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motive repair shop. The lighting is very poor, the floors are of rough concrete, and here in the Tropics our source of air is from two open doors and a few openings high up which allow the rain as well as the air to come in. No windows at all in the building which is the newest of all. Plans are under consideration to improve the physical facilities but as yet nothing definite.

In spite of poor working conditions we think are doing a good job of teaching our children and maintaining the standards so that when they return to the United States they will have the same standing as their fellow students.

We are hoping that you might have some information or know where we could write to obtain information to use as a basis for a factual discussion of better salary and working conditions.

We here in Kwajalein feel that in keeping with the pay scales of other professions that our salary of $7,200 should be for a teaching year and that if we desire on an individual basis to work during the summer months we then should be paid at the going rate for that particular job. Also that our working hours should not have to conform to the hourly paid people. Those days which are designated as school holidays should be days off for teachers without taking additional work or suffering loss of pay.

While the pay of $7,200 might seem high in relation to some areas there should be some incentive for teachers as this is an isolated area. To be exact we are 2,000 miles from any place on the globe. Our island is 21/2 miles long and one-half mile wide. We have no chance for professional advancement and other than exchange of ideas among ourselves and the Overseas Education Association and the National Education Association Journals are our only source of educational enrichment.

As the OTA and NEA representative for the school I have written OTA giving them the same information that I am sending you.

We would like your opinion concerning our goals to improve our working conditions and any advice you might care to offer us in helping us to obtain these goals.

Very truly yours,

(Name withheld on request.)

KWAJALEIN, MARSHALL ISLANDS, June 12, 1961. Mr. ROBERT W. McLAIN, National Education Association, Washington, D.C.

DEAR MR. McLAIN: Your interest in the educational program here on Kwajalein, and concern for the morale of the teachers, is gratifying to say the least. We have had rather a difficult situation here for the past 2 years.

Things have improved quite a bit, however, since Mrs. Smith first wrote in 1959. As a whole, the education received here by the children has been very good. Excellent year-to-year gains have been evidenced by results of the standardized testing program, as well as through correspondence with parents of students who have been transferred elsewhere. Part of the exceedingly poor school facilities described by Mrs. Smith are being replaced by a new school building next year, although even this fails to meet the minimum criteria for a new school plant according to current directives (BuPers Inst.).

We still work under the same contract governing the employment of all TCT employees. It isn't by any stretch of the imagination a document normally signed by a teacher. It is a typical labor contract. The local management of the Transport Co. of Texas maintains a management-labor relationship in its dealing with the school.

Serious morale problems have existed because of nebulous, questionable, and objectionable personnel policies, such as: the requirement that teachers and the principal work in other areas of the company in order to stay on the payroll during the Xmas holidays, unless annual leave is taken (two teachers spent the 2-week period canvassing the housing area counting funiture); the refusal, for ambiguous reasons, to reclassify a teacher to a higher pay classification legally authorized under the terms of the amended BuWeps contract last year (teachers are on the lowest two salary classifications in the manning scale); the refusal, by management, to employ substitute teachers for a period of 3 months this year (K-12 school); status of the school within the company structure--a subordinate element of the Special Services Department; failure to appoint a governing school board, which was recommended by the under

signed in the early fall of 1959 (the commanding officer's school advisory board functions in an advisory capacity only, and has not even met since July 1960, though instructed by the commanding officer to do so once a months, submitting the minutes thereof to him within 7 days). I brought the matter of teachers working elsewhere during the Xmas holidays to the commanding officer's attention through his advisory board a year ago last Xmas, and as a result was told by the resident manager of TCT that, “When management makes a decision you will support it or you can get out." In view of the financial mousetrap aspects of our employment (income tax exemption, etc.), "getting out” was highly impractical at the time.

Two specific recommendations for future company operations of oversea schools that I would make are

(1) Provide a normal school-year contract for school personnel, with provision for summer employment, if mutually agreeable to employee and employer, and a salary schedule that provides for both experience and training beyond the AB/BS.

(2) Require the appointment of a representative school board to govern the administration of the school and to be responsible directly to the resident manager instead of placing the school at the bottom of a lengthy chain of command of nonprofessional people unqualified to make educational

decisions. Inasmuch as we have been told that complaints concerning the company taken outside of channels would result in the termination of the employee concerned (which would involve several thousands of dollars in transportation money and bonus), I would appreciate it if you would keep the source of this information anonymous until after July 15, after which time my association with this: company will be concluded.

Sincerely yours,

HOUSE OF REPRESENTATIVES,

COMMITTEE ON ARMED SERVICES,
SUBCOMMITTEE FOR SPECIAL INVESTIGATIONS,

Washington, D.C. August 21, 1961.
Mr. ROBERT W. MOLAIN,
Staff Contact for Oversea Teachers,
National Education Association,
Washington D.C.

DEAR MR. McLAIN: Thank you for your letter of August 16, 1961, in which you have amplified upon the protest filed by the association concerning the employment of teachers under Navy contract to the Texas Transport Co. for the management of Kwajalein Island.

As you have re ested, the subcommittee will make your letter part of its record, and I shall bring to the attention of the subcommittee the recommendations which you have made. Sincerely yours,

F. EDW. HÉBERT, Chairman. Mr. COURTNEY. For the record, may it appear that the interpolations which were directed and authorized from various witnesses who have appeared on this subject have been, I believe, substantially completed at this time.

Is that right, Mr. Sandweg?
Mr. SANDWEG. Yes.

Mr. COURTNEY. So the record will be at the printer within days and printed.

Mr. HÉBERT. Well, there will be one more meeting. As I suggested at the beginning there will be one more meeting, and that will be a meeting in executive session, an executive meeting in connection with sole source. That will be on Tuesday morning.

(Mr. Courtney aside to the chairman.)

Mr. HÉBERT. The executive session hearings will be released after action by the committee, which is necessary under our rules.

The executive sessions on sole source were held in accordance with our rules. They have been cleared for security, and as soon as we have the full clearance for security review made, and the testimony back with the necessary deletions in the interest of security, the committee will make available in public the full text of those executive hearings, within the realm of security, of what has been deleted.

Mr. COURTNEY. One of the purposes of the meeting would be, on Tuesday, to take the necessary vote to clear the record and authorize the release of the transcript.

Mr. HÉBERT. If there is no further business before the committee, then the committee stands recessed until Tuesday.

Mr. COURTNEY. Tuesday, August 22.
Mr. HÉBERT. August 22.
Thank you, gentlemen.

(Whereupon, at 10:47 a.m., the subcommittee adjourned, to reconvene at 10 a.m., Tuesday, August 22, 1961.)

(COMMITTEE NOTE. Subsequent to the hearings, the American Federation of Government Employees submitted a statement for the record which is set forth in the appendix hereof. Also set forth in the appendix is an exchange of correspondence between the committee staff and the Department of the Navy with reference to the statement submitted by the National Education Association.)

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APPENDIX

STATEMENT OF AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES TO THE HOUSE

ARMED SERVICES COMMITTEE CONCERNING ADVERSE EFFECTS OF CONTRACTING GOVERNMENT WORK TO PRIVATE BUSINESS

(Submitted by John A. McCart, director of legislation)

The interest of the American Federation of Government Employees in the Government's use of contractual agreements with private industry is twofold: (1) The need for safeguarding the interest of the Government in utilizing the most economical means of satisfying its needs; and (2) protecting the employment rights of Federal civil service employees who are needlessly displaced and who in so many instances are subjected to extreme hardship by the deprivation of their means of livelihood.

The organization is disturbed over the increasing practice of contracting with private interests for certain governmental services and activities which for many years have been provided by civil service employees. The policy of discontinuing Government services and facilities and having the same work done in private industry has caused the separation of thousands of career employees of the Government. In many instances it has occurred when those employees were unable to obtain employment elsewhere or at a time when they were economically unprepared for the ending of their services with the Government.

Such a policy wastes valuable skills and in some instances has resulted in a sizable loss to the Government of millions of dollars invested in special equipment or plant facilities which were peculiarly suited to their governmental use but which were not readily adaptable to other uses. It is a policy ostensibly intended to bring about savings, but which in many instances has increased the cost of national defense and of other services needed by the Government.

During the last several years this practice of contracting by the Government has been accelerated in compliance with the Bureau of the Budget Bulletin 60–2, dated September 21, 1959, which amplifies two earlier directives—Bureau of the Budget Bulletins No. 55_4 of January 15, 1955, and No. 57–7 of February 5, 1957. Those who have supported this policy have the viewpoint that the Government is needlessly competing with private enterprise when it provides a service or a product for its own benefit. It is our view that it is wrong to consider the Government as being in competition with private enterprise when it provides a service or does any work which superficially would seem to duplicate the same type of work done in industry.

We believe that the purpose of the service, the circumstances of its need and its existence should govern. True economizing does not necessarily consist of seeking the lowest price of a service or a product.

The general policy outlined in Bureau of the Budget Bulletin 60–2 is that the Federal Government is not to start or carry on any commercial-industrial activity if the product or service involved can be procured from private enterprise. Exceptions to this policy provide that Government operation may be continued where an activity cannot for reasons of national security be turned over to private industry or if procurement through commercial sources would involve higher costs.

We submit that national security is not always served by contracting and that in many instances the work can be done in a less costly manner if the Government were to use its own facilities and its own employees. Some work traditionally belongs in an establishment operated by the Government. While many private contracts have been substituted for governmental activities, numerous examples of Government disillusionment with private contracting have come to light.

Contracting has been erroneously believed to be economical and to afford services which the Government itself could not provide. This viewpoint is

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