gone through with, which is supposed to be every 90 days, your minimum rate has to go up, under that formula.

Mr. PUCINSKI. You have union and nonunion contractors in the Houston area, and you have some contractors that pay as little as $2.12 an hour. You have some contractors that pay $3 an hour. How else would you do it?

Mr. HALL. I am afraid I cannot answer that.

Mr. PUCINSKI. But you are the one who is criticizing the act, over here, and if this committee is going to have any real guidelines on which to draw decisions, we should have your thinking.

And I wonder how you would recommend they resolve this dilemma. If they were to set the minimum prevailing wage in Houston in heavy construction, what protection would the contractor who pays a union wage substantially higher have in bidding on these Government contracts?

Are you suggesting, then, that we should bar the union contractor from bidding on these contracts for the very simple and logical economic reason that he could not afford to come down that low?

Mr. HALL. No, sir. We have no objection to the union. We do not particularly call our contractors union or nonunion. To us it is just a matter of whether you are closed shop or open shop contractors.

Mr. PUCINSKI. But the fact remains that this bill, or this law as it is now administered, does afford this union contractor at least some competitive protection, does it not?

Mr. KELLER. Do you see where it affords any protection?

Mr. RICHARDS. As I understand it, that is not necessarily the purpose of the law, is it?

Mr. PUCINSKI. The purpose of the law is to establish the determined, the prevailing wage structure, so that those who want to bid on a job, or have some sort of a protection, have something to shoot against.

Now, here you have people who are paying $3 an hour, on the one hand, and you have people who are paying $2.12, and nonunion operators, probably.

Mr. RICHARDS. Not necessarily, sir.

Mr. GRIFFIN. Would the gentleman yield concerning the purpose of the law?

Mr. PUCINSKI. Surely.

Mr. GRIFFIN. Maybe we can agree on the purpose of the law.

Would you also agree that the purpose of the law is to see that the Government is not a determining factor in either inflating or deflating wage rates?

Mr. PUCINSKI. No question about it.

Mr. GRIFFIN. And that in a particular area the Government is only trying to reach a prevailing rate, and not to be a factor in either pushing wages down or pushing wages up?

Mr. PUCINSKI. We are in complete agreement on that.

Mr. GRIFFIN. And if the administration by the Department has the effect of pushing wages up or down, we would agree that they are not administering the law properly.

Would the gentleman agree with that?

Mr. PUCINSKI. We agree.

But the question is this, now: How do they arrive at the prevailing wage standard? And so they take into account: What is the top

obligation that X number of employers have, what is the medium obligation that X number of employers have, what is the bottom obligation that X number of employers have; and they try to strike a prevailing balance.

Is this not correct? And is this not the purpose of the act?
Is that right?

Mr. GRIFFIN. Would the gentleman then agree with the Department that by applying an arbitrary 30 percent rule, they are administering the law in accordance with the purpose that we have agreed upon?

Mr. PUCINSKI. I am afraid I do not understand your question.

Mr. GRIFFIN. Well, the Department, as I understand it, looks to see whether there are 30 percent of the workers in a particular classification that are paid a particular rate; and if it happens to be the top rate or the bottom rate, they make the rest of the 70 percent conform to what the 30 percent receives.

Do you think that is a good rule?

Mr. PUCINSKI. Only when there is no prevailing majority. They have to start some place.

Mr. GRIFFIN. What is the prevailing majority? That is the question, is it not?

Mr. PUCINSKI. They have said when they do not have a prevailing majority they have set 30 percent as the base; but the point I am trying to make here in this line of questioning is whether or not you have any, No. 1, objections to the manner in which the Department determines the prevailing wage scale. And I gathered from you that you do have some objections. And I asked you what would be the alternative. And that is where we reached the impasse.

You did not have an alternative to offer?

Mr. RICHARDS. I believe I could suggest one, if I could answer that question, sir.

We believe that perhaps the 30 percent formula is inflationary, as apparently you gentlemen agree, at least some of you, anyway. Perhaps maybe an average would certainly be better than the 30 percent formula.

Mr. PUCINSKI. Well, then, under your reasoning, on a big contract like this, in Houston, Tex., if we were to completely follow your reasoning, then a contractor in Chicago, who has certain obligations in wage standards, would to a great extent be precluded from bidding on this contract.

Mr. RICHARDS. He may or may not, sir. I do not know. And as I understand it, that was not the intention of the Act, to protect the contractor in Chicago or in Houston.

Mr. PUCINSKI. Here we have a national contractor bidding. He bids against the prevailing wage structure in that particular area where the job is going to be done. But the Labor Department then tries to establish a reasonable, logical prevailing wage base, against which he and the rest of the country's contractors shoot.

Is that not correct?

Mr. RICHARDS. I would not think so. I do not understand that as the purpose of the act.

Mr. GRIFFIN. Would the gentleman yield to me again?

Mr. PUCINSKI. Surely.

Mr. GRIFFIN. I was interested in his great concern about the ability of the Chicago contractors to bid, because I well recall that the distinguished Congressmen, Davis and Bacon, who sponsored this law, were concerned about the local workers, the local contractors and local laborers.

Mr. PUCINSKI. Surely. There is no question about that.

Mr. GRIFFIN. And I wonder what effect the application by the Labor Department of building rates and their arbitrary rules has upon local contractors and local laborers in most of the situations that we are concerned with, including the Houston case.

Mr. PUCINSKI. Yes; but I think the gentleman will agree also that in the 30 years since this bill has been in existence, the construction picture has changed substantially.

Mr. GRIFFIN. Maybe we ought to change the law, too.

Mr. PUCINSKI. We have had contractors in the past, I am sure, who have come up from Texas and bid on Chicago area contracts. We have no objection to this. If they can do the job better and they have the machinery and they have the know-how, fine; because you have national contractors who are today bidding. I believe there is some construction going on here on the Capitol by a Philadelphia firm.

So the whole purpose of what we are discussing here is how we can protect the prevailing wage standard in the local community where the job is being done; and we still have not gotten an alternative from you gentlemen.

Mr. GRIFFIN. I understood the alternative suggested was that he take an average.

Mr. PUCINSKI. I believe they are taking pretty much of an average, here, from the figures he cited.

On the laborers, they pay from $1, according to your figures—you gave me figures at the minimum wage that you have on your chart, there $1 for a laborer in heavy construction; and the maximum is $2. And the Department has set $1.35.

Now, do you have any quarrel with that figure?

Mr. ROOSEVELT. I think if the Chair may try to clarify a point here, especially for Mr. Griffin, if he does not have to go for a minute: I think that the Department in this instance is not making and taking a mean between the building trade rates and the heavy construction rates. What they are doing, and what they have done, is to say that in this particular type of situation the rates-and they decided in this instance the building rates apply.

They did not take into consideration the highway construction rates at all. They never came into the determination. And I gather from the colloquy between the gentlemen

Mr. GRIFFIN. I think the chairman is right. We are off the point in this particular case.

Mr. PUCINSKI. We are going to get to that in a minute. The quarrel here, and what I am trying to find out, here: You do not necessarily quarrel with the Labor Department in its prevailing wage determination. In this instance, on the space project in Houston, Tex., your quarrel is with their basic determination that this is general contract work rather than heavy construction work.

Is this not correct? In other words, if the Department of Labor sustained the Corps of Engineers and said, "This is a heavy con

struction job," would you then have any quarrel with the wage structure established by the Corps of Engineers?

Mr. RICHARDS. I think we are talking about two different things, sir. Mr. PUCINSKI. No; we are not. We are talking about the same thing.

Mr. RICHARDS. The 30-percent rule is one thing. That is a general thing, not necessarily applied exclusively to the Houston space case. That is something that is applied all over the United States, as I understand it, according to the rules and regulations of the Department of Labor. Now, that is one thing, sir.

Now, the thing that we are concerned with in Houston-where this 30-percent rule would be secondary-is the pattern of wage rates that they establish there; namely, the building wage rates, instead of the so-called engineering construction or highway and heavy.

Mr. ROOSEVELT. The Chair is going to interrupt the proceedings for just a minute.

(Discussion off the record.)

Mr. ROOSEVELT. Now we will go back on the record.

The Chair will have to say that he is going to have to invoke the 5-minute rule in about 2 minutes.

Mr. PUCINSKI. I merely want to find out from these witnesses: We are talking about the same thing. We are talking about the Davis-Bacon Act.

Now, the general contractors in Texas have had some very strong opinions about this piece of legislation.

Setting aside the basic quarrel here as to whether or not the Labor Department should have ruled this general contract as a heavy construction and we went over this very thoroughly in Houston, as the record will show-I was merely trying to find out whether or not you have any significant disagreement with the manner in which the Department establishes the prevailing wage structure, once they have taken that action.

Now, I know that you are opposed and you object to the final decision, here, where they rule this belongs to general contractors instead of heavy construction. But aside from that, I was more interested in finding out from you gentlemen whether or not you have any quarrel with the formula the Department uses in establishing the prevailing wage structure, if they had ruled that this was a heavy construction job.

Mr. RICHARDS. Now, we are just disregarding the Houston space case?

Mr. PUCINSKI. Yes.

Mr. RICHARDS. In other words, we are speaking in general terms; is that correct?

Mr. PUCINSKI. Yes.

Mr. RICHARDS. I think that in Mr. Keller's testimony he has made two suggestions. And I might respectfully point out we do not exactly have a quarrel; and I would like to point out again, and supplement Mr. Keller's statement, that we certainly respect the gentlemen in the Department of Labor, and their integrity, and their objective and desire to administer the law.

I believe we have two basic suggestions. One is some sort of improvement in the 30-percent rule. And I mentioned possibly an average, instead of 30 percent.

The other is, and especially in Texas, that we have objection to what they did in the Houston case, and in all of these others, actually, that we have mentioned here. And that is where a contract comes along that is nothing but highway and heavy construction, and a separate contract by itself, with no building construction in it-we object to them putting the building construction wage rates on that. Primarily, their reasoning, as I understand it, is because a building construction contract is to follow.

In the case of the Houston situation, sir, actually, I do not suppose anybody, not even the designers of the project, really knew exactly what was coming, because that is still in the process at this time.

Mr. PUCINSKI. I am going to violate the first rule. The first rule, you know, is that you never ask a witness a question unless you know the answer. I am going to violate that rule and ask you: Do you think the Davis-Bacon Act should be repealed?

Mr. RICHARDS. We have not recommended that in this testimony, sir.

Mr. PUCINSKI. Thank you.

Mr. RICHARDS. We have recommended that it could be more efficiently administered by the operating agency concerned rather than the Department of Labor.

Mr. PUCINSKI. I think you will find a great deal of agreement among the committee in that respect.

Mr. ROOSEVELT. I will not say I have made up my mind.
The Chair recognizes Mr. Hiestand.

Mr. HIESTAND. I am very impressed with your testimony, particularly that part of Mr. Keller's testimony where it is indicated that the local firms were excluded from bidding by reason of the rate being established. That is a pretty effective argument, in my judgment. I would like to ask, however: Do you know, quite apart from these cases, where contractors have protested wage rates that have been established? After they have been established, have they protested?

Mr. ROOSEVELT. If the Chair could just clarify that so that I can understand that, I think the point of the question is: Without reference to whether it is highway construction or building trades, do you know of instances in which the contractors, after the prevailing rate has been established, has been announced-have there been many complaints about the manner in which it was established?

Mr. RICHARDS. Yes, sir. Yes, sir, we have to very often question the decisions of the Department on various wage decisions, if I understand your question correctly.

Mr. HIESTAND. Do you get satisfactory adjustments?

Mr. RICHARDS. Well, of course, obviously we have not, in the Houston case. In many, many cases we have. In some we have not. Mr. HIESTAND. But then there have been many, many, to use your words, objections?

Mr. RICHARDS. Yes, sir.

Mr. ROOSEVELT. There have been many, many adjustments, have there not?

Mr. RICHARDS. Yes, sir, in all fairness, there have been many, many adjustments, especially in the last 5 or 6 years.

Mr. GRIFFIN. Will the gentleman yield to me?

Mr. HIESTAND. I will yield to the gentleman from Michigan.