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Veto of a Bill Relating to Rate of Wages for Laborers and Mechanics Employed by Contractors and Subcontractors on Public Buildings.

July 01, 1932

To the Senate:

I return herewith without approval Senate Bill 3847 "An Act to amend the Act approved March 3, 1931, relating to the rate of wages for laborers and mechanics employed by contractors and subcontractors on public buildings."

I attach hereto a memorandum from the Secretary of Labor setting out in detail the reasons for this action.

HERBERT HOOVER

The White House,

July 1, 1932.

Note: The Congress tabled the bill and no further action was taken. The Secretary of Labor's memorandum follows:

MEMORANDUM UPON SENATE BILL 3847

The bill should not be approved. It is obscure and complex, and would be impracticable of administration. It would stretch a new bureaucracy across the country. The bill is an amendatory substitute for the existing act of March 3, 1931, which is a clear and sufficient law. That law has been clarified and reenforced by an Executive Order lEO 5778] issued last January requiring certain stipulations in public contracts to make effective the manifest purpose of the statute. The law during its brief existence has worked with beneficial and generally satisfactory results, and without increase in personnel or appropriation is being administered so as to accomplish substantially the ends sought by this legislation, without the many objectionable features which it would entail.

The existing law of March 3, 1931, should not be scrapped for this proposed amendatory bill with its complexities and obscurities, the results of which could only be dissatisfaction, endless controversy in enforcement, and great increase in expense to the tax-payer.

The present law consists of two fundamental provisions. The first is that all contracts on the part of the United States or the District of Columbia for the construction, alteration, or repair of public buildings in excess of $5,000 shall contain a stipulation that laborers and mechanics employed on such work shall be paid not less than the prevailing rate of wages for work of a similar nature in the city, town, village or other civil subdivision of the State in which the public buildings are located, or in the District of Columbia if the public buildings are located there. The second provision is that every such contract shall contain a further stipulation that in case any dispute arises as to what are the prevailing rates of wages which cannot be adjusted by the contracting officer the matter shall be referred to the Secretary of Labor for determination and that his decision thereon shall be conclusive on all parties to the contract. It does not require a determination of the rate of wages by any Government official before the contract is let, nor even afterwards unless a dispute arises over the prevailing rate of wages in the locality. Such disputes requiring decision by the Secretary of Labor under the present law have been comparatively few because in a majority of the cases presented prevailing rates of wages as required by that law and agreeable to the contractor, the laborers and mechanics in the locality, and to the contracting officer, have been arrived at in the practical way of negotiation and conciliation without the necessity of formal decisions.

This new amendatory proposal introduces a complication into the law by requiring that the advertised specifications for every such contract shall contain a provision stating the prevailing rate of wages in the city, town, village, or other civil subdivision of the State or the District of Columbia, as determined by the Secretary of Labor. An enormous amount of preinvestigation would be necessary by representatives of the Department of Labor before the letting of each contract within the terms of the act in excess of $5,000. For, unless the fixing of the rate of wages be based upon a thorough personal investigation in the locality, the rate stated in the advertised specifications would only provoke dissatisfaction and controversy. Not only would the Government be put to great expense, but there would be cost and inconvenience to the contractors and to the employees remote from Washington to be represented personally before the Secretary of Labor at Washington for the consideration of their cases, all of which the Government would ultimately have to pay for in the contract price. Otherwise, investigations by competent representatives of the Secretary of Labor at great expense to the Government would have to be made in the locality in advance of the letting of every contract within the terms of this amendatory proposal. A large increase in the personnel of the Department of Labor would be necessary to deal with matters which experience under the present law has demonstrated in most cases do not arise and when they do arise can generally be adjusted through negotiation and conciliation to the satisfaction of all concerned. The policy of the present law is more practicable in requiring the investigation and decision by the Secretary of Labor in cases only where a dispute arises after the contract is let that cannot be settled by the contracting officer. For that reason a more thorough investigation and careful consideration can be given by the Secretary of Labor and his staff in the comparatively few disputes reaching him for decision.

The present law applies only to public buildings and hence requires consideration only of the rates in the locality of the building work, but the amendatory proposal applies also to public works and that would involve rates varying from one locality or state to another for the same work, as, for instance, in levee work on the Mississippi or road building in national parks or Government reservations.

Under the present law the rate of wages is that for "all laborers and mechanics" employed under contracts within the law, but the amendatory proposal requires the determination of the rate of wages for the "various grades of mechanics and laborers," clearly indicating that the rate is to be determined not only for the different trades, as bricklayers and carpenters, but for the different grades of such workers within each trade, which would require an official determination of the comparative efficiency of individual workers employed on the work by the contractor or subcontractor.

The amendatory proposal provides for fixed monetary penalties and deductions to be imposed upon the contractor for violations, thus excluding the idea that he may be otherwise penalized. The present law affords superior protection by leaving the matter of breach of its stipulations to be treated like a breach of any other stipulation of the contract. For that reason all consequences of a breach to the laborers and mechanics, to the Government, and to the contractor or subcontractor, may be taken into account in determining whether the contract should be abrogated or what other measure should be taken by the Government.

The amendatory proposal introduces a further new provision declaring that when any of the departments or independent establishment of the United States, including the District of Columbia, performs work "by Government plant and hired labor" which could have been performed under contract, but not including work in arsenals or navy yards, or work performed by the Panama Canal, such departments and establishments, including the District of Columbia, shall also pay not less than the prevailing rate of wages as established by the Secretary oœ Labor at the time the work is undertaken. This not only requires the Secretary of Labor to determine in such cases the prevailing rate of wages, but necessarily also to determine whether the work is such as could be done by contract; and there is no provision as to the method of determining such facts or œor any method for enforcing the findings of the Secretary of Labor. This new provision is obscure in many respects. For instance, it does not state any locality for use in determining the prevailing rate of wages for the purposes of this provision or whether it is subject to the $5,000 minimum limitation stated in another section of the bill relating to public works. Further, as to what is meant by "work" and whether "hired labor" would include permanent employees paid by the date or month at rates fixed according to other laws. Also, whether the provision applies only to work that is being done both in a Government plant and by hired labor or applies to either situation. A further obscurity is whether the provision is to apply when the work is not done by Government plant and hired labor but is let out to be done under contract.

The whole design of the new amendatory proposal requires an expansion of bureaucratic control over activities which now function effectively with the minimum of interference by the Government and that only when dispute arises.
W. N. DOAK
Secretary of Labor
June 30, 1932.

Herbert Hoover, Veto of a Bill Relating to Rate of Wages for Laborers and Mechanics Employed by Contractors and Subcontractors on Public Buildings. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/207125

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