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Note: Survey information was obtained for this specific occupation by use of a common occupational description. The rates shown are those paid by participating companies to employees who performs Description," which is consistent with the Department of Labor, Dictionary of Occupational Titles (DOT), vol. I, dated 1965, 3d edition; "Electronic Technician."

Mr. GURNEY. The important table is in the rear end of it, the very last page of the study, known as exhibit 4. This involves electronic technicians. This was a study of one of the major job classifications at RCA and Pan American and compares their wages with other companies in the area.

It does not cover all of the workers under their contract but it covers the largest job classification. You will see that the wages, and let me see, there are five companies outside of the two that are involved in the service contract and some of these companies are employed by the Government and some in private industry solely in Brevard County,

The wages, minimum and maximum, of the companies involved in the service contract are down at the bottom of the study, $3.36 minimum in both cases and $4.21 being the maximum for this job classification. And the wages of the other five companies range from $5.04 to $4.26 on the minimum side to $5.21 to $1.85 on the maximum side.

This is just exactly the point I was making to the Secretary of Labor, that even right now under the service contract we have, the wages down there which are being paid under this service contract are among some of the lowest in the area. If we put this contract out for bid and bid this down, I cannot see how that can do anybody any good, but it can do all kinds of workers a great injustice.

The other thing that really provokes me about the whole matter is, there is a similar contract at Vandenberg Air Force Base right today out for bids and it is just like the one down at Patrick Air Force Base. I say it is like this one. It is a service contract.

I won't represent to the committee that every job classification was the same, but it is very strange to me that the Labor Department made a wage study and a wage determination at Vandenberg in California. They have already done it and it came in a few days ago, but for some reason they won't do it in our“neck of the woods."

If it applies in one area to a space program on an Air Force base, to a service contract, I don't know why it wouldn't apply in Brevard County, Fla.

So I would like to say this, incidentally, the wage study made by the Department of Labor at Vandenberg is in this, too, and I hope the Secretary will open up his ears and listen more attentively this time and especially if this committee puts heat on him, he might, because it is not fair to do it in one place and not another. The point of the matter is, I agree with you, Congressman Dellenback, this is an area where we need to do economy.

I know, and you know as well as I, that I am one of the most economic-minded people in the world, but I don't like new programs and new spending because I don't think it has anything to do with cutting wages of people who have worked for years and years on a job and are doing good work. I don't think in the service contracts we should put wages out for bid because there is no reason in God's green earth why we can't do a wage study and come up with a reasonably average wage in an area serviced by a Government contract and say: "When this thing goes out for bid, you can't bid below this.”

It seems to me it protects the Government and the workers and does a fair, equal thing for everybody concerned. This is the point I make.

Mr. THOMPSON. The fact is, as Mr. Dellenback points out, there have been cutbacks. Notwithstanding, however, there has not been a cutback with respect to this $78 million contract. We have made a commitment to renew it and it exists-if fewer service contract workers are needed, I feel sorry for those who have to go, but, on the other hand, as long as we are continuing this commitment, the point that you make is true, that it should not be done on the basis of bidding for wages only. That is totally and absolutely unfair.

I don't know the complete picture of the wage structure in Brevard County. I would think in certain areas of it that the wages would be relatively low in certain occupations, but in these occupations, a majority of which are skilled, I was frankly startled to learn of the disparity between the private sector and the public sector in terms of wages, and your statistics are going to be extremely valuable to us.

The Secretary in his letter to me of September 13 goes back to 1967 and says, in effect, that he does not have the people to make a wage determination. He can do it at Vandenburg or elsewhere, but not in Florida. But then he goes on to say that the Department decided in 1967, with no people, no people to send down there, they decided in 1967 that “the pattern of wages in Brevard County was such that the limited resources available for making wage determinations could more appropriately be used for making determinations in other localities." He then says that wages paid to service workers there continue to be equal to those paid to other workers in the community.

How he can arrive at that decision after saying he has not studied it is beyond me.

When Mr. Silberman appears on Thursday we will discuss it with him. It is not my desire, by any means, to have an argument with Secretary Hodgson, whom I respect and who I think is a splendid man, but I simply want him to administer the law as we intended it to be administered. It is unfortunate, but, if the pattern of these hearings continues to be that he refuses to make determinations, and refuses to blacklist, as he is supposed to do under the law, the terrible violators of the law who take advantage of these poor people every where, then we will have to legislate more stringent controls. I would much prefer, of course, not to do that. The fact is, Senator, as you know, that these service contracts exist throughout the whole United States and this kind of situation persists throughout the whole United States. It should not. In some cases they have made determinations such as in the case of some guards on one of the bases, who were getting something like $2.45 an hour, and for comparability, of all things, the Department of Labor said: “Well, let me see, you are the only guards in

fyingation. Whetetion 4 (1) ene it does thing I wohet

the area and you make $2.45, therefore, the comparable wage is $2.45.”

That does not make any sense because there might not be guards elsewhere other than on a military establishment in some areas and the effect of the decision is to freeze the wages of these guards at whatever they are now getting.

Mr. DELLENBACK. I would assume that in the enclave situation that that may be the only way to get a figure?

Mr. THOMPSON. Yes, and the successor doctrine enters in here, but it might well be that we have to stick to the enclave theory in this case because of the highly specialized types of work. As Mr. Evans said, the exotic job deseriptions do not exist anywhere else, not just at Kennedy or in Florida or Brevard County but anywhere else.

Mr. DELLENBACK. Again, the only thing I would emphasize-and I do this only out of fairness--it does not seem to me, at least as I see it, that under section 4(b) the Secretary has not performed his legal obligation. What is being said by the Senator from Florida now testifying and what has been said by earlier witnesses is that they feel that this should not be one of the places where he exercises this discretion given him not to make the study.

I don't think he has not done what authority tells him to do. But it is a legal question if this is one of the cases that he should go ahead even though he has the authority not to go ahead. . )

I feel you are saying, Senator Gumey, that they might be acting properly but this is not what you ought to do but you ought to go the other way under what is also permissible to you.

Mr. THOMPSON. If the gentleman will yield and I don't mean to be unfair to the Secretary, but in the case of one service contractor, Dynamic Enterprises, it was found in violation of the law in 18 separate. locations, moving from here to there and the other place throughout the country. The Secretary refused to blacklist this contractor, notwithstanding a persistent and unconscionable pattern of violation. · Mr. DELLENBACK. That is not the case I alluded to but I am talking about the case before us and looking at the language of section 4(b), and I see there is authority for him to do it.

Mr. THOMPSON. He has discretion.

Mr. DELLENBACK. We may find fault with his judgment, but we cannot, in good conscience, say “You have failed to do what the law mandates you to do.” We are saying we don't think this is the place, or I read the chairman or the witness as saying something other than

that.

Mr. THOMPSON. Yes. What we really say is this: “You have this discretion. We don't agree with the way you are exercising it."

Mr. DELLENBACK. “So you act improperly.”

Mr. THOMPSON. Right. So I would much prefer that he change his mind and make this determination than to take section 4(b) and amend it and tighten it up in such a way as to remove his discretion.

Mr. DELLENBACK. I assume when the gentleman from Michigan, for whom I have tremendous respect, drafted this law, there was a reason for thinking there might be special cases where there ought not to be a mandate. As you just said, Mr. Chairman, our problem is to keep flexibility in the law so we don't make mandatory something that would be wasteful and counterproductive and yet be sure that that dis-, cretion is fairly carried out.

May I just ask one more question of the Senator and then I am finished on this. Do I assume, Senator Gurney, the report you have given to us covers the time and who it was that made the study and the basis of the study and all of this?

Senator GURNEY. It was covered very recently. I got one of my friends to do this, and I would rather not disclose who did it, but I can vouch for accuracy of the figures in there.

Mr. DELLENBACK. I think it is important, if we are going to use the figures as we were in questioning of the Secretary or Under Secretary, that we have some base upon which to do so, being able to tell them how many people were interviewed and when it was done so that we are sure of the statistical soundness of the data. This is excellent information.

Senator GURNEY. I think the study shows and let me say this: When the committee gets into it and uses it, any questions you may want answered to further amplify what the report says, I would be glad to get them for you.

Mr. DELLENBACK. Excellent. I think this is some of the best testimony.

Mr. THOMPSON. I gather you want us to channel the questions through you.

Senator GURNEY. Yes, if you would.

Let me sum up. I don't think the Secretary is intentionally unfair and I realize it is a matter of discretion, and I think probably he may be entirely honest when he says, “I don't have manpower for this.” After all, the freeze on employment and the policy of the administration to cut down on Government employment at a time may leave him short handed.

But the point I make is this: In these service contracts, the only thing you really have up for bid is wages. That is really the only factor that amounts to anything. It seems to me that we ought, as a Congress, to insist that the Labor Department have this manpower and make the studies necessary, where you are going to bid the wages, to make sure that you do have a reasonable determination of wages and a reasonable criteria before you get into that kind of a bid. · Now, there is one other thing here I think is important, too. And that is the kind of times that we now have, where we have such a service bid as this, it is inevitable that when you have companies that are economically somewhat depressed, as these aerospace companies are, and are vying for a service contract bid like this, they are going to bid everything they can down to get the contract.

So in times like this, when you really ought to protect your wages more than perhaps any other time, it is almost a clear mandate that you are going to put the wages on the auction block and bid them down if you don't have some sort of criteria to follow.

I think that is what really the aim of this committee ought to be, is to have some standard practice devised here so we won't put wages on the auction block and bid them down in awarding of service contracts. I think it is in the best interest not only of the workers but also of the Government and society as a whole. If your committee is able to make a contribution here, you certainly will have done a fine thing. Thank you very much.

Mr. THOMPSON. Mr. O'Hara.

Mr. O'Hara. I want to apologize for missing much of your testimony, Senator. I was called to the phone on an urgent matter involving my district, and I am sure you understand.

Senator GURNEY. I do.

Mr. O'HARA. You understand the amount of importance in such matters, but I wish to thank you for your interest in this matter particularly. I heard you summarize your conclusions in the last few minutes, and I thoroughly agree with you. I think you thought out your position very completely.

I would like to take one exception. I don't think that using the word “discretion" in describing the Secretary's 4(b) authority gives quite the right impression. He does not really have discretion to act or not as he sees fit. Section 4(b) circumscribes the conditions under which he is permitted to make variations, tolerances, or exceptions, and they have to do with an overriding national interest and serious impairment of Government business.

I should think one would have to make specific findings of those conditions before he could exercise authority under 4(b).

Mr. DELLENBACK. If the gentleman will yield, it is in the language of the statute at the bottom of the second paragraph which the Secretary has in the letter, using the language "prejudicial to interests," so I gather it is an “or” situation, and again I am not defending his judgment but I think it is clear that he has acted within the scope of the act, whether we think or do not think he should have done something differently within the scope.

There is a difference between the claim of judgment which we think is not properly exercised and a charge, which nobody is making, that he failed to act properly under the law. Mr. O'HARA. May I read section 4(b)—

The Secretary may provide such reasonable limitations and make such rules and regulations allowing reasonable variations, tolerances, and exemptions to and from any or all provisions of this Act as he may find necessary and proper in the public interest or to avoid serious impairment of the conduct of Government business.

Mr. DELLENBACK. That is the language in the second paragraph of this letter.

Mr. O'HARA. But the question is, I would point out, not a matter of discretion simply because the act does not say that the service contract workers shall be paid prevailing wages when the Secretary chooses to see to it that they shall, you know. It is not that wide open.

Mr. THOMPSON. If you will yield again, in his letter of September 13 to me, he cites the limitation in 1967 under his 4(b) authority and goes on to say

They are equally persuasive now and are reinforced by the fact that a change at this time might be prejudicial to the public interest

As distinguished fromwould be prejudicial to the public interest.

So therefore, again, it is a matter of interpretation; how this would be prejudicial to the public interest is beyond my understanding. Perhaps he can come up with some explanation that does not occur to us now.

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