Mr. DONAHUE. Thank you, sir.

At the conclusion of yesterday's testimony, I felt somewhat as if, for purposes of this hearing, I should go downtown and get myself a devil's costume, complete with horns and cloven hooves.

But then I hastened to remind myself of the enlightening and rewarding experiences that I had with members of this subcommittee on the tour of missile bases which they took.

I desire to add my compliments, as a person who is on the scene, to those of the Secretary of Labor, for the remarkable job which the committee did, the hard work-I know it was hard, because I had to participate in it right along with the committee-in examining all of these missile sites, in examining all of the persons, contractors, unions, Government contracting officers, who were involved in all of these different places, holding hearings in an informal way, such as would produce the true facts in their true light.

And I believe that is what the committee was able to accomplish, and I think it has served as a very good and stable introduction to the series of hearings which the committee now in its good sense intends to continue, to look into the administration of this act.

Now, our purpose, of course, in availing ourselves to the committee, is to insure that you are further familiar with our policies and methods in administering this act. And so I shall begin at the beginning. I shall begin with the assumption that none of us know about what has been going on under this statute during this administration and during prior administrations as well.

The Davis-Bacon Act, of course, as you know, Mr. Chairman, is administered in the Office of the Solicitor of the Department of Labor. It is administered by a Wage Determination Division. That Division has personnel of some 75 people. Between 25 and 30 of those are attorneys. The rest are clerical personnel.

There are two Branches in the Division. One determines the wage. That Branch is composed of four different sections for four different parts of the country, divided up geographically, and it has a staff of wage determiners and attorneys.

Each one is assigned to a particular area of that section. He has command over, you might say, a certain amount of the counties in States in his territory. And it is his duty, and the duty of those who work under him, to keep track, so far as he possibly can, on every voluntary basis, of what wage rates are being paid in the construction industry and in the counties which are under his immediate supervision.

Now, I remind the committee at the outset that the Davis-Bacon Act applies to construction, alteration, and repair of Government public buildings and public works of the United States and of the District of Columbia, and to contracts in excess of $2,000 for construction, alteration, and repair of such public works and public buildings.

The Secretary of Labor has the responsibility, under that statute, to determine and to insure that there is contained in the contract the wage rates which prevail for laborers and mechanics on projects of a character similar to the contract work in the city, town, village, or other political subdivision in which the contract work is to be performed.

That contract work covers a tremendous variety of construction activity today. The Davis-Bacon Act applies not only to Federal contract construction, but there are some half a dozen added statutes stimulating or providing for construction work, which incorporate the Davis-Bacon Act and extend it into loan programs and to federally insured programs and to programs supported by grants to the States, such as the Federal Airport Act and the Hill-Burton Hospital Survey and Construction Act.

And collectively, these laws require contract wage minimums for a variety of projects, including dams and highways and airport runways and airports and buildings, sewerlines, waterlines, apartment houses, and wharves and levees and revetments; and missile sites are not the least of the problem, as the chairman and the members of the committee well know.

The Secretary has told you, and I think that it is well for us to keep in mind, again, that wage determinations run in the vicinity of 45,000 to 50,000 a year now, which is a tremendous amount of determinations. How do these wage determiners proceed in their sections to issue these determinations?

Now, first and foremost, before any requests for determinations come in, we must address ourselves to the enormous task of collecting wage data on a continuing and constant and a voluntary basis across the spread of the Nation, in Alaska and in Hawaii, too. That is a constant and continuing process.

First we use the Government agencies to give us information. Whenever they ask for wage rates, we encourage them to give us their opinions, whatever they are worth, as to the wage structure in the area of contract performance.

For example, the Corps of Engineers or some other contracting agency, in estimating what is the proper amount for a contractor to bid on a job, also figures what wage rates are, and loads that into what their estimated contract cost is.

When they do that, they have exercised a judgment. We are very glad to have the benefit of that judgment, and to have them submit to us their ideas on what wage rates are.

Second, the contractors' associations are a very valuable source of information on wage rates in all of the various counties in the United States. We consult them. We urge them to get their local chapters to provide us with continuing information, whether it is on a negotiated union basis or whether it is on a nonnegotiated open shop basis. That information is sent to us. What we like first and foremost is payment information. We want to know not somebody's estimate of what the wages are, but we want the facts as to what wages are paid to how many employees on what kind of a project. That is the basic information.

The unions give us their negotiated contracts. But we do not rest on that. We also insist that those contracts should be backed up by actual evidence through their contractors of payment of the wage which the contract reflects, so that we know that the contract is not just a piece of paper; it is also something which operates in real life. There is an additional source of information which we seek, private organizations, giving to the public and to the Government, on a contract basis, information on projects which are being let out on bid or which are being performed throughout the country.

This service we have found very valuable. What we do: We find out where these projects are, who the contractor may be, and then we write him a letter personally.

We have a form letter for this purpose-I submitted it for the record-asking him how many mechanics, in which categories, he has employed, and what wage rates he is paying them, on that particular project. We send out some 25,000 of these requests in the course of a year.

Now, that is the basic process.

Let me describe to you what happens when a wage request comes in from a contracting agency.

These requests are supposed to come in 30 days, at least, before the project commences, to give us an adequate time. We looked into the matter to see how frequently this occurs. Actually, on an average, the contracting agencies come to us 15 days before the date of letting the contract out to bid, and sometimes it is even shorter than that. Sometimes in emergencies we have even to give the information over the telephone to the agency, and get it down to them, so that we will not be responsible for holding up the procurement of the Federal Government.

When this request comes over to us, it goes to the wage determination section for the part of the country for which that wage determination section has responsibility.

The type of project, the indication of the type and classification of work as needed, is stated on the request from the contracting

agency.

We look at the place where the construction is proposed, and we look at our wage data, whatever it may be, and determine as accurately and precisely as we can, on the basis of the information we possess, what are the rates on projects of a character similar to the contract work.

Mr. ROOSEVELT. May I, if you do not mind, ask a question?
Mr. DONAHUE. Certainly. I would be very glad to have it.

Mr. ROOSEVELT. Are these revised on a regular basis? In other words, I noticed in the Secretary's testimony that the time period to which they hold good, instead of 90 days, will now be 120 days. Now, do you have a regular revision period every 3 months or every 4 months in order to keep this flow of information up to date, in order to enable you to do this? Or do you just do it as you get to the revision?

Mr. DONAHUE. We do it as we get to revision. We do it on a continuing basis; not on a periodic basis, but in response to the demand and to request, always seeking to improve the amount of information available to us.

We have tried to encourage not only the unions but the contractors' associations to keep stimulating this information, to be sent in to us on a current, going basis.

And we have many parts of the country, you might say, organized in that particular way. That is, we have got the contractors in the habit of sending us the new information whenever they get it, and the contracting associations to do that, and also the unions. to do that; so that we receive data on a continuing, flowing basis.

When a request comes in, we look to see whether we have enough information for that area; and if we do not have it, then, and at that

point, we make specific requests of the unions and the contractors in the area, the contractors' associations nationally and locally, to give us more information before we try to look at a wider area.

In other words, as to the locality for the prevailing rate, we first look at the smallest area which will give us substantial wage sampling, so that we will have an accurate picture as to a true prevailing rate. If that area is not productive, we seek more information on that area. If more information does not produce more projects and more employees employed in the area, then we seek outwardly and concentrically to search wider areas, so that we will pick up more projects; never at any point as a general rule searching back earlier than a year before the point of inquiry, and the request for the determination.

Normally speaking, the locality which we use under the statute is the county, but upon careful research of the statute itself and its legislative history, we have determined that Congress intended by its actions under the Davis-Bacon Act to provide the Secretary of Labor with reasonable flexibility in his search for a prevailing rate. He is not rigidly bound in that process, in accordance with our feelings in this matter.

Mr. GRIFFIN. Mr. Chairman, for purposes of clarification, may I ask a question at that point?

Mr. Donahue, you say that the Secretary of Labor has determined that Congress intended in the statute, for purposes of flexibility, to allow the Department of Labor to go beyond the county if it saw fit to do so. What if the Secretary is wrong?

Mr. DONAHUE. What if we are wrong?

Mr. GRIFFIN. Yes. What court can say you are wrong?

Mr. DONAHUE. There is no court appeal, as the Congressman well knows, under the Davis-Bacon Act.

Mr. GRIFFIN. In gathering this information in your files for various areas, what if an interested party, such as a school board, for example, or a local hospital board of directors, thinks that you do not have enough information, or thinks that you have not done a very good job of accumulating the information for that particular area? they have access to your files?

Do

Mr. DONAHUE. They would indeed have access to our files, Mr. Griffin. And that is not an infrequent situation, at all.

I had a case out here in Virginia just recently. Chairman Smith of the Rules Committee called me up and said that they are building a hospital out here in Manassas, and he believed that our wage determination did not reflect accurately the rates for that particular project.

Mr. GRIFFIN. He is a Member of Congress. Is he a little different? Or not?

Mr. DONAHUE. No, I would not regard him as any different.

I would say emphatically to the Congressman if it had been a member of the hospital board, he would receive exactly the same treatment. Mr. ROOSEVELT. I think the record should show he is a rather influential Member of Congress.

Mr. GRIFFIN. For purposes of information in the record, and so that others would not have the impression that this information is available on a regional basis, do I understand that the regional sections of your Department are regional only in their operation, but they are physically located in Washington?

Mr. DONAHUE. That is exactly correct.

Mr. GRIFFIN. So that if a person in Timbuctoo or California wants to check the information in the file for his area, he would have to come to Washington and ask you for permission to look in your file; is that correct?

Mr. DONAHUE. Well, if he wanted to see our file, that is so; but I would like to say this. We have many situations of confusion understandably arising under this statute as to what is a prevailing rate, and where it is insisted within a locality that the wage rate is different from what we are fixing, it is not infrequent that we send somebody right to the spot to find out. And we have done that time and again to perfect our information. Both of us cannot be right; in other words, let us find out what the facts are here.

Mr. ROOSEVELT. Mr. Griffin has brought up a point on which I would like to get some information.

If somebody, in deference to my friend Mr. Martin, wants this information, he must come to Washington. And is there not some possible consideration to be given to the maintenance of the Department's information in slightly more regional areas than Washington is? Mr. DONAHUE. I heartily agree with the chairman. I think we should give consideration to any proposal that might improve the access to our information and our ways of determining what prevails. Mr. PUCINSKI. Mr. Chairman?

Mr. ROOSEVELT. Mr. Griffin has the floor. Will you yield?
Mr. GRIFFIN. Yes.

Mr. PUCINSKI. I wonder if for my own personal information you would tell us just what did happen on that inquiry by Judge Smith. Mr. DONAHUE. Yes, I will, Mr. Pucinski. We looked into it, and we found out that the wage determiner had placed, as Judge Smith had told me, a negotiated Washington rate there; and when that was told me, I said: "I don't believe that the negotiated Washington rate prevails for industrial and commercial construction in Prince William County," where this was. So we sent a man out to make a survey, and he found that to be true, with one exception, and that exception was down in the corner of the county, where there was a steam plant being built for the Virginia Electric Power Co., and there were some union wage rates on that job.

We weighted them into the picture, and we got something that was perhaps a little different from the normal nonnegotiated rate, but which had to take into account the workers who were being employed in that county on that other job.

That was the result.

Mr. PUCINSKI. Did you change your wage determination?
Mr. DONAHUE. We changed the wage rates accordingly.
Mr. PUCINSKI. Downward?

Mr. DONAHUE. Downward; that is correct.

Mr. PUCINSKI. Now, has this same experience occurred in other wage determinations where someone not quite as influential as the good Judge Smith had called your attention to perhaps some factor that you were not aware of? And have you changed your determinations downward in other instances?

Mr. DONAHUE. Frequently and repeatedly; where we have found that we have made mistakes, we change it both downward and upward, depending on the kind of information which we have received.