[Congressional Record Volume 141, Number 2 (Thursday, January 5, 1995)]
[Extensions of Remarks]
[Pages E33-E34]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


           REPEALING THE O'HARA-McNAMARA SERVICE CONTRACT ACT

                                 ______


                         HON. HARRIS W. FAWELL

                              of illinois

                    in the house of representatives

                       Wednesday, January 4, 1995
  Mr. FAWELL. Mr. Speaker, today I am introducing, with my colleagues 
Mr. Ballenger and Mr. Boehner, legislation to repeal the O'Hara-
McNamara Service Contract Act, otherwise known as the Service Contract 
Act [SCA]. The Congressional Budget Office estimates that a repeal of 
this outdated, wasteful, and overly bureaucratic statute will save the 
taxpayers $3.16 billion over 5 years.
  My reasons for introducing this repeal bill are many, but my primary 
criticism of the SCA is that it, like the Davis-Bacon Act, 
artificially 
[[Page E34]] increases the cost of Federal Government service contracts 
and imposes burdensome paperwork requirements on contractors in order 
to prove compliance with the law. The SCA also presents a number of 
pragmatic problems which undermine the effective administration of the 
act.
  The SCA covers all contracts with the Federal Government in excess of 
$2,500 whose primary purpose is to provide services to the Government. 
Unless specified otherwise, any contract with the Government that is 
not for construction or supplies is considered a contract for services. 
Under the terms of the SCA, any service contract entered into by the 
United States or the District of Columbia must contain certain labor 
standards, including the payment of locally prevailing wages and fringe 
benefits. In fiscal year 1992, approximately $19.4 billion in Federal 
spending was covered by the requirements of the act.
  The General Accounting Office [GAO] has outlined a number of 
shortcomings of the act, including: The inherent problems which exist 
in its administration; the fact that wage rates and fringe benefits set 
under it are inflationary to the Government; accurate prevailing wage 
rate and fringe benefit determinations cannot be made using existing 
data; the data needed to make accurate determinations would be very 
costly to develop; and, the Fair Labor Standards Act coupled with 
implementation of administrative procedures could provide protection 
for employees the act now covers. The GAO concluded that for ``[the 
Department] of labor to administer the SCA in a manner that would 
ensure accurate and equitable service wage determinations would be 
impractical and very costly, and that the most logical alternative is 
to repeal the act.''
  Furthermore, a number of administrative difficulties have arisen from 
the broadened scope of the act's application to service employees 
working under Federal Government contracts. Many categories of workers 
under the SCA are, for the most part, skilled and highly trained 
employees whose services are in demand in a highly competitive labor 
market. They are well-compensated, possess a high degree of job 
mobility, and thus are not susceptible to wage busting.
  Mr. Speaker, as Vice-President Gore stated in his Reinventing 
Government report, ``[the Service Contract Act] was passed because of 
valid and well-founded concerns about the welfare of working Americans. 
But as part of our effort to make the Government's procurement process 
work more efficiently, we must consider whether these laws are still 
necessary--and whether the burdens they impose on the procurement 
system are reasonable ones.'' I have carefully reviewed the 
requirements and the application of the SCA and I have come to the 
conclusion that this statute is not necessary and that the burdens it 
imposes on contractors and the American taxpayer are not reasonable 
ones. The market is very capable of setting wage and fringe benefit 
rates and the labor protections in the SCA are available under existing 
statutes, such as the Fair Labor Standards Act.
  Mr. Speaker, as we undertake the tremendous responsibilities of 
governing in the 104th Congress, and as we attempt to respond to the 
call of the American people to streamline government and make it work 
more effectively, repealing the Service Contract Act is a welcome first 
step, and a significant initiative to make our Government more 
efficient, responsible, and frugal. I urge my colleagues to join with 
me in cosponsoring this bill and working for its swift enactment.


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