SEC. 4. Section 5(a) of such Act is amended by inserting before the first comma of the second sentence the words "because of unusual circumstances" and by adding at the end of such section 5(a) the following: "Where the Secretary does not otherwise recommend because of unusual circumstances, he shall, not later than thirty days after a hearing examiner has made a finding of a violation of this Act, forward to the Comptroller General the name of the individual or firm found to have violated the provisions of this Act."

SEC. 5. Such Act is amended by adding at the end thereof the following new section:

"SEC. 10. It is the intent of the Congress that determinations of minimum monetary wages and fringe benefits for the various classes of service employees under the provisions of paragraphs (1) and (2) of section 2 should be made with respect to all contracts subject to this Act, as soon as it is administratively feasible to do so. In any event, the Secretary shall make such determinations with respect to at least the following contracts subject to this Act which are entered into during the applicable fiscal year:

"(1) For the fiscal year ending June 30, 1973, all contracts under which more than twenty-five service employees are to be employed.

"(2) For the fiscal year ending June 30, 1974, all contracts under which more than twenty service employees are to be employed.

"(3) For the fiscal year ending June 30, 1975, all contracts under which more than fifteen service employees are to be employed.

"(4) For the fiscal year ending June 30, 1976, all contracts under which more than ten service employees are to be employed.

"(5) For the fiscal year ending June 30, 1977, all contracts under which more than five service employees are to be employed.

"(6) For the fiscal year ending June 30, 1978, and for each fiscal year thereafter, all contracts subject to this Act."

The SPEAKER. Is a second demanded?

Mr. ASHBRCOK. Mr. Speaker, I demand a second.

The SPEAKER. Without objection, a second will be considered as ordered.

There was no objection.

Mr. THOMPSON of New Jersey. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support of H.R. 15376, a bill to amend the Service Contract Act of 1965. This bill was reported out unanimously by the Committee on Education and Labor and is a product of intensive bipartisan study and investigation.

The Special Subcommittee on Labor, which I have the privilege to chair, conducted 9 days of legislative oversight hearings during this Congress on the administration of the Service Contract Act. We heard testimony from administration officials, representatives of organized labor, representatives of the service industry, and some service workers themselves. We undertook these hearings under the impetus of the Legislative Reorganization Act of 1970, which called upon legislative committees to intensify their oversight activities.

The Service Contract Act was enacted to provide wage and safety protections for employees working under Government service contracts. It makes the Department of Labor responsible for assuring that service employees are paid at least the prevailing wages and fringe benefits for the same work in their locality as others are paid, so that this is simply a wage standards protection statute.

The hearings and our subsequent markup sessions were conducted in a completely bipartisan fashion. Each member of the subcommittee and the full committee was intent on finding out whether there were any problems in the administration of this act and what we in the

Congress could do to correct any deficiencies we discovered. There were five serious problems which became apparent during the course of the hearings.

First. The Department has failed to make wage and fringe benefit determinations for almost two-thirds of the contracts subject to the

act:

Second. A substantial disparity in wages and fringe benefits has developed between Federal wage board employees and their counterparts employed by service contractors:

Third. A great deal of labor-management instability has arisen because of a failure to take the existence of collective-bargaining agreements into account in the wage and fringe benefit determination process:

Fourth. A section of the act giving the Secretary of Labor discre tion in administering the act has been stretched far beyond what the Congress had intended;

Fifth. The practice of rebidding contracts yearly either without wage and fringe determinations or with unrealistically low determinations is creating chaos for reputable contractors and great hardships for employees.

We have addressed each one of these problems in H.R. 15376, In effect, what we have done is to strengthen the hand of the Secretary of Labor in assuring that full coverage of all contracts subject to this act is eventually achieved. We have given the Secretary 6 years to gradually achieve full coverage, beginning by mandating full cover age during fiscal year 1963 of all contracts subject to the act which propose to employ more than 25 employees, and achieving full cov erage of all contracts subject to the act by fiscal year 1978. We believe that this is a fair and equitable mechanism for allowing the Depart ment to gradually evolve the best techniques for making wage and fringe benefit determinations at the lowest possible cost to the taxpayer. There are a number of other technical and clarifying amendments to the act which are explained at some length in the report accompanying H.R. 15376.

I think this is an excellent bill, and I want to especially commend the ranking Republican on the subcommittee, Mr. ASHBROOK, of Ohio, for his complete cooperation during our investigation. I also wish to commend the ranking member of the full Committee on Education and Labor, Mr. QUIE, of Minnesota, for his cooperation and support in our efforts to fashion a legislative vehicle to remedy the problems we found in the operation of the act.

I also wish to commend my colleague, Mr. O'HARA of Michigan, at member of the subcommittee and the author of the Service Contract Act of 1965 in the House, for the diligent manner in which he has pursued the problems that have arisen under the act since it was first passed.

I think we have an excellent bill here, and it is a bipartisan bill which will not only protect service employees, but give reputable service contractors a fairer set of ground rules under which to operate, I urge my colleagues to support this bill.

Mr. ASHBROOK. Mr. Speaker, I yield myself such time as I may

consume.

Mr. ASHBROOK. Mr. Speaker, I was present at all of the hearings on this bill. I could echo many of the things that the gentleman from New Jersey just said. But I would like to call your attention to the statement in part II of the hearings on page 24 by our former colleagues and now senior Senator from Florida.

The thing that is most unfortunate about the way the law is carried out and interpreted by the Department of Labor a present is that employees continually in bases throughout the country, particularly military bases, find themselves pawns in a contract struggle.

I will real to you what Mr. GURNEY indicated happened in Florida, as an example, and I quote him directly:

As you will notice, I represented the Cape Kennedy area as a Congressman, and it is now part of my constituency as a Senator.

I hope everybody will listen to this very closely because this is the very heart of the bill.

To continue:

Last year we had a rebidding of a NASA service contract. The only material thing bid was wages; and able, loyal workers found themselves earning, a day after the contract was awarded, one-quarter, one-third, even as high as 50percent less than before, doing precisely the same job the day before.

Now we have another service contract out for bid at Patrick Air Force Base. This is the service contract now held by Pan American and RCA, and exactly the same thing will happen in this case. Only wages will be bid, and the worker's pay and his ability to feed and clothe and house his family is now out on the auction block. I firmly believe that an average wage should be determined by the Labor Department, after a thorough wage study today in these service contract cases, a wage below which a bidder may not go, and I have requested the Labor Department to do this.

In fact, I have requested it twice. The request was denied the first time, and I have not heard from the second request as yet. I certainly hope that your committee will help in drafting legislation to accomplish this goal in this service contract area.

This is precisely what we are talking about. It makes no sense in equity and it certainly is bad policy to allow contract bidders to come into these areas to underbid and then give a take-it-or-leave-it basis. to the employee who is doing vital work for our country.

I support this on the basis of equity. I support it because I do not believe the Department of Labor has issued the determinations that they should, and has not determined, as GURNEY pointed out, wages below which a bidder may not go.

This, supposedly, should be the law. But bidders can come in and they can, as we saw in our hearings, if you study our hearings, particularly through the Southwest, go from one base to another and have a contract 1 year-and then go in an underbid-and possibly make some money. Maybe that is free enterprise, but the result is to squeeze the employee and pay him less for the same thing that he was doing in the previous year-and then go to another base next year. I think it is completely wrong.

Supposedly, the Department of Labor should protect these employees. But I would say to the Members of this House, the Department of Labor is not doing this. So I support this bill wholeheartedly on the basis of equity.

This bill merely requires that a successful bidder cannot pay less to employees than they were receiving from their former employer pursuant to a contract with respect to wage and fringe benefits. That certainly does not seem to be radical to me.

It has been indicated that prospective wage increases will be included in wage determinations. The committee saw this as a possible pitfall. Every member of our committee recognizes you can have a situation where bids of contracts going into the future would be very high and there would be no way of bringing them under control. That is why the bill specifically gives the Secretary of Labor-and, if you will look at pages 5 and 6, we have added this language "*** if the Secretary so elects" the Secretary of Labor may choose to include any prospective wage increases in his determination.

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Certainly, I cannot foresee on the basis of their handling up to now, that they would agree to any exhorbitant increase.

I happen to feel, in all equity, that this bill is long past due. Many employees have been taken advantage of.

The other thrust of the bill is to require the Secretary of Labor to increase the number of wage determinations yearly until at the end of a 6-year period, wage determinations must be made where any Gov. ernment contract is awarded subject to the Service Contract Act. That is all we are doing, these two major items, making sure that an employee cannot be reduced-you cannot have bidding which would reduce their wages and make the Secretary of Labor by statute increase the number of wage determinations until all wage determinations are issued where contracts are subject to the Service Contract Act. I do not think you can quibble with those two parts of the bill and I wholeheartedly support it.

Mr. THOMPSON of New Jersey. Mr. Speaker, will the gentleman yield?

Mr. ASHBROOK. I yield to the chairman of the subcommittee.

Mr. THOMPSON Of New Jersey. Mr. Speaker, the gentleman is precisely right. The bill in essence is extremely simple, and you have very carefully made clear its two essential ingredients. It might be said in passing that when we had the Department back a second time they thought that the requirement that they make determinations within a year or two would be unreasonable in terms of administrative costs. The fact is that they have a maximum of five people working on this act now after 7 years of its operation, so in order to accommodate them, we stretched it out another 6 years.

Mr. ASHBROOK. I would add to what the gentleman said we are not asking them to do anything that they do not already do under the Davis-Bacon Act.

Mr. THOMPSON of New Jersey. You are exactly correct-or under the Walsh-Healey Act.

Mr. ASHBROOK. Or under the Walsh-Healey Act.

I cannot possibly convey to the Members of this House how personally repugnant I found the activities of many contractors dealing with what frankly must be the low, marginal employees on most of these bases; and for the Government to sanction a policy putting these people in a squeeze, I found personally repugnant.

I think most of you know I do not exactly get a whole lot of union support. The only union that ever supported me was the WCTU, so I am certainly not motivated by any pressures that might come from unions. I am talking merely in terms of what is in the best interests of these employees and how the Government can possibly hold up its head when it is in effect the employer.

Mr. HUNT. Mr. Speaker, will the gentleman yield?
Mr. ASHBROOK. I will be happy to yield.

Mr. HUNT. I take the opportunity to commend the committee, the chairman of the subcommittee, and you (Mr. ASHBROOK) for bringing this bill, H.R. 15376, to the floor and speaking out as you have.

Several years ago I had a situation with a corporation in my district who had a bid situation up in Alaska. They had had this bid for a number of years, and their employees were there with all of their equipment. They were underbid by another contractor. It resulted in a loss of wages and in certain places a little less money, but the fellows stayed there because they were located up there in the vast barren stretches and did not want to come home. The only thing they did was to take over the equipment, as it were, for less money, and still maintain the job.

Fortunately, this year when the bids came out, the company which had the bids originally regained them and put the wage scale back where it had been in the first place. So it is about time this manipulation of underbidding by contractors for their own personal corporate gain came to an end.

I wish to commend you and your committee for bringing this to the attention of Congress.

Mr. ASHBROOK. I thank the gentleman for his contribution. We will later hear from the gentleman from Florida (Mr. FREY) who has had similar experience and who will speak for this bill. I think those who have seen the operations of this contract process certainly must question the Government's role, which, of course, would be part of our role, in sanctioning this type of squeezing. It is incredible, if you could read the testimony, if you could hear the testimony, how people had their wages reduced, wages which already by most scales are not high. As indicated, they are probably at the lower economic level, mostly custodial employees, those who work in laundries, those who work in dispensaries, those who work in cafeterias and to have these real low wages undercut as a part of the supposed fair and free bidding process is something which should not be sanctioned.

I certainly voice my very strong approval of this bill as a means of rectifying the situation.

Mr. GROSS. Mr. Speaker, will the gentleman yield?

Mr. ASHBRROOK. Yes, I yield to the gentleman from Iowa.

Mr. GROSS. I thank the gentleman for yielding.

This is the second bill in succession from the Committee on Labor and Education that carries no departmental report, no report of any kind. Can the gentleman advise me as to why there is nothing from the Department of Labor, or any other agency in Government?

Mr. ASHBROOK. First of all, I can say to the gentleman is not it a wonderful day late in the session when we can get bills out of the Committee on Labor and Education that do not have to totally rewritten on the floor of the House?

I will say in all candor the administration favored the previous bill, but the administration does not favor this bill. I would say that if you study the hearings, Mr. Silberman, the Under Secretary of Labor who testified for the Department of Labor, indicated to the committee that, because the members of our committee were so unanimous on this bill