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SHAFER, Mr. CUNNINGHAM, Mr. VINSON, ment problems, in connection with the nomic decline of a region, and the eco-
Mr. BROOKS of Louisiana, and Mr. DUR- allocation of defense expenditures. nomic decline of a way of doing business
HAM had been appointed managers on The Senator from South Carolina may is readily apparent.
the part of the House at the conference. regard his amendment as no more than How many other serious questions the

a proviso imposing a condition in regard amendment of the Senator from South

to these expenditures. In reality, it is Carolina may raise it is impossible at ENROLLED BILLS SIGNED a far-reaching proposal tacked onto a this time to foretell. But the ones I have The message also announced that the provision of the bill to which it bears suggested will at least serve to indicate

not the slightest relation. The amended how damaging its effect may be. Speaker had affixed his signature to the following enrolled bills, and they were

provision deals with purchases of food, In all fairness, Mr. President, I am

clothing, cotton, and wool at home. bound to say that I know the Senator signed by the Vice President:

The amendment itself deals, by nullify- from South Carolina does not mean to S. 67. An act for the relief of Anastasia ing them, with efforts to correct or pre- strike so broadly at established contractJohn Tsamisis; vent economic dislocation.

ing procedures. He aims only at curbing S. 69. An act for the relief of Dr. Peter C. T.

Mr. President, the emphasis of the the power of the President under existKao; S. 143. An act for the relief of Hanni Mario

rider of the Senator from South Carolina ing law so to direct defense spending in Matuschke;

on preventing any use of Government such a way as to relieve manpower shortS. 196. An act for the relief of Alejandro contracts to prevent or correct economic

contracts to prevent or correct economic ages and to alleviate unemployment. de la Cruz Hernandez;

dislocations raises serious questions as to But not even this lesser aim is insignifiS. 486. An act for the relief of Che Kil the applicability of the amendment to cant or negligible in its harmful effects. Bok; other important laws.

It happens that I come from a State S. 556. An act for the relief of Marinella The Walsh-Healey Act, for example, which suffers from the most serious area Taletti;

was designed to use the leverage of Gov- of unemployment anywhere in the Union. S. 615. An act for the relief of Altoon

ernment contracts to raise the wage level I refer to the city of Lawrence, where Saprichian;

of substandard industries. Are not such today nearly 20 percent of the total labor S. 669. An act for the relief of Helene Olga industries instances of economic dislo- force is unemployed. When speaking at Iwasenko; and

cation? If so, does not this rider deny Lawrence on October 21, 1952, PresidenS. 2399. An act to amend the Atomic Energy Act of 1946, as amended.

effect, under defense contracts obligating tial Candidate Eisenhower pledged the funds appropriated by H. R. 5969, to or- use of defense contracts as a means of

ders of the Secretary of Labor fixing alleviating unemployment. On April 1 DEPARTMENT OF DEFENSE APPRO

minimum wages payable by a con- of this year the President personally tractor?

conferred with a Lawrence delegation, PRIATIONS, 1954

Under section 2 (c) (16) of the Armed representing both management and laThe Senate resumed the consideration Services Procurement Act of 1947, con- bor, and renewed that pledge in clear of the bill (H. R. 5969) making appro- tracting officers not infrequently take and unequivocal terms. priations for the Department of Defense into account the desirability of locating Mr. President, the Senator from South and related independent agencies for the a new plant in an area remote from the Carolina would make it impossible for fiscal year ending June 30, 1954, and for threat of atomic attack. Is the concen- President Eisenhower to carry out that other purposes.

tration of industrial plants in congested pledge. His amendment would eliminate The PRESIDING OFFICER. The areas of the East an "economic dis- policies now in effect which give bidquestion is on agreeing to the motion of location”?

matching privileges to business firms in the Senator from Massachusetts (Mr. What of the decision by a contracting areas of serious unemployment, such as SALTONSTALL), to strike out the commit- officer that the award of a contract to a Lawrence and Lowell, Mass.; Providence, tee amendment on page 58, between lines particular low bidder might so burden R. I.; the Crab Orchard area of Illinois; 15 and 20. The amendment to which that bidder as to prevent fulfillment of the Iron Mountain area of Michigan; the the motion relates will be stated.

the contract? Under section 2 (c) (1) Terre Haute and Vincennes areas of InThe legislative clerk read as follows: of the Armed Services Procurement Act, diana; and a number of areas in PennProvided further, That none of the funds

there is no doubt that a contracting offi- sylvanian and West Virginia. There are appropriated by this act shall be available cer has authority to turn down such a now in all 26 such areas in 11 Statesfor expenditure under any contract without bid and to award the contract, instead, areas certified by the Secretary of Labor regard to the provisions of law relating to to a higher bidder whose staying power as having 6 percent or more of the labor the making, performance, amendment, and

is better established. Would not this force unemployed. Because of improved modification of contracts, for the purpose of

rider cast doubt upon the authority of employment, in some cases hastened by correcting or preventing economic dislo

the contracting officer to take such a the bid-matching privilege which this cations,

step in order to avoid the “economic dis- amendment would destroy, 28 other Mr. SALTONSTALL. Mr. President, location" of the first bidder?

areas, including 6 States other than the the amendment proposed by my good Section 714 (f) (2) of the Defense Pro- 11 mentioned a moment ago, have refriend, the senior Senator from South duction Act, as recently extended, au- cently been dropped from their eligible Carolina [Mr. MAYBANK] is—and I say thorizes special treatment of small- classification. this both sincerely and respectfully-an business firms in the award of defense Mr. President, at this point in my reunfortunate one.

contracts. It is the tendency of big busi- marks, I ask unanimous consent to have The Senator from South Carolina may ness to grow bigger and of small business inserted in the RECORD a tabulation of regard his amendment as aimed merely to become submerged. Is not the pur- these areas. at striking down what seem to him un- pose of this section to correct a tendency The PRESIDING OFFICER. Is there due preferences for other parts of the toward "economic dislocation”? It objection? country. In reality, it would strike down would certainly seem to be so; no funda- There being no objection, the tabulaevery effort by the administration to take mental distinction between the economic tion was ordered to be printed in the into account manpower and unemploy- decline of the textile industry, the eco- RECORD, as follows: List of surplus labor areas certified by the Department of Labor and notified by the Office of Defense Mobilization under Defense Manpower

Policy No. 4

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40 5

Altoona, Pa. (Blair County)..

Feb. 21, 1952 June 6, 1952 Asheville, N. C. (Buncombe County)-

do.. Mar. 13, 1952 Atlantic City, N. J. (all of Atlantic County, except towns of Landisville and Minotola and Buena Vista Township (in part); Ocean City and township of Upper, Cape May County).

do.... May 13, 1952 Cumberland, Md. (Allegany County, Md., Mineral County, W. Va.)

do.

Mar. 13, 1952 Gloversville, N. Y. (Fulton County).

Mar. 21, 1952 May 3, 1952 Herrin, Murphysboro, and West Frankford, Ill. (Franklin, Jackson, Johnson, Perry, Union, and Williamson Counties)

Feb. 21, 1952 Mar. 13, 1952 Iron Mountain, Mich. (Dickinson and Iron Counties, Mich.; Florence County, Wis.; Niagara Township, Marinette County, Wis.)-- Mar. 4, 1952

do.. Johnstown, Pa. (Cambria and Somerset Counties).

May 27, 1953 | July 1, 1953

36 15 31

7 12 59

List of surplus labor areas certified by the Department of Labor and notified by the Office of Defense Mobilization under Defense Manpower

Policy No. 4-Continued

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Lawrence, Mass. (city of Lawrence and towns of Andover, Methuen, and North Andover in Essex County).
Lowell, Mass. (city of Lowell and towns of Billerica, Chelmsford, Dracut, Dunstable, Littleton, Tewksbury, Tyngsborough, and West-

ford in Middlesex County).
Mayaguez, P. R. (municipality of Mayaguez).
Parkersburg, W. Va. (Wood, Pleasants, Ritchie, Wirt, and Calhoun Counties).
Point Pleasant, W. Va. (Mason, Jackson, and Putnam Counties) -
Ponce, P, R. (municipality of Ponce).
Pottsville, Pa. (Schuylkill County, amended Feb. 17, 1953, to include that portion of Carbon County comprising the boroughs of Lans-
ford, Summit Hill, Mauch Chunk, and East Mauch Chunk, and the township of Mauch Chunk (which includes the communities
of Nesquehoning and New Columbus).---
Providence, R. I. (Bristol County, city of Warwick, and towns of East Greenwich and West Warwick, Kent County; cities of Cen.
tral Falls, Cranston, Pawtucket, Providence, and Woonsocket, and towns of Cumberland, East Providence, North Smithfield, and
Smithfield, Providence County, R. I., town of North Kingstown, Washington County, R. I.; city of Attleboro and Seekonk, Bristol
County, Mass.; towns of Bellingham, Franklin, Plain ville, and Wrentham, Norfolk County, Mass.; towns of Blackstone and Mill-
ville, Worcester County, Mass.).
Ronceverte and White Sulphur Springs, W. Va. (Greenbriar and Monroe Counties)
San Juan, P. R. (municipalities of Bayamon, Catano, Guaynabo, Rio Piedras, and San Juan).
Scranton, Pa. (Lackawanna County).
Sunbury, Shamokin, and Mount Carmel, Pa. (Montour, Northumberland, Snyder, and Union Counties; Centralia Borough, and

Conyngham Township, Columbia County).
Tacoma, Wash, (Pierce County).
Terre Haute, Ind. (Vigo County).
Uniontown and Connellsville, Pa. (Fayette County).
Vincennes, Ind., (Knox County)
Wilkes-Barre, Pa. (Luzerne County)
Winston-Salem, N. C...-

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Areas in which notifications have been

vidual Senator, would he permit me to token, a policy of bringing work to exrevoked conclude my statement?

isting facilities so as to make the best Mr. KNOWLAND. Yes, indeed.

I possible use of available plants and
Notifi-
Date of revo-
thought the Senator had concluded.

equipment. This policy is not new, and Area

cation

cation
No.
Mr. SALTONSTALL. No.

it costs the Government nothing. Ever

Mr. KNOWLAND. The Senator may since World War II, beginning with War Bay City, Mich....

22 June 27, 1952

go right ahead. I may say I wanted to Production Board Directive No. 2 of Biddeford, Maine.

42 Oct.

1, 1952

ask for support of the committee amend- March 1942, the allocation of GovernBrockton, Mass...

6 Dec. 3, 1952 Connersville, Ind.

45 Feb. 6, 1953

ment, as against the motion of the Sen- ment contracts has been guided by laborDanielson, Conn.

25 Do. ator from Massachusetts to strike out, supply considerations. Since 1942 sucDanville, Ill.

35 Apr, 10, 1953

and I did not want to do it under any cessive directives have been aimed at this Detroit, Mich.

1 May 23, 1952 Flint, Mich.

14 Do.

misconception. That is why I moved problem. The most recent, and the one Fall River, Mass..

11 June 2, 1953
over to my own desk.

now in effect, is Defense Manpower PolGrand Rapids, Mich.

17 May 23, 1952

Mr. LANGER. Mr. President, will the icy No. 4, which is based on Executive Ionia, Belding, and Greenville, Mich..

18 Dec. 3, 1952 Senator from Massachusetts yield for a Order 10193 (December 16, 1950) and Joplin, Mo.

32 Feb. 6, 1953

question? La Cross, Wis.

Dec. 3, 1952 44

section 2 (c) (1) of the Armed Services Lewiston, Maine...

46 Oct. 1, 1952 Mr. SALTONSTALL. I yield to the Procurement Act, 1947. Manchester, N. H.

10 Do.

Senator from North Dakota.
Martinsburg, W. Va..
July 16, 1953

As announced on February 7, 1952, the Milford, Mass.

56 Apr. 10, 1953 Mr. LANGER. The Senator did not objectives of Defense Manpower No. Muncie, Ind.

24 June 27, 1952 read the tabulation which he placed in 4—and these are the objectives which Nashua, N. H.

26 Oct. 1, 1952

the RECORD. New Bedford, Mass. 19 Apr. 10, 1953

the amendment of the Senator from New York, N. Y.-

16 Oct. 1, 1952

Mr. SALTONSTALL. I shall be glad South Carolina would defeat-are these: Norwich, Conn.

47 Feb. 6, 1953 Port Huron, Mich.

to do so, if the Senator desires it.

23 Dec. 23, 1952 Portsmouth, Ohio..

(a) To coordinate conversion from civilian 34 Aug. 30, 1952 Mr. LANGER. I merely wanted to

to military production; Reading, Pa.

37 July 29, 1952 know whether the list included the State Richmond, Ind. 43 Dec. 3, 1952

(b) To minimize strains and dislocations 30 Taunton, Mass.

Apr. 10, 1953
of North Dakota.

in the economy resulting from such converUtica and Rome, N. Y.

27 June 2, 1953 Mr. SALTONSTALL. North Dakota is sion;

not listed as one of the surplus labor (c) To preserve employee skills necessary The following group IV areas were not areas.

to the fulfillment of Government contracts approved by ODM due to lack of facilities:

Mr. LANGER. I thank the Senator. and purchases; Beckley, W. Va.; Clearfield-DuBois, Pa.; Dur

Mr. SALTONSTALL. But I would also

(d) To maintain productive facilities; ham, N. C.; Fairmont, w. Va.; Jasper, Ala.; say to the Senator that it is not an ab

(e) To assure utilization of the Nation's Morgantown, W. Va.; Waynesville, N. C. solute classification, for the reason that,

total manpower potential by making use of

the manpower resources of each area; and Mr. KNOWLAND. Mr. President as I understand, the surveys are not

(f) To help assure timely delivery of reMr. SALTONSTALL. I yield to the made in small-business sections. So

quired goods and services by locating proSenator from California.

there could be a small-business section curement where the needed manpower and Mr. KNOWLAND. I wanted to get which would not be included in these facilities are fully available. the floor in my own right. I thought the areas, since the Secretary of Labor did Senator had yielded the floor. If the not include them.

By way of further explanation of Senator will yield to me

DMP No. 4, the Office of Defense Mo

A purpose of the present policy, Mr.
Mr. SALTONSTALL. I yield.
President, almost as important as the

bilization issued a bulletin on February Mr. KNOWLAND. I first wish to make alleviation of unemployment, is that of

25, 1953, stating: it perfectly clear that I am speaking now avoiding the aggravation of labor short

A primary aim of Federal manpower policy in my individual capacity as a Senator, ages. Labor shortages cause delays, in

has been to bring defense work to the workand I purposely moved away from the crease costs, and lead to an influx of

ers in preference to moving them. When acting majority leader's desk back to my new workers whose arrival results in

large numbers of workers move to already own desk in the Senate, so that no one housing emergencies and strains on the

tight areas, heavy burdens are placed on would be under any misconception as to schools, the water supply, the sewerage schools, the water supply, the sewerage housing, transportation, utilities, etc. If on

community facilities-schools, hospitals, my speaking merely as a Member of the system, and the fire and police departe the other hand, workers do not migrate and Senate, and not as acting majority ments.

ments. The policy which the Senator leader.

unemployment develops in certain areas, unfrom South Carolina would defeat is thus employment compensation costs increase Mr. SALTONSTALL. Mr. President, if one of bringing the work to the workthe Senator is going to make a brief

and plants, tools, and workers' skills remain ers in order to use manpower resources idle and unable to contribute to our mostatement in his own time, as an indi- where they are. It is also, by the same bilization program.

That is the statement of the Office of As a result of this finding, the Depart

bilization, testified that in order to apply Defense Mobilization, explaining the ob- ment of Defense issued a directive which the area approach equitably, it would have. jectives that have just been set forth. authorizes procurement officers to set

been necessary to certify many small, one

mill towns as being eligible for preference DMP No. 4, as carried out by Muni- aside a portion of a textile procurement

under such policy, which would not have tions Board directives and regulations, for textile mills operating not more than

been feasible. provides essentially, as I have already in- 80 hours a week—two 40-hour shifts.

The matter is closely related to that condicated, for bid-matching procedures. Such mills are entitled to participate in sidered in the decision of January 14, 1952, In the case of areas having more than the set-aside portion if they meet the referred to above. In such decision, the 6 percent of their labor force unem- average amount of the prices at which Director, Office of Defense Mobilization, ployed-called by the Labor Department the formerly advertised parts of the pro

was advised that in view of the intent of

the Congress as set forth in section 2 of “Group IV areas" or "labor surplus curement went to other firms. This, I

the Defense Production Act of 1950, and areas"-two types of situations are coy- wish to emphasize, is not a regional privi

the authority contained in section 2 (c) (1) ered. lege, but applies to all textile mills, wher

of the Armed Services Procurement Act of In negotiated procurements over $25,- ever located, operating not more than 80

1947, to negotiate contracts when deter000, DMP No. 4 gives business firms in hours a week.

mined to be necessary in the public insurplus labor areas the privilege of Mr. President, the Comptroller Gen- terest, this Office would not object to othermatching the bid of any firm in an area eral has squarely ruled that the bid- wise proper

payments under contracts not classified as a surplus labor area. matching procedures which I have just

awarded through negotiation to concerns

located in distress-labor areas. The deterIf the surplus labor area firm is able to summarized have ample authority in law,

mination that it is in the public interest to match the lowest bid by any other firm, namely, section 2 of the Defense Produc

award contracts on such basis is primarily it is awarded the contract. An exception Act of 1950 and section 2 (c) (1) of

the responsibility of the contracting agency tion however, is made for the benefit of the Armed Services Procurement Act, and ordinarily is not for questioning by this firms, large or small, in areas too small 1947.

Office in the absence of a clear abuse of or remote to be classified by the Depart

I ask unanimous consent to have authority. Nothing has been called to my ment of Labor. Since the loss of a con- printed in the RECORD at this point in attention indicating any general abuse of

the authority up to this time. However, tract by such a firm may cause serious my remarks a letter from the Comptrol

this Office will continue to examine conunemployment in its entire area, surplus ler General to this effect.

tracts of the type discussed herein, and aplabor area firms are not permitted to

The PRESIDING OFFICER. Is there

propriate action will be taken when indimatch its bid. objection?

cated by the circumstances involved. In other words, in small areas where There being no objection, the letter

Sincerely yours, there is one factory, so to speak, not was ordered to be printed in the RECORD,

LINDSAY C. WARREN,

Comptroller General of the United States. classified by the Department of Labor, as follows: this provision for matching bids by sur

COMPTROLLER GENERAL

Mr. SALTONSTALL. What I have plus labor area firms is not permitted.

OF THE UNITED STATES,

already said, Mr. President, should make The second type of bid-matching pro

Washington, June 18, 1953.

clear that DMP NO. 4 does not cost the Hon. HOMER E. CAPEHART, cedure employs the use of partial set

Chairman, Joint Committee on De

Government one single penny. In fact, asides in connection with procurements

fense Production, United States

as I shall show, it more than pays for which are subject to formal advertising

Senate.

itself. for bids. Instead of awarding the entire MY DEAR MR. CHAIRMAN: Reference is made In every case where set-asides are procurement on an advertised-bid basis, to your letter of June 4, 1953, calling to my used, the portion of the procurement part of the procurement is set aside for attention a motion passed by your commit- reserved for formal advertisement is distressed area firms and small firms tee, as reported on page 33 of Defense Pro

that quantity of the total needed which which submitted bids within 20 percent duction Act Progress Report No. 26, dated

is most likely to result in the lowest posof the lowest bid. These firms are then May 4, 1953, to request the Comptroller General to check certain contracts and to fur

sible bid. Only that amount of the progiven the opportunity to match the low nish you with a report thereon. I was not

curement over and above this portion bid on the publicly advertised portion aware of the action of the committee until

is set aside. of the procurement; if more than one receipt of your letter.

Since the successful bid or bids on the award is made under the publicly adver

It appears that your committee desires to

advertised portion have to be matched be advised whether, in my opinion, the sotised portion, it is the weighted average

by the firms entitled to participate in called set-aside textile contracts discussed in amount of the successful bids which the subject report are authorized by law or

the set-aside, the awards made under the

set-aside cannot cost the Government must be matched. Any firm which thus constitute an improper exercise of the au

any additional money. In the case of matches the low bid becomes entitled to thority referred to in my decision of January participate in the set-aside portion.

14, 1952 (31 Comp. Gen. 279), to the Director multiple awards, in fact, the set-aside of Defense Mobilization.

can and often does result in a saving to I emphasize at that point that the

The "set aside" method of procurement the Government. firm, in order to get into that classifica

consists of an arrangement whereby only Mr. President, I ask unanimous contion and to qualify for a bid, must be a portion of any specific procurement is ad

sent to have inserted in the RECORD at within 20 percent of the low bidder, be- vertised in the regular manner and the con

this point in my remarks a summary fore he is allowed to participate.

tracts awarded to the lowest bidder or bidThe Office of Defense Mobilization has portion (the “set aside” portion) of the proders. Contracts to supply the remaining which conclusively establishes this fact.

There being no objection, the sumnot found it possible, however, in the

curement are then negotiated with firms mary was ordered to be printed in the case of certain industries, to carry out in surplus-labor areas who had submitted

RECORD, as follows: the DMP No. 4 purpose of conserving bids which did not exceed by more than 20

SAVINGS ON TEXTILE PROCUREMENTS UNDER essential skills and maintaining propercent the highest bid accepted on the ad

DMP No. 4 vertised portion. With respect to "set ductive resources on a surplus labor area aside” textile contracts, mills operating on

If a whole procurement for, say, 600,000 basis.

Some industries have accordingly an 80-hour week basis, or less, are given yards of cotton duck were publicly adverbeen exempted from DMP No. 4. In the first opportunity to negotiate contracts at tised the bids might look like this: case of the textile industry, a panel of

fair and reasonable prices, preferably the the Surplus Manpower Committee estabweighted average of the related bid prices,

Price per but in no event higher than the highest

Firm
Quantity bid on

yard lished by DMP No. 4 found that

price of an award made under the related Some action is in the public interest in invitation for bids, regardless of whether

A.
100,000 yards.

$2.00 order to mitigate the serious production and or not such mills are located in a surplus

B
do.---

2.02 employment problems in the textile indus- labor area.

C
-do...

2. 04 try as a whole. To the extent that procure- It is explained that mills located in sur- D

--do....

2. 06 E. ---do...

2. 08 ment policies can help to stabilize condi- plus-labor areas are not given preference as

F..
..do.

2. 10 tions in the textile industry, the panel finds such with respect to textile contracts for

G, etc.

12. 12 that such assistance to stabilization within the reason that the industry would be the industry will help to maintain the pro- seriously affected since the Government ductive facilities and the skilled labor force buys a substantial amount of its products of the industry in the interest of future con- and a significant number of firms are con- In this case firms A-F would be successful tingent needs of the Nation for maximum centrated in surplus-labor areas. Conse- bidders; firms G, H, I, etc., would be production of textiles.

quently, the Director, Office of Defense Mo- squeezed out. But if 200,000 yards of the

_do.

1 And up.

procurement had been set aside, the high- tion of whether we are going to appro- from other areas. In fact in some cases est price of any successful award would priate billions of dollars.

goods were purchased at lower prices. have been $2.06. Mr. SALTONSTALL. Will the Sen

Yours very truly, A firm working not more than 80 hours

MARTIN P. DURKIN, ator permit me to finish my statement? per week, in order to participate in the set

Secretary of Labor. aside 200,000 yards, would have to submit If the Senator says the committee made a bid of not more than $2.03.

Mr. President, there are other letters a report, I will take his word for it. The Government is thus saved an aver- Mr. MAYBANK. I will not say it addressed to the chairman of the Apage of 6 cents per yard on the 200,000 yards made a report. The Banking and Cur- propriations Committee by Mr. Arthur S. under the set-aside. Nor is there any addi- rency Committee, under the able leader- Flemming,

Director of Defense Mobilizational overhead cost: although textile con- ship of the Senator from Indiana [Mr. tion, and, I think, from the Secretary of tracts cost the Government, on the average, CAPEHART), in rewriting the law in con- Defense, and I would ask the acting $557 each to administer, the set-aside, by it

nection with controls, eliminated that chairman of the Appropriations Comself, does not increase the number of con

section of the law which applies to what mittee to read those letters when he tracts involved.

the Senator has been speaking about. makes his remarks. Mr. SALTONSTALL. Mr. President,

Mr. SALTONSTALL. I was referring Mr. HAYDEN. It is quite evident that the money-saving aspect of DMP No. 4 to the report of the Committee on De- an excellent argument can be made for is also evident in the case of negotiated fense Production.

a proposal that takes work to the worker. procurements. In such procurements Mr. President, I have a letter dated But when Congress enacts a statute dethe bid-matching privilege of surplus July 20, 1953, from the Secretary of

July 20, 1953, from the Secretary of pendence must be placed on how it operlabor area firms forces firms not located Labor, Mr. Martin P. Durkin, which I

ates. Instead of taking work to the in such an area to shave their profit shall read, as follows: :

worker, in the instance I am familiar margins in order to avoid the possible

JULY 20, 1953. with, it takes work away from workers loss of the contract to a firm entitled The Honorable LEVERETT SALTONSTALL,

who are skilled and moves it to another to the bid-matching privilege.

United States Senate,

place at greater cost to the Government. Another aspect of DMP No. 4, Mr.

Washington, D.C.

Does the Senator say that is the fault President, which should also be made DEAR SENATOR SALTONSTALL: I am respond- of the law, or the fault of the adminisvery clear is its close connection with ing to your inquiry regarding the views of

tration of the law? this Department concerning the objectives procedures designed to assist small busiand experience with defense manpower poli

Mr. SALTONSTALL. Would the Senness. Under the surplus labor area setcy No. 4. The success of the mobilization

ator repeat his question briefly please? aside procedure that I tried to describe

program, in the development of our capacity Mr. HAYDEN. If an instance can be a few minutes ago, small business firms

to defend the Nation, requires efficient usé pointed out under this very law where are entitled to second priority after sur

of all of our resources including manpower the cost to the Government was greater plus labor area firms. If no firm in the as well as facilities. In keeping with the and work was taken away from skilled latter category is able to match the suc- objectives of full utilization of productive cessful bid or bids on the publicly adver- capacity and plant facilities, we must take

workers in one area, in order to provide

work in another area for persons not tised part of the procurement, small every reasonable step to make the most effi

cient use of our manpower resources. firms outside surplus labor areas are

so skilled, would the Senator say that given next crack at the contract. The Our manpower policy is primarily concerned was the fault of the law, or the fault of

with bringing defense work to the workers the way in which the law was adminisresult is that 76 percent of all set-aside

in preference to moving them. The move- tered? contracts thus far awarded under DMP

ment of large numbers of workers to al- Mr. SALTONSTALL. If the Senator's No. 4 have gone to small firms.

ready tight areas creates serious burdens on As crowning proof of the undesirabil- community facilities such as schools, hospi

facts are correct, I would say the law

was administered in a poor way. ity of attempting by an appropriations tals, housing, transportation, and utilities. rider to restrict the power of the ad- Utilization of available labor supply, on the

Mr. HAYDEN. Let me give the Senministration to control the tremendous other hand, reduces unemployment, costs of ator the facts. At the request of the impact of defense spending, I should like unemployment compensation and permits armed services, in order to disperse the to remind the Senate that the Joint use of idle plants and tools.

parachute industry, a factory was estabDefense Production Committee has held

Locating work where needed workers are lished in Phoenix, Ariz., which employed

available will full and detailed hearings on the opera

some 250 seamstresses making para

(a) Contribute greatly to the utilization tion of DMP No. 4. That committee of the Nation's total manpower potential the Phoenix company made a lower bid

chutes. The time came for bidding and has not yet submitted any findings to by making full use of each area's manpower the Senate. It would be premature and resources;

than any other bidder. What happened? unwise to anticipate its findings by the (b) Conserve manpower by (1) minimiz

A Brooklyn concern, not in a labor scarcadoption of a rider to an appropriations ing the need for migration, and (2) reducing ity area, agreed to take over the job at bill which has not had the benefit of labor turnover and absenteeism caused by a higher price, and opened its manufacany hearings or any study by the Gov

inadequate housing and community facili- turing establishment in Massachusetts,

ties; ernment agencies that would be most

the Senator's State. What was the efdirectly affected.

(c) Help assure timely delivery of required fect? The skilled workers, the seam

goods and services; Mr. President, I was one of those who

stresses, who knew how to do the work,

(d) Preserve employee skills necessary to testified before the committee. The the fulfillment of Government contracts and

were displaced. They lost their jobs. committee has not rendered a report,

Workers had to be reassembled in Maspurchases; and and yet, on an appropriation bill, with- (e) Maintain needed productive facilities.

sachusetts and had to acquire skills. In out any hearing of any kind, we go for

The principle of taking work to the worker

the end the transfer cost the Governward to adopt the rider. is supported by management and labor as

ment more money. Mr. MAYBANK. Mr. President, will represented on the National Labor-Manage- Mr. SALTONSTALL. The Senator the Senator from Massachusetts yield? ment Manpower Policy Committee which ad- from Arizona mentioned that before the Mr. SALTONSTALL. I yield.

vises the Director of the Office of Defense committee the other night, and I would Mr. MAYBANK. When the Banking

Mobilization and the Secretary of Labor. reply to him by saying that we have and Currency Committee rewrote the

Locating work as provided by Defense Man

made inquiries of the Office of Defense National Production Act this year, pro

power Policy No. 4 has caused no substantial
adverse effect on the national economy or on

Mobilization. The company to which vision was made for a Joint Committee any given area; however, the amounts of

the Senator has referred is the Phoenix on Production. We thought so well of it work which have gone into surplus man

Parachute Co. Am I correct? that it was adopted. The Senator from

power areas have assisted these areas in Mr. HAYDEN. That is correct. Arizona [Mr. HAYDEN] is a member of utilizing manpower and facilities in the Mr. SALTONSTALL. I quote from an the committee, and he knows about it. interest of national defense. The policy has served to emphasize the need to avoid areas

informal report of the Office of Defense Now the function is turned back to the

of critical labor shortage. military.

Mobilization concerning that incident.

I wish to point out to you that this I deeply appreciate the Senator's atti

This is not firsthand information; it is policy has been implemented in such a way tude, and I deeply appreciate the situa

information that was submitted to me. as to secure goods and services for the Govtion in Massachusetts. It is a question

This firm lost part of a $4 million paraernment from surplus manpower areas at chute procurement to a New York firm of free enterprise, and it is also a ques- prices no higher than for goods purchased intending to move to Lowell, Mass.

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On the original bids the procurement lieve the Senator from Massachusetts Mr. GEORGE. Will the Senator perwas split four ways, with the Arizona agrees with the fundamental policy be- mit me to ask him if I am laboring under firm being the fourth lowest. hind this practice.

a misapprehension when I say that I In other words, they were fourth up As the distinguished Senator from thought this was a bill for the national from the bottom. I am informed there South Carolina (Mr. MAYBANK) has said defense? were other bids above that.

the entire $38 million can eventually Mr. SALTONSTALL. It is. This was a bona fide case of losing a work around into so-called distressed - Mr. GEORGE These appropriations contract in the normal way under DMP areas. Sooner or later we can create are taken from the money of the taxNo. 4, but it remains true that the Lowell distressed areas in every State of the payers all over the country. firm would not have had a chance at the Union.

Mr. SALTONSTALL. That is corcontract if it had not submitted a bid . Mr. SALTONSTALL. Mr. President, rect. lower than the Phoenix Co., that is, a I wish to be absolutely fair to my two Mr. GEORGE. This is not a bill for bid corresponding to the weighted aver- colleagues from Arizona. When we in

the relief of any particular section age of the four lowest bids, of which the quired into the Parachute case, the ODM

Mr. SALTONSTALL. It certa Phoenix Co.'s was the highest. said that it was thinking of making a

not, Mr. President; and I would say In other words, in that case the Gov- careful investigation of the parachute

Mr. GEORGE, I should like to ask ernment actually saved money, because industry under paragraph 8 of ODM

another question. It is not a labor regthe firm did the work at a lower price policy No. 4, which I have here, if Sen

ulation bill, is it? than that for which it would have been ators care to see it in order to assist done in Phoenix, Ariz. parachute-manufacturing companies in

Mr. SALTONSTALL. No. What the

Senator from South Carolina [Mr. MAYMr. HAYDEN. The only way the bid meeting clothing-company competition. could have been made lower was for the In other words, the question arose in the

BANK] is doing is endeavoring to place in Brooklyn company to have been made minds of officials of ODM as to whether

the bill an amendment which would deny

effect to an Executive order, based upon aware of the bid submitted by the Phoe- the competition of the clothing industry nix Parachute Co. I think my colleague is not harmful to the parachute industry.

other laws, which helps to make it poscan confirm that.

In this instance, from the Govern

sible for the Government to fulfill its Mr. SALTONSTALL. I think that is ment's point of view, money actually was

contracts without causing dislocation by true. That is the only advantage that saved. Employment was provided in a

making it necessary for unemployed peoan area of unemployment or distress is distressed labor area in which at the

ple, capable of doing defense work, to given by the DMP No. 4 procedure. Un- time, I believe, at least 20 percent of

move away from their homes into already

crowded areas. der that procedure, after the bids are in the labor force was unemployed. if the company in the distressed area is I do not stand here for a moment and

Mr. GEORGE. I have listened pawithin 120 percent of the lowest bid, it say that I believe that if the other area

tiently to the Senator. His remarks can rebid and get a part of the contract was left completely without industry or

seem to me to be in favor of some sort of at the weighted average prices of the without work for people in the industry, regulation of labor, or of relief. I am awards to the companies which got con- this ought to have been done. I do not

not laboring under the apprehension tracts under the formally advertised say that. As the junior Senator from

that this defense program was instituted part of the procurement.

Arizona has said, that would be robbing for any such purpose as that. Mr. GOLDWATER. Mr. President, Peter to pay Paul. However, I do say

Mr. SALTONSTALL. It certainly was will the Senator yield?

that the principle involved in the Execu- not; and I do not for one minute admit Mr. SALTONSTALL. I yield.

tive order has been of some help, al- to my friend from Georgia that what I Mr. GOLDWATER. I wish to add a though not a great deal. It is intended am advocating is relief. brief statement to what my colleague, to try to carry Government business into Mr. GEORGE, I respectfully suggest the senior Senator from Arizona [Mr. areas where there is skilled labor, rather to the Senator that he ought to resurrect HAYDEN], has mentioned in this connec- than to move labor out.

Harry Hopkins and get him to administion.

Mr. GEORGE, Mr. President, will the ter this program. I think he could do ODM policy No. 4 seems to be a fine ex- Senator yield?

a magnificent job, and he could relieve ample of robbing Peter to pay Paul. It Mr. SALTONSTALL. I yield.

distressed people in various areas of the is completely contrary to the free enter- Mr. GEORGE How much money ap

country where he war.ted to grant relief. prise system, under which we should be propriated in the bill could be used for We would go back to personal governoperating. I shall mention one more the purposes indicated by the distin

the purposes indicated by the distin- ment. I thought the present adminispoint in connection with the matter. I guished Senator from Massachusetts? tration said it was against personal point out the danger that exists under Mr. SALTONSTALL. Speaking quick- government, . this system.

ly from memory, after reading the hear- Mr. SALTONSTALL. This is not perThe firm that took the bid away from ings, although I do not say this is accu- sonal government. The regulations are the Phoenix Parachute Co., up to the rate, I would say that to date approxi- based upon laws which are very strict. time the letter was written, which was mately $52 million in contracts have The extent to which the Executive order May 16, 1953, had never manufactured been awarded. In the case of textiles, has been used is comparatively slight; any parachutes on its own premises. approximately $5 million has been and where it has been used it has been Evidently what it did—and I say this awarded to mills operating not more in an effort to get Government procurewithout full knowledge of the facts, but than 80 hours a week.

ment at no increased expense at least, it is quite evident that the firm oper- Mr. GEORGE. How much of the ap- and at the same time to relieve unemated in this way-was to take advantage propriation, which I thought was for ployment. of ODM policy No. 4, and, being located national defense, could be used?

Mr. GEORGE. I understand; but if in New York, it made a lower bid, and Mr. SALTONSTALL. I believe the we are to rely on Executive orders, we then went into a distress area and es- proper answer to the Senator's question can get one in behalf of steel, cement, tablished a factory.

is that any amount that procurement or anything else. What we are getting I understand from the president of the decided should be used. The provision back to is personal government. Under Phoenix Parachute Co. that up to a affects a policy of procurement.

this sort of procedure, we are leaving month ago the Brooklyn concern had Mr. GEORGE. Any amount that is

Any amount that is to the discretion of someone who wants not established a factory in Lowell, Mass. appropriated for procurement could be to change labor laws or someone who Again, I may be in error, but that was used?

wants to grant relief in a particular area the statement of the president of the Mr. SALTONSTALL. It could be used, of the country, to do just that. I say Phoenix Parachute Co., which, by the provided these four qualifications are now, as I said during a Democratic adway, is now out of business. met:

ministration, that personal government So in order to satisfy the so-called First, if it is a negotiated contract, it always leads to favoritism, and favoritdistress labor area of Massachusetts, we can be directed to a distressed laborism always leads to corruption and abuse. now have a distress situation in Phoenix, area.

That is precisely what is being underAriz. What we have is the dog chasing Mr. GEORGE, Mr. President, will the taken in this kind of program. his tail. We are robbing Peter to pay Senator yield?

Mr. KNOWLAND. Mr. President, will Paul. Where will it end? I do not be- Mr. SALTONSTALL, I yield.

the Senator yield? XCIX-597

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