THE WACKENHUT CORP., MARTINEZ, CALIF. (Guarding Oil Refineries) 1. Shift premium-8¢ afternoon shift, 12¢ midnight shift. 2. Paid holidays-6 per year plus overtime payments for two additional holidays worked. 3. Sick leave-1966-8 sick leave days per year; 1967-9 sick leaves days pear year; 1968-10 sick leave days per year. 4. Vacations-1 week's vacation after one year's service; 2 week's vacation after three years' service. 5. Three days paid bereavement leave time. 6. $52.00 per year uniform allowance. 7. Jury duty pay provisions. 8. Insurance coverage-$3,000 life insurance coverage plus "B" type hospitalization, medical and sickness benefit insurance coverage. FEDERAL GUARD SERVICES, LIVERMORE, CALIF. (Employed at the AEC Sandia Project) 1. Shift premium-10¢ afternoon shift, 15¢ midnight shift. 2. Paid holidays-8 per year. 3. Sick Leave-12 days per year. 4. Vacations-1 week's vacation after one year's service; two week's vacation after two years' service; three week's vacation after 15 years' service. 5. Uniforms are furnished. 6. Three days bereavement leave pay time. 7. Personal travel pay allowance for outlying posts where private transportation required. 8. Insurance-Approximately $3,000 life insurance plus a "B" type hospitalization, medical and sickness insurance coverage. We respectfully request that a determination also be made as to the prevailing fringe benefits for the Fremont, California area. We believe the above listed area fringe benefits provide an ample basis for this determination. The failure to include a determination as to these fringe benefits with the wage rate determination is working an extreme hardship on the guards performing security functions at this government contract site at Fremont, California. An early determination as to these fringe benefits by your Department, would be very much appreciated. Very truly yours, 1/ 1 week paid vacation after 1 year of service with a contractor or successor. 2/ 8 paid holidays per year: New Year's Day, Washington's Birthday, Decoration Day, Independence Day, Labor Day, Veterans' Day, Thanksgiving Day, Christmas Day. Exhibit C-3 CLARENCE T. LUNDQUIST, SEPTEMBER 19, 1966. Administrator, U.S. Department of Labor, Wages and Hours and Public Contracts Division, Office of the Administrator, Washington, D.C. GENTLEMEN: On August 26, 1966, your Division issued a revised Wage and Fringe Benefit Determination, WD 66-108. This determination was made at the request of our International Union in its letter of August 1, 1966. The request was made on behalf of a unit of security guards employed by the Burns Security Systems, Inc., a division of the Burns International Detective Agency at the Federal Aviation Agency Installation at Fremont, California. As the certified bargaining representative of the unit of guards working at the above location, our Union has attempted to negotiate a union contract on their behalf with Burns, using your determination of August 26, 1966 as a basis. The Burns Organization is now paying these guards the prevailing rate of $2.41 per hour, however, it refuses to include any provision for the payment of the determined fringe benefits in the current contract because its contract with the Federal Aviation Agency contains no provision for the payment of fringe benefits. As a result, union contract negotiations are again stalled. We respectfully submit this information for your consideration in the matter. Your advice and assistance will be appreciated. Very truly yours, Exhibit C-4 RICHARD H. ANTHONY, Director, Region 8. Mr. JAMES C. MCGAHEY, UNITED PLANT GUARD WORKERS OF AMERICA, President, International Union United Plant Guard Workers of America, Detroit, Mich. DEAR SIR AND BROTHER: This is to call your attention to the problem of the inclusion of fringe benefits we are atempting to negotiate in a union contract with the Burns Security Systems, Inc. on behalf of its guards employed at the Federal Aviation Installation, Fremont, California. On March 29, 1966, negotiations began on this contract at the Burns business office, 1211 Park Avenue, San Jose, California. On that date and at this meeting. union contract proposals, and a copy of the McNamara-O'Hara Service Contract Act were submitted to the Burns negotiators by the union. At this meeting, union negotiators were informed by Burns that its current service contract with Federal Aviation expired on June 30, 1966. On June 8, 1966, WHPC Divisions of the U.S. Department of Labor issued Wage Determination 66-108 which provided an hourly wage rate of $2.41 to be paid to guards and watchmen employed on service contracts in the Fremont, California area. Burns has been paying its guards at Fremont $2.41 per hour since July 1, 1966. In subsequent negotiating meetings with Burns, union negotiators proposed the inclusion of a number of fringe benefits as a part of the contract along with the established wages. These proposals were based upon benefits which the union had secured for plant guards in other union contracts in the general area of Fremont. At a meeting held in late July 1966, union negotiators were informed by Burns that the service contract it had signed with Federal Aviation contained no provision for the payment of fringe benefits to its guards at Fremont. This was the first time the union had knowledge of the above condition. Accordingly, a request for a determination as to fringe benefits was made by the union to WHPC Divisions on August 1, 1966. On August 6, 1966, WHPC Divisions issued WD 66-108 (Rev.), which provided fringe benefits. Fremont area, of 1-week paid vacation after 1 year of service and 8 paid holidays per year. Upon receipt of WD 66-108 (Rev), the union again attempted to reach an agreement with Burns on fringe benefits and again company negotiators stated that the company could not possibly agree to inclusion of such benefits in a current union contract because its current service contract contained no provisions for payment of same. In a letter of September 19, 1966, the union then informed WHPC Divisions of the stalemate which had occurred in contract negotiations because of the position taken by Burns regarding WD 66-108 (Rev.), and requested advice and assistance. In a letter of reply dated October 12, 1966, WHPC Divisions advised the union that the provisions of WD 66-108 are not applicable to the current service contract between Burns and Federal Aviation because this contract was entered into prior to August 9, 1966. Correction: the number of the determination referred to in this paragraph should be WD 66–108 (Rev.) The foregoing is the correct history of the development in the matter. Enclosed are copies of pertinent documents and correspondence. If I can be of any further assistanct, please advise. Sincerely and fraternally, RICHARD H. ANTHONY, Mr. McGAHEY. We in our organization have had the same type of problems as Mr. Donahue and his union have had over a period of years and we were part of trying to get this act in effect back in 1964. I heard some of the testimony and I thought we understood the intent of the act when it was passed but it hasn't worked out that way. We have a couple of cases here that we documented. One was in Fort Rucker, Ala., where they had made a wage determination back in 1967, and then there was negotiations with different contractors. We went through three contractors there, a changeover. The last negotiation that was held, there was an agreement which would have eventually raised the wages to 2.55, while this contract was in effect. And they asked for a new determination, but the determination when it was given was again back to 2.25 which it originally had been, and as a result of that there was a refusal by the contractor to put the new wages in effect and also there was an attempt to get the contracting officer at Fort Rucker to get the approval to put this wage increase in effect, and for some reason or other, we couldn't get too many answers down there. It seemed that this woman who was a contracting officer couldn't find the wage determination, and she didn't want to talk to our international representative there who was handling the negotiations, and it was a very confusing situation and it has been in many other areas. We also have listed here a problem that we had out in California at Fremont, Calif., where the Department made a determination but did not include fringe benefits and then when we protested this, they said they couldn't include fringe benefits because the contract had already been let. They made a mistake in the first place by not following the intent of the act but as a result of this, we were unable to get these fringe benefits put in effect because they were not part of the contract. This takes me into the area of this Emerald case. We are very interested in this because our union was the union that had the Burns case and our general counsel just appeared in the circuit court on appeal on that a month ago and we haven't got the decision on it from the courts, but they pointed out the successor clause. Then we noticed in Emerald that the Government, the Air Force, filed in this case a brief which it seems to me that the NLRB must have taken into consideration, although they were not a part of the case themselves when they stated that all they had to do was recognize the people but there would be no successor clause because this was a Government contract, and the whole picture looks to me as if when you apply the current rate that is on a contract and they do not look forward to what that contract agreement between labor union and the contractor has in it, it would mean that you could never get a wage increase. After all, industry has their regular wage increases, Civil Service employees have their regular wage increases, but under the Contract Service Act, if it was applied, as some people feel it should be, we would never be able to get a wage increase that would be established by the Government and there would be no need for bargaining. It would destroy unions because there would be no collective bargaining in this thing. This, I am sure, was not the intent of Congress because I talked to many of the congressmen and Congressman O'Hara, who was instrumental in moving this for us at that time, and I am sure we all understood what it meant, but it had not been applied and in this service area, contract service area, there is a lot of cutthroats and there are people in this business that are given contracts that certainly do not deserve to have contracts with the Government because if the Government would check their back records and I am sure they would find out that they were not the type of people that should be handling Government contracts. Today, in this age that we have, with so many problems going on, if a contracting agency hires people at cut rate wages, they cannot get the type of people that I am sure the Government wants, to protect the Government installations and what has been going on here has certainly been in violation of the intent of this act. I feel that if this committee could come up with some changes in the act to tighten it so that it would be impossible to violate it, and we have run into problems where the company would say, well, the contract was let before there was a determination made, so, therefore, you are not entitled to the general prevailing scales in the area, and this could lead to a real problem, especially for the people who take these jobs. When I originally testified before, I told the committee of cases where a contractor would hire a group of people to handle the guard service. And, in many of these areas, it is hard to get housing and once they would get their housing and get their kids in school, then the following year they would change contractors again. They would throw the individuals, who were working, out on the street and normally they wound up on welfare and this is happening the way this act is being used today, this is actually helping to put people on welfare in the different areas. Mr. THOMPSON. I might comment that I would warrant that there are service contract employees actually at work who qualify for welfare. Mr. McGAHEY. That is correct. Mr. THOMPSON. There is no question about that. And more of them are going to qualify as their wages are frozen and as costs elsewhere increase. Mr. McGAHEY. Mr. Chairman, I note another thing here in the act and I am sure the act says that you shall have the fringe benefits, the prevailing fringe benefits in the area in these contracts. I would safely say that 98 percent of all guard service contracts has very few of the fringes and none of them have any retirement plans and many of them their health and welfare plans are very little. They are not what is considered the prevailing fringes in the area. So this is a real, real serious problem, and this is a matter of enforcement here. It is in the act but for some reason or another, we are not getting it and I hope what comes out in this committee is going to give us the help that we need. Mr. THOMPSON. We will do whatever we can, but I think it is really tragic that we have to be talking about tightening up the act so that there can't be any maladministration. How we can make more explicit our intention in a revision than we did in the original act, I don't know. The fact is that the act as it is, as it exists this minute without any amendment, if administered according to Congress' intent, would achieve the high hopes that you and I and Mr. O'Hara and Mr. Donahue and everybody else who advocated it had in 1965. Mr. McGAHEY. I can recall different areas where we have run into problems, and it was mentioned once before, where the Government gave out a contract to guard a Government installation and they were supposed to supply trained police dogs. Well, without investigating this company that they gave the contract to, they found out the company had no such trained police dogs. They had no trained guards so they went out and hired a farmer off of the next 20 acres down there some place and he had himself a little poodle with him and this is the type of service that the Government is getting and this is not what the intent of this act is, I am sure. Mr. THOMPSON. Being the owner of both a poodle and a german shepherd, I might say that I would prefer to work with the poodle. Mr. O'Hara ? Mr. O'HARA. Mr. Chairman, I thank you. Mr. McGahey is absolutely right and I want to again express my outrage that the Service Contract Act has been seized upon by-I like the way you put it here-the Air Force in its role, an intermeddler. Mr. McGAHEY. That is my general counsel's word. Mr. O'HARA. Officio intermeddler, that they should have the infernal chutzpah to come in before the trial examiner and the board and say, "Well, that may be so, everything after the Burns case and the Wackenhut case." They say, "Yes, that is right, the successor doctrine would apply if this were a private contract or whatever and they would have to abide by the wage contained in the agreement, but instead we think you ought to do these fellows out of that wage and the reason we think so is because the Congress passed the McNamaraO'Hara Act." How they can use that legislation to justify a result that gives the workers less wages than they would have otherwise received is just. inexplicable. Finally, about that Fort Rucker matter, here is the situation, Mr. Chairman. The area is Fort Rucker. The guards that Mr. McGahey and his labor union represents are the only guards on the base. So they say we are going to make a prevailing wage determination and the prevailing wage determination is for guards at Fort Rucker and in |