said that, that we, as the record indicates, where errors have been committee, have not hesitated to correct errors when they have come to our attention.

And mostly I would make a personal plea for this: that the people involved in the program will of course reserve the right to disagree with us, because it is a free country, and they have a right to disagree with us, but will do so with the concept in mind that the law is being administered fairly and impartially by officials of the Government, who have only one project in mind, and that is to administer the law fairly and impartially.

Mr. Donahue and I are relying, by and large, upon the established civil servants of the Department in carrying out this program-people who have served the Department throughout various administrations, throughout the years. We have made very few changes in the personnel of the Department in this area, and in fact, in most areas, since I have taken office.

I think, and it is not only a thought, because I have found, that the civil servants of the Department-and I never checked the date when they were employed, or the administration under which they have been employed-are doing the best that can be done to administer the programs fairly and impartially, and, as I said, in accordance with congressional intent.

We welcome suggestions for improvement of these programs, and we welcome frank discussion.

I do not know that we always welcome criticism, but we understand that we are subject to criticism. We do not resent it. And we hope to profit by it.

It is in this spirit that I thought I wanted to appear before you this morning, Mr. Chairman, and pledge the cooperation of the Department to these hearings that you are holding.

Mr. ROOSEVELT. Thank you, Mr. Secretary. We are very grateful for the time and trouble which you have taken to be with us, and also for the help that Mr. Donahue has given us in the past, and which I know he will give us in the future.

Some of the matters you have, of course, touched upon, and I can assure you that we will want Mr. Donahue to come back and talk about the possible review features which have been quite widely discussed. There are also a number of other things which bear upon specific matters which in all probability you would rather, I suppose, we discuss with Mr. Donahue.

Secretary GOLDBERG. That is correct. Mr. Donahue is my trusted Solicitor, and he is in charge of administering the program, and I fully support what he has done, and he is, of course, much more familiar with the details of operations than I.

Mr. ROOSEVELT. In view of that, I do not want to preclude the members of the committee, because you may have to leave us before Mr. Donahue has concluded. Perhaps the members would want to inquire. Mr. PUCINSKI. I join in welcoming you, Mr. Secretary. There is more and more talk around the country that you, Mr. Secretary, are the anchor man of the Kennedy administration, and as a fellow Chicagoan, let me say that we are very glad to hear this.

One thing that you in your summary have not talked about: Yesterday there was a great deal of discussion here about who protects

the public interest. I notice in your prepared statement you do make reference to this, and I wonder if we could have a clear statement from you, sir, as to the Department. I maintained here yesterday that the Department really looks after the public interest. I wonder if you would care to elaborate on that before we proceed.

Secretary GOLDBERG. Thank you for your kind and undeserved reference to me although for a moment I was troubled: An anchor man in the Navy, you know, is the last man on the totem pole.

Mr. PUCINSKI. No. You know what I mean. As an Air Force man, I would not understand.

Secretary GOLDBERG. I have been an Air Force man, too, so I regard that to be a compliment.

Obviously, as I said in my statement, which I did not read, the public interest in this area, like in all areas, is the paramount interest, and the Department is the responsible agency of the Government charged with protecting the public interest in these matters. The public interest has been defined by the Congress, and we are trying to carry out that definition of the public interest which Congress defined.

I agree with the definition of the public interest that Congress has defined, and that is that the public interest of the United Staes is served by seeing to it that Federal funds should not be used to depress local wage standards. Now, there is some misconception about this. Some people think that the only public interest involved in a wage determination is for Federal construction to be built as cheaply as possible. If Congress had meant that, they would have said otherwise. But Congress has not said that.

Congress has said, "We want Federal construction to be built as cheaply as possible, but not at the expense of depressing local wage standards." So that this is the definition of the public interest which Congress has maintained throughout the years, and I think it is a sound concept.

It would obviously be very bad public interest for the Congress, in my opinion, at least, unless this Congress wanted to change that, to say that Federal funds should be expended in such a way as to depress the prevailing local wage standard in a particular area. This would make the Federal Government really an employer or a supporting employer, who operates at substandard wage conditions.

This is not the philosophy of the Congress.

Mr. PUCINSKI. Finally, I was very happy to hear you say here this morning that we would hear more on this aspect of thinking of some form of review, administrative review.

As you know, there has been considerable discussion and debate within the committee whether or not this review should take the course of judicial review. And I have maintained that this would, especially in the light of your figures of 50,000 wage determinations, create a completely hopeless and impossible situation, and I am delighted to hear that the Department is considering some form of speedy administrative review where these parties have a chance at least to make their views known if they object or dissent or disagree with the Department's determination. This is very encouraging news to us this morning, sir.

Thank you very much for being with us.

Secretary GOLDBERG. Thank you, Congressman.

Mr. AYRES. I do not want to detain you, Mr. Secretary.

It is always a pleasure to have you before the committee.

I was just talking to counsel, here, trying to get my own thinking straight on the application of the act. Let us take steel, for instance. In the manufacture of an I-beam, the manufacturer of the product itself, of course, does not come under the act.

Secretary GOLDBERG. It comes under the Walsh-Healey Act, not the Davis-Bacon Act, if he produces for the Government.

Mr. AYRES. I will not say we have all agreed, but it has been agreed, that there is not going to be any increase in the steel industry as far as wages are concerned; but the minute the I-beam leaves the mill and is assigned to a construction job, when does the way for the handling of that I-beam become effective? When it hits the construction job? When do you take over?

Secretary GOLDBERG. Again, this would depend on the factual circumstances as to when the project becomes a construction project: and I know there are a lot of rulings applying this principle to specific projects.

The theory is that obviously, in the manufacturing end, Congress has provided another statute dealing with that subject, and then Davis-Bacon is a statute designed to deal with construction activities.

And I think that I have read many of the decisions, and Mr. Donahue may want to say a word about it, but it depends essentially upon when this project becomes, when you look at it in its totality, a construction project.

Charlie, did you want to add to that?

Mr. DONAHUE. Yes, Mr. Ayres. I think I might be able to clarify this a little bit, if you can bear with me.

it

Normally, when the steel goes to the job, then the construction work is in process, and the Davis-Bacon Act will apply. When does go to the job? It is purchased by the contractor, who will install it. It is brought to the vicinity of the job site. Very frequently, that contractor will lease or secure for himself an area of land where he can deposit his materials. Sometimes, and quite often, his workmen fabricate that material at that particular spot, near the job site of actual construction.

We will consider not only the construction project itself, but also the laborers and mechanics who are working at the nearby place, where he has stored and is working on his materials, as subject to the Davis-Bacon Act.

Mr. AYRES. In other words, if he transfers the I-beam near the construction site and assembles it there, or fabricates it, then Davis-Bacon would apply?

Mr. DONAHUE. That is correct.

Mr. AYRES. But if he brought it outside the site and fabricated it there, and then put it on a car, then it would not apply?

Mr. DONAHUE. More than likely you are correct. It all depends on the circumstances of each case. He would not normally do what you suggest, I might add.

Mr. AYRES. There are certain circumstances where he would. For instance, take sheet metal duct work. They can send the sheet in to the local area and then have it fabricated there, or they can have it fabricated just outside the mill.

In other words, we have a situation where the same type of work is being done, or possibly could be done. In one instance the act would apply, and in the other instance it would not.

Mr. DONAHUE. That is probably true. It is possible, yes, sir.

Mr. ROOSEVELT. We have two members of the full committee who are really ex officio. I notice the chairman of the full committee has just arrived.

Mr. Chairman, do you care to say a word?

Mr. POWELL. I want to welcome my old friend.

Mr. ROOSEVELT. Mr. Griffin?

Mr. GRIFFIN. I am glad to join my colleagues in welcoming the Secretary here.

Mr. Secretary, you were very careful to state your understanding of the policy underlying the Davis-Bacon law: that Federal funds should not be used to depress local wage standards. Is it in the public interest if Federal funds are used to inflate local wage standards?

Secretary GOLDBERG. No, I think the policy of the law should be, as expressed by Congress, that for the work that the Federal Government does or contracts for, prevailing wages are to be paid.

Mr. GRIFFIN. In other words, the Federal Government should not be a decisive factor in either inflating or deflating the wage rates in a given area. The Federal Government should pay the prevailing wage rate. That is our general understanding of the policy of the law, is it not?

Secretary GOLDBERG. That is correct. That is what the statute provides.

Mr. GRIFFIN. And if the Labor Department, in administering the law-and of course I do not expect you to concede that this is the case, but if the Labor Department were so administering the law as to be inflating local wage rates, or depressing them, the Department would not be carrying out the intent of Congress?

Secretary GOLDBERG. Either way. Our job here is to make sure that the wage which is paid is the prevailing wage for the corresponding class of laborers and mechanics employed on projects of a similar character in the vicinity where the work is to be performed.

Mr. GRIFFIN. Mr. Secretary, I may be unduly concerned about one aspect of our hearings, but I think that some assurance might be helpful. We are exploring a legislative area in which different agencies of the Government, at least to some extent, have conflicting interests. The Corps of Engineers, for example, may not always agree with the Department of Labor in a particular wage determination in a given situation; or the contracting officer of a branch of the armed services may disagree with the Labor Department.

We are also faced with the problem that some of the contractors who may have complaints do a lot of construction work for the Government. And I have noticed, or at least suspected, a certain amount of reluctance on the part of some of these people to come before our committee and to state their case.

Certainly I know that, as far as you are concerned, there is no reason for any reluctance on the part of any person, in another agency of Government or anywhere in the business world, to come before this committee.

Secretary GOLDBERG. I want to make as categorical a statement as I can make.

I think it is not only the right but the responsibility of anybody involved in this area to come before this committee of Congress and frankly express their views. And for a frank expression of views, or even very vigorous criticism, there will be no retribution of any kind. This is not my philosophy in administering the Department, and never has been. We are not thinskinned about it. I have stated that upon a review of the activities of the Davis-Bacon Act since I took office, I believe. But I have also stated I think the committee is doing a good job in having these hearings, and there is no damper upon any agency of Government, and certainly upon any private individual, coming in and expressing himself, and no action will be taken of any kind that will prejudice anybody.

Mr. ROOSEVELT. If the gentleman would yield to the Chair a minute, I think it should be placed in the record that no individual invited by the committee, no private individual, has refused to come before the committee. No public agency has refused to come before the committee, although some of the public agencies have stated that in their view their interest is very subordinate and that their major view should be stated by either the Air Force or the Corps of Engineers. These are the two primary contracting agencies, I think it would be fair to say, that are involved in the matter.

And in each instance, full cooperation has been given to the committee by both the Corps of Engineers and by the Air Force and the Defense Department. I just want to make the record clear that there has been no hesitancy on anyone's part to come before us.

Mr. GRIFFIN. I think that is a fair statement by the chairman. I appreciate it. However, recognizing the rather delicate and difficult area into which we are going, it is well to clear the air of this sort of possibility. As I indicated at the outset, I was sure of the response of the Secretary of Labor, and that his Department would, and should, cooperate with this committee.

And, I am sure the Secretary would condone no activity on the part of any subordinate in trying to discourage any presentation before this committee.

Secretary GOLDBERG. You can be very sure of that. As a matter of fact, Mr. Donahue, who represented me, participated in a meeting at the Bureau of the Budget of the Government agencies who might be involved in this, and Mr. Donahue encouraged the representatives of the Government agencies to appear here and discuss frankly what their problems might be.

Mr. ROOSEVELT. May the Chair also say that we hope these questions can be rather limited.

The meat of the matter, if I may say so, Mr. Secretary, we have to find from Mr. Donahue.

If we would, wherever we can, defer our questions to Mr. Donahue, I would appreciate it.

You may proceed, of course, in asking any questions you have in mind.

Mr. GRIFFIN. Mr. Chairman, I just wanted to indicate that the minority, to the extent that I can reflect the views of the minority, is not going to be satisfied with some Under Secretary of the Air Force or some top-level official in the Corps of Engineers being the only witness in a particular situation if we think that a local contracting officer or