I have with me today William Murphy, Business Manager of our Local Union 2088, which is the collective bargaining representative for the employees employed on the Air Force Eastern Test Range. He will, in his statement, detail the collective bargaining history and current economic conditions at Cape Kennedy, Florida.

The Act is being disregarded by the Labor Department and the procuring agencies of the Federal Government. We hope that through the influence of this committee, the Secretary of Labor will review the facts surrounding this case and give the matter the consideration it deserves and reverse his decision not to apply the Wage Determination Section of the Act. The failure to do so will, we are certain, lend to turmoil and labor strife.

The Act as now administered cannot possibly protect the prevailing labor standards for employees of contractors furnishing services to the Government. Without an effective system for predetermining prevailing wage rates, the application of the Service Contract Act will continue on its present erratic course. In the long run, employees of contractors with government contracts for services will be exploited.

It is our position that if this Act was properly and legally administered as Congress clearly intended that no amendments would be necessary. However, amendments may be in order by the Congress to the end that the contracting agencies and the Department of Labor meet the mandate which Congress intended. In other words, an exemption from the application of the Act should not be given unless the contracting agency indicates in writing to the Department of Labor that failure to make a determination is "necessary and proper in the public interest" or will "avoid serious impairment of the conduct of Government business" and gives valid reasons to support such statements.

Thank you.

STATEMENT OF WILLIAM B. MURPHY, BUSINESS MANAGER, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 2088, COCOA BEACH, FLA. Mr. Chairman: I appreciate this opportunity to present my views in reference to the Service Contract Act of 1965, and particularly as to its application for the recompeting of the Air Force Eastern Test Range Support Services Contract which is presently underway. Pan American World Airways presently holds the contract, with RCA International Service Corporation as their major subcontractor. IBEW Local 2088 represents approximately 400 employees of RCA.

On 8 June 1971, the Air Force announced its intention to recompete the Air Force Eastern Test Range Support Services contract. With the memory fresh in mind of last year's award of the Kennedy Space Center Support Services contract to Boeing and the wage decreases of up to 50% which followed, a delegation of Local Union leaders went to Washington to personally appeal to the Air Force and the Department of Labor for a wage determination under the Service Contract Act of 1965.

This delegation and representatives of the International Unions met with the Department of Labor representatives on June 16, 1971 to formally request a wage determination. Representing the Labor Department were Warren D. Landis, Assistant Administrator, Wage and Hour Division, and James O. Hall, Deputy Assistant Administrator. While we left with no assurances of a wage determination, we did leave the above meeting greatly encouraged. The above meeting was followed up on June 21, 1971 with a letter addressed to the Secretary of Labor requesting a wage determination as called for by the Service Contract Act. This letter was signed by the heads of all the Local Unions involved.

The first indication we had that a Wage Determination would not be made was when I was notified by Horace E. Manasco, Administrator, Employment Standards Administration, U.S. Department of Labor, in a letter dated September 10, 1971 that Secretary of Labor Hodgson had decided not to make a wage determination. In this letter, Mr. Manasco stated two reasons why Secretary Hodgson had refused to make a wage determination. The first reason was that making a wage determination "might be prejudicial to the public interest in the success of the President's economic program to combat inflation." This reason both shocks and astounds me. If part of the President's "economic program to combat inflation" is an attempt to cut the wages of workers on government service contracts, we will do all in our power to bring about the defeat of that program.

The second reason as stated in Mr. Manasco's letter was that "Wage rates paid service workers at Cape Kennedy have been and continue to be equal to or greater than those paid other workers elsewhere in the general community." This reason will just not hold up under even cursory examination as I shall shortly prove. First, however, I should like to point out that even if Secretary Hodgson was completely correct in this reasoning, his actions are in violation of the Department of Labor's Branch of Wage Determinations, Manual of Policies and Procedures for Administration of the Service Contract Act, Section 303 (b) (2), which reads as follows:

303 "In the Locality"

(b) "Locality" may be geographically limited to a particular Federal installa. tion or facility such as Naval shipyard, an Air Force base, or a similar Department of Defense installation. Such limitation is appropriate for a determination: (2) If the facility or installation is situated within a larger metropolitan area for which survey or other wage data are available but with a pattern of wages and fringe benefits differing significantly from that reflected for the overall metropolitan area. For example, survey information in a particular metropolitan area may show that the majority of janitors surveyed received at least $2.00 an hour, whereas the wage level existing at the Federal facility might be $2.25 an hour due to the influence of a collective bargaining agreement covering janitorial employees of a contractor,.

It is the obvious intention of this Section to protect any higher rates which may have been arrived at through the collective bargaining process at a government installation.

However, the fact remains that the second reason given is just not true and I believe the following information will substantiate that fact:

IBEW Local 2088 was formed in November 1960 representing employees of what was then the RCA Service Company. Collective bargaining negotiations with RCA since that date have resulted in the following increases on job rates:

If you ignore 1961 as meaningless, this averages out to 3.01% per year, which I am sure you will agree is well below the national average.

To attempt to compare our rates to those paid other workers elsewhere in the general community, is difficult. The bulk of our members are very highly trained electronics technicians who work on highly complex state of the art electronics systems. No similar work is being performed in the community. In spite of this, some comparisons can be made. I believe it would be of value to you to first compare our rates as they were in 1963. These job rates are as follows: Switchboard Operator:

You will note that while in 1963 our rates were well ahead of Southern Bell Telephone and close to Civil Service, we are now well below both. The reason why we have slipped further and further behind is the constant threat on the part of the U.S. Air Force to recompete the contract, as they are now doing.

The only other rate comparisons I can make are three RCA Electronics Technicians who have subsequently been hired by Civil Service for Range Measurements Laboratory at Patrick Air Force Base performing the identical work they were doing while employees of RCA. Two of these technicans are now GS-11's which has a maximum salary of $315.60 weekly. The other is a GS-12 which has a maximum weekly salary of $376.

The comment of the Secretary of Labor that our wage rates are higher than average for the locality is further rebutted by a letter, a copy of which I furnish you, dated 11 April 1966, from the late Edward W. Kiffmeyer, Labor Relations Officer, Headquarters, Air Force Eastern Test Range, in which he commends IBEW Local 2088 for their "maturity and reasonableness." This letter further commends us for the fact ". . . that no member of IBEW Local 2088 has ever lost a man day here because of discordant Labor-Management relations . . . This record still stands. If the refusal of the Secretary of Labor to make a wage determination results in any attempt to reduce the wages or benefits of any member of IBEW Local 2088, that record will most certainly be broken. I thank you for your attention and assistance in this matter.

DEPARTMENT OF THE AIR FORCE, Patrick Air Force Base, Fla., April 11, 1966.

Mr. KEVIN BURKE,
President, International Brotherhood of Electrical Workers Local 2088, Cocoa
Beach, Fla.

DEAR MR. BURKE: I watched with great interest the developments in the current agreement negotiations between your Local 2088 and RCA. Particularly noteworthy in these negotiations are the facts:

That they were conducted in a quiet manner without the need for any government assistance.

་་་

The agreement was consummated in a timely manner preventing any delay or interruption of work.

The agreement is of three years duration which I believe is in the best interest of your members, your employer, and the government.

The maturity and reasonableness demonstrated by you, the officials of the local union, and your negotiating committee in these negotiations and your sense of responsibility to the Defense and Space effort are commendable.

Mr. Burke, Major General Vincent G. Huston the Commander of the Air Force Eastern Test Range and I commend you, the officers and members of Local 2088, and your International union, especially Mr. Anthony J. Salamone, for a job well done in the handling of these negotiations and in your handling of grievances here at the Eastern Test Range. This and the fact that no member of Local 2088 has ever lost a manday here because of discordant labor-management relations establishes a record second to none.

I look forward to the continuation of the splendid relationship existing between your IBEW, your employer RCA, and this headquarters.

Sincerely yours,

EDWARD W. KIFFMEYER,

Labor Relations Officer,
HQ, Air Force Eastern Test Range.

Mr. SALAMONE. Mr. Chairman, I think we might proceed faster if you have questions on the matter, if you reviewed that deposition or our statement. That would save us a great deal of time.

Mr. THOMPSON. I have read your statement in a cursory way. Of course, I am intimately familiar with the whole situation. I would like to point out that your statement shows the same pattern with the Navy as others do with the Air Force and with the Army.

I don't know whether you realize it or not, but in recent days the Secretary made a wage determination for Vandenburg Air Force Base, but yet says he doesn't have the people with which to make one in Florida.

Now, that may or may not be so. I will have to accept on the face of it the fact that he does have a limited number of personnel. I think, however, and I would suppose that you would agree, that for a contract of the size of the one in Florida, it would seem imperative that either his staff undertake to make a determination or contract for an independent study as was done for Senator Gurney and use that to set the level.

Do you think that in general the people who are not connected with the space activity in Florida in Brevard County, are making more, or less, money than those on the base for comparable activity?

Mr. SALAMONE. I think, Mr. Chairman, as you will see from Mr. Murphy's statement, the limited survey we made and the limited knowledge we have of the wage scales prevailing in the area, the people working at Cape Kennedy for contractors are actually at this point in time making less than workers with similar skills are earning in the Brevard County area.

Mr. THOMPSON. And history indicates that not many months or years ago, in general the people at Kennedy were making slightly more than those on the outside, but this is reversed.

Mr. SALAMONE. The Secretary in his lame excuse for not making a wage determination indicating the heyday of the cape, and I don't know where he references the heyday, whether it was 1967 or 1964, even at that time the rates being paid to the IBEW bargaining units were comparable to the rates in the area for other private companies or private industry.

Mr. THOMPSON. That is our understanding.

Mr. Duffy, the counsel, has a question.

Mr. DUFFY. Mr. Salamone, I don't want to ask any questions directly on the case which is in litigation, but there were a couple of points in your prepared statement that might be indicative of general policies within the Labor Department. You mention that when the Navy made a request for a wage determination, they did not include any information on wages currently being paid in that locality, and that they had submitted the request for a wage determination outside of the 30 days that were required. When this gentleman was deposed, did he give any reasons for not aking any followup action?

Mr. SALAMONE. I can answer the question better this way. Since we prepared our statement, we have taken another deposition of a gentleman that was sitting in place of the Assistant Secretary of the Navy, Sanders, who claims to have reviewed this matter.

Let me read from the transcript of the deposition. Our attorney asked him, "Are you saying as Assistant Secretary of the Navy that you could not get the wage rates that were being paid by Kentron ?" (Kentron was the incumbent employer and had been on the scene about 10 years.) His answer was, "No, sir."

The next question, "You could not, or would not?" The answer was, "We could get them."

The attorney's question was, "Why didn't you get this?" And his answer was, "It is not the policy of the Department of the Navy to obtain that type of information on the filing of the form."

The form on its face requires-I think it is question No. 7-that if there is no applicable wage determination, readily available wage data should be furnished with instructions, on the back of the form. He in essence is saying here, "We just dismissed that as a matter of policy."

Mr. DUFFY. And the Labor Department took no followup action as a result of that?

Mr. SALAMONE. None whatsoever. As a result of the Secretary of Labor's deposition, we were able to establish that not even a telephone call was made, which is really all that would have been required.

The Navy certainly knew the rates that were being paid. The form 98 that was filed had on its face the fact that Kentron was the incumbent employer, and certainly the employees had to be paid something, and they made no effort whatsoever, not even a telephone call, and by their deposition they admit to this negligence, if you will.

Mr. DUFFY. Mr. Salamone, when the Undersecretary of Labor testified before this subcommittee last spring, he reviewed the previous Labor Department policy on issuing enclave and facility determinations, and told us they had shaken out the policy a bit. The manual which served as guidance for Labor Department employees in issuing enclave determinations was introduced into the record by the Undersecretary.

In your prepared testimony, there were indications that the Labor Department man had different instructions. Did you press that issue when you deposed your witness?

Mr. SALAMONE. We pressed the issue to the extent that it was a joke. On page 12 of our statement is where we get into it. After we established that the Pacific Missile Range in itself met the criteria for an enclave or facility rate determination, we pushed him on why one wasn't made.

His response was this; I am paraphrasing here: "We frowned upon that, and I am under instructions from Mr. Moran, who is my boss, head of Administrative Workplace Standards, that we are not to make enclave or facility rate determinations."

He also went on further to say; here again I am paraphrasing: "Yes; we have a policy manual. It is a little thing, and we got it together for ourselves, but I don't really follow it.