CONGRESSIONAL RECORD - SENATE

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• Document Creation Date: December 22, 2016
• Document Release Date: February 23, 2010
• Sequence Number: 4
• Publication Date: June 4, 1985
• Content Type: MEMO

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S 7314
C NGRESSIONAL RECORD -SENATE June 4,
osse. We must get it right the first time.
A historical lack of program stability in By working together, with a genuine com-
space contracts In terms of funding and re- mitment to improve quality and productivi-
quirements has hampered investment in ty. I firmly believe that we can regain our
new technology to improve productivity. qualitative edge and restore the public's
However, the Air Force now is fostering sta- confidence and trust. We must succeed In
bility with acquisition initiatives like base- this endeavor because the alternative. quite
lining and multiyear procurement. simply, is unacceptable.
We have had great success with multiyear Mr. BUMPERS. Mr. President, what
procurement, including six'major programs is the parliamentary situation?
under multiyear contracts instead of annual The PRESIDING OFFICER. Under
buys. Three of these programs include space
systems: the Navstar Global Positioning the previous order, the Senate will
System, the, Defense Meteorological Satel- now temporarily lay aside the pending
lite Program. and the Defense Satellite amendment, and the Senator from
Communication System. Massachusetts [Mr. KENNEDY] is rec-
Although space systems are playing an in- ognized to offer an amendment to
creasing role in our nation's warfighting ca- strike the Davis-Bacon provision.
pability, I realize that-the space business is Mr. BUMPERS. Is the amendment
still largely characterized by high-cost piece that is being laid aside the Kerry
parts and low-volume system acquisitions. - amendment?
However,-we still must find ways to reduce
costs. If there are low-cost ways to automate The PRESIDING OFFICER. That is
production, even for limited quantities of correct.
space hardware, we need to find them. One Mr. BUMPERS. Is there a time
Place, to start is by taking a hard look at agreement on the Kerry amendment
computer-aided manufacturing applications and the Kennedy amendment-a time
in all facets of space system production. certain to vote?
Despite the fact that space systems are The PRESIDING OFFICER. There
bought in small quantities, improved meth-
ods for manufacturing them are not con- is a 1-hour time agreement on the
tract-specific. Therefore, a space systems Kennedy amendment and a 40-minute
producer who invests in versatile machining time agreement on the Kerry amend-
systems like robotics, automation, and com- ment. There is no time certain for a
puter-aided manufacturing has the ability vote.
to diversity and become more competitive in Mr. BUMPERS. Following the dispo-
the marketplace. For example, one aero- sition of the Kennedy and Kerry
space company modernized a facility that amendments, are there any unanimous
makes integrated circuits for tactical mis-
siles. That same facility now can make inte-
grated circuits for space and C3 systems. schedule for the remainder of the
Modernization pay dividends. DOD bill?
Much of what I have said here about the The PRESIDING OFFICER. Yes.
need for high quality and increased produc- Under the previous order, upon the
tivity'in our nation's defense industry has disposition of the Kerry amendment,
been said before. In fact, these very issues the Senator from Wisconsin [Mr.
were discussed at length a little over two PROXMIRE] will be recognized to offer
years ago in this same publication. Since amendment No. 119.'-
then, many of us in the defense acquisition Mr. BUMPERS. Is that got to be
business have repeated the same themes in
countless speeches, articles, and meetings after a vote on the Kennedy amend-
with defense industry representatives. Some ment?
companies have responded to our call for The PRESIDING OFFICER. After
action; many have not. As a consequence, the vote on the Kennedy amendment
our industrial base still faces problems that and the Kerry amendment.
require vigorous action to ensure timely and Mr. BUMPERS. Are there any
lasting resolution. orders following the Proxmire amend-
,
L,et's fact facts. At one time there was no went?
question about the industrial superiority of The PRESIDING OFFICER. There
the United States. We were the world's sup- are not-
and of technologically advanced products, are n BUMPERS. I thank the Chair.
and our defense industry produced weapon , Mr. systems that were superior to those of other 'Mr.. GRAMM. Mr. President, a par-
nations. Today. many of our systems are liamentary inquiry.
still the best in the world, but our margin of The PRESIDING OFFICER. The
superiority is slipping. Senator will state it.
It's time to get back on track-and with- Mr. GRAMM. Is there a unanimous
out delay. Air Force Systems Command is consent request pending that the Ken-
doing its pant in what must be a mutual get-
we in the defense-industry team are con parliamentary inquiry, the unani- time as I may use.
n a very re sense, our national security would' take unanimous consent. The sent that the previous inquiries not be
is at stake. Our potential adversary contin- amendment is not pending at this counted against the time.
andd to the quality outproduce
of oe us his in military setime-relating to the yeas and nays, The PRESIDING OFFICER. With-
At systems is on n the the rise. At the -same time, the American people are. specifically. out objection, it is so ordered. .
getting fed up with reports about the way Mr. GRAMM. So, further making a Mr. KENNEDY. I yield myself such
even greater challenges of the future.
I The PRESIDING OFFICER. That limitation,' and I ask unanimous con-
part of Industry so we can get on with solv- time that- both sides have used up Mr. KENNEDY. Mr. President, I un
ing the problems of today and meeting the their time? derstand that we have a 1-hour time
.ideas with our partners in industry We are there be a yea and nay vote, and that sufficient second.
looking fpr`a complementary effort on the the yeas and nays be ordered at that The yeas and nays were ordered.
A LAU L LLLX71LJll\ ..7 Vr r ".I'M
J.rta.
1SEFDMENTNO. 2344"
as follows:
The Senator from Massachusetts E;
KENNEDY]. for himself, Mr. 8recrm and t
'
PACxwooD, proposes an amendment nuiq.
bored 254.
Mr. KENNEDY. Mr. President, I as>t
unanimous consent that reading of the
amendment be dispensed with.
The PRESIDING OFFICER. With.
out objection, it is so ordered.
The amendment is as follows:
Beginning on page 74, - line 3, strike all
through page 76, line 13.
Mr. KERRY. Mr. President, a parlia-
mentary inquiry.
The PRESIDING OFFICER. The
Senator will state it.
Mr. KERRY. Mr. President, it was
my understanding, although there was
not a unanimous-consent agreement
with respect to the yeas and nays-
perhaps the chairman of the commit.
tee, the manager of the bill,' can clari.
fy this-whether .or not there was an
understanding that there would be a
proceeding to the yeas and nays with
-respect to that amendment.
The PRESIDING OFFICER. Any
Senator has the right to request the
yeas and the nays at an appropriate
time.
Mr. KERRY. It is my understanding
that we were proceeding along an
agreement that we would do that. Is
that clear?
Mr. GOLDWATER. My President, I
think the yeas and nays were ordered
on the Kerry amendment.
The PRESIDING OFFICER. The
yeas and nays were ordered. On the
Kennedy amendment there has been
no order for the yeas and nays.
Mr. KERRY. Butwith respect to my
amendment, I believe the yeas and
nays have been ordered.
The PRESIDING OFFICER. ' The
Senator from Massachusetts.
Mr. KENNEDY. Mr. President, I ask
for the yeas and nays.
well effort. We are looking for ways to work neuy runendment be m order, that The PRESIDI G ' V!'11'11(;hat. Is
smarter, not harder, and we're sharing our there be 30 minutes to each side, that there a sufficient second? There is a
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CONGRESSIONAL RECORD -SENATE b 73
osts.
ect
c June 4, 1985 amendment, tion 15 Mr. President, this behalf of ealiy rejected by the Reagan _adminis- key construction ~oT s differen c Than i
which I am offering on
myself, and their le in
PACKWOODn strikes the Davis-Ba on in many instances Feder~aliprojebctt d~ dete et'`hiiYTITTg""tb aT pr`o3ect osts.oEven
pecx
provisionis of the so-called Gramm are the only data available for the Department of Labor, the Agency
the pending amendment from the pening defense "heavy" and "highway" construction. relied on most heavily by CB ,agrees
authorization bill. Those provisions, The Gramm language also claims that its inability to take worker pro-differences
into
account which added to the bill in com- any \thatth courts have already ap- raises ivalid questions about its own
heg the last minute, without opportunity any pretations
hearings s and little le opp opportunity for proved.. In fact, the bill before us cost savings estimates. As Dr. John
Ch and one of the
rega portion of ulations on twhichhtthe Dis- FFordoadministration ?
debate, are of uniustifidd
the Labor and t ion's adopts
the jurisdiction
saying that thee the ?nstruct on es in this country on
y has said in
wages of specifi Columbia Court of
Human defensible Resources Committee
In
construction workers across this-eoun- partment of Labor had no legal au- this
There is simply no sound basis for fratut-
ator Contrary to the claims of the Sen- thority to issue the regulation, subsec- sly assuming that lower wage rates
ator from Texas, his language does not tion (B) of the Gramm amendment
codify existing administrative practice, would allow the Secretary of Labor to the construction industry generally mean costs. Will not reduce military cosaissue "helper"itclassifications loThe Senate should not accept an
fortss, a will ill not
Federal t produce any Government, savings and d it it in all circumstances on all military amendment whose cost-saving ration-
does on such flimsy Projections.
for t
does not belong in this bill. What it construction projects. However, the ale In s bfaas, the Gramm provision may
will do is effectively strip both union court of appeals told the Labor De- I increase, rather than decrease,
r decrease,
and nonunion workers on military con- partment that it may not issue a regu- well n costs therary construction
classificatithe ons overall
struction projects, t both urban and helper permitting
that projects; will arbitrarily and unfairly
rural al areas s across the country, , of all union and non-
the prevailing wage protections cur- would, and I quoe, of ~~ ~ which reduce - wages for both
rently provided under every other type fundamental purpose union- construction workers; and will
of federally supported construction is, that wages on Federal construction not produce any savings for the Feder-
project. projects mirror those locally prevail- al Government.
The Gramm amendment makes two ing," and because it would -result in I meat urge that the would adoption strike of my amend-
the Davis
major changes in the Davis Bacon law payment of lower wages than those Bacon provisions from the bill.
as it applies to military construction prevailing in the community for the loo JOHNSTON. Mr. President, will
prnt EZ ects. 000 First, it would raise the cur- I want work underscore that point for a the Senator yield for a question?
rent
, to. million and thereby coverage exempt t threshold ht moment because we sometimes The
and
track of just what the Davis-Bacon yields time?
tracts from the g PRESIDING OFFICER. Who
majority of military -Bac nzAct. con Act is intended to do. It does not and Imo, JOHNSTON. Mr. President, this
the. pay- Senator asks the Senator to yield for
require Senator two questions
con- was rates or never union intended wage to rate
center, 95 According a fi fi percent guu of res res all prepared
CBO by the Federal procurement data mint of high wage rags or low wage The PRESIDING OFFICER. Who
or nonunion
)
yields time?
struction contracts, or about 48,000 wage rates. The law was and is simply
out of approximately 51,00?1 contracts, 1 designed to pay the prevailing wage yields TON. First of all, let me
r covering 40 percent of the dollar : rate for a particular class of work in a say I ask this question from the stand-
volume of those contracts, will be to- } given local area. Nothing more, but . point of someone who has not made
tally exempt from Davis-Bacon re- surely nothing less. up his mind.
I don't know. how anyone We dis-i Mr. KENNEDY. I am- glad to yield
adopted. ents if the pending language is agree with that principle- for a question I time.. The Gramm amendment also sub- argue about how to define the concept Mr. on my Mr. President, I
gtantially alters the way in which job "prevailing - wage." But surely tell Mr. JOHNSTON. HSlaicolPresid I
classifications and. wage rates are es- should not throw out the concept alto- tell my is ed olle I wish the
tablished for those few contracts that gether..Of course, the Federal Govern- a asking these t ' esem question to, answer the
Would still be .subject to Davis-Bacon went should not pay excessive wage same 'two questions- fmm answer the
and would, in effect, repeal the law rates; but just as surely, the Federal point of a Senator who has tae setu stand-
with respect to those contracts as well. Government should not be a substand- point made u his mind who this point.
mply arThe real Y purpose of the Gramm First, does the administration sup-
Supporters amendment the Gramm provisions
' loth their nLabor will simply port the Gramm amendment?
codify" existing Labor Department amendment is not amendment eoditY existing Second, I had thought that the con rles or to reform the regulations courts. which have been upheld Dw but rather to repeal the concept problem of Davis-Bacon, that is the ar
The the Gramm amendment is wrong, con. tificially high wage rates which 1l
TGramm amendment goes far trucfit prevailing wage Apra military p r- thought were insupportable under they
beyond anything the Reagan d
tration has ever proposed regarding pis. previous law, had been pretty well the administration of the Davis Bacon Nor is there any substantial evidence cured by the regulations which the ad-
Act. In the first place, the' administra- that the Federal Government will save minis ltrati Senatohas op ed. both ques the ton has never proposed an 'increase in money if this. amendmit is ent fbbecoommes tions? Is that true?
Scold by two Bone to $ law. To - . like, thateov rall costs on military Mr. KENNEDY. First of all, there
the threshold
o the dig ais-been no
million. ch Second, on~ t
supports
indication that trat changes adopted b the
amendment ThetCBO evalua n pprojwill ects a smallal- of h Sthat the administration lsupports
the Qra=m protections worker protestioi3s which the savings from the adoption of the the Gramm amendment. We have no
Reagan administration, after a 2-year Gramm language; It relies previous Labor, statement by y the Secretary of Labor,
the r of
evaluation, chose to retain. studies by the Department , In
tiro proposes would prohibit. which ha and a been terFederal agencies horoughly discredit" whf h became effectieivepin January of
'tuU
the
from Texas p pot
idB to addr wage of ban
the use of Federal project wage dated. Even tthe hat weak cuts p or i xn problem year, were designed
tt ns making highwaIY conmina- cally um
floor o on heavy and highway construe- satranslate into reductions in :,over- rates into rural areas as well as the
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S 7316 CONGRESSIONAL RECORD - SENATE June 4, 1985
possibility that union negotiated wage
rates were given too much weight.
So the current regulations are self-
evident. In my view and I discussed
them in detail in the letter that I sent
to the Senator from Louisiana.
Mr. JOINSTON. If the Senator will
yield further, do I understand that the
change in regulations which goes in on
January 1 applies alike to military
construction as well as other Federal
projects so there is no special problem
here with military projects that needs
curing, that the problem if there re-
mains one is the same throughout all
areas of industry?
Mr. KENNEDY. The Senator is
quite correct, and I think what you
may very well have, if my amendment
is not accepted, is a good deal of confu-
sion for contractors who will have to
apply one set of standards in one area
of contracting and a completely differ-
ent one in another.
Mr. JOHNSTON. One final ques-
tion: Employers, I think, want this as
do the chamber of commerce and
other groups, but their problem princi-
pally is, as I understand it, that they
want to codify these rules because
they think these rules are good rules.
Is that correct? They are afraid they
will be changed by some later _adminis-
Mr. KENNEDY. The fact is,, and I
tried to point out that in spite of the
assurances that have been given by
the chairman of the committee, the
Gramm amendment does not codify
the existing Reagan proposals of 'Jan-
uary of this year. It goes far beyond
them.
There is a letter from the Defense
Department indicating in the last line:
Accordingly, the Department has no ob-
jection to the inclusion of either version in
the authorization bill.
That is hardly administration posi-
E tion.
Mr. President, I ask unanimous con-
ion of either version in the authorization
dill.
Sincerely
Mr. KENNEDY. Mr. -President, I
withhold the balance of the time.
.Mr. JOHNSTON. I have no further
questions.
The PRESIDING OFFICER. Who
yields time?
Mr. GRAMM. Mr. President, I con-
trol the time on this side.
The PRESIDING OFFICER. The
done to bring us to this point. Initial-
ly, in the Armed Services-Committee,
we exempted the Pentagon from
Davis-Bacon. That saved us an esti-
mated $300 million a year. When we
went back into committee in our effort
to strike a compromise, we came out
with a compromise that does the fol-
owing things:
First of all, it codifies the regula-
tions that were imposed by the Labor
Department as amended by a court
ruling which subsequently struck
down part of that proposal. Now let
me outline basically what we do.
Mr. GRAMM. Mr. President, let me 4 Under the old regulation, we could
set the parameters of this debate. We look at only 30 percent of the labor
are here not debating labor law in a , market to define a prevailing wage.
whole entire debate about Davis- ' Under this new regulation, we can
Bacon. We are here debating the au look at 50 percent. Under the old regu-
thorization of Department of Defense . lation, we were precluded from looking
bill for 1986 fiscal year. at helpers that were involved in con-
In this bill we find ourselves in a dif- struction. Under this new regulation,
ficult circumstance. We have a grow- we are allowed to look at helper wages
ing Soviet -menace on one hand and we if helpers are used in the production
have a mounting deficit menace on an- process as part of standard prevailing
other. Procedures.
We have adopted in this body a Now there is a confusion here be-
budget that calls for a zero real cause the labor market set out to use
growth rate, a substantial change in helpers where they were clearly identi-
public policy from the previous 4 fiable as part of the production proc-
years. The other body has adopted a ess in defining Davis-Bacon. The court
budget that calls for a 4-percent reduc- struck that down, but the court made
tion in :the real growth of defense by it clear that where it was a prevailing
denying the COLA for defense in their practice that it was allowable. And all
budget. we have done is taken the procedures
We, therefore, find ourselves in a po- of the Labor Department that are
sition -of having to reject the status strongly supported by American busi-
quo, having to look for additional sav- ness and amended it to deal with the
ings to allow us to meet this dual crisis problems raised by the court. This 'is
of the Soviet threat -and the deficit the procedure as the. Labor Depart-
threat. And it is in that dilemma that ment intended to implement it in re-
we address this issue. vising from the proposal it Initially
Now, the distinguished Senator from made that was in fact struck down by
Massachusetts has. -questioned wheth- the court.
er there are savings to be had from The second thing we did was to set
Davis-Bacon. No independent reputa- out a threshold of $1 million below
ble authority in this Nation questions which the Davis-Bacon provisions
that. would not apply. Now this is impor-
with just some data, tant, Mr. President, because it opens
Let me again
,
Deputy Secretary of Defense to the substantiate my point. This is a study up -defense construction to small busi-
chairman of the Committee on Armed done by Alice Rivlin, Democrat, -ness?
Services. former Director of the Congressional I want to read you a card sent out by .
There being no objection, the letter? Budget Office. In a study published In the National Federation of Independ-
was ordered to be printed in the; July 1983, she finds that the repeal of ent Business outliging? their strong
RECORD, as follows: the Davis-Bacon provision would save support for these provisions and their
THE DaevTy SECRETARY of DEFENSE, over a 5-year period from 1984 to 1988 opposition to the Kennedy amend-
Washington, DC, May 22, 1985. $7 .6 billion in budget authority and merit.
Hon. BAIMT
Chairman, Cottee $5.2 billion of outlays. On behalf of the more than 500,000 mem-
Committee on Armed Services,
In fact the '-GAO and OMB, under ))Js of the National Federation of Inde-
1 agree, with your estimated savings of
$300--million for total repeal based on the
Fiscdl Year 1986 budget originally submit-
ted by the President. The latest provision,
however, only exempts DoD contracts less
th
inion f
is Bacon A
t
-
the D
an
a
c
$ m
rom
We estimate this provision would save about
$150 million annually.
In addition to saving money, either ver-
sion would significantly reduce administra-
tive burdens on the government and con-
tractors, especially small contractors.
Relief from the provisions of the Davis-
Bacon Act would be of great benefit to the
U.S. seMR. nate, a, "%,. Dux the Carter administration and the pendent Business, :I urge you to vote no on
letter asking Thank you for gout, of May 1 1, RMAN: , asking for my comments on Congressional-Budget Office have con- the Kennedy amendment to strike the
~~$aco~n reform provisions of the DOD
legislation which would waive the Davis- f sistently found that the Davis-Bacon Davis- nnbill. After sio t it is eeD
authorizati4 -
Bacon Act for military construction.
years provisions squander the taxpayers', tainly time t
reform this statut
This le
-
o
e
g
.money. In fact, a premium as much as ? islation .was originally intended to provide
40 percent above the market wage for local Workers and contractors with a fair op-
contract labor ;in 'construction has portunity to compete on Federal projects
been paid by the Pentagon, not in a with firms outside the area. Instead, local
ripoff of the taxpayer caused by inept f firms, usually small and sometimes minority
administrators or corrupt officials but 1 owned, are, now at a competitive disadvan-
by an act 'imposed in a period of na- tage with large'firms outside who are able
tional depression in 1931 which has no to,pay the higher than average Davis-Bacon
red wit
e as co
ah the lower wa
e in
Wa
g
mp
g
applicability to today's problems. The i
the
private n sector from locally. the Substantial
t of saw
fact that we have not changed this logs will result' fro
eenactment these
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r985
have
itial-
ttee,
from
esti-
i we
FJort
out
fol-
June ~, 1985
CONGRESSIONAL RECORD - SENATE S 7317
;ula-
abor
ourt
ruck
r let
be-
use
>nti-
roc-
)urt
Lade
ling
I all
ires
are
lusi-
the
S'is
art-
re-
ally
i by
,em-
nde-
on
the
SOD
cer-
leg-
vide
op-
ects
cal
rity
ran-
-ble
con
e in
sav-
iese
; es-
zbe
saved. Additionally, both CEO and GAO
have long advocated reform of Davis-Bacon
along these lines. Once again, NFIB's mem-
bers urge you to oppose the Kennedy
amendment to strike the Davis-Bacon
reform provisions. Your vote on this issue
will be used as a key small business vote in
the 99th Congress.
There was question about the ad-
ministration's support or opposition.
We are not debating labor law here.
We are debating authorization for de-
fense. We are debating economics in
spending the taxpayers' money. We
are not debating how we are going to
set about relationships between man-
agement and labor.
I have a letter here from the Deputy
Secretary of Defense, William H. Taft
IV. I would like to read a portion of
that letter.
I agree with your estimated savings of
$300 million for total repeal based on the
Fiscal Year 1986 budget originally submit-
ted by the President. The latest provision,
however, only exempts DOD contracts less
than $1 million from the Davis-Bacon Act.
We estimate this provision would save about
$150 million annually.
Now, Mr. President, I could go into
great length in documenting what the
Davis-Bacon provision set out to do
and what it has in fact produced, but
that is not the key issue here. The key
issue is, are we going to allow a well-
defined special-interest group that
supports the preservation of existing
law, a law that is out of touch with the
economic reality of the 1980's, to stand
and cost the taxpayers money, more
money than all the toilet seats, all the
crescent wrenches, all the cathode ray
tubes ever bought by the Pentagon in
the history of the Republic?
We are going to, on the Kennedy
amendment, cast one vote that can
save the taxpayer more money than
all the rip-offs that we have all stood
up, in front of the television cameras
and cursed and damned and belittled.
On this one vote, by simply allowing
small contractors to get a chance to
compete. by simply codifying regula-
tions that make eminently good sense,
by simply looking at the labor market
as it exists, we can save $150 million a
year.
The question here is the public in-
terest of $150 million a year in defense
savings versus the special interests.
That is the question to be decided
here. I hope my colleagues will stay
with the committee, implement these
reforms that. are needed, allow small
business . to enter into defense con-
struction, promote competition, pro-
mote jobs, and allow us to run the
Pentagon as a business.
What kind of story would it make?
Where do you think it would run in
.the Washington Post if it were uncov-
ered tomorrow that there was a ripoff
of the taxpayer occurring because the
Pentagon was paying noncompetitive
wages and it was costing us $300 mil-
lion a year? It would run on the front
page. That is not happening.
Congress has imposed this inefficien-
cy for a bill that was passed-with good
intentions 54 years ago. The time has
come in this important area with the
crises we face, with the Soviet threat
and a deficit threat, to change this
provision of law. This, Mr. President,
is not a repeal. It is a compromise pro-
vision.
I urge my colleagues to judge it not
on the basis of partisanship but on the
merits of the situation. Look at the
merits of the debate, look at the $150
million a year, look at how reasonable
the proposal is, and make your deci-
sion on that basis.
Mr. NUNN. Mr. President, will the
Senator yield for a couple of factual
clarifications?
Mr. GRAMM. I am happy to yield.
Mr. NUNN. I am trying to listen to
both sides of this debate. I think it is
an important question.
It is my understanding that the Sen-
ator from Texas, on the $1 million
threshold, moving from $2,000 to $1
million in terms of exempting the con-
tractor from the provision of Davis-
Bacon, the Senator from Texas, I be-
lieve, he said, and I may not be precise
on this-is 40 to 45 percent of the
DOD contracts, the number of con-
tracts that would be exempt?
Mr. GRAMM. If the Senator will
yield back, in terms of the dollar
amount, about 40 percent of the con-
tracts would be exempt. In terms of
the number of pieces of paper, obvi-
ously there are many small contracts,
a smaller number of large contracts,
and we are talking about in the 90-per-
cent range. But we are talking about
here opening up about 40 percent of
all contracts for construction that are
a million dollars or less. -
I remind our distinguished ranking
member that a million dollar contract
in 1931 was a big contract. Today It is
quite small. By the time you get sub-
contractors, by the time you pay for
material, you are talking about a job
that there are literally thousands of
small independent contractors who
could undertake this, but because they
face the dilemma of having to keep a
different set of books to pay Davis- i
Bacon wages, have their laborers being
paid the market wage on one job and
this artificial wage on another job,
tions as modified by court decision.
Let me explain that very briefly.
Let me explain that very briefly.
The regulations proposed by the De-
partment of Labor injected the use of
helpers which is a common practice in
many areas of the country in construc-
tion. It used the language related to
helpers as an identifiable practice. The
Court struck that down saying that
the provisions of Davis-Bacon dealt
with not identifiability but with pre-
vailing practice.
So what I have done is amend the
sections of the bill related to the pre-
vailing practice to allow helpers where
that is a prevailing practice to be
counted in the determination of wages
so that we are not paying helpers jour-
neymen's wage because of Govern-
ment mandating a wage that is out of
touch .with reality.
So it is the regulations at the Labor
Department, after the court ruling,
which will be forced to make the modi-
fication, and the court suggested that
modification.
Mr. NUNN. If I understand the Sen-
ator correctly, then it is a regulation
that is in the works, and not one .that,
Mr. GRAMM. That is correct.
Mr. NUNN. It. is not a final regula-
tion.
Mr. GRAMM. That is correct.
Mr.. NUNN. I thank the Senator.
Mr. NICKLES. Will the Senator
yield?
Mr. GRAMM. I yield 4 minutes to
the Senator from Oklahoma.
Mr. NICKLES. Mn President, I com-
mend my good friend, the Senator
from Texas, and I urge opposition to
'the amendment of my friend, Senator
KENNEDY. Mr. President, I think it is
awfully important that we saver-some
money in the Department of Defense.
Everyone I know says that the De-
fense Department wastes some money.
This is one excellent example-of how
we are wasting something like '$150
million a year. We can save oy in
ervices Committee language reform-
they are effectively precluded from `military -construction projects. The
being. involved. That is why the Na- Gramm amendment is identical to a
tional Federation- of Independent reform proposal (S. 1005) that 1 intro-
Business opposes this amendment. duced along with Senators EAST,-HAW-
Mr. NUNN. I think that clarifies my KINs, HUMPHREY, LAxALT, THURMOND,
question, because the Senator is talk-` DENTON, GRAMM, GOLDWATER, QUAYLE,
ing about . 90 to 95 percent of the and MATTINGLY earlier this year, but
number of contracts, but about 40 per- this particular amendment only ap-
cent of the dollars involved in those plies to DOD procurement., It is not
contracts. { governmentwide reform. Senator
- Mr. GRAMM. That is correct. GRAMM's -language codifies the three
Mr. NUNN. I believe that reconciles essentials of the' administrations regu-
with the Dear Colleague letter put out `latory changes, and increases the cur-
by Senators KENNEDY AND PACKWOOD. I 1 rent statutory threshold from $2,000
have one other question along that 'to $1 million.
line. I believe the Senator from Texas The three , basic reforms in the
said his amendment incorporates ex- Gramm amendment are long overdue._
isting regulations. 'Even President Carter's study' group
Mr. ' GRAMM. If I might clarify recommended most of these changes.
that. It incorporates existing regula- It should be stressed that ,these
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June 4, 1985 CONGRESSIONAL RECORD - SENATE S 7319
Mr. KENNEDY. Mr. President, I struction, you stay with the Gramm cannot find a majority who hav^ a
yield myself 5 minutes. amendment. particular prevailing wage, then you
Mr. President, I would like to place You will then find that school is out go to a weighted average of those
in the REcoRD the material provided with regard to the defense contracts. workers.
by the Department of Labor by CBO You will find school is out on the mili- Since we do not know what those s
on their estimated savings by this par- tary construction projects to house weighted averages will be under the t
ticular amendment. these servicemen and women of this new regulations, how in the world can
In spite of the eloquence of the Sen- country. we determine what the savings would
ator from Texas, the Senator is just All we are saying in this amendment be? That concerns me. I really wanted
plain wrong. The CBO estimate on is that we don't want to pay more than to ask the question of the Senator
budget outlays is $47 million by 1987. the prevailing wage, but we are not from Texas but maybe the Senator;
Mr. President, I ask unanimous con- going to pay less than the prevailing from Massachusetts wishes to answer.
sent that it be made a part of the wage either. We want contractors to Mr. KENNEDY. I think the Senator
RECORD. compete on efficiency, on quality, and is exactly right. The difficulty in
There being no objection, the table on price. But on wages we don't want making that estimate has been docu-
was ordered to be printed in the the Federal Government to depress lo- mented by the Department of Labor,
RECORD, as follows: cally prevailing wage practices. It is the CBO, and various studies on this
TABLE 3.-AUTHORIZATIONS IN FUNCTION 050 IN THE quite interesting to hear about saving question. I think the whole question is
NATIONAL DEFENSE pUTHORitATWN ACT, 1986 AS RE money on defense when the Senator how do you factor in productivity, in
well knows that the IG has found an- terms of the skills of the workers.
PORTED BY THE SENATE ARMED SERVICES COMMITTEE other $1.8 billion, and just 3 weeks I think it is fair to say that the sav-
[er ftal y a MTM of taus] ago, they found another $4.7 billion on ings have never been justified, and cer-
the day of the markup in the Armed tainly do not warrant the statements
d
Services Committee. made by the supporters of this amen -
Mr. President, I think that if we ment.
So
,
rgms: are truly interested in ensuring quality Mr. GRAMM addressed the Chair.
Estmated aumaaatO.. level..... 71,013 .............. ............ .....................:.... The PRESIDING OFFICER. The
Estimated outlays ................._... 68,838 2,175 ......_..-................_.......... construction-that is all we are talking
"0 51 t;llwam: ttiorization level -14 8 23 31 37 about, military construction-for the Senator from Texas.
st Mr. GRAMM. Let me begin with ref-
E Estimated outlays ..................... 117 7 22 31 37 military personnel of this country,
Travel *man= then the men and women that are erence to the question of the Senator
Estimated aumaiza..a level..... 664 674 681 688 693 going to build that military construe- from Louisiana on procedure. Under
Estimated "'nays '..""""?_'..'?"'. tion are going to get the same wages
Reserve hai>ses the old procedure, there was the abili-
Estimated authorization loud..... 80 94 35 28 17
Estimated outlays ............ .:........ 77 93 36 28 17 that are going to go on in that local ty to find 30 percent of the workers
Stockpile uooisitions: Estimated community. who had that wage. Under the new
outlays.. ............ -?-??--?...... ........... -230 140 9o The argument of the Senator from procedure, it is based on 50 percent.
D>ris-Samn re~I: ,
Estimated uaiffatgn kvel........._........ -140 -140 -150 -155 Texas, is that if we seek the most sub Under the old procedure, if you
Est e~nays --.?.-... -47 -86 -119 -135 standard wages possible, we are going could not find 30 percent, you went to
Oadime Estimated `ated ad itioas to save money. That is hogwash. Ev-
*s. levgl..._
-550 -650
595 eryone in this body knows that we will the highest 50, percent, and then if
Estmated outWys ...tion .............._... -555 -65 -- 575 270 -480 -600 -625
MW you could not find that, you went to
Estimated authorization level..... 78 - 92 93 93 92 get cost overruns as those contractors an average. Under this, we go to the
Esttinatedauyays........ ....... 73 94 93 93 92 come back to the. Department of De- average. So in terms of makeup, scope,
Function 050 total, fense and say: "We know we came in study, there is no change.
Estimated authonza too low. You aren't going to have that I am afraid the American people
taNhudget au- 71,266 153 91 64 34 hospital completed unless we add-an-
thordy._ ..................
Estimated outlays.........69.653 2,867 357 170 109 other $5-$10 million to that contract., " would have to laugh at the assertion
of the Senator from Massachusetts
Note-Totals may not add due to rarardng.
Mr. KENNEDY. Mr. President,
these figures are not dreamed up to be
bandied about like the $7 billion figure
the Senator from Texas just cited.
This CBO estimate says $47 million in
1987, and I think the methodology
used to reach that figure is open to
question.
Mr. President, the Senator from
Texas talks as if the Department of
Labor does not belong to this adminis-
tration. It is an arm of this administra-
tion. They have the opportunity to
promulgate regulations. If they want
to promulgate regulations, why not let
them promulgate regulations? The
fact of the matter is that the studies
that .are done-even by the Depart-
ment of Labor, and by CBO which
projects a $47 million savings assumes
that reductions of wage rates imply
equal reductions in project costs. It as-
sumes, therefore, that wage rates are
uncorrelated with productivity. That
is interesting-not related to produc-
tivity, uncorrelated with productivity.
The fact of the matter is productivity
is important, and it is as important in
terms of our national security as any
other issue. If you want to cut locally
prevailing wage rates on military con-
We have seen this time in and time that somehow the paying of artificial
'but in this body. The amendment of ly high wages on Government con-
the Senator from Texas is just inviting struction produces quality, whereas
nendment would be acceptect.
never has been a study, that could sub-
stantiate addressed that.
Chair. The quality Of private construction
Mr. KENNEDY. I reserve the re on for-profit business is uniformly
minder ha remaining? time. How much time better than the Federal Government.
have I OFFICER (Mr. In fact, our papers are full every day
The PRESIDING
Nicxl.Es). The -Senator from Massa- of poor workmanship and junk being
chusetts has 14 minutes remaining. bought at the taxpayers' expense.
Mr. JOHNSTON. Will the Senator Paying artificially high -wages, paying
from Massachusetts yield for a couple helpers, journeymen, and contractor
of questions? wages, does not in, itself produce qual-
uandering the axpayerS' money
it
S
y.
q
Mr. KENNEDY. Certainly.
Mr. JOHNSTON. As I understand it, is not and has never been the path to
there have been no hearings held ,on quality in construction or anything
this. I understand that the data base else.
for determining what the - savings I yield 2 minutes to the :Senator
would be under the new regulations from Idaho.
nonexistent because Mr. SYMMS. I thank the .Senator
letel
y
are comp
the regulations have been changed for yielding.
from the- old law where if you could Mr. President, I want. to begin by
not find a majority of workers which, complimenting - my, colleague and
shad a particular prevailing wage,( friend from Texas, Senator GRAMM,
under the old rule you went to that; for working so hard to see that this
where you could identify ; 30 percent] package of labor and procurement re-
d
'
e-
s
which had a particular. -prevailing forms was included in this year
wage. Under the new rules, if you fense authorization bill. I also what to
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June 4, 1985 -
CHAMBER or CoMrsmcs
CONGRESSIONAL RECORD -SENATE
OF THE UNITED STATES,
Washington, DC, May 17, 1985.
lion. STrvEND. Symms,
U.S. Senate, Washington, DC.
DEAR SENATOR Syrtis: The U.S. Chamber
of Commerce respectfully requests that you
consider our comments concerning Title VII
of the Fiscal Year 1986 Defense Authoriza-
tion Bill (S. 1029).
First, the Chamber strongly supports sec-
tion 721, which removes restrictions on the
Department of Defenses (DOD) ability to
contract out activities to the private sector.
This provision is extremely important for
the following reasons:
1. It gives the Secretary of Defense specif-
ic authority and responsibility to contract
out when it is cost efficient and consistent
with national security.
2. It improves DOD's ability to save
money. DOD now estimates that contract-
ing out has saved over $400 million per year,
despite current limitations.
3. It enhances DOD's flexibility and re-
sponsiveness, by allowing greater use of the
private sector's ability to increase or reduce
activities without cumbersome civil service
and personnel requirements.
Further, the Chamber fully supports
reform of -the Davis-Bacon and Walsh-
Healey Acts as provided by the bill's com-
petitive labor purchase requirements (sec-
tions 711, 712 and 713). These sections pro-
vide for substantial cost savings on military
vate employees can work under flextime
schedules why not employees working for
federal contractors? And it has been demon-
strated pver and over again that contracting
out is a very cost effective way to provide
goods and services for the government.
Leaving all three of these provisions in the
bill will save hundreds of millions of dollars
for the taxpayers.
NFIB's members urge you to support
these changes in DOD contracting. Your
votes on these issues will be used as "Key
Small Business" votes in the 99th Congress.
JOHN J. MOTLEY III.
Director of Federal Legislation.
Mr. SYMMS. Talk about hogwash-
the Senator from Massachusetts was
making reference to hogwash. I have
never heard an argument based on
more hogwash than saying that the Just on military contracts.
to do with ,
thin
an
h
g
y
as
wages you pay-
The Reagan regulations just issued
the quality of the work on housing or! and now being implemented and first
hospitals for military families. Those , used seem to move in that direction. If
buildings will be built according to there is something wrong with that,
specifications and the the wage rate has` we can look at it on the basis of all
nothing to do with it. Federal contracts.
As a matter of fact, even though I
compliment- the Senator from Arizona Once again, Congress is confronted
and the Senator from Texas for in- with an attempt to remove Davis-
cluding this provision, the very fact Bacon protection from military eon-
that the Department of Labor has to struction projects? In the name of cost
find a wage rate paid to 50 percent of saving, this bill would guarantee noth-
57321
tect against the fly-by-night operators
getting a Federal contract, a Govern-
ment contract, by bidding low on a
contract and by paying very low wages
to workers brought in from outside
the community or State. The purpose
of the act is to preserve. the prevailing
wage of workers in a specific area
based on a community and its immedi-
ate surrounding area. That is meritori-
ous.
There are parts of Davis-Bacon that
are wrong now, that do not protect
using the prevailing wages. That prob-
lem should be addressed in a proce-
dure using the law. Those should be
thoughtfully corrected by action on all
Ing Dot shoddy construction per-
formed by unskilled -workers in an
area of the country where the Nation
can least afford it, our national de-
fense stystem. Congress has repeated-
ly' rejected attempts to eliminate
Davis-Bacon from military construc-
.contracts for construction covered by the strikes me as a travesty. It is an even
Davis-Bacon Act and goods covered by the travesty when they take the
Walsh-Healey Act. These federal contract 1 greater laws artificially inflate wage rates for gov- 30 Percent mark because they remove
ernment contractors and reduce competitive many skilled workers who might be
bidding, both of which significantly increase {available to do those Jobs and who
government costs in general and military Jmay produce better workmanship
costs in particular.
Both laws also disadvantage the employ-
ers by significantly and inappropriately in-
creasing labor costs. The Davis-Bacon and
Walsh-Healey Acts force federal contractors
to adopt premium wage and/or overtime
rates which can create major economic and
administrative burdens and can be disrup-
tive of personnel practices.
Finally, the Chamber has some concerns
regarding section 702, which deals with the
allowability of contractor general and ad-
11 White we Comm end Sen-
i
ti
i
mi
t
rather than more shoddy workman-, tion in recent years, once in 1979 and
i
1980
ai
n
. .
n
ship. ag
I think that the Davis-Bacon provi- To quote from the committee report
sions ought to be kept in this bill as of 1979, the Labor Committee report,
the Senators from Texas and Arizona after consideration of Davis-Bacon,
have recommended. We have heard a they concluded by saying:
lot of railing about toilet seats, ham- - The removal of the Davis-Bacon Act pre-
mers, nuts and bolts, and all kinds of -ailing wage requirement could have the
things that the Defense Department is long-term effect of undermining the skilled
paying an exorbitant price for. A lot of labor base on which the military installs-
my colleagues here have made those Lions rely.
ve
s
cos
n
s
ra
ator Gramm for attempting to resolve the arguments very eloquently On this
.perceived problems in a reasonable and floor. But I believe we now have an op-
-careful manner, the Chamber questions the portunity to save the taxpayers a very
need for such specific guidelines in legisla- signfiicant amount of money.
tion. We are not opposed to what we under- I would say to my colleagues that we
stand to be the Senate's major concerns in have an opportunity to save the tax-
this area and are in agreement with the ob- payers some money and get more out
jectives of the legislation. However, we be- of our defense dollar more houses,
lieve that this type of specificity is.more ap-
propriate for the regulatory process better health facilities, better every-
.
We appreciate this opportunity to com- thing for the military families of this
ment, and we ask that you carefully consid- country. I urge my colleagues to vote
er our views. down this .amendment, and 1. compli-
Sincerely,
ALBERT D. BouRLANn.
went the Senator from Texas for his
work on this issue. I yield the floor.
Several Senators addressed the
S. 1029, DOD AUTHORIZATION BILL
DEAR SENATOR: During debate on the'DOD Chair.
Authorization bill an attempt may be made The PRESIDING OFFICER. The
to strike the Committee's language on Senator from Montana.
Davis-Bacon, Walsh Healy, . and/or "icon- Mr. KENNEDY. Mr. President, how
tracting out". The National Federation of ? much time remains?
Independent Business