[Senate Hearing 108-627]
[From the U.S. Government Publishing Office]
S. Hrg. 108-627
APPALACHIAN COUNCIL AND WORKING FOR AMERICA INSTITUTE
=======================================================================
HEARING
before a
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
SPECIAL HEARING
JULY 22, 2004--WASHINGTON, DC
__________
Printed for the use of the Committee on Appropriations
Available via the World Wide Web: http://www.access.gpo.gov/congress/
senate
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COMMITTEE ON APPROPRIATIONS
TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky TOM HARKIN, Iowa
CONRAD BURNS, Montana BARBARA A. MIKULSKI, Maryland
RICHARD C. SHELBY, Alabama HARRY REID, Nevada
JUDD GREGG, New Hampshire HERB KOHL, Wisconsin
ROBERT F. BENNETT, Utah PATTY MURRAY, Washington
BEN NIGHTHORSE CAMPBELL, Colorado BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas RICHARD J. DURBIN, Illinois
MIKE DeWINE, Ohio TIM JOHNSON, South Dakota
SAM BROWNBACK, Kansas MARY L. LANDRIEU, Louisiana
James W. Morhard, Staff Director
Lisa Sutherland, Deputy Staff Director
Terrence E. Sauvain, Minority Staff Director
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Subcommittee on Departments of Labor, Health and Human Services, and
Education, and Related Agencies
ARLEN SPECTER, Pennsylvania, Chairman
THAD COCHRAN, Mississippi TOM HARKIN, Iowa
JUDD GREGG, New Hampshire ERNEST F. HOLLINGS, South Carolina
LARRY CRAIG, Idaho DANIEL K. INOUYE, Hawaii
KAY BAILEY HUTCHISON, Texas HARRY REID, Nevada
TED STEVENS, Alaska HERB KOHL, Wisconsin
MIKE DeWINE, Ohio PATTY MURRAY, Washington
RICHARD C. SHELBY, Alabama MARY L. LANDRIEU, Louisiana
ROBERT C. BYRD, West Virginia (Ex
officio)
Professional Staff
Bettilou Taylor
Jim Sourwine
Mark Laisch
Sudip Shrikant Parikh
Candice Rogers
Ellen Murray (Minority)
Erik Fatemi (Minority)
Adrienne Hallett (Minority)
Administrative Support
Carole Geagley
C O N T E N T S
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Page
Opening statement of Senator Arlen Specter....................... 1
Statement of Hon. Thomas Dowd, Deputy Assistant Secretary of
Labor, Employment and Training Administration, Department of
Labor.......................................................... 3
Prepared statement........................................... 6
Statement of Hon. Bobby Baker, mayor, Batesville, MS............. 31
Prepared statement........................................... 32
Statement of Jim Bowen, president, West Virginia AFL-CIO......... 32
Prepared statement........................................... 34
Statement of Gary Darlington, executive director, Appalachian
Council........................................................ 35
Prepared statement........................................... 37
Statement of William M. George, president, Pennsylvania AFL-CIO.. 38
Prepared statement........................................... 40
Summary statement of Nancy Mills................................. 43
Statement of Herbert Mabry, chairman emeritus, Appalachian
Council........................................................ 44
Prepared statement........................................... 46
Summary statement of William Burga............................... 47
Prepared statement of Senator Robert C. Byrd..................... 50
Questions submitted by Senator Robert C. Byrd.................... 53
APPALACHIAN COUNCIL AND WORKING FOR AMERICA INSTITUTE
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THURSDAY, JULY 22, 2004
U.S. Senate,
Subcommittee on Labor, Health and Human
Services, and Education, and Related Agencies,
Committee on Appropriations,
Washington, DC.
The subcommittee met at 9:36 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Arlen Specter (chairman)
presiding.
Present: Senator Specter.
opening statement of senator arlen specter
Senator Specter. Good morning, ladies and gentlemen. The
Appropriations Subcommittee on Labor, Health and Human
Services, and Education will now proceed.
The hearing this morning is on the Appalachian Council and
Working for America Institute.
The AFL-CIO Appalachian Council has, for nearly 40 years,
contracted with the Department of Labor to provide services for
Job Corps students. Its current contract expired on April 30th
of this year. At the time of the termination, the annual budget
of $3,900,000 was allocated $1,700,000 for vocational training,
and $2,200,000 for career transitional service support to help
Job Corps students acquire jobs.
There is very considerable interest by this subcommittee
and the Appropriations Committee generally and, for that
matter, the entire Congress on these Job Corps centers, but
especially because one Job Corps center is in Pittsburgh,
another is in Charleston, West Virginia, and I know that
Senator Byrd, the ranking member of the full committee, is very
concerned about that. There is another Job Corps center in
Batesville, Mississippi.
I would note that Senator Cochran is both a member of this
subcommittee and with Senator Stevens rotating off on term
limits from the chairmanship of the committee, Senator Cochran
is in line to be chairman of the committee next year.
I know of the work of the Job Corps center in Pittsburgh
personally, having visited it on many occasions. I recollect
going there with Senator Heinz in the early 1980's shortly
after I was elected to the Senate and noting how important that
work was.
When you talk about Job Corps, obviously we are talking
about some of the neediest of individuals who are not in the
college ranks or the Ph.D. or the professional ranks, but are
looking for jobs. In a sputtering economy, I think we are on
the way back, but we still have problems, frankly especially in
southwestern Pennsylvania in our State. There are some pockets
where there are major, major problems.
I would be less than candid if I did not say that I was
concerned about the activities of the Department of Labor here.
As soon as I found out about the matter, I wrote to Secretary
of Labor Chao on March 3. We will have a copy of this letter
put in the record.
[The letter follows:]
U.S. Senate,
Washington, DC, March 3, 2004.
Hon. Elaine Chao,
Secretary, U.S. Department of Labor, 200 Constitution Avenue, NW,
Washington, DC.
Dear Madame Secretary: I am writing to you concerning your
Department's recent decision to not award a new contract to the
Appalachian Council-AFL/CIO, following the expiration of the current
contract (E-7056-9-00-82-30).
The Appalachian Council is a nationally recognized provider of
education and training services, and has served the employment needs of
our Nation for nearly 40 years. This outstanding organization provides
training for youth at three vocational training sites--including the
Pittsburgh Job Corps Center--as well as enhanced job development and
other placement services for Job Corps graduates throughout the United
States.
I am troubled by the adverse impact discontinuation of this
contract will have on our ability to effectively train Job Corps
students, and accordingly, strongly urge you to renew the contract with
the Appalachian Council.
Thank you for your personal attention to this matter.
My best.
Sincerely,
Arlen Specter.
Senator Specter. I put a personal note on it to her noting
it is a very good program and very important to me. I received
a reply from Ms. Emily DeRocco, Assistant Secretary of Labor
for Employment and Training, informing me that the contract
would expire on April 30, just 2 days later, and would not be
renewed. I think that this subcommittee and the chairman are
entitled to a little more consideration than that.
I wrote to Secretary Chao again on March 31 of this year,
and I will put a copy of that letter in the record. I will also
put a copy of the letter from Secretary DeRocco dated April 28
into the record and a copy of my letter to Secretary Chao dated
March 31 in support of the application of the AFL-CIO Working
for America Institute to continue its work for the program year
July 1, 2004 through June 30, 2005, and I have not yet received
a reply.
[The letters follow:]
U.S. Senate,
Washington, DC, March 31, 2004.
Hon. Elaine Chao,
Secretary, U.S. Department of Labor, 200 Constitution Avenue, NW,
Washington, DC.
Dear Madame Secretary: Last spring I wrote to you on behalf of the
AFL-CIO Working for America Institute. At that time, the Institute was
awaiting a decision on a grant proposal to continue their work in
establishing labor-management partnerships in key industry sectors and
to provide training and technical assistance to labor representatives
who serve on state and local Workforce Investment Boards (WIBs).
While I was disappointed that the Institute's sectoral work was not
funded--especially as it included a manufacturing partnership in
southwest Pennsylvania--I was appreciative of the Department's decision
to continue to fund the Institute's program of support for WIB Labor
Representatives. As you noted in your July 2003 announcement of the
grant, organized labor is a statutory stakeholder in the public
workforce investment system and their input is important to the
effective functioning of the system at the state and local level. I
know that to be the case in Pennsylvania, and the labor representatives
of our state value the training and technical assistance provided by
the Institute.
I understand that the scope of work for the current grant focused
heavily on the role of labor representatives and other union workforce
practitioners in implementing the expected changes in the Workforce
Investment Act (WIA). Action on that legislation has not been
completed, as the House-Senate conference has yet to be scheduled.
Nevertheless, there is a great deal of agreement on many changes to the
WIA system, and upcoming training sessions scheduled by the Institute
will go a long way toward preparing labor representatives to play an
active role in system improvements. I expect a large contingent of
labor representatives from Pennsylvania will participate in the East
Coast training session in New York City in May.
I also understand that the Institute has submitted a proposal to
continue their work in Program Year 2004. I wanted to let you know of
my strong support for that proposal and I trust that you share the
recognition that the job you have entrusted to the Institute requires a
continuation grant so that they can be active participants in the
implementation of WIA statutory changes even if the reauthorization
period extends into the next program year.
Thank you for your support of the fine work being done by the
Working for America Institute and your continued support for American
workers.
Sincerely,
Arlen Specter.
______
U.S. Department of Labor,
Assistant Secretary for Employment and Training,
Washington, DC, April 28, 2004.
Hon. Arlen Specter,
U.S. Senate, Washington, DC.
Dear Senator Specter: Thank you for your letter on behalf of the
Appalachian Council-AFL/CIO, regarding the expiration of the national
contract effective April 30, 2004.
The circumstances which make it necessary to refrain from renewal
of this contract are unfortunate. Despite ongoing remediation efforts
by the Department of Labor's Employment and Training Administration,
the delivery of services by the Appalachian Council has increasingly
failed to meet the standard necessary to address the needs of those
entrusted to the Job Corps program. An increasing number of youth
assigned to the Appalachian Council for services have not been
adequately trained or placed in jobs related to their training at
sustainable wages.
Please be assured that measures have been undertaken to prevent
interruption of services to students. Arrangements are being made for
the provision of vocational training and job placement services at the
Job Corps center.
If you have any questions, please don't hesitate to call me at
(202) 693-2700.
Sincerely,
Emily Stover DeRocco.
Senator Specter. It is, candidly again, a little hard for
this subcommittee to take the lead on funding the Department of
Labor when the chairman of the subcommittee writes and does not
get any response. That is just not the way the committee works
within our branches of Government.
STATEMENT OF HON. THOMAS DOWD, DEPUTY ASSISTANT
SECRETARY OF LABOR, EMPLOYMENT AND TRAINING
ADMINISTRATION, DEPARTMENT OF LABOR
ACCOMPANIED BY RICHARD TRIGG, SAN FRANCISCO REGIONAL ADMINISTRATOR,
EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR
Senator Specter. With that brief introduction, we will turn
now to our first witness, Deputy Assistant Secretary for
Employment and Training, Mr. Thomas M. Dowd. Prior to Mr.
Dowd's obtaining this position, he served as Director of
Business Relations and Regional Administration for the
Employment and Training Administration in Philadelphia and had
previously been a Peace Corps volunteer. He is a graduate of
the University of New Mexico, and he will be accompanied by Mr.
Richard Trigg, the ETA Regional Administrator in San Francisco
and former National Director of Job Corps.
Welcome, Mr. Dowd. Our committee practice is to have a 5-
minute opening statement. All formal statements will be made a
part of the record, and that will leave us the maximum time for
questions and answers. Please proceed.
Mr. Dowd. Mr. Chairman and members of the subcommittee, I
have worked with the Department of Labor for 10 years and
served as the Deputy Assistant Secretary of the Employment and
Training Administration for the last 18 months.
I am pleased to have the opportunity to testify regarding
the Department of Labor's past contract with the Appalachian
Council to provide vocational training, job placement, and
career transition services to Job Corps students and graduates.
I would also like to discuss briefly the Department's past
grants with the Working for America Institute which I will do
at the end of my remarks.
APPALACHIAN COUNCIL
The Appalachian Council's contract was one of nine sole-
source national vocational training contracts with unions,
union-affiliated entities, and a national business
organization. We refer to them as National Training
Contractors, or NTCs.
Senator Specter. Mr. Dowd, Senator Thurmond was renowned
for one of his comments to witnesses. He would always say, pull
the machine a little closer. You are out of range of that. You
have got it turned on all right. Even a little closer yet, Mr.
Dowd.
Mr. Dowd. Thank you, sir.
Sole-source contracts are awarded without competitive
bidding and are rare, making up approximately 4 percent of the
Job Corps' operating budget. The overwhelming majority of Job
Corps contracts are competitively bid through the solicitation
and procurement process. The NTCs must meet the stringent
requirements of the Federal Acquisition Regulations, or FAR,
including the requirements that the services provided are
available from only one responsible source and that the
services result in positive outcomes and performance.
The NTC contracts have always been for 1 year with 4 option
years. During 2003 and early 2004, as the NTC contractors were
completing their fourth option year, the Department reviewed
all NTC contracts to determine whether each contract still met
the FAR sole-source procurement requirements and determined
that the Appalachian Council contract no longer met the
requirements.
The contract with the Appalachian Council had two distinct
components: (1) placement and career transition services; and
(2) training for students in a variety of trades at the three
Job Corps centers.
The Workforce Investment Act, WIA, of 1998 and its
implementing regulations require that continued services,
including transition support and workplace counseling, be
provided to all Job Corps students for 12 months following
their graduation from the program. To meet this much broader
post-training requirement, the Job Corps began contracting for
career transition services through the competitive procurement
process.
Prior to WIA, the Appalachian Council was the sole provider
of career transition services to Job Corps graduates.
Currently, however, Job Corps has 87 contracts for career
transition services with approximately 150 providers throughout
the Nation providing those services. Therefore, the Council is
no longer the only responsible source for career transition
services and does not meet the FAR standards for sole-source
procurement. However, the Appalachian Council is encouraged to
compete, along with the other providers, to offer career
transition services to Job Corps graduates.
With respect to the training portion of the Appalachian
Council's contract, the Council's performance was overall
unsatisfactory and consequently did not justify renewal. ETA
closely monitors the performance of each training contractor.
When performance levels are inadequate, we establish a 1-year
probationary period during which we require the NTC to develop
and implement a Program Improvement Plan. If meaningful
performance improvement does not occur, the program is closed
or training slots are reduced.
With regard to Appalachian Council's training programs,
poor performance became evident in the last contract period,
which began November 1, 1998. Over the past 4 years, 23 percent
of the Appalachian Council's 22 vocational training programs
were closed due to continued poor performance, as compared to
approximately 10 percent of all other NTC programs.
By June 30, 2003, the Appalachian Council's last full
operating year, they reported the lowest performance outcomes
of all NTCs and center-operated vocational programs for the
following major performance indicators: vocational program
completers, placements, initial average hourly wage, and
average hourly wage when placed in a job that is related to
training.
We required the Council to develop a Program Improvement
Plan to eliminate the identified weaknesses in the program in
order to make it an effective training provider for Job Corps
students. We determined that continuation of the poorly
performing Appalachian Council contract is not in the best
interest of Job Corps students.
At the Department of Labor, we believe that effectively
managed programs result in better performance and that those
programs that do not work must be strengthened or terminated.
Even where we have had a long-term contractual relationship
with service providers, if the activities are not producing
results needed for the Nation's young people, the Government
has an obligation to terminate ineffective contracts.
WORKING FOR AMERICA INSTITUTE
With regard to the Working for America Institute, ETA
awarded a $1 million grant to the organization for program year
2003 to continue providing training and technical assistance to
labor representatives on State and local workforce investment
boards. On March 5, 2004, ETA received an unsolicited proposal
from the Working for America Institute seeking financial
support to continue such activities.
We believe strongly that grants previously awarded to
community-based organizations, business, and government
associations, and other organizations such as Working for
America Institute, that focused on developing organizational
relationships to promote workforce development are not the best
use of limited resources at this time.
To help clarify our funding priorities, we have met with
numerous representatives from nonprofit organizations and
associations, including the Working for America Institute
leaders, seeking grants through sole-source procurement. While
the capacity-building grants have ended, these organizations
are welcome to submit proposals that demonstrate employment and
reemployment of workers as a primary focus. We are looking for
unique approaches to serving targeted groups such as low income
individuals or youth offenders or projects that improve the
skills of workers in high growth industries.
PREPARED STATEMENT
Mr. Chairman, this concludes my opening statement. Again, I
appreciate this opportunity to appear before you on behalf of
the Department of Labor's Employment and Training
Administration. I am prepared to respond to any questions that
you and your colleagues may have.
[The statement follows:]
Prepared Statement of Hon. Thomas M. Dowd
Mr. Chairman, and members of the Subcommittee, I am pleased to have
the opportunity to testify regarding the Department of Labor's past
contract with the Appalachian Council to provide vocational training,
job placement and career transition services to Job Corps students and
graduates. I would also like to discuss briefly the Department's past
grants with the Working for America Institute, which I will do at the
end of my remarks.
Job Corps was created in 1964 to provide job training and placement
services to economically disadvantaged youth ages 16-24. Most of the
70,000 youth enrolled in the program annually are served in the 118
residential centers and 2 non-residential programs, the majority of
which are operated through competitively-procured contracts. The
typical Job Corps student is a high school dropout who reads just above
the 7th grade level, belongs to a minority group and has never held a
full-time job. Job Corps consistently achieves good results for these
youth and helps them embark on meaningful, sustainable careers.
The Appalachian Council's contract was one of nine ``sole-source''
national vocational training contracts with unions, union-affiliated
entities, and a national business organization--we refer to them as the
National Training Contractors (NTCs). ``Sole-source'' contracts are
awarded without competitive bidding and are rare--making up only a very
small percentage of Job Corps contracting (approximately four percent
of the Job Corps operating budget). The overwhelming majority of Job
Corps contracts are competitively bid through the solicitation
procurement process. The NTCs must meet the stringent requirements of
the Federal Acquisition Regulations (FAR), including the requirements
that the services provided are available from only one responsible
source, and that the services result in positive outcomes and
performance. Job Corps declined to renew the Appalachian Council's
contract both because the Council no longer qualified as a ``sole-
source'' and because its performance was unsatisfactory, particularly
regarding average hourly wages for graduates. For example, at the close
of Program Year 2002, the Council's last full operating year, average
hourly wages for Appalachian Council graduates at initial job placement
were $7.71, compared to $8.84 for all NTCs (including the Appalachian
Council).
The NTC contracts have always been for one year with four option
years. During 2003 and early 2004, as the NTC contractors were
completing their fourth option year for the contract period November
1998 to January 2004, the Department reviewed all NTC contracts to
determine whether each contract still met the FAR sole-source
procurement requirements. This review resulted in a determination that
the Appalachian Council contract no longer met the sole-source contract
requirements.
The contract with the Appalachian Council had two distinct
components: (1) placement and career transition services through its
Industrial Work Experience Program, and (2) training for students in a
variety of trades at three Job Corps centers. After careful review, we
concluded that the Council was no longer the only responsible source
because the passage of the Workforce Investment Act of 1998 (WIA)
resulted in expanded career transition services and a concomitant
increase in the number of contractors able to offer such services.
With the passage of WIA, the Job Corps changed its approach to
investments in post-program continued services. This change
strengthened the program's emphasis on achieving long-term labor market
attachment and good wages for Job Corp graduates.
Specifically, section 148(d) of WIA and its implementing
regulations require that continued services, including transition
support and workplace counseling, be provided to all Job Corps students
for 12 months following their graduation from the program. To meet this
much broader post-training requirement, the Job Corps began contracting
for career transition services such as these through the competitive
procurement process.
Prior to the passage of WIA, the Appalachian Council was the sole
provider of career transition services to Job Corps graduates through
its Industrial Work Experience Program. Job Corps' previous contracts
with the Council, therefore, were appropriately sole-sourced to the
Council because it was the only responsible source for those services.
Currently, however, Job Corps has 87 career transition service
contracts, providing services at over 100 sites.
The expansion of career transition services in the past 3 years to
all graduating Job Corps students caused the large increase in the
number of career transition service contractors. Because of this, the
Council is no longer the only responsible source for career transition
services and, therefore, does not meet the FAR standards for sole-
source procurement. However, the Appalachian Council is encouraged to
compete, along with the other providers, to offer career transition
services to Job Corps graduates.
With respect to the training portion of the Appalachian Council's
contract, the Council's performance was unsatisfactory and,
consequently, did not justify renewal. The Office of Job Corps closely
monitors each of the National Training Contractors to ensure that the
contractor's performance actually results in meaningful employment
outcomes for our graduates, such as job placement, retention, and
earnings growth. Of course, not all programs perform at the same level,
and when performance levels are inadequate, we establish a one-year
probationary period during which we require the NTC to develop and
implement a Program Improvement Plan. If meaningful performance
improvement does not result, the program is closed or training slots
are reduced until the contract can be terminated. All NTC programs are
subject to the same rigorous review and corrective action system. With
regard to the Appalachian Council's training programs, poor performance
became evident early in the last contract period, which began November
1, 1998, for the following performance indicators: Average Hourly Wage
at Initial Placement; Job Training Match (JTM); and JTM Average Hourly
Wage. As a result of this poor performance, we required the Council to
develop a Program Improvement Plan to eliminate the identified
weaknesses in the program in order to make it an effective training
provider for Job Corps students.
Over the past four years, 23 percent of the Appalachian Council's
22 vocational training programs were closed due to continued poor
performance, as compared to approximately 10 percent of all other NTC
programs. This reduced total contract slots by 114 from 542. By June
30, 2003, the Appalachian Council's last full operating year, they
reported the lowest performance outcomes of all NTCs and center-
operated vocational programs for the following major performance
indicators: vocational program completers; placements; initial average
hourly wage; and average hourly wage when placed in job-related
training. The Appalachian Council also had the lowest weekly earnings
at 6 months, $352, and 12 months, $359, following initial placement, as
compared to $383 and $393, respectively, for all other NTC programs.
The Appalachian Council did not improve performance after
implementation of their Program Improvement Plan.
In the end, we arrived at our decision to not renew the Appalachian
Council's contract because the Council no longer meets the FAR
requirements for a sole-source award given the proliferation of
available career transition service contractors. In addition, we
determined that the continuation of their poorly performing training
contract is not in the best interest of the at-risk youth that the Job
Corps serves.
At the Department of Labor, we believe that effective program
strategies and activities should be continued, and those that do not
work must be strengthened or terminated. Even where we have had long-
term contractual relationships with service providers, if the
activities are not producing the results needed for the Nation's young
people, the government has an obligation to terminate ineffective
training contracts, such as we did in this instance with the
Appalachian Council.
With regard to the Working for America Institute, the Employment
and Training Administration awarded a $1 million sole-source grant to
the organization for Program Year 2003 to continue providing training
and technical assistance to labor representatives on state and local
workforce investment boards. On March 5, 2004, ETA received an
unsolicited proposal from the Working for America Institute seeking
financial support to continue its program of training and technical
assistance for labor representatives on local workforce boards.
We reviewed the proposal and determined that this type of general
capacity building no longer coincides with the Department's priorities
to award discretionary grants that support initiatives focused on
training workers in the skills necessary to ensure their employment or
reemployment. This distinction is particularly important now that WIA
is in its fifth year of implementation.
We believe strongly that grants previously awarded to community-
based organizations, business and government associations, as well as
entities such as the Working for America Institute, that focused on
developing organizational ``relationships'' to promote workforce
development, are not the best use of limited resources at this time.
To help clarify our funding priorities, we have met with numerous
representatives from non-profit organizations and associations,
including the Working for America Institute leaders, seeking grants
through sole-source procurement. While the ``relationship'' grants have
ended, ETA has advised each organization that they are welcome to
submit proposals that demonstrate employment and reemployment of
workers as a primary focus. We have also shared that we are looking for
unique approaches to serving targeted groups (e.g., low income, youth
offenders, dislocated workers, etc.) or as part of a high growth
project that improves skills of workers in a high growth industry such
as health services, construction, and biotechnology. Additionally, we
want to see measurable outcomes and results included in each proposal
specifically, and at a minimum, outcomes relating to participants'
entered employment, job retention and wage gains.
In a meeting with representatives from the Working for America
Institute in January 2004, we indicated that future funding would be
considered in the context of a high growth or targeted group project.
The Working for America Institute representatives were given
information and encouraged to both respond to future competitive grant
opportunities and to submit a concept paper in the high growth area if
they felt they had a viable project design.
Mr. Chairman, this concludes my testimony. Again, I appreciate this
opportunity to appear before you on behalf of the Department of Labor's
Employment and Training Administration. I am prepared to respond to any
questions that you may have.
CORRESPONDENCE WITH THE DEPARTMENT OF LABOR
Senator Specter. Mr. Dowd, are you in a position to tell
this subcommittee why I did not receive or the subcommittee,
acting through me as its chairman, did not receive an answer to
my letter of March 3 until April 28, just 2 days before the
contract was to expire?
Mr. Dowd. No, I am not, but I will absolutely look into it
as soon as I return to the office.
Senator Specter. Would you repeat that answer, please?
Mr. Dowd. No, I am not prepared because I do not know the
facts, but I will check it immediately upon returning to the
office to find out what is the status of the response.
Senator Specter. Well, the facts are that I wrote on March
3 and received an answer on April 28 and the contract was due
to expire on April 30. Those are the facts. Why did I not get a
timely response?
Mr. Dowd. As I said, Senator, I do not know but I will
absolutely check to see where the response is in the Department
to make sure that we get an answer back to you and why we did
not respond----
Senator Specter. Well, did you check your file on this
matter before coming to testify here today?
Mr. Dowd. I checked to see the letters that did get sent up
here and I did not find any record on the response that you
indicated that we did not make to you.
Senator Specter. Are you in a position to tell me why my
letter of March 31 to Secretary Chao concerning the AFL-CIO
Working for America Institute has not yet been answered?
Mr. Dowd. I will also check on that letter to see what the
status of that one is as well.
Senator Specter. Mr. Dowd, how can this subcommittee make
recommendations for a multi-billion dollar budget when we do
not have any lines of communication with your Department?
Mr. Dowd. I agree that we need to better communicate back
to you and respond to your requests, and I will check and see
what the status is.
WAGE RATES AND GEOGRAPHICAL WAGE DIFFERENTIALS
Senator Specter. In your written statement, you have cited
that the Appalachian Council's contract was unsatisfactory,
particularly regarding hourly wages for graduates and you cite
the Appalachian Council's graduates at initial job placement at
$7.71 compared to $8.84 for all NTCs. What was the compensation
level after the initial job placement?
Mr. Dowd. Richard, do you have that number there?
Senator Specter. Initial job placement, of course, is a
snapshot at the start, but what happened later?
While they are searching for that, Mr. Dowd, perhaps you
can answer this question. Where were the other Job Corps
centers located?
I know Mr. Trigg, according to the information here, is
from San Francisco where you have a very substantially higher
compensation level than you do in the Appalachian Regional
Commission. When you trace the Appalachian Regional Commission
through the south and into western Pennsylvania, you come to
very, very tough economic places. So there would be an
expectation that when you are looking at Mississippi, when you
are looking at Alabama, looking at Kentucky, looking at
southwestern Pennsylvania, you would have a lower compensation
level. Has that been taken into account?
Mr. Dowd. Yes, I believe that is correct. The actual
average weekly earnings are averaged out over all of the
programs operated by the Appalachian Council. I think, Mr.
Trigg, you have those figures there now.
Senator Specter. Well, when you say NTCs, what does NTC
stand for?
Mr. Dowd. Well, that is all the National Training
Contractors.
Senator Specter. National Training Contractors.
Mr. Dowd. Yes.
Senator Specter. Some of those are located in San
Francisco?
Mr. Trigg. Yes, sir.
Senator Specter. How does the wage level in San Francisco
compare to the hill country of West Virginia? Have you been to
West Virginia, Mr. Trigg?
Mr. Trigg. Yes, sir, I have.
Senator Specter. Well, then you are in a position to answer
the question.
Mr. Trigg. Senator, the wages----
Senator Specter. I am going to ask you more questions
because I can hear you. It is a bad thing to be able to be
heard. You get more questions, Mr. Trigg. Go ahead.
Mr. Trigg. The wages that are set aside for all National
Training Contractors, as well as all of the center-operated
programs, are developed on a geographically-based model. So
marketing conditions in various regions are taken into
consideration when we establish the baseline models.
The expectation for our National Training Contractors is
that they perform at a higher level than our center-based
operators because of their sole-source nature.
Senator Specter. They perform at a higher level because of
why?
Mr. Trigg. Because this is a sole-source contract and they
have a special niche or special opportunities for placement for
these youth, the expectation, when we provide a sole-source
contract, is that they will perform at a higher level than
everyone else.
Senator Specter. Well, why is that? What unique
opportunities do they have for placement? And how can they
circumvent the critical problem? If you are in a depressed
area, you have lower compensation than when you are in San
Francisco. You do not have to be rocket scientist to know how
much higher prices are in San Francisco and how much more
people are paid there than they are in the Appalachian Regional
Commission if you take some of the towns in the South,
extending up through western Pennsylvania. So is that not a
factor that has not really been taken into consideration here?
Mr. Trigg. Well, Senator, I believe that the factor has
been taken into consideration. What we compare is not only the
Appalachian Council's performance, but we compare the
performance of all other NTC operations in those same
geographic areas, as well as the performance of center-based
programs in those geographic areas.
Senator Specter. Well, but your statistics here are the
Council at $7.71 compared to $8.84. That is not an enormous
differential to start with, but the other National Training
Contractors are obviously in areas which have higher wages. Is
that not true?
Mr. Trigg. That is true, sir.
Senator Specter. Well, I do not consider that to be a solid
reason for drawing a conclusion that the Appalachian Council is
no longer qualified because its performance was unsatisfactory,
particularly regarding average hourly wage for graduates in
light of the major, major discrepancies in the areas covered.
Farther on in your statement, Mr. Dowd, you talk about the
Appalachian Council had the lowest weekly earnings at 6 months,
$352, and 12 months. $352 compared to $383 again is not a major
discrepancy in my opinion. Do you think it is, Mr. Dowd?
Mr. Dowd. If I could, Mr. Chairman----
Senator Specter. Let me supplement the question. Do you
think it is especially in light of the difference in economic
levels of the Appalachian Commission compared to other more
lucrative areas?
Mr. Dowd. If I could, Mr. Chairman. We have vocational
training programs offered to the Job Corps students all across
the country and they are offered by the center operators who
competitively bid to run the Job Corps centers at the 118
centers. Those center operators offer vocational training
programs. Now, that is the center operators.
On the other side, we had nine, we now have eight National
Training Contractors. The national training contractors have
been given their contracts on a sole-source basis. They did not
have to competitively bid them. There is a distinction to be
made there.
Second, I want to share with you that of all of the NTC
contractors we have had, the Appalachian Council has
consistently been the lowest performing contractor of all nine.
It has consistently been----
APPALACHIAN COUNCIL PLACEMENT RATE
Senator Specter. Well, be specific, Mr. Dowd. In what
respect? Are you aware of the fact that the Appalachian Council
placed 87 percent of its graduates, according to the Labor
Department's own data, which is above the 85 percent
performance goal established by the Department?
Mr. Dowd. Yes. I will be specific. But on that particular
statistic, I would want to make sure that that is speaking to
placement in any job versus placement in actual jobs they were
trained for.
Senator Specter. Well, my question to you is were you aware
of that fact.
Mr. Dowd. Yes. We do have those facts.
Senator Specter. My question to you is were you aware of
that fact, not that you do have those facts. Were you aware of
that fact?
Mr. Dowd. Yes.
Senator Specter. Why was it not in your statement? Why not
give a full picture to the subcommittee of the achievements of
the Appalachian Council so we can evaluate it, as well as the
statistics which you think are derogatory?
Mr. Dowd. Well, if I might, sir. On that particular fact,
many of the contractors who provide vocational training--there
are two factors that are important to put forward. At the very
minimum, we would expect that National Training Contractors
would be able to place students who graduate in a job. But
obviously, that is not good enough. We do not want just any
job, even if it is 87 percent. We want a job that is
specifically related to the training they receive.
Senator Specter. Do you have facts at your disposal which
undercut the fact that the Appalachian Council exceeded the
goal? Do you have facts at your disposal that those jobs were
inferior jobs?
Mr. Dowd. We have facts that would show that their
placements for initial average wages are at least $1 less than
all other contractors who place students. That includes the
National Training Contractors as well----
Senator Specter. We have already dealt with the conclusion
that it is not comparable if you deal with, say, San Francisco
compared to West Virginia. Would you not agree that if you are
comparing San Francisco's starting salaries with West Virginia,
they are not even apples and oranges? They are acorns and
watermelons. Would you not agree with that?
Mr. Dowd. Well, I would agree that if we tried to compare
wages from West Virginia to California, there is a discrepancy,
but I do not believe that is what we do. What we do is take the
average of all the wages of all the operators that are placing
people across the country to try to regularize----
Senator Specter. Well, do you have any region which is in
as tough a financial shape as the Appalachian Regional
Commission?
Mr. Dowd. Well, I can think of a few Indian reservations
where we have got a couple of Job Corps centers, but it is one
of the toughest economic----
Senator Specter. You would agree that the Appalachian
Commission is one of the toughest. May the record show Mr.
Trigg is nodding in the affirmative. Right, Mr. Trigg?
Mr. Trigg. Yes. The Appalachian area is a very difficult
area.
PITTSBURGH JOB CORPS CENTER
Senator Specter. Well, gentlemen, I do not find your case
very strong condemning what the Appalachian Council has done.
What is happening to the Job Corps center in Pittsburgh
since April 30 with this contract not being let?
Mr. Dowd. The services at the Pittsburgh center are
continuing to be provided in the vocational programs that were
previously operated by the Appalachian Council. I want to be
clear that----
Senator Specter. Who is doing that?
Mr. Dowd. The center operator. And that kind of goes back
to my point a moment ago that----
Senator Specter. Are there other facets of what they are
doing besides what you just enumerated? What did you say is
continuing to be provided?
Mr. Dowd. The same training program that was previously
provided by the Appalachian Council is being managed and
operated by the center operator in Pittsburgh, so that the
program itself has not stopped. Students are continuing to be
trained.
Senator Specter. Were those folks operating it for the
Appalachian Council?
Mr. Dowd. No. The center operator is the contractor who is
running the center.
Senator Specter. So there was a change made on May 1?
Mr. Dowd. No.
Senator Specter. What happened after April 30 when you
terminated the contract of the Appalachian Council?
Mr. Dowd. All the centers are operated by center operators
that are not National Training Contractors. The National
Training Contractors also provide vocational programs at a
number of Job Corps centers. I want to draw the distinction
here. All of the center operators operate vocational training
programs.
Senator Specter. Well, what was the Appalachian Council
doing with respect to Pittsburgh prior to April 30?
Mr. Dowd. They were offering a variety of programs: food
service, health occupation, carpentry.
Senator Specter. And what has happened to those programs
after May 1?
Mr. Dowd. Right. The center operator, the contractor who
runs the Job Corps center, that runs the dormitory, runs the
food service, operates the entire center, and operates some of
their own vocational training programs, picked up these
programs and are continuing to offer them to the students.
Senator Specter. Are they doing a better job than the
Appalachian Council did? Have they increased initial job
placement?
Mr. Dowd. We believe that the center-operated programs in
Pittsburgh have certainly been comparable and better than the
programs that were offered by the National Training Contractor,
Appalachian Council.
Senator Specter. Well, aside from what you believe, which
is conclusory, have they gotten initial job placement at a
higher figure than the Appalachian Council?
Mr. Dowd. I believe that is correct for the programs that
they have operated. It is a little early to say with regard to
the programs they just picked up.
Senator Specter. You believe it is correct? I pause when I
hear comments about ``I believe.'' What I am interested in is
what you know based on facts. Do you know based on facts?
Mr. Dowd. The other vocational programs at the Pittsburgh
center are better in their performance than the Appalachian
Council in the Pittsburgh center. The difference is about $8.69
versus $8.16 per placement.
Senator Specter. And what period of time is that for?
Mr. Dowd. The past program year, which would have been July
2003 to June of this year.
Senator Specter. And what is that figure again?
Mr. Dowd. $8.69 versus $8.16.
Senator Specter. $8.69?
Mr. Dowd. Yes.
Senator Specter. Compared to $8.68?
Mr. Dowd. $8.16.
Senator Specter. $8.16? Is that a sufficient differential
to oust a long-term contractor?
Mr. Dowd. Well, I would say that there are circumstances
where the Appalachian Council's performance with some programs
was average. It was not any better or worse than most
contractors for those particular programs. But in totality
their overall performance as a contractor for all their
programs, as I indicated before, was the lowest-performing
contractor in the Nation for all National Training
Contractors----
Senator Specter. Would you provide this subcommittee with
backup statistics on that, specifying what the contractors were
other places, contrasted here?
Mr. Dowd. Yes.
[The information follows:]
Appalachian Council and Working for America Institute
background
Job Corps' contract with the Appalachian Council was one of nine
sole-source contracts administered through the national office of Job
Corps. Typically, contracts for center operations are procured through
Job Corps regional offices; the regional offices have primary oversight
over the centers. Most vocational training is provided by the center
operator as a part of the overall operation of the center. The National
Training Contractors (NTCs) are an exception to this rule. NTCs
typically have an expertise and network in one particular occupation
such as painting, carpentry, or masonry, and provide specialized
training in that field at as many as 30 or 40 different Job Corps
centers.
appalachian council contract
The contract with the Appalachian Council consisted of two tasks:
(1) provision of career transition services, and (2) provision of
vocational training. The following performance statistics relate solely
to the vocational training programs. The vocational training programs
provided by the Appalachian Council were not focused on one area of
expertise, as is the case for all other NTCs. The Appalachian Council
provided training in nine different occupations, and the training was
provided at only three Job Corps centers: Pittsburgh, PA; Batesville,
MS and Charleston, WV.
performance
In the last few program years, Appalachian Council's performance
was so poor that many of the vocational training programs were closed.
In fact, all programs at the Pittsburgh Job Corps Center were scheduled
to be closed.
The following charts reflect the Appalachian Council's most
significant performance deficiencies in the past six program years. The
Program Year (PY) begins on July 1 and ends on June 30 of the following
calendar year.
The following information indicates the Appalachian Council's
sustained poor performance in the areas of initial and long-term
earnings at the centers where they had vocational training programs
compared to other NTCs programs and center-operated programs at the
same three centers. Performance results were particularly disappointing
when compared to all other NTCs and center-operated programs
nationally.
Note: All the ``a'' charts are based on the national, overall
performance data for each program year listed, comparing the
Appalachian Council to all other NTCs and center-operated programs.
These are comparisons of national performance for all NTCs that include
both high and low wage areas.
All the ``b'' charts are based on the performance data for Calendar
Year (CY) 2003 comparing the Appalachian Council performance to the
NTCs and center-operated programs at the same three centers. CY 2003
data was used as it best reflects the Appalachian Council programs'
performance in its last full 12-month cycle before the contract ended
in February 2004.
1. initial average hourly wage
Definition
The sum of the hourly wage of vocational completers initially
placed in jobs or the military All vocational completers initially
placed in jobs or the military
Performance Trend
Chart 1a shows the Appalachian Council's deficiency, nationally, in
attaining initial average hourly wages as compared to all other NTCs
and Center-Operated Programs from PY 1998 through PY 2003. When
comparing Appalachian Council's initial average hourly wages with the
NTCs, the result is a difference well over $200 a month. In addition,
when comparing the Appalachian Council's initial average hourly wage to
the center-operated programs, the results were consistently below,
except in PY 1999 when the two are equal. For Job Corps graduates who
typically earn between $350 and $400 a week, this can be the difference
in a graduate's ability to pay for adequate housing or transportation.
Chart 1b, based on CY 2003 data, shows a similar pattern for the
initial placement average hourly wage measure. The Appalachian
Council's initial placement average hourly wage was below the other
NTCs and the center-operated programs at both Charleston and
Pittsburgh. The only exception is at Batesville where the Appalachian
Council's completers out-earned those from the center-operated
programs. Please note that the Appalachian Council is the only NTC at
Batesville.
2. job-training-match (jtm) average hourly wage (initial)
Definition
The sum of the hourly wage of vocational completers in training-
related employment or the military. All vocational completers who were
initially placed in jobs or the military.
Performance Trend
Chart 2a shows that the Appalachian Council's Job-Training-Match
(JTM) wage was outperformed by all NTCs in every program year from
1998-2003. In addition, the Appalachian Council's performance trailed
the center-operated programs for most of the past six program years.
The differences between the Appalachian Council and all other NTCs
in this outcome measure ranges from $1.78 to $2.47 per hour. These
hourly differences translate into $71 and $99 in a 40-hour work week,
respectively. These differences represent a significant reduction in
earnings for Job Corps graduates who earn between $350 and $400 a week.
Chart 2b illustrates a similar picture of the Appalachian Council's
JTM average hourly wage in CY 2003. While the wage difference between
the Appalachian Council and the NTCs at the Charleston center is less
than a dollar, the differential at the Pittsburgh center is
significant. The wage difference between the Appalachian Council and
the NTCs at the Pittsburgh center is $4.52 per hour which represents a
$181 per week difference in total wages for Job Corps graduates.
3. 6-month average weekly earnings (long-term)
Definition
The sum of weekly earnings of vocational completers who report
working at 6 months following placement in a job that meets the Job
Corps definition of placements. All vocational completers initially
placed who complete the 6-month follow-up survey and report that they
are working in a job/military that meets the Job Corps definition of
placement
Performance Trend
Chart 3a shows the Appalachian Council trailing all other NTCs in
the 6-month average weekly earnings outcome measure from PY 2001 to PY
2003. Earnings fluctuated between $352 and $354, representing a
deficiency of $44 per week to $59 per week when compared to all other
NTCs.
Chart 3b demonstrates that the Appalachian Council's performance
outcomes for 6-month average weekly earnings measure trailed the other
NTCs by $56 per week at Charleston and by $297 per week at Pittsburgh.
4. 12-month average weekly earnings (long-term)
Definition
The sum of weekly earnings of vocational completers who report
working at 12 months following placement in a job that meets the Job
Corps definition of placement. All vocational completers initially
placed who complete the 12-month follow-up survey and report they are
working in a job or the military that meets Job Corps definition of
placement.
Performance Trend
Chart 4a shows that, nationally, the Appalachian Council
consistently trailed all other NTCs in the 12-month average weekly
earnings measure from PY 2001-PY 2003. Differences ranged from $44 per
week to $79 per week. The Appalachian Council's performance in this
measure was even lower than that of the center-operated programs in PY
2001, though the earnings increased slightly in PY 2002 and PY 2003.
Chart 4b provides a comparison of the 12-month average weekly
earnings by center. Although the performance results show that the
Appalachian Council outperformed the NTCs and center-operated programs
at the Charleston and Batesville centers, the data shows a significant
difference of $295 per week between the Appalachian Council and the
other NTCs at the Pittsburgh center.
5. vocational completion rate
Definition
Number of terminees who complete a vocational training program
before separating from Job Corps. All students assigned to a vocational
program.
Performance Trend
Chart 5a shows that the Appalachian Council's overall vocational
completion rate nationally topped all other NTCs and center-operated
programs from PY 1998-PY 2000. However, beginning in PY 2001, the
Appalachian Council's vocational completion rate had a consecutive
three-year decline, while all other NTCs and center-operated programs
improved their overall completion rates.
Chart 5b shows that the Appalachian Council's completion rates in
CY 2003 were significantly below the other NTCs and the center-operated
programs at the Charleston and Pittsburgh center. It is important to
note that the Construction Technology and Health Occupations programs
at Pittsburgh had such low completion rates in PY 2001 and PY 2002 that
both programs were reduced in size as a result (not reflected in the
chart). At the Batesville center, where there are no other NTC
programs, the Appalachian Council's completion rate was slightly higher
than that of the center-operated programs.
6. initial placement rate
Definition
The number of vocational completers who are initially placed in a
job, an education program, the military, or a job/school combination,
or who transfer to an approved Advanced Training program at another
center. All vocational completers whose initial placement records are
due or received or who transfer to an approved Advanced Training
program at another center.
Performance Trend
Chart 6a indicates that the Appalachian Council's initial placement
rate nationally was sporadic when compared with all other NTCs and
center-operated programs during the six-year period of PY 1998-PY 2003.
Even though the Appalachian Council had a unique advantage of having
its own career transition services provider, the IWEP, the initial
placement rates were below all other NTCs and center-operated programs
in PY 1998, PY 1999, PY 2002 and CY 2003.
Chart 6b shows that in CY 2003, the Appalachian Council's initial
placement rate was much lower than that of the other NTC programs as
well as the center-operated programs at both Charleston and Pittsburgh.
At Batesville, the Appalachian Council's initial placement rate is
almost the same as that of the center-operated programs.
7. job-training-match (jtm) placement rate
Definition
The number of vocational completers initially placed in training-
related jobs or the military. All vocational completers who were
initially placed in jobs or the military.
Performance Trend
Chart 7a shows that the Appalachian Council's Job Training Match
placement rate was satisfactory in PY 1998 at 78 percent. The rate
declined in subsequent years to a low of 60 percent in both PY 2001 and
PY 2002. The rate slightly increased to 68 percent in PY 2003. Despite
the increase in PY 2003, the Appalachian Council trailed all other NTCs
in every program year except PY 2000 for this measurement.
Chart 7b shows a breakdown of the Appalachian Council's improved
Job Training Match placement rate in CY 2003 at the three centers.
Although the Appalachian Council's performance was satisfactory at the
Charleston and Pittsburgh centers, they trailed the center-operated
programs at the Batesville center in CY 2003.
8. 6-month placement rate
Definition
The number of vocational completers who are in a job/military or
school that meet the Job Corps definition of placement at 6 months
after initial placement. All vocational completers initially placed who
complete the 6-month follow-up survey.
Performance Trend
Chart 8a shows that, nationally, the Appalachian Council's 6-month
placement rate fluctuated from PY 2001 to PY 2003. Although the
Appalachian Council's 6-month placement rate trailed that of all other
NTCs and center-operated programs in PY 2001 and PY 2002, their
performance for this measure topped both in PY 2003.
Chart 8b shows that the Appalachian Council surpassed the NTCs and
center-operated programs at the Charleston center; outpaced the NTC at
the Pittsburgh center but trailed the center-operated programs in both
Pittsburgh and Batesville.
9. 12-month placement rate
Definition
The number of vocational completers who are in a job/military or
school that meets the Job Corps definition of placement at 12 months
after initial placement. All vocational completers initially placed who
complete the 12-month follow-up survey.
Performance Trend
Chart 9a shows that the Appalachian Council's 12-month placement
rate was below the NTCs and center-operated programs in both PY 2001
and PY 2002. The rate increased slightly surpassed the NTCs and center-
operated programs in PY 2003.
Chart 9b shows the Appalachian Council's uneven achievement in this
measurement at the three centers in CY 2003. Although Appalachian
Council performed well at the Charleston center (with only one trade),
it performed unsatisfactorily at the Pittsburgh center when compared to
the NTCs and center-operated programs. Appalachian Council's
performance at the Batesville center was just slightly better than the
center-operated programs.
10. appalachian council's vocational training program performance
Chart 10 lists the number of Appalachian Council programs
performing below or above Job Corps' national or regional standards in
each program year.
chart synopsis
--The majority of the Appalachian Council's vocational training
programs performed below standard in all five past program
years (PY 1998-PY 2002).
--The Appalachian Council operated with the vast majority of its
programs performing well below the JTM average wage standards,
nationwide, from PY 2000-PY 2002.
--From PY 2001-PY 2003, the Appalachian Council had approximately 50
percent of its programs performing below the 6-month average
weekly earnings standard each program year.
--The Appalachian Council had at least 44 percent of its programs
performing below the 12-month average weekly earnings standard
in each program year from PY 2001-PY 2003.
--From PY 1998-PY 2002, the Appalachian Council had an increasing
percentage of programs that performed below the national
standards for vocational completion in each program year.
--The chart portrays a similar pattern in terms of the number of
Appalachian Council programs performing below each program
year's standards for initial placement. In PY 1998, it had 11
programs below standard. It ended in PY 2002 with 10 below
standard.
--The Appalachian Council consistently had the vast majority of its
programs performing below standard in the Job-Training-Match
measure from PY 1998 through PY 2002.
--The Appalachian Council had the vast majority of its programs
performing below the 6-month placement standards in PY 2001 and
PY 2002.
--In PY 2001 and PY 2002 the Appalachian Council had most of its
programs performing under the 12-month placement standards
nationwide.
Senator Specter. Well, to repeat, I think on the basis of
what your written statement has, you certainly have not made
that case out, Mr. Dowd, Mr. Trigg.
I would appreciate it if you would respond to the questions
about communications with this Department and see if you can
get that to us before the end of the day, signed by the
Secretary, please. Thank you very much, gentlemen.
[The information follows:]
U.S. Department of Labor, Assistant Secretary
for Congressional and Intergovernmental Affairs,
Washington, DC, July 22, 2004.
Hon. Arlen Specter,
Chairman, Subcommittee on Labor, HHS-Education, Appropriations, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: Thank you for your letter to Secretary Elaine L.
Chao expressing support for the AFL-CIO's unsolicited proposal
submitted by the Working for America Institute to the Department of
Labor's Employment & Training Administration (ETA). In order to meet
the deadline you established during this morning's hearing, I am
responding on the Secretary's behalf. I apologize for the delay in
responding to your concerns.
As you know, upon the passage of the Workforce Investment Act in
1998, ETA funded several ``relationship grants'' to national
organizations for the purpose of helping their state and local members
gear up to participate in the new workforce system. Organizations that
received such grants included the National Council of La Raza, National
Puerto Rican Forum, National Urban League, OIC of America, SER Jobs for
Progress, Inc., National Governor's Association, National Association
of Counties, National Conference of State Legislatures, US Council of
Mayors, National Conference of Black Mayors, a joint project of the
U.S. Chamber of Commerce and National Association of Manufacturers, and
the National Alliance of Business.
ETA stopped funding these ``relationship grants'' at the end of
Program Year 2002, except for the AFL-CIO's Working for America
Institute, which was awarded $1 million for an additional year, Program
Year 2003, which ended on June 30, 2004.
However, now that the Workforce Investment Act is in its fifth year
of implementation, we strongly believe that it is more important to
complete the transition from capacity building to actual training
programs. We believe we should focus limited financial resources on
programs that deliver actual training services to workers rather than
to pour additional funds into organizational infrastructure. After four
years, the AFL-CIO should have developed sufficient ability to
participate effectively in the WIA system.
On January 5 of this year, the senior leadership of the Employment
and Training Administration met with representatives of the AFL-CIO to
advise them that the ``relationship grant'' would be ending and to
explore other possible funding opportunities. ETA indicated that any
proposal focused on providing actual training opportunities for workers
would be considered for funding. In fact, there were a number of phone
calls and e-mails following up on this meeting. Moreover, as a result,
we assume, of our invitation to submit training proposals, the Working
for America Institute submitted a concept paper for a project on
limited English proficiency services that remains under consideration.
As a matter of fact, the Department of Labor has funded a number of
training programs proposed by labor unions. These include AFL-CIO
affiliates such as the Service Employees International Union, Hotel
Employees and Restaurant Employees International Union, International
Association of Machinists, Fraternal Order of Police, United Auto
Workers, and the International Brotherhood of Electrical Workers, to
name just a few.
Nevertheless, on March 5, 2004, ETA received an unsolicited
proposal from the Working for America Institute seeking financial
support to continue its program of training and technical assistance
for labor representatives on local workforce boards.
The Department has rejected this proposal. It is difficult to make
the case that the AFL-CIO should receive yet a fifth year of funding
for organizational purposes when the other national organizations were
able to achieve their goals in three. Additionally, given that there
are so many workers seeking training or retraining opportunities, we
believe ETA's emphasis is rightly placed on promoting employment or
reemployment projects having measurable outcomes.
We appreciate your interest, and, again, I regret the delay in
responding.
Sincerely,
Kristine A. Iverson.
Senator Specter. We turn now to panel two, Mayor Bobby
Baker, Mr. Jim Bowen, Mr. Gary Darlington, Mr. William M.
George, accompanied by Ms. Nancy Mills; Mr. Herbert M. Mabry,
accompanied by Mr. William A. Burga. We have you listed here in
alphabetical order because of the prominence of the various
witnesses.
We turn now to Mayor Baker, Mayor of Batesville,
Mississippi, since 1976, a member of the Board of Directors and
Executive Committee of the Mississippi Municipal Association.
He attended Northwest Junior College and the University of
Mississippi. Welcome, Mayor Baker, and we look forward to your
testimony.
STATEMENT OF HON. BOBBY BAKER, MAYOR, BATESVILLE, MS
Mr. Baker. Thank you, Mr. Chairman. I appreciate the
opportunity of speaking before the subcommittee. Thank you,
Senator Specter.
I would like to speak on behalf of the Appalachian Council
and its contract with the Department of Labor. My name is Bobby
Baker and I have been the Mayor since 1976. I was the Mayor
when Job Corps came to our city and when the Appalachian
Council and the contractor came to our city in 1981.
I will limit my remarks today to my personal knowledge of
the Appalachian Council as it relates to the Council's
operations in Batesville.
I am aware that the Council's training programs have in the
past 5 years been responsible for any positive recognition that
the Batesville Job Corps has received. In a publication titled
Trends in Job Corps Program Outcomes PY98-PY02, dated October
2003, and released by Richard Trigg, National Director of Job
Corps in November 2003, the Batesville Job Corps was recognized
as a consistently high performing center in the following three
areas: graduate placement, 1 out of 5 cited on the national;
placement rate of vocational completers only, 1 out of 6 cited
nationally; and former enrollee placement, 1 out of 9. The
Council was responsible for training and placing approximately
70 percent of all the students from the Batesville center.
The Appalachian Council was a good partner not only in
Batesville but in the surrounding communities as well. The
Council viewed community service projects as an important tool
in preparing their students for the workplace--100 hours of
community service was an expectation of all students. Students
were involved in worthwhile projects such as Habitat for
Humanity, Grenada Elderly Apartments, Quitman and Panola County
Rehab Housing Project, and the local food bank. The involvement
provided students the opportunity to interact with the local
community in a positive manner.
Other types of community activities included job shadowing,
adopt-a-highway, and career day. The Council has always
recognized that students' involvement in community activities
is an integral part of preparing for the workplace.
The Batesville Boys and Girls Club benefitted from the
efforts of the Council-trained students as the hardhat trades
work on projects to improve and enhance the club.
I am also aware that the Council students have written
hundreds of letters to our troops and have sent care packages
to them.
PREPARED STATEMENT
It seems to me that the continuation of the Council's
involvement in Job Corps in general and at the Batesville,
Mississippi Job Corps Center in particular makes good sense
both from the view of the government and also the students that
the Council serves.
Again, Mr. Chairman, thank you for allowing me to be here,
and I will accept any questions that I may be able to answer.
[The statement follows:]
Prepared Statement of Bobby Baker
Chairman Specter, Senator Harkin, Senator Byrd and members of the
Subcommittee, thank you for this opportunity to testify on behalf of
the Appalachian Council and its contract with the Department of Labor.
My name is Bobby Baker and I am and have been the the mayor of the city
of Batesville, Mississippi for the past three decades.
Mr. Chairman, I will limit my remarks today to my personal
knowledge of the Appalachian Council as it relates to the Councils'
operations in Batesville.
I am aware that Councils vocational training programs have in the
last five years been responsible for any positive recognition that the
Batesville Job Corps Center (BJCC) has received. In a publication
titled Trends in Job Corps Program Outcomes PY98-PY02 dated October
2003 and released by Richard Trigg, National Director of the Job Corps
in November of 2003, the BJCC was recognized as a ``Consistently High
Performing Center'' in the following three important measurements:
Graduate Placement Rate (1 of 5 cited nationally), Placement Rate of
Vocational Completers Only (1 0f 6 cited nationally) and Former
Enrollee Placement Rate (1 of 9 cited nationally). The Council was
responsible for training and placing approximately 70 percent of all
Batesville students.
--The Appalachian Council was a good partner, not only in Batesville
but in the surrounding communities as well.
The Council viewed community service projects as an important tool
in preparing their students for the workplace. One hundred hours of
community service was an expectation for all students. Students were
involved in worthwhile projects such as Habitat for Humanity, Grenada
Elderly Apartments, Quitman and Panola County Rehab Housing Project,
and the local Food Bank. This involvement provided students the
opportunity to interact with the local community in a positive manner.
Other types of community activities included Job Shadowing, Adopt-
a-Highway and Career Day. The Council has always realized that student
involvement in community activities is an integral part of preparing
for the workplace.
The Batesville Boy's and Girl's Club benefited from the efforts of
Council trained students as the hardhat trades work on projects to
improve and enhance the Club.
I am also aware the Council students have written hundreds of
letters to U.S. troops in the Middle East, and have also forwarded
``care packages'' of items that the troops (e.g., razors, stationary,
hard candy, and music cassettes).
It seems to me that the continuation of the Council's involvement
in Job Corps in general and at the Batesville Job Corps Center makes
good sense, both from the view of government but for the students the
Council serves as well.
I thank you, again, Mr. Chairman, for the opportunity to testify,
and I look forward to answering your questions.
STATEMENT OF JIM BOWEN, PRESIDENT, WEST VIRGINIA AFL-
CIO
Senator Specter. Well, thank you very much, Mayor Baker.
We turn now to Mr. Jim Bowen, president of the West
Virginia AFL-CIO and a member of the Board of Directors of the
Wheeling Pittsburgh Steel Corporation. Mr. Bowen has been with
the West Virginia AFL-CIO since 1965 and was inducted into the
West Virginia Labor Hall of Fame in 1993.
Thank you for joining us, Mr. Bowen, and we look forward to
your testimony.
Mr. Bowen. Thank you, Chairman Specter, and I want to thank
you for this opportunity to testify on behalf of the
Appalachian Council and its sole-source contract with the
Department of Labor.
The AFL-CIO Appalachian Council, Incorporated is a
nonprofit organization pledged to aid disadvantaged persons and
to encourage the realization of their full economic and
cultural potential through a wide range of human resource
development programs.
The Council began as an outgrowth of a meeting of the
Appalachian Trade Union Conference held in Charleston, West
Virginia in October of 1964. The 12 chief officers of the State
AFL-CIO organizations in the area of greater Appalachia,
including Alabama, Georgia, Kentucky, Maryland-DC, Mississippi,
North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee,
Virginia, and West Virginia, joined together to form a
nonprofit corporation to work toward unearthing and
understanding the employment and training of the region, to
develop plans for their solutions, and to stimulate and
undertake specific projects or action programs for their
resolve and/or elimination. Our mission then and today was to
help people become productive and self-sufficient members of
our society.
The Appalachian Council's national programs have been in
continuous operation since 1974 through a series of sole-
source, cost reimbursement contracts with the Department of
Labor's Employment and Training Administration and the National
Office of Job Corps. The programs are evolving continuously in
response to the various needs of the entities within the Job
Corps community and those changes mandated by the United States
Congress, the administration, and the Job Corps Federal
managers.
The Appalachian Council has to question whether our sole-
source contract has been unfairly targeted, given the fact that
this Labor Department, which seems to have a problem with labor
unions, also revoked its national contract with the AFL-CIO
Working for America Institute.
The Working for America Institute is a nonprofit
organization founded by the AFL-CIO to help unions and labor-
management partnerships connect to the pubic workforce system.
For the past 5 years, the National Office of Job Corps, as
well as Region II, Philadelphia, officials, has been proactive
in their efforts to make it difficult for our staff to do their
jobs. They often ignored our pleas for help, and they were very
quick to judge and offer only criticism, thus fostering low
morale and dissension. As we review the events that have
occurred, we see a pattern of behavior from the National Office
of Job Corps that substantiates our belief that there was,
since the beginning of this current contract, November 1998, a
plan in place to intentionally impede the Council's capability
to be successful.
The programs are now being taken over by big corporations
and they then subcontract out, with very little accountability
on performance and placements.
As an example of our actions in West Virginia, I wish to
cite the Charleston automotive repair program located in
Charleston, West Virginia at the Charleston Job Corps Center
that has been operating since November of 2000. The program had
performed up to all center expectations. During PY 2001 and PY
2002, the center's vocational manager rated it as the best
program on center. One of the strengths of the program was the
large number of students that entered the military service of
our country, and as a result of the efforts of our instructors,
those students that enlisted in the military were encouraged to
pursue military occupations related to their trade. From its
first day of operation, this program exceeded all of Job Corps'
accountability measures.
I will conclude my testimony by offering the following five
points, sir.
Number one, the Council has a long and successful history
of dedicated and committed service to Job Corps. We have
managed our contractual responsibilities and have interfaced
with Government representatives in a straightforward and honest
way.
Number two, the National Office of Job Corps did everything
in its power to make it difficult for us to fulfill our
contractual obligations and to maintain our uniqueness.
Number three, we have never been provided an explanation of
the decision not to renew our contract although the Council
requested such explanation.
Number four, we have never been informed by the NOJC that
our sole-source status has been changed.
PREPARED STATEMENT
And finally, number five, the actual performance for our
training programs based on Job Corps established criteria
during the most recent program year, PY 2003, compares
favorably with other national training contractors for the same
period and in most categories exceeds the national average.
And, Mr. Chairman, I would refer you to the record. There is a
chart in that record that will show you that on seven
categories, we are either equal to or exceed the other
providers.
Again, let me thank you, Mr. Chairman, for the opportunity
to testify here today.
[The statement follows:]
Prepared Statement of Jim Bowen
Chairman Specter, Senator Byrd and members of the Subcommittee,
thank you for this opportunity to testify on behalf of the Appalachian
Council and its sole-source contract with the Department of Labor.
The AFL-CIO Appalachian Council, Inc. is a nonprofit organization
pledged to aid disadvantaged persons and to encourage the realization
of their full economic and cultural potential through a wide range of
human resource development programs.
The Council began as an outgrowth of a meeting of the Appalachian
Trade Union Conference held in Charleston, West Virginia in October
1964. The twelve chief executive officers of the State AFL-CIO
organizations in the area of greater Appalachia (Alabama, Georgia,
Kentucky, Maryland-DC, Mississippi, North Carolina, Ohio, Pennsylvania,
South Carolina, Tennessee, Virginia and West Virginia) joined together
to form a nonprofit corporation to work toward unearthing and
understanding the employment and training of the region, develop plans
for their solution, and to stimulate or undertake specific projects or
action programs for their resolve and/or elimination. Our mission is to
help people become productive and self-sufficient members of society.
The Appalachian Council's National Programs has been in continuous
operation since 1974 through a series of sole-source, cost
reimbursement contracts with the Department of Labor's Employment and
Training Administration and the National Office of Job Corps. The
programs are evolving continuously in response to the various needs of
the entities within the Job Corps community and those changes mandated
by the U.S. Congress, the Administration, and Job Corps Federal
Managers.
The Appalachian Council has to question whether our sole-source
contract has been unfairly targeted, given the fact that this Labor
Department, which seems to have a problem with labor unions, also
revoked its national contract with the AFL-CIO Working for America
Institute.
The Working for America Institute is a non-profit organization
founded by the AFL-CIO to help unions and labor-management partnerships
connect to the public workforce system.
For the past five years, the National Office of Job Corps as well
as Region II (Philadelphia) officials has been proactive in their
efforts to make it difficult for our staff to do their jobs. They often
ignored our pleas for help, were quick to judgment and offered only
criticism, thus fostering low morale and dissension. As we review the
events that have occurred, we see a pattern of behavior from the
National Office of Job Corps that substantiates our belief that there
was, since the beginning of this contract (Nov 98), a plan in place to
intentionally impede the Council's capability to be successful.
The programs are being taken over by big corporations and then
subcontracted out with very little accountability on performance and
placements.
As an example of our actions in West Virginia, I wish to cite the
Charleston Automobile Repair program located in Charleston, West
Virginia at the Charleston Job Corps Center that has been operating
since November of 2000. The program had performed up to all Center
expectations. During PY 2001 and PY 2002 the Center's Vocational
Manager rated it as the best program on Center. One of the strengths of
the program was the large numbers of students that entered military
service. As a result of the efforts of our instructor, those students
that enlisted into the military were encouraged to pursue military
occupations related to their trade. From its first day of operation
this program exceeded all of Job Corps' accountability measures.
I will conclude my testimony by offering the following five (5)
points:
1. The Council has a long and successful history of dedicated and
committed service to Jobs Corps. We have managed our contractual
responsibilities and have interfaced with government representatives in
a straightforward and honest way.
2. The National office of Job Corps did everything in its power to
make it difficult for us to fulfill our contractual obligations and to
maintain our uniqueness.
3. We have never been provided an explanation of the decision not
to renew our contract although the Council requested such an
explanation.
4. We have never been informed by the NOJC that our sole-source
status had been changed.
5. The actual performance for our training programs based on Job
Corps established criteria during the most recent Program Year (PY
2003) compares favorably with other National Training Contractors for
the same period and in most categories exceeds the National Average.
I thank you again, Mr. Chairman, Senator Byrd and the members of
the Sub-Committee for the opportunity to testify today.
STATEMENT OF GARY DARLINGTON, EXECUTIVE DIRECTOR,
APPALACHIAN COUNCIL
Senator Specter. Thank you very much, Mr. Bowen.
We now turn to Mr. Gary Darlington, executive director of
AFL-CIO Appalachian Council. Prior to his current position, he
was a public school administrator and the Regional Director of
the Pennsylvania Higher Education Assistance Agency. Mr.
Darlington holds a bachelor's degree from Slippery Rock and a
Master's Degree from Westminster College.
Thank you for joining us, Mr. Darlington, and the floor is
yours.
Mr. Darlington. Thank you, Chairman Specter and members of
the subcommittee. Thank you for this opportunity to testify on
behalf of the Appalachian Council and its sole-source contract
with the Department of Labor.
Given that our contract with the Labor Department was
canceled with only 60 days' notice and our organization, after
35-plus years of service to Job Corps, was never provided an
opportunity to defend our record of performance, we are
especially grateful to you, Mr. Chairman, for this opportunity
to respond to the Deputy Assistant Secretary regarding this
matter.
With your permission, Mr. Chairman, I hope to submit a more
extensive statement for the record and focus my remarks today
on three points.
The Appalachian Council has a strong record of success.
Despite being forced to operate without adequate resources and
equipment, as well as the upheaval of the national Job Corps
program caused by the implementation of the Workforce
Investment Act in 2000, the Appalachian Council can still point
to a strong performance record.
Not only can our job training programs boast generally of
placement rates that exceed the national averages, it can be
said that several of our training programs individually were
recognized as the best in their specific location. Furthermore,
the transitional services we provided Job Corps students
through our industrial work experience program, IWEP, have
garnered the praise of every other national training contractor
that has a sole-source contract with Job Corps, as well as
Government-operated centers, Department of Agriculture. Both
the NTC's and the U.S. Department of Agriculture Forest Service
have written to the national Job Corps directors to say that
the loss of our program would have a negative impact on the
entire Job Corps community.
The Labor Department has treated the Appalachian Council in
a disparate and unfair way. The ETA waited many months before
notifying the Appalachian Council that our contract would not
be renewed, thus providing our organization no opportunity to
defend itself or to make changes to our programs to accommodate
the Labor Department's concerns. Further, by waiting until late
February 2004, February 26, to notify our organization, just 60
days before our contract expired, the Labor Department made it
difficult, if not impossible, for our organization to seek the
assistance of the Congress in reviewing the fairness of the
Labor Department's decision.
Point number three, the complexity of the competitive
bidding process makes it difficult for a nonprofit organization
like the Appalachian Council to compete on a level playing
field. While the department asserts that we can compete in the
future for this work, we cannot do so on a level playing field.
Our greatest asset, our knowledge of Appalachia, our 35-plus
years of commitment to these programs, and the maturity and
experience of our staff are not given significant consideration
in the current competitive procurement process, and because of
our size, we are absent the resources to contend with the
unlimited finances of the mega for-profit corporations.
Further, not knowing when in the future a contract will be let,
we cannot say if our organization will survive long enough to
compete.
PREPARED STATEMENT
Mr. Chairman, the Appalachian Council was created to serve
the unique needs of the Appalachian region. We understand
Appalachia. We understand the needs of workers. With over 30
years of broad experience and with established long-term
relationships with unions and employers in the Appalachian
region and other regions of the Nation, we can offer services
that no other contractor can provide. Historically our
organization has operated successfully as a one-of-a-kind
labor-related entity within the Job Corps system. It is
imperative that the subcommittee understands that while another
contractor may be able to offer cheaper services, they cannot
compare to our unique ability to both understand and to service
the special needs of Job Corps.
I thank you again, Mr. Chairman, for the opportunity to
testify, and I look forward to answering your questions.
[The statement follows:]
Prepared Statement of Gary Darlington
Chairman Specter, Senator Harkin, Senator Byrd and members of the
Subcommittee, thank you for this opportunity to testify on behalf of
the Appalachian Council and its sole-source contract with the
Department of Labor.
Given that our contract with the Labor Department was cancelled
with only sixty days notice, and our organization after thirty-five
plus years of service to Job Corps, was never provided an opportunity
to defend our record of performance, we are especially grateful to you,
Mr. Chairman, for this opportunity to respond to the Deputy Assistant
Secretary regarding this matter.
With your permission, Mr. Chairman, I hope to submit a more
extensive statement for the record, and focus my remarks today on three
points.
--The Appalachian Council has a strong record of success.
Despite being forced to operate without adequate resources and
equipment, as well as the upheaval in the national Job Corps program
caused by the implementation of the Workforce Investment Act in 2000,
the Appalachian Council can still point to a strong performance record.
Not only can our job training programs boast generally of placement
rates that exceed the national averages, it can be said that several of
our training programs individually were recognized as the best in their
specific location. Furthermore, the transitional services we provided
Job Corps students through our Industrial Work Experience Program
(IWEP) have garnered the praise of every other National Training
Contractor (NTC) that has a sole-source contract with Job Corps as well
as government operated centers (Agriculture). Both the NTCs and the
USDA Forest Service have written to the National Job Corps Directors to
say that the loss of our program would have a negative impact on the
entire Job Corps community.
--The Labor Department has treated the Appalachian Council in a
disparate and unfair way.
We have only recently learned that in April 2003, the Employment
and Training Administration (ETA) recommended to the Department of
Labor's Policy Review Board that the Appalachian Council's contract be
renewed as a sole-source contract. Again in September we were included
in the ETA intent to renew our contract. Apparently, only after the
Policy Review Board questioned that request did the ETA decide to
revoke the sole-source status of our contract. To this day we have not
been told directly by DOL that this was the case.
The ETA waited many months before notifying the Appalachian Council
that our contract would not be renewed, thus providing our organization
no opportunity to defend itself or to make changes to our programs to
accommodate the Labor Department's concerns. Further, by waiting until
late-February 2004 (Feb. 26) to notify our organization, just sixty
(60) days before our contract expired, the Labor Department made it
difficult, if not impossible, for our organization to seek the
assistance of the Congress in reviewing the fairness of the Labor
Department's decision.
--The complexity of the competitive bidding process makes it
difficult for a non-profit organization like the Appalachian
Council to compete on a level playing field.
While the Labor Department asserts that we can compete in the
future for this work, we cannot do so on a level playing field. Our
greatest assets--our knowledge of Appalachia, our thirty-five plus
years of commitment to these programs, and the maturity and experience
of our staff are not given significant consideration in the current
competitive procurement process and because of our size, we are absent
the resources to contend with the unlimited finances of the mega for
profit contractors. Further, not knowing when in the future a contract
will be let, we cannot say if our organization will survive long enough
to compete.
Mr. Chairman, the Appalachian Council was created to serve the
unique needs of the Appalachian region. We understand Appalachia. We
understand the needs of workers. With over thirty years of broad
experience and with established long-term relationships with unions and
employers in the Appalachian region and other regions of the nation, we
can offer services that no other contractor can provide. Historically,
our organization has operated successfully as a one of a kind Labor
related entity within the Job Corps system. It is imperative that the
Subcommittee understands that while another contractor may be able to
offer cheaper services, they cannot compare to our unique ability to
both understand and to service the special needs of Job Corps.
I thank you, again, Mr. Chairman, for the opportunity to testify,
and I look forward to answering your questions.
STATEMENT OF WILLIAM M. GEORGE, PRESIDENT, PENNSYLVANIA
AFL-CIO
ACCOMPANIED BY NANCY MILLS, EXECUTIVE DIRECTOR, WORKING FOR AMERICA
INSTITUTE
Senator Specter. Thank you very much, Mr. Darlington.
Our next witness is Mr. William M. George, president of the
Pennsylvania AFL-CIO and chairman of the AFL-CIO Appalachian
Council. Prior to his current position, he was the secretary-
treasurer of the United Steel Workers Legislative Council of
Pennsylvania. Mr. George attended Penn State and the AFL-CIO
Institute. For the record, I would comment that I have known
Mr. George for many years and have found him to be a very, very
reliable leader of his labor movement and a public-spirited
citizen.
He is accompanied by Ms. Nancy Mills, who is the Executive
Director of the AFL-CIO Working for America Institute. Prior to
her current position, she served as Assistant Director of the
AFL-CIO Corporate Affairs Department. She is a graduate of
Antioch College. She is here to assist in responding to
questions.
Thank you for joining us, Mr. George, and we look forward
to your testimony.
Mr. George. Thank you, Senator. It is always been a great
interest to be in the house of the Senator from Pennsylvania
and to be part of an organization that has this opportunity. We
all want to thank you and your staff and the cooperation that
you have given us in these findings that we are trying to
achieve, as you and I have talked many times about, enhancing
the quality of life of many Pennsylvanians and those citizens
that live in the Appalachian Council. I want to thank you again
on behalf of all of us.
Given that, absent written justification, our contract with
the Labor Department was canceled with only a 60-day notice,
and our organization, after 35-plus years of service to Job
Corps, was never provided an opportunity to defend our record
of performance, we are especially grateful to you, Mr.
Chairman, for this opportunity to respond to the Deputy
Assistant Secretary regarding this matter.
Just before I get into some other statement--you all have
copies of this--I just want to make a quick remark that people
have to understand the mission objective of the Appalachian
Council was generated by the U.S. Senate and the House of
Representatives through the Secretary of Labor during the
1960's that created this sole term, the famous term, ``war on
poverty.'' This all came out of the ideas of many, many
testimonies, how do we correct the war on poverty? And you
needed an organization and institution that knew Appalachia,
knew about where people lived and how we can go out and recruit
those uneducated individuals and do something in States that a
lot of people were not paying a lot of attention to in a lot of
counties in western Pennsylvania and a lot of counties in West
Virginia.
So I mean, there seems to be in this whole thing, as I look
into this program, a thing about competition, pennies here,
pennies there, and nobody really looks at the general mission
and objective of the war on poverty, enhancing the quality of
life.
If in fact, Mr. Chairman, the people that we have dealt
with with our sites and our institutions and the people we have
provided over the years--we are proud to sit here today. And I
want the Department of Labor to understand whether we continue
or not, you will never take our dignity. You will never take it
away from us what the AFL-CIO Appalachian Council has done for
thousands and thousands and thousands of students in enhancing
their lives and their quality of life. That has to be in the
back of everybody's mind at this particular hearing today.
So I just wanted to get that off my chest before I get into
a couple general statements. And I will try and take a minute
or 2 off of my general statement.
For the past several years, the national office of Job
Corps, as well as Region II officials in Philadelphia, has been
proactive in their efforts to make it difficult for our staff
in that region to do their jobs. They often ignored Council
staff pleas for help, were quick to judgment and offered only
criticism, thus fostering low morale and dissension. As we
review the events that have occurred, we see a pattern of
behavior from the national office of Job Corps that
substantiates our belief that there was, since the beginning of
this contract, which is November 1998, a plan in place to
intentionally impede the Council's capability to be successful.
Council-operated training programs in Pittsburgh functioned
without needed equipment for the full 5 years of the contract
purportedly due to the lack of funds. While we begged for new
equipment for our programs, the region had no difficulty in
finding equipment monies for the Pittsburgh Job Corps Center.
It is kind of funny how this takes place. They kick us out. Now
suddenly the money appears, et cetera.
In February 2002, a strong performing program,
transportation, was cut in half for alleged poor performance,
although it had recently at that time received an award from
the center for outstanding performance, and immediately the
material handling component of the program was coopted by the
center operator. The center not only maintained the program
with regional office approval, as was earlier testified by the
Department of Labor. The success of it was because they hired
our people. They hired our instructors once they eliminated
them, and then they went and found the funds to buy a full
complement of new equipment.
Can somebody tell me? Does this sound like there is a
little bit of conspiracy here or something?
Late in February 2003, we were instructed to terminate our
entire center-based management and administrative staff in both
Pittsburgh, as well as Batesville, as you have heard from the
previous testimony of the Mayor, by March 31, 2003. These cuts
effectively eliminated our occupational exploration program and
our ability to provide enhanced job development and post-
placement follow-up with our students.
Immediately following the program cuts, discussions took
place with the national office regarding the future of the
programs in light of the cuts. These discussions were positive.
We were offered assurance that we did have a future and that
there would be other opportunities for the Council within Job
Corps.
At the end of that very same day, we were informed that we
were to close out our transportation program at Pittsburgh and
that the instructor should wrap up his business by the end of
March 2003. No reason for the closure was provided. Talk about
a morale-buster. You got it. Through this particular incident
and others like it, the students the real victims. It was not
so many of us. The real victims were the students as, more
often than not, decisions were not made for their benefit.
Not only can our job training programs boast generally of
placement rates that exceed the national average--and by the
way, they mentioned some numbers. In our general statement to
you this morning, Mr. Chairman, there is quite a number of
pages with our facts and figures that came from the Department
of Labor over the years about performance, about graduations,
about awards that the Appalachian Council has received over the
years.
Furthermore, the transitional services we provided Job
Corps students through our industrial work experience program,
which is called the workforce investment boards, have garnered
the praise of every national training contractor that has a
sole-source contract with Job Corps, as well as Government-
operated centers. Both the NTC's and the USDA Forest Service
have written to the national Job Corps directors to say that
the loss of our program would have a negative impact on the
entire Job Corps community.
Mr. Chairman, I would also question whether our sole-source
contract has been unfairly targeted, given the fact that this
Labor Department, which seems to have a serious problem with
labor unions, also revoked the national contract with the AFL-
CIO Working for America Institute after 35 years of service,
which many of those programs, this Senator from Pennsylvania
was very proud to be supportive of.
As it was with the Appalachian Council, I can only wonder
whether there is some concerted effort at the Department of
Labor to terminate all partnerships with labor unions and the
organizations established to connect labor unions and the
Department of Labor.
PREPARED STATEMENT
It is from this point on where we would like to make some
comments in reference to the national AFL-CIO program, and Mr.
Senator, we would ask that Nancy Mills be given a minute or 2
either at this time or at the conclusion of the testimony here,
to just kind of form what has happened with the national AFL-
CIO's Working for America Institute.
[The statement follows:]
Prepared Statement of William M. George
Chairman Specter, Senator Harkin, Senator Byrd and members of the
Subcommittee, thank you for this opportunity to testify on behalf of
the Appalachian Council and its contract with the Department of Labor.
Given that, absent written justification, our contract with the
Labor Department was cancelled with only sixty days notice, and our
organization after thirty-five plus years of service to Job Corps, was
never provided an opportunity to defend our record of performance, we
are especially grateful to you, Mr. Chairman, for this opportunity to
respond to the Deputy Assistant Secretary regarding this matter.
For the past several years the National Office of Job Corps as well
as Region II (Philadelphia) officials have been proactive in their
efforts to make it difficult for our staff in that Region to do their
jobs. They often ignored Council staff pleas for help, were quick to
judgment and offered only criticism, thus fostering low morale and
dissension. As we review the events that have occurred, we see a
pattern of behavior from the National Office of Job Corps that
substantiates our belief that there was, since the beginning of this
contract (Nov 98), a plan in place to intentionally impede the
Council's capability to be successful
Council operated training programs in Pittsburgh functioned without
needed equipment for the full five years of the contract purportedly
due to lack of funds. While we begged for new equipment for our
programs the Region had no difficulty in finding equipment monies for
the Pittsburgh Job Corp Center (PJCC). In February 2002, a strong
performing program, Transportation, was cut in half for poor
performance (although it had recently received an award from the Center
for outstanding performance) and immediately the Material Handling
component of the program was co-opted by the Center operator. The
Center not only maintained the program with Regional Office approval,
it hired our instructor and found the funds to buy a full compliment of
new equipment.
Late in February 2003 we were instructed to terminate our entire
center based management and administrative staff in both Pittsburgh as
well as Batesville by March 31, 2003. These cuts effectively eliminated
our Occupational Exploration Program and our ability to provide
enhanced job development and post-placement follow-up with our
students.
Immediately following the program cuts discussions took place with
the National Office regarding the future of the programs in light of
the cuts. Those discussions were positive. We were offered assurances
that we did have a future and that there would be other opportunities
for the Council within Job Corps. At the end of that very same day we
were informed that we were to close our Transportation program at
Pittsburgh and that the instructor should wrap up his business by the
end of March 2003. No reasons for the closure were provided. Talk about
a morale buster. Through this particular incident and others like it,
the students were the real victims, as more often than not decisions
were not made for their benefit.
Not only can our job training programs boast generally of placement
rates that exceed the national averages, it can be said that several of
our training programs individually were recognized as the best in the
respective Center and/or Region. Furthermore, the transitional services
we provided Job Corps students through our Industrial Work Experience
Program (IWEP) have garnered the praise of every other National
Training Contractor (NTC) that has a sole-source contract with Job
Corps as well as government operated centers (Agriculture). Both the
NTCs and the USDA Forest Service have written to the National Job Corps
Directors to say that the loss of our program would have a negative
impact on the entire Job Corps community.
Mr. Chairman, I would also question whether our sole-source
contract has been unfairly targeted, given the fact that this Labor
Department, which seems to have a serious problem with labor unions,
also revoked its national contract with the AFL-CIO Working for America
Institute after some thirty five years of service.
As it was with the Council, I can only wonder whether there is some
concerted effort at the Department of Labor to terminate all
partnerships with labor unions and the organizations established to
connect labor unions to DOL programs. In another action, one totally at
the Secretary's discretion, we learned in June that the Department's
Employment and Training Administration (ETA) had decided not to renew a
grant given to the AFL-CIO Working for America Institute. This decision
would terminate over 35 years of continuous support for the Institute--
through Democratic and Republican administrations alike--to assure a
voice for workers in the public workforce system.
Senator Specter, I know that you are aware of the work done by the
Institute, and its predecessor organization (HRDI). You have seen the
work they do in supporting both joint labor management high road
training partnerships, in helping programs that serve dislocated
workers and in training the legislatively called for labor
representatives who serve on the country's Workforce Investment Boards.
Pennsylvania was proud to co-host the 2002 Working for America National
Conference and we were proud that you agreed to serve as a keynote
speaker at that conference.
Other federal agencies--the Department of Commerce, the Small
Business Administration, and others--spend millions of dollars
providing assistance to the nation's employers in connecting with
federal government programs. The fact that the Department of Labor is
choosing not to maintain an investment in connecting labor to the
programs it is charged with administering is out of line with this
government practice.
These cuts have led to even greater investments in the Institute by
the AFL-CIO itself (the Institute is a non-partisan 501(3) (3) non-
profit organization) and by foundations but some of its historic
objectives are most appropriately funded through the Department of
Labor.
Over the last three years, the Institute has already seen two of
its programs de-funded. The first of these cuts was to their work
assisting unions in providing dislocated worker services--a cut made at
a time of record dislocation in our economy. That cut was followed by
the termination of their program to help establish labor-management
partnerships in key industry sectors--a program which had been helping
unions and employers in the Southwest corner of our state join with
their counterparts in Ohio and West Virginia to address the needs of
manufacturing critical to the Ohio River Valley.
The remaining grant from DOL supported a program of training and
technical assistance to the network of more than 1,300 labor
representatives who serve on the nation's state and local Workforce
Investment Boards (WIBs). It is this work that the Department has know
decided it will no longer support. Pennsylvania had participated
vigorously in this program and if the decision is not reversed, the
labor representatives serving as the voice of workers in the public
workforce system will no longer have the assistance of the Institute in
helping them become more effective members of their boards.
I applaud the work that you have done to support labor as the
statutory voice of all workers in the public workforce system, and I
hope that those efforts will result in a reversal of the unprecedented
decision by the Department to terminate its funding of the Institute.
We believe that there is substantial evidence Mr. Chairman for
continuation of both of these valuable programs and we ask for your
support in ensuring a continued role for both the Working for America
Institute and the Appalachian Council with the Department of Labor.
I thank you, again, Mr. Chairman, for the opportunity to testify,
and I look forward to answering your questions.
Senator Specter. Mr. George, we would be pleased to hear
that now.
Mr. George. It is my pleasure to introduce to you now Nancy
Mills who is the Director and part of the program that was part
of the HRDI that was shifted over to this new program which has
been really, really held by many Governors and their
departments of labor.
My relationship is because in our State, Governor, it was
because of your efforts. If you remember, when they created the
workforce investment boards, there was a question whether these
local communities and counties and regions that create these
boards should have a right to have labor unions or labor
representatives. It was because of your efforts and others that
we inserted that the boards should have a makeup of labor
voices mandated by law. And so this institution was very, very
generous in providing to us, Working for America Institute, the
AFL-CIO, and educating our members. I am proud to say, Senator,
you have in the State of Pennsylvania, because of the AFL-CIO
program, qualified people sitting on workforce investment
boards there more than any other State in America.
So it is my pleasure to introduce to you Nancy Mills.
Senator Specter. Ms. Mills, thank you for joining us and
you may proceed.
SUMMARY STATEMENT OF NANCY MILLS
Ms. Mills. Thank you so much, Mr. Chairman, and thank you,
President George, for your willingness to share the podium here
this morning.
As I said, thank you so much for your invitation to testify
before you this morning about the Department of Labor's
decision not to renew its grant with the AFL-CIO Working for
America Institute.
You have already heard some, and I know you will hear some
more, about the Department's decision not to renew the grant
with the Appalachian Council, but in another action, one
totally at the Secretary's individual discretion, the Institute
learned in June that the Department's Employment and Training
Administration had decided not to renew a grant given to the
AFL-CIO Working for America Institute. This decision would
terminate over 35 years of continuous support for the
Institute, through Democratic and Republican administrations
alike, to assure a voice for workers in the public workforce
development system.
Senator Specter, I know that you are aware of the work done
by the Institute and its predecessor organization, HRDI. You
have seen the work we do in supporting both joint labor
management high road training programs like the 1199 health
care training program in Philadelphia, in helping programs that
serve dislocated workers, and in training the legislatively
called-for labor representatives who serve on the country's
workforce investment boards. The Pennsylvania AFL-CIO and the
Philadelphia Central Labor Council co-hosted our 2002 national
conference and we were very pleased that you agreed to serve as
the keynote speaker at that conference.
Other Federal agencies, the Department of Commerce, the
Small Business Administration, and others, spend millions of
dollars providing assistance to the Nation's employers to
connect with Federal Government programs. The fact that the
Department of Labor is choosing not to maintain an investment
in connecting labor to the programs it is charged with
administering is simply out of line with this and established
Government practice.
These cuts by the Department have led to even greater
investments in the institute by the AFL-CIO and by foundations.
The institute, by the way, is a nonpartisan 501(c)(3) nonprofit
organization, but some of its historic objectives are most
appropriately funded by the U.S. Department of Labor.
Over the last 3 years, the Institute has already seen two
of our DOL supported programs defunded. The first of these cuts
was to our work assisting unions in providing dislocated worker
services, a cut made at a time of record dislocation in our
economy.
That cut was followed by the termination of our program to
help establish labor-management partnerships in key industry
sectors, like the regional skills alliances that you were so
instrumental in promoting, a program which had been helping
unions and employers in the southwest corner of Pennsylvania
join with the counterparts in Ohio and West Virginia to address
the needs of manufacturing critical to the Ohio River Valley.
We had to terminate that program as a result of the cut in DOL
funding.
The one remaining grant from the Department of Labor
supported a program of training and technical assistance to the
network of more than 1,300 labor representatives who serve on
the Nation's State and local workforce investment boards. It is
this work that the Department has now decided it will no longer
support. Pennsylvania and many other States had participated
vigorously in this program and if the decision is not reversed,
the labor representatives serving as the voice of workers in
the public workforce system will no longer have the assistance
of the Institute in helping them become more effective members
of their boards.
I applaud the work that you have done to support labor as
the statutory voice of all workers in the public workforce
system, and I hope that those efforts will result in a reversal
of the unprecedented decision by the Department to terminate
its funding of the Institute.
Thank you again for this opportunity to speak.
STATEMENT OF HERBERT MABRY, CHAIRMAN EMERITUS,
APPALACHIAN COUNCIL
ACCOMPANIED BY WILLIAM BURGA, PRESIDENT, OHIO AFL-CIO
Senator Specter. Thank you, Ms. Mills, for your testimony.
Our next witness is Mr. Herbert Mabry, Chairman Emeritus of
the Appalachian Council and president emeritus of the Georgia
AFL-CIO. He began his union career in 1950 as a member of the
Carpenters Local 225 in Atlanta. Mr. Mabry is accompanied by
Mr. William Burga, president of the Ohio AFL-CIO. Prior to his
current position, Mr. Burga was subdistrict director of the
United Steel Workers of America in Canton.
Thank you for joining us, gentlemen, and we look forward to
your testimony, Mr. Mabry.
Mr. Mabry. Thank you very much. My name is Herb Mabry and I
am past president of the Georgia AFL-CIO for 30 years and a
member of the Appalachian Council Board practically from the
inception of it and have been involved in the programs.
It was in 1977 that the Council's highly successful
national program IWEP, the industrial work experience program,
was developed based on an early assessment of weaknesses in the
Job Corps program. Recognizing that students could be
successful through the course of their training program yet
fail in their first few months on the job became the basis of
the new program.
Mr. Chairman, I would like to also inject in there, at that
time, I was serving on the Board of Directors of the Martin
Luther King Center for Social Change, and as such, I went to
them and explained what we were trying to do and enlisted their
help with our program because back then, it was not very
popular to see. And my testimony will show you that for a white
man to be escorting young men and women that were coming into
Atlanta into certain areas of our city, to try to place them in
meaningful employment.
But it was in that year that the concept of the national
support network for students was first considered and thus
resulted in a meeting between the Council and representatives
of the Department of Labor. The meeting took place in Jekyll
Island, Georgia, and as a board member of the Council, I became
part of and was integral to those discussions that we had.
As a result of that meeting, the concept and need of Job
Corps offering enhanced and individualized, one-on-one support
to students, particularly with those students trained by other
national training contractors, became a reality. Over the
years, home-based, 24/7, hands-on staff developed good-paying,
sustainable jobs, recruited students to fill those jobs, found
housing and affordable transportation, and served as mentors
and/or surrogate parents for the 90-day period. Everyone
connected with the program, including board members lent a
helping hand.
I can recall after going through this. I was talking to Mr.
Darlington. I can recall on a Saturday morning when the
students were sent into Atlanta where we could find them
housing. We had housing for them. And I can recall them coming
into Atlanta on Saturday morning, and I would get up and take
my pickup truck and I would go to the Greyhound bus station in
Atlanta and pick those students up. And we would have cars to
follow with the students. We would load it down with their
belongings. Everything those young men and women owned was
there coming with them. And a little humor: we looked like the
Clampetts going down the road when we left that bus station
with all of their baggage put on the truck.
Mr. Mabry. But we found homes for them and we took them
there and put them in.
This service became recognized throughout Job Corps and
today experienced staffers in Job Corps now refer to this type
of post center support as the traditional IWEP. Everyone was
talking about the role that IWEP had played in finding places
for them and what they were referring to.
Job Corps is to this day, trying to emulate IWEP's role.
However, the effort to mirror IWEP's style of transition
services has proven difficult for them. This is true for
several reasons. CTS providers, like other entities, are
limited by their historical paradigms as to what the work
really is. Additionally, CTS staff folks are heavily burdened
by issues of accountability and regulations and have little
time for the direct, hands-on, 24/7 support the IWEP staff
provided, nor can they establish the depth of relationships
that IWEP had developed over many years with the unions,
employers, as well as city and State governments.
Mr. Chairman, just like every other group of people, those
young men and women would come into the city and occasionally
we would have one to get in trouble driving or whatever. It
might be drinking and driving, whatever. I went to the
courthouse and represented those people. I am not an attorney
but I represented them with the judges. I served as chairman of
the Fulton County Personnel Board. They all knew me, what I did
for a living. And I would go represent those young men and
women and get them to where they could go back to work the next
day. And we were very successful and able to do that.
Mr. Chairman, I can personally attest to the quality of the
service that was provided out of the Atlanta region, and I had
personal relationships with many of those folks over the years.
And the dedication and commitment to the students they served
was undeniable.
PREPARED STATEMENT
Furthermore, I am aware that in January 2003, the Atlanta
Regional Director made a surprise visit to the office in
Decatur, Georgia at the behest of the national office of Job
Corps and met with the staff. Later he announced at a regional
meeting--and this is very, very important, Mr. Chairman. He
announced at a regional meeting that the Council had the best
CTS operation he had ever seen, and he praised the staff he met
with and forwarded a very positive report to the national
office. This is a strong statement, Mr. Chairman, to continue
this valuable program and to continue a role for the Council in
Job Corps.
Mr. Chairman, I thank you for the opportunity of being here
today.
[The statement follows:]
Prepared Statement of Herbert Mabry
Chairman Specter, Senator Harkin, Senator Byrd and members of the
Subcommittee, thank you for this opportunity to testify on behalf of
the Appalachian Council and its contract with the Department of Labor.
It was in 1977 that the Council's highly successful national
program, IWEP (Industrial Work Experience Program), was developed based
on early assessments of weaknesses in the Job Corps program.
Recognizing that students could be successful throughout the course of
their training program yet fail in their first few months on a job
became the basis for the new program.
It was in that year the concept of a national support network for
students was first considered and thus resulted in a meeting between
the Council and representatives of the Department of Labor. That
meeting took place in Jekyll Island, Georgia and, as a Board member of
the Council, I became part of and was integral to those discussions.
As a result of that meeting the concept and need of Job Corps
offering enhanced and individualized one on one transitional support to
students particularly with those students trained by the other National
Training Contractors became a reality. Over the years, home based 24/7
hands-on staff developed good paying sustainable jobs, recruited
students to fill those jobs, found housing and affordable
transportation and served as mentors and/or surrogate parents for a
ninety day period. Everyone connected with the program including
Council Board members lent a helping hand. I can recall on more than
one occasion moving students' possessions on a Saturday morning in my
pick-up truck.
This service became recognized throughout Job Corps and today
experienced staffers in Job Corps now refer to this type of post center
support as the traditional IWEP role.
Job Corps is, to this day, trying to emulate IWEP's role. However,
the effort to mirror IWEP's style of transition services is proving
difficult. This is true for several reasons. CTS providers like other
entities are limited by their historical paradigms as to what the work
really is. Additionally, CTS staff folks are heavily burdened by issues
of accountability and regulation and have little time for the direct,
hands on, 24/7 support that IWEP staff provided nor can they establish
the depth of relationships that IWEP had developed over many years with
unions, employers as well as city and state governments.
Mr. Chairman, I can personally attest to the quality of the
services that were provided out of the Atlanta Region. I had personal
relationships with many of those folks over the years and the
dedication and commitment to the students they served was undeniable.
Furthermore I am aware that in January 2003 the Atlanta Regional
Director made a surprise visit to our office in Decatur at the behest
of the National Office of Job Corps and met with staff. Later he
announced at a Regional meeting that the Council had the best CTS
operation he had ever seen. He praised the staff he met with and
forwarded a very positive report to the National Office.
This is a strong testament Mr. Chairman for continuation of this
valuable program and to the need to continue a role for the Council in
Job Corps.
I thank you, again, Mr. Chairman, for the opportunity to testify,
and I look forward to answering your questions.
Senator Specter. Thank you very much, Mr. Mabry.
Mr. Burga, would you care to supplement the comments in any
way?
SUMMARY STATEMENT OF WILLIAM BURGA
Mr. Burga. Yes, Mr. Chairman, just briefly.
I was hoping Senator DeWine would be here so I could talk
with him.
Mr. Chairman, there is clearly something going on at the
Department of Labor in their denial of funding of both these
organizations. We in Ohio are concerned in both respects.
We also had an opportunity to talk with the Department of
Labor about another problem as it relates to the AFL-CIO and
labor unions, and that was the Labor-Management Reporting and
Disclosure Act where they want to change the LM2 requirements.
The evidence that you hear today and my sitting in the back of
the room and listening, I think there is clear evidence that
this Department of Labor is on a mission as regards the AFL-CIO
in particular and any relationship that we might have or that
might be held by other groups with the AFL-CIO.
So I certainly respect the hearing that you are holding
today and perhaps you can do your influence of having this
Department of Labor reconsider these fundings because they are
very much needed, as the record will show.
Thank you very much.
Senator Specter. Well, thank you, Mr. Burga.
This is an especially busy day in the Senate because we are
about to embark upon the August recess to give us an
opportunity to attend the national conventions and also to come
back to our home States and visit with our constituents. So it
is a very busy day.
But I will tell Senator DeWine what you said. I know he
will be very concerned about it and will follow up.
Mr. Burga. Thank you.
Senator Specter. Mr. George, let me begin the questioning
with you. I would be interested in your amplifying the comment
you made that funds were unavailable to improve the facilities
when the Appalachian Council was running, for example, the
Pittsburgh Job Corps, but when the shift was made, that
additional funds were available. I would like to know a little
more about that.
Mr. George. It is a program that was originated and started
by Appalachian Council and had been there for a couple of
years. The specific generics of that I would like to have Gary
just maybe make a comment how that was shifted and the reason
given to us when they did it, which I understand was no reason.
Mr. Darlington. Senator, the transportation training
program was a dual component program consisting basically of
training students to have commercial driver's licenses and also
do material handling, which is warehousing work. The program
with the Appalachian Council was functioning. It was probably
the top functioning program in terms of statistics during that
time. However, it was subsequently cut in half. The material
handling part of the program was shifted to the center
operator.
We had been asking for additional equipment to run that
program. We could not get it. However, when we were no longer
part of that material handling program, the equipment was
available.
Senator Specter. Thank you very much, Mr. Darlington.
Mr. George, you made a comment which was pretty much the
same as what Mr. Burga said, that there appears to be some
direction by the Department of Labor against AFL-CIO. I would
be very interested in both of you gentlemen amplifying what you
have seen there and what you think may be the causes of it.
Mr. George. Well, I mean, it is obvious--and I think maybe
Jim Bowen may have a comment too--at least from my State of
Pennsylvania in the last 3 years--at least for the last 2
years. It has been 3 years. 2 years since I have felt it
personally. It is not only the LM3 form reporting, which is a
burdensome process on local unions, which are 2,600 local
unions in the State of Pennsylvania. They report by government
entities on a biannual year on their audits and their stuff
that takes place to the Department of Labor under the NLRB and
stuff that is taking place. It got streamlined. That was
satisfied for many, many years during Republican and Democratic
administrations with a lot of information that any malfeasance
was in those reports where by investigation was easily picked
up.
The Department has decided to try to invoke--I guess it is
on hold here or we are going see it--I do not know if it is
going to go or not. But during the election, it seems it got
quiet, but up until the spring, you and several other Senators
was inquiring why was this being done to the point there would
be 43 pages of reporting from the time that you would walk to
the bathroom, to have to mention the cost of the toilet paper
that was put into the men's room, and a number of meaningless,
meticulous time that would have to be spent. And an accounting
firm had predicted that every local union with over 100 members
would be required to have an accountant go over this tremendous
amount of questioning that would take place that would have to
be filled out. So that was one occasion that we have seen.
The second occasion, of course, is what you have heard
here, the two great institutions that has been here over 35
years just, at least in our opinion for no justifiable reasons,
being wiped out.
The other, Senator, is one that you were caught up in, as
you and I were aware. Unfortunately, for the State of
Pennsylvania, we were probably hit as hard as anybody with the
unbalance of trade and the incoming of trade into the State of
Pennsylvania. In the last 3 years, we have lost 200,000 jobs.
Of course, a lot of that was giving training monies, TAA and
TRA money that came out of the Department of Labor, because of
the Department of Labor certifying industries that were
impacted by trade automatically entitled people to be able to
get those training monies. Unfortunately, because of no reason
and everybody running around for the first 3 months of 2001, we
were delayed $20 million. A cost of over 250 participants in
the TRA and TAA program were immediately denied in any programs
that could take place. So we had no initiative programs from
January, February, March, and April of that year that people
could get into the programs.
We have never had that since the inception in the 1980's of
TAA and TRA. It just makes you wonder, when you have those kind
of things impacting you in your particular State, why was this
taking place. It did not happen in any other State to my
understanding. In fact, it is my understanding that four other
States who had not used their money up in mid-year is when the
Department of Labor went and took the money out of those States
and put it into Pennsylvania. At least there is a letter out by
the U.S. Department of Labor saying that they would allocate
the money.
You were very much involved in it because it was a tidal
wave to all of the members of the general Congress here that
their constituency were being denied continuing education
programs.
So that is some of the reasons why we feel that there seems
to be a prejudice, an initiative by this Secretary of Labor to
look at an institution that has been a standing institution in
this Nation and has been part of the rebuilding of this country
not only by labor unions, but in the community standing up in
order to make greater training programs and enhancing the
quality of life for all Americans.
By the way, all of our institutions are nonprofit. There is
no money-makers here. We do not have shareholders. We do not
have stockholders like a couple of other people that play in
these programs do.
Mr. Burga?
Senator Specter. Mr. Burga, would you care to respond?
Mr. Burga. I would just like to say a couple of things, Mr.
Chairman.
Two big elements that we see showing this problem is a lack
of communication prior to their decision-making. I think the
record shows it here and it shows it on the Appalachian Council
and also the Working for America Institute. You would have to
check with them, though, as to why they do the things they do.
I cannot give you any factual reason. But talking with the AFL-
CIO officers, they do not get notice about what the Department
of Labor intends to do until after the Department of Labor
decides to do it. Neither did the Appalachian Council. They do
not even respond to you, Mr. Chairman, when you send them
letters. I do not know why they are acting this way. But the
record is clear the way they are acting, and it is not
conducive for good relationships. It is not conducive for the
American workers. So other than that, I cannot respond.
Senator Specter. Thank you.
Mr. Mabry. Mr. Chairman?
Senator Specter. Mr. Mabry, let me give you a question and
then you can make a comment.
In evaluating these programs in Georgia--and I will come to
Mayor Baker in Mississippi--the question comes to my mind as to
whether there is not a very heavy participation by minorities
looking for the job training, and then the issue of starting
salary is likely to be lower than might be expected if you are
not dealing with minorities in depressed areas. I would like
you, Mr. Mabry, and then you, Mayor Baker, to comment on a
couple of States in the deep South as to whether that in fact
is not true.
Mr. Mabry. Well, thank you, Mr. Chairman. It is true
because the Appalachian Council is made up, as you well know,
of North/South Carolina and then Georgia, Alabama, Mississippi,
Tennessee, and they are right to work States. Then when we go
in and try to place these young men and women in these places,
the first reaction from the employer in a lot of cases is that
we are sending in people to try to organize their employees.
Senator Specter. So in a right to work State, it makes it
even more difficult.
Mr. Mabry. It makes it more difficult.
Senator Specter. That is a phenomenon of some of the
States, but not in others where these statistics would be.
How about it, Mayor Baker? Do you find the same situation?
Mr. Baker. Senator, I am probably not qualified on that
point to answer your question, sir. I will tell you, as I
stated earlier, the Appalachian Council has been involved since
this center in Batesville, Mississippi opened in 1981. From all
we have ever been told by the Department of Labor and others
was the Appalachian Council was doing a great job in training
and placement.
Senator Specter. Mr. Bowen, I was impressed by your
testimony generally, but when you used the language of a plan
to intentionally impede the Council's capacity to be
successful, I would like you to expand upon that, if you could.
Mr. Bowen. Yes, sir. As explained by my good friend, Bill
George, and Bill Burga, some of the incidents that caused me to
form that kind of an opinion, I think the testimony heard prior
to our group providing testimony in respect to the inability
and the failure to contact our people in respect to areas that
may be deficient, even though I certainly question because,
Senator, the chart I referred you to that is in the record is
from the numbers from the Department of Labor, not our numbers.
We did not create them.
The incidents referred to by Brother George in respect to
the LM3, in respect to our program, in respect to the AFL-CIO
Institute for America--the workforce investment part is
fantastic. In our State we are certainly minorities on those
committees in number, but we are very strong because of the
education that was provided for the labor members of WIA. And
we are dramatically having major problems in the TAA arena
because we do not have the funds for our training.
And all this causes me to be very suspicious of the actions
of the Department of Labor in this particular matter, and that
is why I made that statement, sir.
Senator Specter. Thank you, Mr. Bowen.
Senator Byrd could not be here this morning. He sent word
that his wife is ill, and that he asked that his statement be
included in the record which will, without objection, be made a
part of the record.
[The statement follows:]
Prepared Statement of Senator Robert C. Byrd
Thank you, Mr. Chairman, for holding this hearing. I think it's
important that the Labor Department publicly explain its decision to
cancel the Appalachian Council's contract, and I doubt such an
explanation would ever have been made had it not been for your interest
in the matter.
The Labor Department notified the Appalachian Council on February
26, 2004, that its contract would terminate on April 30--giving the
Appalachian Council only 60 days notice.
In reading that letter, I am reminded of life in the old coal
company towns of Southern West Virginia, when the coal company owned
everything, even the homes in which the miners lived. I remember the
letters miners would receive terminating their employment. David
Corbin's book Life, Work, and Rebellion in the Coal Fields cites an
excellent example of a coal company terminating a miner's job.
I quote from a letter dated November 26, 1923. It reads: ``This is
to notify you that we will not be in need of your services any longer
after this date. You are further notified to surrender the possession
of the house you now live in on or before January 1, 1924.''
That's how I read the Labor Department's termination letter to the
Appalachian Council. After thirty years of service, the Labor
Department provides sixty days notice that the Appalachian Council's
services are no longer needed and orders them to vacate the premises.
In March, I wrote a letter to the Labor Secretary asking her to
reconsider her decision. I didn't receive a response until April 28--
two days before the Appalachian Council's contract was set to expire,
and even then it was a response that said nothing.
Given the manner in which this contract was terminated--the lack of
notice given to the Appalachian Council, the delay in responding to
Senators' inquiries until the last possible moment--it's no wonder the
Appalachian Council feels as though it has been unfairly targeted by
the Labor Department. At the very least, the manner in which this
contract was canceled was done in a way to keep the Congress at arms
length, and that bothers this Senator a great deal.
Thank you again, Mr. Chairman, for reminding the Labor Department
that their decisions are not exempt from Congressional oversight.
Senator Specter. He focuses on the importance of the
hearing and calls for an explanation of the decision to cancel
the Appalachian Council's contract. He says, ``I doubt such an
explanation would ever have been made had it not been for your
interest in the matter.''
I want to include also a copy of Senator Byrd's letter to
Secretary Chao dated March 19, 2004.
[The letter follows:]
U.S. Senate,
Committee on Appropriations,
Washington, DC, March 19, 2004.
Hon. Elaine L. Chao,
Secretary, U.S. Department of Labor, 200 Constitution Avenue, N.W.,
Washington, DC.
Dear Secretary Chao: I am concerned about the Labor Department's
recent decision to not renew or extend its sole source contract with
the Appalachian Council-AFL/CIO, following the expiration of its
current contract on April 30, 2004.
The Appalachian Council's National Programs have been in continuous
operation since 1974 and can boast of an impressive performance record.
This unique program has served over 100,000 Job Corps students since
1974. I am particularly proud of the Appalachian Council's Auto
Mechanics program at the Charleston Job Corps Center that has been
recognized as one of the top trades at that Center. Furthermore, the
Appalachian Council's Industrial Work Experience Program has received
Job Corps' highest ratings.
For thirty years, the Labor Department has contracted with the
Appalachian Council, and, for thirty years, the Appalachian Council has
had an exemplary performance and accountability record.
I strongly urge you to reconsider your decision to cancel the
Appalachian Council's contract, and I thank you in advance for your
personal attention to this matter.
With kind regards, I am
Sincerely yours,
Robert C. Byrd.
Senator Specter. Ms. Mills, your testimony about the
Working for America Institute I think is very important. As you
noted, I keynoted that event and have attended many events. One
was especially prominent that I went to with Henry Nicholas in
Philadelphia on District 1199(C) of the National Union of
Hospital and Healthy Care Workers of AFSME, a very impressive
program where 61 major health care employers placing graduates
in higher skilled jobs in which there is great demand.
There were a great many nurses there that day. I was
especially struck by it because I chaired the Veterans Affairs
Committee and the veterans hospitals, as our hospitals
generally in America, have a very short supply of nurses, being
required to work overtime to care for the elderly in very, very
difficult circumstances.
I note the headline in today's business section of the Post
about Chairman Greenspan saying that wages are down because
people are not skilled. I speak frequently at high schools and
develop the approach of the importance of developing skills and
tell the young people there are great opportunities if you are
skillful and analogize America to Noah Webster's example. The
world is like a pyramid. There is a lot of room at the top and
it is very crowded at the bottom. I know, having had a large
staff in the Philadelphia District Attorney's Office and as a
U.S. Senator, we are always searching for people with skills.
So I am very much concerned about what is happening. We are
going to be pursuing this matter. We are going to be putting
the questions to the Department of Labor as to what is
happening here.
We are starting three votes right now at 11 o'clock. One of
the difficulties of scheduling matters in the Senate is that
the votes take precedence over everything else. No matter where
you are, if you are meeting with the President and the bell
rings for a vote, that is our principal occupation, is voting.
But I think this has been a very informative session, and I
am going to call upon Secretary Chao to review this decision.
We have yet to fund the Department for next year, and there is
always a certain amount of persuasion that comes from the purse
strings on the Appropriations Committee. I chair this
subcommittee. It is a very important subcommittee on capital
assets where education and health are major capital assets and
the workforce is a gigantic capital asset.
As I noted earlier, Senator Stevens rotates off of this
committee's chairmanship at the end of this year. There are
term limits. And Senator Cochran will then become chairman. I
am going to tell him about your testimony, Mayor Baker. I know
he would have wanted to have been here. And then I am in line
to be chairman of the full committee thereafter, and the
insights that I have had serving as the subcommittee chairman
are very, very valuable.
ADDITIONAL COMMITTEE QUESTIONS
Senator Specter. There will be some additional questions
which will be submitted for your response in the record.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Robert C. Byrd
notice of cancellation of appalachian council's contract
Question. The Appalachian Council's contract was canceled with only
60 days notice. How much notice is typically given before canceling a
sole-source contract?
Answer. There are no minimum requirements related to advance notice
in the Federal Acquisition Regulations (FAR). The Appalachian Council
was provided with written notification of the non-renewal action 64
days prior to the close of the contract on April 30, 2004.
The Appalachian Council has had long-standing performance issues,
and the organization was aware of the Department of Labor's concerns
with its performance. Under the circumstances, we believe that
providing 60+ days notice was appropriate.
date of decision to cancel appalachian council's contract
Question. The letter alerting the Appalachian Council that its
contract had been canceled was sent on February 26, 2004. When did the
Employment and Training Administration make the decision to cancel the
Appalachian Council's contract?
Answer. In the Fall of 2003, the Department of Labor extended the
Appalachian Council contract from November 1 through December 31, while
a decision regarding contract renewal was being made. The final
decision was reached in January 2004, and the Council was notified via
letter the following month.
notification to appalachian council regarding sole-source status
Question. According to the time line you provided my office, the
sole-source status of the contract was being questioned as far back as
June 2003. Why was the Appalachian Council not notified before February
26th that its sole-source status was in danger?
Answer. A final decision was not reached until January 2004.
However, the Appalachian Council experienced performance problems
throughout the period of the contract, which began on 11/1/98 and ended
on 4/30/04. For example, five vocational programs run by the Council
were closed by the end of Program Year 2002. The closings, as well as
other sanctions imposed on Council programs, were preceded by extensive
discussions and/or correspondence between Council officials and
Department of Labor National and Regional Office staff.
CONCLUSION OF HEARING
Senator Specter. Thank you all very much for being here.
That concludes our hearing.
[Whereupon, at 11:02 a.m., Thursday, July 22, the hearing
was concluded, and the subcommittee was recessed, to reconvene
subject to the call of the Chair.]
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