Whereas under the present system of handling the bidding and execution of contracts for Government work, the highly technical and increasingly important electrical work in Government buildings is included with the general contract, resulting in wasteful and needless cost to the Government, and in many cases ruthless shopping by the general contractors of the subcontract bids for electrical work among irresponsible subcontractors who, if successful, cut labor rates and quality of workmanship to the serious detriment of proper electrical installations; and

Whereas the Federal Government bureaus-Treasury Department, Veterans' Bureau, etc.-have been appealed to for relief from the wasteful and destructive effects of the present system of handling the bidding on Government work and have replied that they are unable to correct the conditions without legislative action: Therefore be it

Resolved, That the Association of Electragists, International, take action to obtain the introduction in Congress through proper congressional representative procedure, and to urge the support and passage by the United States House of Representatives and the United States Senate, of a bill to correct such waste and abuse by separation of bidding and execution of all electrical work from the general contract.

Senator WALSH of Massachusetts. I have not had an opportunity to examine the bill under consideration so as to understand its exact purpose. I should like to inquire if you have given consideration to the possibility of there being confusion and delay and annoyance by having several contractors in the construction of a major project; I mean where the contracts might be let separately.

Mr. FITTS. We have the experience in four States and in several cities where the work is being done in this way, and it is our experience that delays do not occur. Under present conditions our contractors can not settle up and get their final payment until the job is finished. And I might say that their own interest is just as great as that of the general contractors in the matter of getting the work finished and going ahead in an orderly fashion.

Senator WALSH of Massachusetts. In what States is this law now in effect?

Mr. FITTS. In New Jersey, North Carolina, New York, and Pennsylvania. A similar custom is in effect in a number of the Middle Western cities.

Senator WALSH of Massachusetts. I suppose you met with the objection I have suggested when you undertook to enact this law in those States.

Mr. FITTS. Oh, yes.

Senator WALSH of Massachusetts. Is it your judgment from the operation of the law in those States that that factor has not been appreciably noticeable in diminishing the efficiency of the work?

Mr. FITTS. No. Very often the mechanical equipment contractor is off the job before the general construction work is finished. He just cleans up and gets out.

Senator BARBOUR. Would it operate to the advantage or the disadvantage of local men as you see it?

Mr. FITTS. I believe it would operate to the advantage of local men, because when a general contractor takes his sub bids he takes them from the Atlantic to the Pacific. He sends out post cards inviting everybody he can get on his list to make a bid. If the work were allowed to be bid for separately the small man in the local community would have a chance on the work that he was able to do,

the larger contractor would be more interested in the larger contracts and would not be annoyed by bidding on the smaller ones. It would be a case, I think, where you would have a great many more local men given a chance. If you will start at Miami and go up to Boston and look at the lighting or heating or plumbing work on your post office buildings you will find you are to-day bringing contractors from Chicago, for instance, into the metropolitan district of New York. Now, it stands to reason that they can not operate as cheaply as the New York man if they give you the same class of work, because they will have travel expense, and will have other extra expenses that the New York man does not have. You can go down to Miami and you will find some man from about a thousand miles away working on the job there. It is an unfortunate and expensive way of doing the job.

The CHAIRMAN. You do not have any New York contractors going out West, do you?

Mr. FITTS. Yes, sir; sometimes we do. We have some foolish contractors in New York as well as in other cities.

Senator BARBOUR. Have you any further information or data to present to the committee?

Mr. FITTS. I should like to read into your record some telegrams that I have here, because they represent a very large mass of manufacturers and distributors in the heating and plumbing industries that are interested in seeing you report this bill favorably. The first one is [reading]:

JOSEPH C. FITTS,

CHICAGO, ILL., May 10, 1932.

Heating and Piping Contractors National Association,

New York, N. Y.:

The Central Supply Association, consisting of manufacturers and wholesalers of plumbing and heating supplies operating in 40 States, is in full accord with legislation provided in Senate bill 4342 and authorizes you to read this telegram at the hearing on this bill before Senate Committee on Public Buildings and Grounds.

And the next one is [reading]:

Jos. FITTS,

R. MACFEE, Secretary.

NEW YORK, N. Y., May 11, 1932.

New Willard Hotel, Washington: The Steam Heating Equipment Manufacturers' Association, representing the majority of manufacturers in our line, is in full accord with the legislation provided in Senate bill 4342 and authorizes you to read this telegram at the hearing of the bill before the Senate Committee on Public Buildings and Grounds.

E. J. RITCHIE, Secretary.

The next one is from the National Association of Fan Manufacturers [reading]:

I have your telegram to-day, advising that a hearing on Senate bill 4342 is set for Thursday a. m., May 12, at 10.30, and that you will represent the National Association of Fan Manufacturers and the Industrial Unit Heater Association, as we have previously authorized you to do.

Thank you very much for this advice.

All our people are in accord with you in favoring this bill and the similar bill introduced into the House.

Gentlemen of the committee, these represent practically the entire mass of manufacturers in the heating and ventilating fields and the

plumbing field, with millions of dollars in capital and plant investment, and who feel that this bill would be a stabilizing influence in their business if it were enacted into law.

The CHAIRMAN. Is that all of your statement?

Mr. FITTS. That is all of my statement. Now, we have a number of other gentlemen here if you would like to hear them. I think we can limit the number.

The CHAIRMAN. We will hear any gentlemen you have present and who wish to be heard.

Mr. FITTS. I wish to call Mr. Walter Pangborne, president of the W. V. Pangborne & Co. (Inc.), of Philadelphia, representing the Electrical Guild of North America, and the Electragist International. He is president of the Pennsylvania Electrical Contractors' Association.

The CHAIRMAN. The committee will be glad to hear Mr. Pangborne.

STATEMENT OF WALTER V. PANGBORNE, PHILADELPHIA, REPRESENTING THE ELECTRICAL GUILD OF NORTH AMERICA, THE ELECTRAGIST INTERNATIONAL; PRESIDENT OF THE PENNSYLVANIA ELECTRICAL CONTRACTORS' ASSOCIATION

Mr. PANGBORNE. Mr. Fitts has submitted a very able statement, and perhaps any statement I might make or any answers I might give to your questions would somewhat duplicate what he has said.

But I want to say that I represent the Pennsylvania State Contractors' Association, which has locals in every city in Pennsylvania, and the Electrical Guild of North America that has locals in all the principal cities of the United States. Our membership are for this bill. I have been instructed to come down here and endeavor to secure legislation of this kind.

I will say that personally I have been for 20 years in the electrical contracting business, and have had a very wide experience, covering all classes of work. I also want to say that in the last 20 years our work has become very intricate and complicated. Some persons might visualize electrical work as merely having to press a button and the lights go on. As a matter of fact it calls for installing very complicated machinery. I have here a few booklets I should like to submit to the committee, not for the purpose of advertising, but in order to point out what electrical work has developed into at the present time.

In the State of Pennsylvania, where my principal office is, we have operated under a similar law for many years, and we know that it is very satisfactory. At times we have discussed it before committees of the Pennsylvania Legislature, and I have heard it pointed out that this bill in the State of Pennsylvania has saved the taxpayer of that commonwealth over $10,000,000 since it was enacted.

An electrical contractor prefers to bid direct to the Government, to the State, or the municipality, because when he bids direct he knows he is going to be paid for his job. And when. He can quote a better price by reason of the fact that he does not have to worry about the credit risk. I have seen several subcontractors carried

under because the general contractors passed out of the picture. We feel that in bidding direct to the Government, the municipality, or the State we can avoid that risk.

The CHAIRMAN. You do not find any delays in the matter of payments by the Government, do you?

Mr. PANGBORNE. No. The Federal Government, the State, and the city generally pay their bills very promptly. Or that is, they have done so up to now.

The CHAIRMAN. And I hope that situation will be unchanged. Mr. PANGBORNE. I have every belief and confidence that it will be kept up. I might add that we at times get cards on Government contracts from 20 or 30 general contractors from all over the country, and we do not know their capabilities. And every one wants better price. If we bid to the State or the Federal Government we send one proposal. We put our bid in and that is all of that. You are then either the low bidder and get the work or you are out. When you figure to the general contractor you spend months and months chasing around his office trying to convince him you are the fellow to do the job, and it terribly increases the overhead of all subcontractors. We believe that it brings about a floating of subcontractors all over the country. And we know that is the case by general contractors. I can cite specific cases: In the city of Boston. the electrical work is being done by a contractor from New Orleans. The CHAIRMAN. On what job?

Mr. PANGBORNE. The post office job. In Baltimore the electrical work was done by a contractor in Chicago. And that causes a continuous running all over the country, whereas if bids were taken separately on this work it would cause the work to remain in the localities where it really should be.

I certainly hope that this committee can see fit to report this bill favorably. And I thank you gentlemen for the opportunity to be

heard.

The CHAIRMAN. Who will be the next witness?

Mr. FITTS. Martin W. Utz, who is representing the National Association of Master Plumbers, and is past president of the New York State Association of Master Plumbers.

The CHAIRMAN. We will be glad to hear Mr. Utz.

STATEMENT OF MARTIN W. UTZ, ROCHESTER, N. Y., REPRESENTING THE NATIONAL ASSOCIATION OF MASTER PLUMBERS

The CHAIRMAN. Will you state whether you appeared before the House committee when they held hearings on this bill?

Mr. Urz. Yes; I did.

The CHAIRMAN. Have you anything different to state now, or will it be the same testimony you gave there?

Mr. Urz. It will be practically the same testimony, other than the fact that I come from a State where this law is in effect at the present time, and to say that it has worked very satisfactorily, very advantageously to the State and to the contractors.

The CHAIRMAN. All right. The committee will be glad to hear from you.

Mr. Urz. I should just like to quote what Mr. Sullivan Jones has to say regarding this bill. He was formerly State architect of New York:

When mechanical bids are segregated there is a better opportunity for the owner to buy service. In the State work we get a better class of contractors, more responsible contractors, and contractors who are prone to be interested in winning a reputation as well as profits, when we segregate the mechanical trades.

I should like also to submit as an example a condition which existed in the city of Buffalo some years ago. The city of Buffalo requested bids for some schools which they contemplated building, and included the mechanical equipment in with the general contracts. They received bids, and after they were received they decided to segregate the mechanical equipment from the general contract. When they received the second set of bids by reason of the separation of mechanical equipment there was a saving to the city of Buffalo of $84,854.

I come from the city of Rochester, where I believe they are contemplating building a new post office. We plumbing and heating contractors would like to see the mechanical equipment separated when that job comes out. I feel that there would be more enthusiasm from local contractors to go after that job than by putting the contract through a general contractor.

I believe that is all that I have to say, Mr. Chairman.

The CHAIRMAN. We thank you. Who will you have next, Mr. Fitts?

Mr. FITTS. John H. Zink, president of the Heat & Power Corporation, Baltimore, Md., and a member of the board of directors of the Heating and Piping Contractors National Association.

The CHAIRMAN. We will be glad to hear Mr. Zink.

STATEMENT OF JOHN H. ZINK, PRESIDENT HEAT & POWER CORPORATION, BALTIMORE, MD.; MEMBER OF THE BOARD OF DIRECTORS OF THE HEATING AND PIPING CONTRACTORS' NATIONAL ASSOCIATION

The CHAIRMAN. Did you testify before the House committee? Mr. ZINK. Yes, sir. And I have just three points in addition to what I said at the hearing before the House committee that I should like to have you consider.

The CHAIRMAN. Proceed.

Mr. ZINK. I am one of the fortunate or unfortunate contractors who is entirely excluded from bidding on Government work because my standard of business is at odds with the present practice.

Very definitely I think your present method is what might be appropriately termed a brokerage business, in which both the Government and the subcontractor is sold short. To me, my business requires brains, capital, credit, and a place to do business. These are entirely disregarded or disqualified by the general contractor in his set-up of bidding and doing Government work.

I should like to say that the post office in Baltimore, the city from whence I come, is a very definite and concrete example. It was