. With passage of the act in 1965, our union felt that the vicious practices of certain Government contractors regarding the use of workers as pawns in competitive bidding would cease. We felt that service employees on Government projects would finally achieve a minimum of protection with respect to wages and fringe benefits and thereby encourage industrial and economic stability.

Unfortunately, our expectations and those of Congress, as reflected in the act, have not been fulfilled by the present administration. Thus, it was necessary for me to appear before this committee on April 2, 1971, and document numerous instances wherein the Department of Labor has refused, failed, and/or misapplied the clear provisions and intent of the Service Contract Act.

I, and many others, held to the fervent hope that the Department of Labor would heed the disclosures made before the subcommittee in April.

We hoped that the Secretary of Labor and those under his supervision would correct all inequities and examples of misadministration of the act. It now appears, however, that hope is lost. The Department of Labor has chosen to ignore and defy the clear mandate of the act, the expressions of Congressmen who drafted the act, the interests of the public, and the rights, interests, and well-being of workers, their families and communities.

After 2 days of hearings, it is unnecessary for me to detail the circumstances which now prevail at Cape Kennedy with respect to the Air Force decision to recompete the contract for support services on the Eastern Test Range. I would like, however, to summarize the consequences of the Department of Labor's refusal to make a wage determination at Cape Kennedy.

Since 1956 our union has represented from 500 to 200 guards employed by Pan American at the Cape. During this period of time there has been no work stoppage of guards, we agreed to no-strike clauses and arbitration of unresolved issues and have entered into successive bargaining agreements through the process of free collective bargaining.

Our bargaining agreements have raised guards above the poverty level of income, but have not contributed to inflation of the economy. These agreements have permitted guards to purchase homes, raise families, participate in community affairs, and generally to live lives with economic dignity.

Also during this period of time, guards have specialized solely in security for our Nation's space programs. They have forsaken other opportunities because they have given up to 18 years of their lives in security work at the Cape. They have brought a measure of experience, competence, and, most importantly, dedication to their duties which has contributed to the teamwork of our space program.

The entire situation before you cries out for congressional, legal, and public action and reaction. I submit to this committee and the public generally that the Department of Labor's misfeasance in the matter of a wage determination at Cape Kennedy is unconscionable, contrary to express provisions of the act, and detrimental to the policy and interests of this country.

First, section 2(a) of the act provides in part that every contract for Government services shall contain provisions specifying prevailing wages and fringe benefits. The Secretary of Labor is directed by section 3(b) to carry out the provisions of the act.

To my thinking, this language is mandatory, express and includes the intent of Congress as expressed in committee hearings or otherwise. To date, however, the Department of Labor has ignored the statute, congressional intent, and the public interest. Its refusal to act is not based upon statutory or policy sanctions. Rather, its refusal has been unilateral and arbitrary. There have been no hearings, fact findings, significant investigations or comparative studies to support or justify in any respect the Department's inaction.

Second, the Department cannot retreat behind the facade of “* * * limited resources available for making wage determinations * * *" why since 1967 has the Department been unable to make a determination at a facility as important as Cape Kennedy? Why now, after 18 years of renegotiation of a service contract, is the Department of Labor unable to make a wage-fringe determination for competitive bidding which will affect the livelihood of 6,000 citizens and the future of an entire area? Is it a "reasonable administrative practice” to refuse to apply the clear language of the act when no study has been made and no reasons given to justify such refusal ?

And this brings me to a final question as to the irrationality of the Department's position: If a study has been made (with limited resources) to justify the refusal to make a wage determination, why were not such resources and efforts used to make a determination ?

Third, the Department has asserted that a wage determination as required by the act “* * * might be prejudicial to the public interest in the success of the President's economic program to combat inflation." “Might be.” Is the Department's statement based upon sheer conjecture or study and findings of fact?

I submit that the Department's statement is unsupported and unsupportable. Had the Secretary bothered to check, he would find that the wages and fringes at the Cape are not and were not inflationary. If having employees on Government service contracts earn and enjoy a decent standard of living is inflationary, then our union pleads guilty.

Fourth, the Department's refusal to act in accordance with the Service Contract Act is contrary to law, commonsense, and the President's economy policy. It is not in the interest of combating inflation to permit bidding for Government contracts on the basis of FLSA minimum wages. Employees who suffer wage reductions have less purchasing power. When their standard of living is lowered, homes are lost to foreclosure, education of children suffers, and the community generally experiences economic blight.

While it is true that the President has imposed wage-price freeze and control, it is not true that he has sanctioned the rollback of wages and benefits to poverty levels. The current inaction of the Department could set back Cape Kennedy service employees 6 to 10 years in their economic status or place them on unemployment compensation and ultimately welfare.

Moreover, å rollback of wages at this time under wage freezes and controls will hold service employees forever in a frozen wasteland of economic injustice.

I have summarized only a few of the numerous reasons, legal, equitable, and moral, as to why the Department of Labor should act in accordance with the Service Contract Act. To date, of course, the Department has been adament in its refusal to act and has not enlightened the public with its reasons. I had always thought that the Department of Labor was there to serve the public interest and enforce duly enacted laws. Its refusal to act at Cape Kennedy raises grave doubts.

Our union and others, as well as individual employees, similarly affected, have limited alternatives to correct injustice by our Government. We have appealed to this committee and respectfully urge your prompt legislative attention to the problem. The details of the legislative process, however, will not prevent injustice at Cape Kennedy. Accordingly, our union will seek redress immediately in the courts, unless the Secretary of Labor decides to have a change of heart and make a wage determination down at the Cape prior to the granting of these bids.

If this is not done, then we are prepared to move into the courts and to get an injunction to stop them from granting these contracts.

We feel very strongly on this and I want to refer any further remarks on that to my general counsel, Mr. Gregory.

Thank you very much. Mr. O'HARA. Thank you. Mr. McGahey, all I can say is amen. I trust that the Department, having had an opportunity to review the matter that is before it in this request for a wage determination, will arrive at a different conclusion than they arrived at in September. And if they don't do so, it is my opinion that they are clearly in violation of the law and of their own regulations.

I would certainly hope that a court of law would give redress to the intended beneficiaries of the law. The intended beneficiaries of the law are the workers at the Cape, the kind who are represented by your union. As a matter of fact, Mr. McGahey, I think it is only fair to state that it is your union and the interest of your employees that had a good deal to do with stimulating congressional action in enacting this legislation in the first place.

So, clearly, the members of your union are among the intended beneficiaries of the act.

I notice, as you indicated, you have Mr. Jack Russell with you. I would like to welcome him to the committee. You have with you Mr. Gordon Gregory as well, who is one of the outstanding members of the Michigan Bar and who is also a very distinguished and conscientious citizen of one of the communities in my congressional district, serving as a member of the school board and in other public capacities.

Mr. Gregory, did you want to make any comments or add anything to what Mr. McGahey has said ?

Mr. GREGORY. Not really, Mr. Chairman, only to thank you for the flattering remarks and indicate that we do find some encouragement in the remarks by the representative of the Department of Labor as well as the Air Force that this matter can be taken care of in accordance with the provisions of the act as opposed to the necessity for legal action. We will be following it very closely.

Mr. O'HARA. Will you assure me, as Mr. McGahey has, that if the Department's decision is not reversed that you will be in the courts?

Mr. GREGORY. We were prepared, Mr. Chairman, to file an action tomorrow if no indications were given by the Department of Labor that the situation would at least be looked at.

Mr. O'HARA. I thank you very much for your testimony and I certainly appreciate what you are trying to do. It is not only for your own members, it is for thousands of other workers at the Eastern Test Range who are adversely affected by the Department's refusal to make a determination and I congratulate you on your determination to see to it that the Department does its duty under the law.

Thank you very much.

The subcommittee will now stand adjourned subject to the call of the Chair.

(Whereupon, at 12:25 p.m., the subcommittee was adjourned subject to the call of the Chair.)

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