I would like to ask Mr. Silberman if he would respond to that assertion?

Mr. SILBERMAN. I think, Mr. O'Hara, I said without having had an opportunity to study the document, but listening to your quote from the document and then your characterization of the quote, that it sounded to me as if it were apples and oranges.

I must say I have to continue that position, because reading the document, I don't know whether this document served as the basis for the decision in 1967. This is an internal memorandum from Mr. Landis to Mr. Schiferl, but it seems to set forth some of the same rationale.

I can't talk for what was in fact the decisionmaking document in 1967. I wasn't there. Insofar as it does set forth the rationale, it says

In view of the prevalence of labor management agreements at the government installations in the locality and the omission of data for the construction industry, it is felt that any wage determination in the locality for the skills and craft primarily, employed at the government installations would create more problems then it would solve.

The prevalence of the agreements also ensures adequate wage and fringe benefits for the workers employed at the installations.

I see no reference to a single source contract. I don't think reading this document that any was intended, so I still don't see what the connection you draw between that paragraph and single source contract in 1967 is.

Mr. O'HARA. All right, let me elucidate. The last sentence of that paragraph says

The prevalence of the agreements also ensures adequate wages and fringe benefits for the workers employed at the installations.

Is that the case now as you go to a bid situation?

In other words, I take that sentence to mean that these agreements will continue in force and effect and that the provisions of the agreements will continue to protect the workers involved.

Now, if a new contractor comes in at Eastern Test Range, will the existence of agreements between Pan Am and unions of which workers at Eastern Test Range are members protect those workers' wage rates? Mr. SILBERMAN. Well, I don't know whether all the bidders have collective bargaining agreements. I would assume that they do. But I don't know.

Mr. O'HARA. Not covering Eastern Test Range?

Mr. SILBERMAN. Well, now you are really getting into quite a different question. You are getting into the successor doctrine problem in the National Labor Relations Act.

Mr. O'HARA. That is right. If the successor doctrine applied in full force and effect, if the successor doctrine would provide that whatever contract covered these workers while they worked for Pan Am at Eastern Test Range would be transferred over and cover what new contractor might come in, then the conditions would be the same. But is it your understanding that the successor doctrine, as it now stands, would do that?

Mr. SILBERMAN. Well, let me say that the successor doctrine is a matter for the National Labor Relations Board, not for us, and I don't read this paragraph as in any way implying or stating that a precondition for the rationale was the assumption that the same collec

tive bargaining agreement which covered a group of employees would continue no matter who the contractor was.

It seems to say here that collective bargaining agreements covered most of the employees and although there might be variation, any collective bargaining agreement would give a fairly complete measure of protection.

It seems to me, to be perfectly candid with you, as I understand it, you don't want to allow any bidder to come in even if he has a collective bargaining agreement if any portion of that is less favorable than the existing collective bargaining agreement covering the incumbent contractor.

I don't get that out of the Service Contract Act.

Mr. O'HARA. In the first place, Mr. Silberman, the eastern test range, if a contractor came in that had collective bargaining agreements covering-in other words, let's suppose General Motors was a bidder. I don't know if they are or aren't interested. General Motors has contracts with the United Auto Workers, contracts that cover Chevrolet plants, contracts that cover the Buick Division, contracts that cover this plant, that plant and other plants. All of them arising from separate bargaining.

But they don't have a contract with the United Auto Workers that covers the employees at the eastern test range because they haven't got any employees at the eastern test range. If they were to get the contract for eastern test range, their employees would not automatically be covered by UAW's contracts with the other divisions of General Motors. The UAW would have to go in and try to get representation, try to get G.M. either to agree to making them the barbaining agent to bargain a contract or else win an election and get certified and so forth.

So, clearly in the current situation, if a new contractor comes in he is not bound by any collective bargaining agreement that he has at some other phase of his activities, nor is he bound by the collective bargaining agreement that Pan Am has with their existing employees. And if he chooses to negotiate a new one covering those workers, so be it. He may or he may not.

But you see, Mr. Silberman, your own regulations with respect to the 4(b) exceptions say this, and I quote from 29 Code of Federal Regulations 4.123 (b) administrative action under section 4(b) of the

act:

1

The authority conferred on the Secretary by section 4 (b) of the Act will be exercised with due regard to the remedial purpose of the statute to protect prevailing labor standards and to avoid the undercutting of such standards which could result from the award of Government work to contractors who will not observe such standards, and whose saving in labor cost therefrom enables them to offer a lower price to the Government than can be offered by the fair employers who maintain the prevailing standards.

That is what it says. So in 1967 the Department found that the same contractor was going to stay on the job. The same contracts were going to remain in force. There was no possibility that there would be any reduction of wage rates below that provided for in the collective bargaining agreements, and so they were able, in 1967, to say, "We don't have to make a determination because we know that these rates will continue to be paid. There is not going to be anyone coming in on the contract who is going to undercut."

There was no possibility of anyone coming in. But, Mr. Silberman, today there is, and there is no assurance that that new contractor, if he comes in, is going to pay the same rates. Isn't that correct?

Mr. SILBERMAN. I was wondering when I was going to get the question mark on that.

Mr. O'HARA. I thought I would like to phrase it as a question. You can answer yes or no. [Laughter.]

Mr. THOMPSON. Or maybe. [Laughter.]

Mr. SILBERMAN. The answer I would give to the question is no.
Mr. O'HARA. There is no assurance?

Mr. SILBERMAN. No, the answer to your question was no. Because I believe what you have done is equate the phrase "prevailing labor standards" with the existing collective bargaining agreement at that unit and I think such an equation is not consistent with the Service Contract Act. It might be in certain circumstances, but it is not compelling.

Mr. O'HARA. That is what the Department found in 1967. That is the only reason they could have arrived at the 4(b) decision they did. Mr. SILBERMAN. I see no indication that that is in fact what the Department found in 1967. I think that is where we got into the apples and oranges dialogue. As I read the memorandum, they were talking about labor management agreements generally in the area. They weren't talking about any specific agreement. That is where it seems to

me

Mr. O'HARA. "At the Government installations in the locality."
Mr. SILBERMAN. Plural, installations.

Mr. THOMPSON. There was only one major agreement in the area and that was with Pan Am, which has had this contract for at least 16 years now.

Mr. SILBERMAN. Of course, I can't testify exactly how many agreements were in effect in 1967.

Mr. THOMPSON. As I read the language, it has to apply to the particular one which we are discussing.

Mr. SILBERMAN. Let me read the sentence that is important. "The prevalence of the agreements also ensures adequate wage and fringe benefits for the workers employed at the installations."

I think there were a number involved.

Mr. THOMPSON. There were and still are collective bargaining agreements there with the Teamsters, the Machinists, the International Brotherhood of Electric Workers and so on. They were the only ones in existence in the area.

Mr. SILBERMAN. As I said, Mr. Chairman, I can't testify as to exactly how many agreements were in effect back in 1967, but as I read that paragraph and as I understood what I heard, in the decision of 1967 what they were observing is that most of the affected employees were unionized and were covered by one of various different collective bargaining agreements.

Mr. THOMPSON. The Secretary must be intimately familiar with it since he restates its applicability today.

Mr. SILBERMAN. I think he was intimately familiar with the rationale. I doubt that he knew exactly how many different agreements there were in Brevard County in 1967.

Mr. THOMPSON. I don't think the fact that there were several is relevant really.

Mr. SILBERMAN. I most humbly beg to differ with you, Mr. Chairman. If Mr. O'Hara were correct-and to be correct he would have to establish there was only one agreement and I certainly don't get that impression. It goes back to the basis of the Service Contract Act.

As I understand the act, we are supposed to protect prevailing standards, but that doesn't mean we are to protect an existing individual contract in an individual installation against competing unions which might have different contracts.

What Mr. O'Hara seems to be really bothered by is the National Labor Relations Board determination in that Emerald Maintenance

case.

Mr. O'HARA. What I am bothered by is the Department's decision not to make wage determinations, and when I asked them why, and when the chairman asked why, they said, "For the same reasons we didn't make it in 1967."

I said, "All right, what were the reasons you didn't make it in 1967 ?” And we went down there, under your regulations 29 CFR 0.123 (c) which says, "All papers and documents made a part of the official record of administrative action pursuant to section 4(b) of the act are available for public inspection.'

We went down there and said, "OK, let's see the records of that 1967 decision." You gave them to me and they say that, "In view of the prevalence of labor-management agreements at the Government installations in the locality and the omission of data for the construction industry, it is felt that any wage determination in the locality for the skills and crafts primarily employed at the Government installations would create more problems than it would solve. The prevalence of the agreements also insures adequate wage and fringe benefits for the workers employed at the installations."

Well, Mr. Silberman, they had to find that because your regulation 4.123(b) says that "The authority conferred on the Secretary by section 4 (b) of the act will be exercised with due regard to the remedial purpose of the statute to protect prevailing labor standards and to avoid the undercutting of such standards which could result from the award of Government work to contractors who will not observe such standards, and whose saving in labor cost therefrom enables them to offer a lower price to the Government than can be offered by the fair employers who maintain the prevailing standards."

In other words, what you found in 1967 was that there wasn't going to be any new contractor of the sort described in your regulation, that is, there wasn't any possibility that there was going to be an award of Government work to a contractor who would not observe such standards, because there wasn't any other contractor in the picture. It was just Pan Am. You didn't need to worry about that.

Mr. SILBERMAN. I think that is a mischaracterization of the regulation and the decision of 1967. I think I have indicated that where I feel you are mischaracterizing is equating the term used in our regulation of "prevailing labor standards" with an existing individual collective bargaining agreement. That is just not the way the Act is administered or in my judgment intended.

Mr. O'HARA. Mr. Silberman, let me ask you this question: Did you take your action in September in which you declined to make a wage determination for the Eastern Test Range in accordance with your own regulations or did you take it in disregard of your own regulations?

Mr. SILBERMAN. I would say the former.

Mr. O'HARA. All right. Will you tell me on what basis you could have concluded that your action would be-well, to quote from your regulation: "The authority conferred on the Secretary by section 4(b) of the act will be exercised with due regard to the remedial purpose of the statute to protect prevailing labor standards and to avoid the undercutting of such standards which could result from the award of government work to contractors who will not observe such standards."

Will you tell me what assurance you have in the Eastern Test Range contract that there will not be an award of government work to contractors who will not observe prevailing labor standards.

Mr. SILBERMAN. I think I ought to point out what I said at the outset of the testimony, that in light of Senator Gurney's informal survey which he brought to our attention this last week, the Secretary has decided that we are going to run another survey so as to determine whether the facts still remain as we understood them.

Mr. THOMPSON. But you added, did you not, Mr. Secretary, that the fact that he is going to undertake another survey is by no means an indication that he is going to make a determination based on that survey?

Mr. SILBERMAN. Well, he is going to make a decision on that survey, but that doesn't mean a determination of prevailing rate. I would, of course, be glad to come back after we run that survey, and we will both know what the facts are exactly, and perhaps that would help you. Mr. O'HARA. Depending on what the decision is, we may insist that you come back.

Mr. SILBERMAN. You don't have to insist, Mr. O'Hara. I am always delighted to come before this committee.

Mr. O'HARA. I know that. We all enjoy these experiences. In fact, we look forward to them. But, in any event, I am glad that you are going back and taking another look at this because I do think it badly needs another look.

very

Mr. Chairman, I have been very disrespectful of the rules of the committee and of the rights of Mr. Dellenback and I would like to give up the floor at this time with the reservation that I might be permitted

to resume

Mr. THOMPSON. I think we will have time to get back to you, Mr. O'Hara.

Mr. Dellenback, as I read it, you are entitled to about 32 minutes. [Laughter.]

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

Mr. THOMPSON. That is a decision made on comparability of time. [Laughter.]

Mr. DELLENBACK. There is an intepretation that the 5-minute rule stresses equality rather than arbitrary standards by the clock.

I really don't have many questions. I would just emphasize if I read correctly, Mr. Silberman, your testimony that was given to us, and