[Congressional Record Volume 142, Number 77 (Thursday, May 30, 1996)]
[House]
[Pages H5741-H5743]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




REQUEST OF PRESIDENT TO USE STATUTORY AUTHORITY TO SUSPEND DAVIS-BACON 
               ACT FOR REBUILDING EFFORT IN OKLAHOMA CITY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Oklahoma [Mr. Lucas] is recognized for 5 minutes.
  Mr. LUCAS of Oklahoma. Mr. Speaker, I yield to my friend from Georgia 
a few seconds.
  Mr. KINGSTON. Mr. Speaker, I thank the gentleman from Oklahoma for 
yielding.
  Had the gentleman from Texas yielded, what I wanted to point out is 
that the Republican Party, acting in a spirit of bipartisanship, is 
taking the President of the United States at his word on the Wisconsin 
waiver and we are going to have that bill on the floor of the House.
  I am surprised, as I listen to these Democrats, that they are against 
it because it was President Clinton's idea. I wanted to make sure that 
folks know we are doing exactly what President Clinton called for and 
that no Democrats have expressed any outrage until suddenly tonight.
  I thank the gentleman.
  Mr. LUCAS Mr. Speaker, I think the gentleman's point is well taken.
  Mr. Speaker, on July 27, 1995, President Clinton signed Public Law 
104-19 which appropriated $39 million in Community Development Block 
Grants [CDBG] to assist citizens of Oklahoma City with meeting the 
financial hardships created by the bombing of the Alfred P. Murrah 
Federal building. This truly was the proper Federal response to a 
presidentially-mandated national emergency. Never before had Congress 
passed, and the President signed, legislation utilizing CDBG funds in 
this manner. An act of terror of this magnitude forces all of us to 
reflect on the standard operating procedures under which we, as a 
government, react to national emergencies. At this time, I am asking 
the President and the rest of the Federal Government to diligently 
reflect on how best we can restore Oklahoma City to where it was before 
9:02 a.m. of that fateful day.

  Mr. Speaker, as millions of people around the Nation joined the city 
of Oklahoma City on April 19 to remember those killed and injured in 
the bombing of the Alfred P. Murrah Federal building, they may have 
noticed the number of buildings that remain as damaged today as they 
were immediately following this tragic event.
  On April 17 of this year, I sent a letter to President Clinton 
pointing out that there are major obstacles to fully utilizing the CDBG 
funds in the rebuilding effort and asking for his assistance in freeing 
up these funds to rebuild Oklahoma City. Specifically, I asked that he 
use his statutory authority to suspend the Davis-Bacon Act for these 
funds. It is my belief that in a unique situation such as what occurred 
in Oklahoma City, this authority

[[Page H5742]]

should be used. In fact, FEMA appropriations are not subject to Davis-
Bacon to ensure that relief efforts can be accomplished in an 
expeditious manner so that the focus can be on rebuilding the 
communities affected. The funds appropriated to Oklahoma City should be 
seen in this light, which would warrant the suspension of Davis-Bacon.
  To date I have received no response from the White House; by not 
responding to this request, President Clinton has ignored the request 
of Oklahoma City which has appealed to me for assistance in this 
matter. Last week, armed with specific case examples from Oklahoma 
City, I sent a second letter which again asked the President to 
exercise his authority to suspend this act. One example stated Davis-
Bacon raised the costs of the project by 75 percent, and the city 
estimates that all project costs rise by an average of 25 to 40 
percent. These are dollars that do not go toward disaster relief, but 
which are badly needed by the people of Oklahoma City.
  According to title 40, section 276a-5 of the U.S. Code, ``In the 
event of a national emergency, the President is authorized to suspend 
the provisions of the Davis-Bacon Act.'' On the day of the bombing, the 
President issued a release stating that the bombing was a national 
emergency. I agreed with him and welcomed his pronouncement.
  Mr. President, I ask you to take the next step and suspend the Davis-
Bacon Act today. The sooner this is done, the sooner Oklahoma City will 
be able to fully utilize the money appropriated them last year.
  I understand that Davis-Bacon is a politically charged issue and that 
this is a campaign year, but I maintain to the President that my motive 
for this request is not to repeal the Davis-Bacon Act, but to utilize 
the act to its fullest.
  My point is that, in disaster situations, like what happened in 
Oklahoma City, the primary role of the Federal Government is to ensure 
that the fewest number of restrictions are placed on relief workers and 
small businesses. Had Oklahoma City received money from FEMA instead of 
from HUD, as disaster relief funds normally are, Davis-Bacon 
requirements would not have applied. Therefore, I feel this is a 
reasonable and nonpartisan request. I stand here today, as a 
representative of the people from Oklahoma City, who simply want to use 
the Federal relief funds in the matter that relief funds have 
historically been used.
  Presidents Roosevelt, Nixon, and Bush, used this section of the law 
to suspend Davis-Bacon. Though there clearly is a precedent for 
suspending Davis-Bacon, there is no precedent for what occurred in 
Oklahoma City.
  My question is simple: Mr. President, what will it be, yes or no?
  Mr. Speaker, the letters of the President referred to earlier are 
included for the Record.

                                     House of Representatives,

                                   Washington, DC, April 17, 1996.
     Hon. William J. Clinton,
     President of the United States,
     Washington, DC.
       Dear President Clinton: As we approach the one year 
     anniversary of the tragic bombing of the Alfred P. Murrah 
     Federal Building in Oklahoma City, I want to take the 
     opportunity to relate to you certain problems that have 
     slowed down the utilization of the $39 million in Community 
     Development Block Grant (CDBG) funds by businesses and 
     individuals. A similar letter has also been sent to Secretary 
     Reich and Secretary Cisneros.
       First, I want to emphasize that the people of Oklahoma, 
     myself included, will forever be indebted for the federal 
     response to this unprecedented act of terrorism. In fact, it 
     is because of this rapid response that I feel that this issue 
     must be addressed. As you know, Oklahoma City received $39 
     million in CDBG funds through the Department of Housing and 
     Urban Development. Secretary Cisneros worked closely with 
     myself and others to find offsets in this section of the 
     budget and worked very hard to assure that the City would 
     have flexibility in its use of this money.
       At present, this money is subject to The Davis-Bacon Act, 
     which requires small businesses to comply with Davis-Bacon 
     reporting requirements and pay local prevailing wages for 
     work associated with cleaning up and rebuilding the 
     devastated area. The City of Oklahoma City has estimated that 
     Davis-Bacon increases the cost of these projects by 25-40 
     percent and produces long delays. Even employees who want to 
     help rebuild their workplace have to be certified under 
     conditions of the Davis-Bacon Act and be paid as though they 
     were general contractors. Like you, I want maximum 
     utilization of the CDGB funds to rebuilt the City. Under 
     these conditions, I fear that the $39 million will not be 
     sufficient to rejuvenate Oklahoma City.
       In Title 40, Section 276A-5, United States Code, the 
     President has the authority to suspend the Davis-Bacon Act in 
     times of national emergency. As you are aware, the Oklahoma 
     City bombing was declared a national emergency on April 19, 
     1995. I am requesting that this authority be used. I am not 
     advocating any statutory changes to be made to this Act, nor 
     do I want this request to be seen as a testament to Davis-
     Bacon; however, in times of national emergency, appropriated 
     funds should solely be directed for relief efforts. I'm 
     afraid that currently that is not the case.
       If this action is not desirable to the administration, I 
     would recommend substantially increasing the threshold for 
     Davis-Bacon projects so that small contractors can bid on 
     this work. This would also allow small businesses to use 
     their own employees to clean up and rebuild their stores. 
     Again, this would only apply to the CDBG funds in Oklahoma 
     City.
       If this is done, I believe we owe it to the businesses and 
     the community to set up an on-site verification process to 
     immediately certify workers so that these relief projects can 
     be expedited. This would not address the higher costs for 
     these projects, but would allow them to commence work.
       I believe that a solution to this problem can be achieved. 
     The aftermath of the Oklahoma City bombing is a tremendous 
     illustration of how federal, state, and local officials can 
     work together and work with the community to address a 
     disaster. I hope that this cooperation continues, and I thank 
     you for your consideration of my requests.
           Sincerely,
                                                   Frank D. Lucas,
     Member of Congress.
                                                                    ____

                                    Congress of the United States,


                                     House of Representatives,

                                     Washington, DC, May 23, 1996.
     Hon. William J. Clinton,
     President of the United States,
     Washington, DC.
       Dear Mr. President: On April 17, 1996, a request was made 
     for your further assistance in rebuilding Oklahoma City after 
     the bombing of the Alfred P. Murrah Federal Building. As a 
     unique and tragic event, the bombing has no parallel or 
     precedent, which requires vigilance among citizens and public 
     officials to continue our efforts to heal our broken 
     community.
       To date, I have not received a response from you regarding 
     the City of Oklahoma City's request for a suspension of the 
     Davis-Bacon Act (the Act) requirements as it relates to the 
     CDBG funding for bombing relief. Title 40, Sec. 276a-5 
     (U.S.C.), provides the President authority to suspend the 
     Act's requirements in times of a national emergency. On April 
     19, 1995, you declared a national emergency for Oklahoma 
     City. Based on your tour of Oklahoma City on April 5 of this 
     year, you know firsthand the extent of the damage that still 
     exists one year later. Thus, quick action to our request will 
     accelerate the recovery effort.
       Recently, I received an interim response from Assistant 
     Secretary DeCell of the Department of Housing and Urban 
     Development, which was lacking in relevance and understanding 
     of our problem. Hopefully, HUD's cursory examination will not 
     weigh too heavily on your decision to grant our suspension 
     request.
       During staff discussions with HUD, it was mentioned that no 
     precedent exists for such a suspension. In fact, President 
     Roosevelt, Nixon and Bush have granted it on three occasions. 
     Additionally, I trust you will agree that no precedent exists 
     for what occurred in Oklahoma City and any reliance on past 
     situations are not analogous or relevant.
       The following are a sampling of real life examples of how 
     the Act is constricting the rebuilding efforts. The increased 
     costs are undeniable. The city of Oklahoma City has submitted 
     a request for an additional $26 million in bombing relief. 
     This subsequent request underscores the urgency in maximizing 
     the relief funds already available to Oklahoma.
       1. The use of a single ``prime contractor'' increases the 
     cost of the project because the prime contractor will add 
     overhead costs for subcontracting, administrative expenses to 
     complete the Davis-Bacon compliances and profit.
       2. Most Davis-Bacon wages in Oklahoma City exceed the wage 
     that is usually paid in the open market.
       3. Because Davis-Bacon sets specific wages for specific 
     trades, the general laborer, employed by a small business, 
     may perform several tasks during his daily shift. In a given 
     day, the employee may use a backhoe, a shovel and frame walls 
     in a building. Each trade classification has a different wage 
     rate which must be documented with the number of hours worked 
     in each classification. This means that in an eight hour day, 
     the employee could use a shovel for 1.5 hours @$7.37 per 
     hour, use a backhoe for 45 minutes @14.06 plus $3.49 in 
     fringes/ per hour and frame a building for 5.45 hours @$11.90 
     per hour.
       4. City staff have been told that if an employee is working 
     at a higher wage classification, the employee must be paid at 
     the highest wage rate regardless of the work being performed 
     (See Asbestos removal).
       5. Davis-Bacon does not take into account merit and 
     longevity of employees and their corresponding wages. All 
     employees are paid the same minimum wage regardless of 
     experience. An employer could pay more than the

[[Page H5743]]

     minimum wage to more senior employees, but that is unlikely 
     given that the minimum wage is usually more than the most 
     senior employee makes on projects not subject to Davis-Bacon 
     wages.
       6. According to the Department of Housing and Urban 
     Development, repairs to bomb-damaged buildings completed 
     before October 30, 1995, are not subject to Davis-Bacon 
     wages. Any project after that date is subject to Davis-Bacon. 
     If the work has been completed by the property owner and the 
     contractor has been paid and his employees have been paid:
       (a) What incentive does a contractor have to recalculate 
     all of his employee hours at the Federal Wage rate?
       (b) If a contractor does not want to re-figure his wages, 
     what recourse does an owner have to get reimbursed? (The 
     contractor has been paid, why spend the time to re-figure?)
       (c) When the contractor does comply, he will add overhead 
     and profit to his costs making the job even more costly.
       7. The $2,000 threshold for Davis-Bacon projects is too 
     low. If you have two items to replace such as a window and an 
     overhead door, the total cost may only be over $2,000. Each 
     contractor will spend an hour or less on the job to install 
     the products. Most of the bid is for the product, not the 
     labor. A small independent contractor or small business owner 
     will spend three days filling out paperwork for an hour-long 
     job (See 1 NW 12th Example).


                                examples

311 N. Harvey--original bids:
  Ward Construction..............................................$2,900
  Southwestern Roofing...........................................21,398
                                                             __________

    Total........................................................24,298
  Revised Davis-Bacon bids (11% increase)........................27,000
                                                               ==========
_______________________________________________________________________

520 N. Hudson--original bids:
  Brat Paint......................................................5,434
  Mike Harper.......................................................675
  King Electric...................................................3,045
  Mid-American Roofing...........................................32,134
                                                             __________

    Total........................................................41,288
  Revised Davis-Bacon bids (One Prime Contractor) (44% increase).59,398
                                                               ==========
_______________________________________________________________________

225 NW 6th--original bids:
  Overhead Door...................................................1,600
  Mid-American Roofing...........................................37,578
                                                             __________

    Total........................................................39,178
  Revised Davis-Bacon Bids (One Prime Contractor) (25% increase).48,920
                                                               ==========
_______________________________________________________________________

408 NW 6th--original bids:
  Central Glass...................................................7,209
  Bob Growan (exterior paint).....................................2,305
  Ed Orr (replace ceiling).......................................11,900
                                                             __________

    Total........................................................21,459
  Revised Davis-Bacon Bids (75% increase)........................37,720
                                                               ==========
_______________________________________________________________________

       In this case at 408 NW 6th, the property owner obtained the 
     low bids above from individual contractors. The owner had 
     also completed some minor reimbursable repairs prior to this 
     bidding. The owner was told that he would have to rebid the 
     project with the required wage rates and that he could only 
     sue one ``prime contractor'' on projects where Davis-Bacon 
     wage rates are in effect. The results of bidding the same 
     work with general contractors and Davis-Bacon wage rates, is 
     provided. This is an increase of $16,261 or 75% for the same 
     work.
       Although this may be an extreme case, history with our 
     program shows most increases due to wage rate requirements in 
     the range of 8-50%, it is indicative of the possible cost 
     increase that can result from a combination of wage rate 
     requirements and the use of general contractors on small 
     jobs. The property owner was not surprised that the price 
     increased significantly, but was baffled that we required him 
     to do this. His question was why? To be honest, I don't know, 
     other than ``that is the federal requirement.''
       1 NW 12th Street: Taylor's Downtown Glass gave a bid of 
     $433.23 to replace a window in a downtown building. It will 
     take less than 30 minutes to perform the task. Tull Overhead 
     Door gave a bid of $3,597.00 to replace an overhead door. The 
     contractor will spend less than an hour installing the 
     product. Taylor's Downtown Glass spent three days filling out 
     the paperwork and has to keep track of the entire week of 
     payroll for a job that takes less than 30 minutes. Tull 
     Overhead Door spent costly time attending a pre-work 
     conference that was required even though he had done Davis-
     Bacon work before.
       Asbestos Removal: The federal wage rate for Asbestos 
     Workers is $18.00 per hour plus $5.13 in fringes. The problem 
     is that local asbestos abatement companies only pay that rate 
     to employees when working in full containment garments 
     (``moon suits'' with respirators). Otherwise they pay them at 
     a regular common laborer rate or a wage rate that corresponds 
     to their other job.
       However, according to Davis-Bacon Rules, the abatement 
     workers must be paid as such when they are driving a truck, 
     unloading lumber and building containment areas, load out 
     areas, etc. This will increase the asbestos abatement cost 
     significantly and our project designers are amazed that this 
     rule must be followed.


                               conclusion

       The point of the examples provided in this letter is that 
     there is a substantial cost factor involved in implementing 
     this program with Davis-Bacon prevailing wages, and I feel 
     the money would be better spent providing additional 
     assistance to those who were damaged. In addition, the fact 
     that we must pay these wage rates with the accompanying 
     reporting paperwork for businesses and additional City staff 
     costs, frequently adds to the frustration of those who we are 
     trying to help. Business and property owners often state that 
     this is just another example of the government doing 
     everything slower and at an increased cost. Unfortunately, I 
     must agree with them.
       I realize that there may be a reluctance to suspend Davis-
     Bacon wage rates for these funds. Although, I do find it 
     interesting that if Oklahoma City had obtained funding 
     through the Federal Emergency Management Agency (FEMA), as is 
     typical in a disaster area, federal Davis-Bacon wage rates 
     would not apply. However, because Congress designated 
     Community Development Block Grant Funds (CDBG) for this 
     unique disaster, HUD requires all construction projects with 
     a total project cost of $2,000 or more to pay Davis-Bacon 
     wages. In general, if the intent of the FEMA policy is not to 
     burden those affected by a disaster or emergency with Davis-
     Bacon requirements, then I feel that the same policy should 
     apply to the unique situation in Oklahoma City.
       Your attention to this matter is truly appreciated. I look 
     forward to our continued cooperation in assisting those 
     damaged and providing for the revitalization of the areas 
     affected by the bombing.
           Sincerely,
     Frank D. Lucas.

                          ____________________