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Mr. O'HARA. Well, you have referred to the fact that they receive no check on the background of these guards that were hired, and that the ones that were hired evidently had no experience in guard work. What was the extent of the supervision of their work by the contractor! Would you have any knowledge of that?

Mr. McGAHEY. Yes; I sent our local president and two of our representatives out a couple of different times to check these areas to see what kind of security they were having, and they talked to the individual at the gate, and the president of the local asked the question: “How often do you see your supervisor ?"

He said, “Weil, as I understand, he will be around once a week.” And this individual that is in this picture here wasn't quite sure who he was working for. He didn't know what his wage rate was until later on. Actually, he was just a young fellow that lived on a farm just a half a mile down the road, and this headman from Halsil Products came in and looked around and went down to the farm and asked if he could get somebody down there to work to guard this installation because he had no guards, he had no police dogs, he had no cars—there were supposed to be patrol cars such as this other company had.

Now, we are not talking just for this particular company. There are a lot of good, legitimate contract agencies around this country. A lot of them. And a lot of them that would like to pay their people a decent scale of wages, but they are in a position that they are bucking against these dollar-and-a-quarter-an-hour people, and they can't give their employees a decent scale.

Mr. O'HARA. It is your opinion, then, that the established, experienced, and reputable guard agencies are unable to successfully compete for Government contracts in many cases because of the failure of the Government to provide some sort of wage standards for employees on these contracts; is that it?

Mr. McGahay. That is right. I have been told by some of the owners of some of the largest national guard agencies who have been in the business for a long time that they now don't even care to put in a bid for a Government contract because there are so many of these contracts that are let out at such cheap rates. They couldn't afford to hire decent personnel.

Mr. GRIFFIN. Mr. Chairman, could I make a suggestio point? Maybe the chairman has already thought of this, but it seems to me that in view of this testimony, which I think is rather serious I mean, for example, here they hired a farmer without any training. Now, they used a house pet for a police dog. At least that is the allegation here. No security clearance. No wonder they can hire people for a dollar and a quarter. I mean, apparently either they had no specifications or if they had any specifications requiring trained police dogs and security clearance, and so forth, the Defense Department was lax and negligent in applying its own regulations. I just wonder if it would not be worth the subcommittee's time to bring be

fore us, at least for a part of one morning, somebody out of the Defense Department who can explain to us about their procurement procodures in this area, and maybe we can get a better understanding of why a situation like this would develop.

Mr. O'HARA. I think that is an excellent suggestion, and since the gentleman has brought it up, I will take it up with the chairman of the subcommittee who, unfortunately, is absent this morning, and suggest that we have someone from the Department of Defense to explain and justify their policy in this regard, because I think they are quite dangerous.

I might add, however, that the problem is not confined to guards by any means. It happened to come to my attention that guards were involved because of any acquaintance with Mr. McGahey and Mr. Livingston, and another officer of the International Union, Mr. Gary, who is a constitutent of mine. But when it first came to my attention, it was a case involving the hauling of mail by truck between the cities of Detroit and Port Huron. I learned of it because there was a threatened work stoppage in this mail hauling between Detroit and Port Huron. It seems that the fellow who had gotten the contract was paying his truckdrivers, hauling mail between these two points, 75 cents or $1 an hour—I do not remember just which—and after the contract had been in force for a while, the employees were organized and were trying to bargain for an extra 25 cents, and there was a threatened work stoppage and that is what brought the whole problem to my attention. That is when I discovered that there was not any kind of wage protection on a service contract.

Now, a dollar and a dollar and a quarter, even, is a good deal less than the prevailing wage for drivers of over-the-road equipment in the Detroit-Port Huron area, and I know that the situation has arisen many times, particularly in connection with building maintenance employees, where the low bidder has often been the contractor who managed to be the low bidder because he was paying a very, very low wage to his employees.

But I think, with respect to guard services, the gentleman from Michigan is correct. We ought to look into that, into the security aspect of that one, as well as the effect upon the wage rates in the community.

Mr. McGAHEY. That would be very interesting, sir.

We have a copy of the invitation to bid, here, if you wanted us to leave that with you, on this Nike site.

Mr. O'HARA. Could you leave it?

If there is no objection, I would like to have that invitation to bid left with us and incorporated in the record of the hearing at this point.

(The document referred to follows:)

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INVITATION FOR BIDS
DATE ISSUED * 13 August 1963

INVITATION NO. AV-20-051-54-5
Sealed bids m
TRIPLICATE

subject to (1) +. Tormand Conditions of the Invitation for Bids, (2) the accompanying Schedulo, (8) General Provisions (Stanslard Form Septa_sol edition), which are incorporated herein by reference, and (4) ruch other contract provis ons and spa ations is ara s'tached or incorporated by reference in the Schedule, will be received at the abre offen, int'l

11:2

'clock_2. m., Farer: Standard Time, 13 Septembr: 1963 (date) and at that tizie publicly ed, for furnishing the supplies or services described in the accompanying Schedule, for delivery 1. o. b. AS P2C 1.D

HEREIN General information and instructions to bidders are oor ‘ained in the terms and conditions on the reverse hereof.

SCHEDULE

QUANTITY
ITEM NO.
SUPPLIES OR SERVICES

UNIT UNIT PRICE AMOUNT

(No. ol unito) GUARD SERVICE - Armed, uniformed, for security

ENTER PRICES ON DID proaction for Phased out NIKE Site., Detroit Datense

SCHEDULE PAGES

THRU
ACUR ESS ALL BIDS TO

CONTRACTING OFFICER, FORT WAYNE
301 WEST JEFFERSON AVENUE

BIDS !*UST SET FORTH FULL, ACCURATE AND
DETROIT 17. MICHIGAN

OCM IT TORMATION AS REQUIRED BY THIS SEAL AND MARK BID INVELOPES AS FOLLOWS:

TION 7BDS (INCLUDING ATTACHSEALED BID: Guard Service, N. Sites

MSN 1 T PENALTY FOR MAKING FALSE IF NO. AV-20-051-64-5

STA, VINS ENDS IS PRESCRIBED IN 18 USC OPENING DATE: 13 September 1963

100. 11:00 a. II, EST

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BID

DATE OF BID

In compliance with the above, the undersigned offers and agrees, if this Bid be accepted within calendar days (60 calendar days unless a different period be inserted by the bidder) from the date of opening, to furnish any or all of the items upon which prices are quoted, at the price set opposite each item, delivered at the designated point(s) within the time specified in the Schedule. Discounts will be allowed for prompt payment as follows: XXXXXXXB****XPO XXXdak XlbX*XXXXXXXX , 20 Xch. Ichoat hidayat

percent, 30 calendar days. BIDDER REPRESENTS: (Check appropriate botes) (1) That he is, is not, a small business concern. (See definition on reverse hereof.) If bidder is a small business concern and is not the manufacturer of the supplies

bid upon, he also represents that all supplies to be furnished hereunder will, will not be manufactured or produced by a small business concern in the United States, its Ter:

ritories, its possessions, or the Commonwealth of Puerto Rico. (2) That he is a regular dealer in, manufacturer of, the supplies bid upon. (8) (@). That he has, has not, employed or r nined any company or person (other than a full-time bona fide

employee working solely for the bidder) to solici. Ir secure this contract, and (b) that he has, Q has not, paid or agreed to pay any company or person (other thin a full-time bona fide employee working solely for the bidder) any fee, commission, percentage or brokerage fee, contingent upon or resulting from the award of this contract; and agrees to furnish information relating to (a) and (6) above as requested by the Contracting Officer.

(For Interpretation of the representation, including the term "ona Ade employee," we Code of Federal Regulations, Titie 4*, Part 150.) (4) Ho operates as an individual, o partnership, corporation, incorporated in the State of NAME AND ADDRESS OF BIDDER (Streot, olty, sono, and State. Type or SIGNATURE OF PERSON AUTHORIZED TO SIGN BID print)

COPY 70

DIDOL

6. ORY

DATE OF AWARD

AWARD

AMOUNT ESTIMATED

ACCENTED AS TO ITEMS NUMBERED

UNITED STATES OF AMERICA

ACCOUNTING AND APPROPRIATION DATA

BY SUONIT INVOICE FOR PAYMENT TO

Contracting Oficer. Contracting Officer, Building 202, Fort Wayre 6301 West Jefferson Avenue

SEE SPECIAL PROVISION 9
Detroit, Michigan 48217
PAYMENT WU BE MADE BY

This contact is authorized by Chapter 137, Title 1 of Finance & Accounting Officer, Fort Wayne, Puidisg 9

the United States Code (Public Law 1028, 84th Congress) 6301 West Jefferson Avenue, Dezoit, Michigan 4827

Award will be made on this Form, or on Standard Form 36, or by other otoial writton notio..

TERMS AND CONDITIONS OF THE INVITATION FOR BIDS

Act concerning overtime payment, child labor, safety and health provisions, etc., may be obtained from the Wage and Hour and Public Contracts Divisions, Department of Labor, Washington 25, D. C. Requests for information should state the Invitation number, the issuing agency and the supplies covered.

1. DISCOUNTS.-(a) Prompt-payment discounts will be included in the evaluation of bids, provided the period of the offered discount is sufficient to permit payment within such period in the regular course of business under the delivery, inspection, and payment provisions of the Invi. tation and Bid.

(b) In connection with any discount offered, time will be computed from date of delivery of the supplies to carrier when delivery and acceptance are at point of origin, or from date of delivery at destination or port of embarkation when delivery and acceptance are at either of those points, or from date correct invoice or voucher is received in the office specified by the Government if the latter date is later than the date of delivery. Payment is deemed to be made, for the purpose of earning the discount, on the date of mailing of the Government check.

1. PREPARATION OF BIDS.-(a) Bidders are expected to examine the drawings, specifications, Schedule, and all instructions. Failure to do so will be at the bidder's risk.

(b) Each bidder shall furnish the information required by the bid form. The bidder shall print or type his name on the Schedule and each Continuation Sheet thereof on which he makes an entry. Erasures or other changes must be initialed by the person signing the bid. Bids signed by an agent must be accompanied by evidence of his authority.

(c) Unit price for each unit bid on shall be shown and such price shall include packing unless otherwise specified. A total shall be entered in the Amount column of the Schedule for each item bid on. In case of error in extension of price, the unit price will govern.

(d) Alternate bids will not be considered unless authorized by the Invitation.

(c) When not otherwise specified, bidder must definitely state time of proposed delivery.

(1) Time, if stated as a number of days, will include Sundays and holidays.

2. SUBMISSION OF BIDS.-(a) Bids and modifications thereof shall be enclosed in sealed envelopes addressed to the issuing office, with the name and address of the bidder, the date and hour of opening, and the invitation number on the face of the envelope. Telegraphic bids will not be considered unless authorized by the Invitation; however, bids may be modified by telegraphic notice provided such notice is received prior to the time set for the opening of the bids.

(6) Samples of items, when required, must be submitted within the time specified, and unless otherwise specified by the Government, at no expense to the Government. If not destroyed by testing, samples will be returned at bidder's request and expense, unless otherwise specified by the Invitation.

(c) In the event no bid is to be submitted, do not return the Invitation unless otherwise specified. However, a letter or post card should be sent to the issuing office advising whether future Invitations for the type of supplies or services covered by this Invitation are desired.

3. WITHDRAWAL OF BIDS.-Bids may be withdrawn by written or telegraphic notice (see 4 below).

4. LATI BIDS.-Bids and modifications or withdrawals thereof received after the time set for opening will not be considered, unless they are received before the award is made, and it is determined by the Government that failure to arrive on time was due solely to delay in the mails for which the bidder was not responsible.

I. AWARD OF CONTRACT.-(a) The contract will be awarded to that responsible bidder whose bid, conforming to the Invitation for Bids, will be most advantageous to the Government, price and other factors considered.

(b) The Government reserves the right to reject any or all bids and to waive informalities and minor irregularities in bids received.

(c) The Government may accept any item or group of items of any bid, unless the bidder qualifies his bid by specific limitations. UNLESS OTHERWISE PROVIDED IN THE SCHEDULE, BIDS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE SPECIFIED; AND THE GOVERNMENT. RESERVES THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A QUAN. TITY LESS THAN THE QUANTITY BID UPON AT THE UNIT PRICES OFFERED UNLESS THE BIDDER SPECIFIES OTHERWISE IN HIS BID.

(d) A written award mailed (or otherwise furnished) to the successful bidder within the time for acceptance specified in the bid shall be deemed to result in a binding contract without further action by either party.

9. SELLER'S INVOICES.-Invoices shall be prepared and submitted in quadruplicate unless otherwise specified. Invoices shall contain the following information : Contract and order number (if any), item numbers, description of supplies or services, sizes, quantities, unit prices, and extended totals. Bill of lading number and weight of shipment will be shown for shipments made on Government bills of lading.

5. GOVERNMENT - FURNISHED PROPERTY.-No material, labor, or facilities will be furnished by the Government unless otherwise provided for in the Invitation.

6. LABOR INFORMATION.- Attention is invited to the possibility that wage determinations may have been made under the Walsh-Healey Public Contracts Act providing minimum wages for employees engaged in the manufacture for sale to the Government of the supplies covered by this Invitation for Bids. Information in this connection, as well as general information as to the requirements of the

10. DEFINITION OF SMALL BUSINESS.---Generally, a small business concern for the purpose of Government procurement is a concern that (1) is not dominant in its field of operation and, with its affiliates, employs fewer than 500 employees, or (2) is certified as a small business concern by Small Business Administration, (See Code of Federal Regulations, Title 13, Part 10.5, as amended, which contains the detailed definition and related procedures.)

NOTE: If a corporation, bidder (contractor) shall cause the following certificate to be executed under its corporate seal, provided that the same officer shall not execute both the contract and the certificate; or, in lieu of executing the certificate, bidder (contractor) shall furnish evidence, satisfactory to the Contracting Officer, of its agents authority to sign the contract to bind the corporation thereto.

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of the Contractor, was then

of said corporation;

that said contract was duly signed for and in behalf of said corporation

by authority of its governing body, and is within the scope of its

corporate powers.

AFFIX CORPORATE SEAL

(Signature)

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