[Congressional Record Volume 146, Number 44 (Monday, April 10, 2000)]
[House]
[Pages H1988-H1989]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




THE NAVY'S MANIPULATIVE USE OF PREVAILING WAGES ON GUAM FOR THE PWC BOS 
                                CONTRACT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Guam (Mr. Underwood) is recognized for 5 minutes.
  Mr. UNDERWOOD. Mr. Speaker, I speak again on the issue of the 
implementation of a commercial study, the A-76 program, which basically 
is designed to outsource a number of jobs in my home island of Guam.
  I rise again to point out some very serious difficulties with this 
process, and point out to the Members and especially the Members of the 
Committee on Armed Services that these kinds of problems which we are 
experiencing in Guam will inevitably be experienced by everyone as they 
undergo this A-76 process.
  Yesterday on Guam, Raytheon Technical Services commenced their 
contract with the U.S. Navy for base operation support functions. 
Approximately 800 Federal civil service workers were laid off, and most 
of them were immediately rehired by Raytheon under the so-called right 
of first refusal to perform the very same jobs as they did last week, 
only they will be paid a salary of 40 to 60 percent less.
  The Navy has told us that the wages that the contractor is required 
to pay are based on a ``prevailing wage determination,'' as is 
calculated by the U.S. Department of Labor. These are calculated by a 
prevailing wage survey. This survey is a composite of job-specific wage 
rates by industry in a particular community. They do not, however, 
account for the price of local consumer goods and foodstuffs which must 
be purchased in order to survive in that community, so Federal jobs 
also include a cost-of-living allowance that makes up this difference.

                              {time}  1915

  The private contractor is not required to pay this. In attempting to 
comprehend the situation on Guam between the high cost of consumables 
and the depressed prevailing wage rates, we spoke with the Prevailing 
Wage section of the Guam Department of Labor. We were informed that the 
Guam Department of Labor is responsible for the wage determination for 
foreign laborers under the H-2 program and is based on survey results 
done on Guam and reflective of local conditions.
  Furthermore, the Guam Department of Labor noted that the wages 
established as a result of these surveys have complied with the 
requirements of the Davis-Bacon Act. The Guam Department of Labor is 
aware that the Navy contract with Raytheon is neither in line with Guam 
Department of Labor prevailing wage, nor mainland wage standards. Guam 
DOL has said that the wage survey for the Navy contract was not done on 
island and thus questions the survey's methodology.
  Mr. Speaker, the question now begs where did the Navy get this wage 
data from? Well, one conclusion that we can draw from these depressed 
wages is that they pick the lowest possible salaries as determined from 
a whole range of areas of unofficial wage-study areas.
  Now, I provide an example. We will use a real live Raytheon job offer 
against similar positions on Guam, using the Guam DOL prevailing wage 
survey, again a survey that is done under U.S. DOL supervision and is 
intended for foreign workers. For administration and accounting 
services, under the Navy service contract an accounting clerk is now 
being offered a wage of $5.80 an hour, compared with the Guam 
prevailing wage rate of $8.48 an hour. For a data entry operator, 
Raytheon has offered $11.86 an hour versus the Guam prevailing wage of 
$13.25 an hour.
  Mr. Speaker, this is outrageous. Not only does it seem that the Navy 
was utilizing faulty data of an unknown source, but the Navy is taking 
advantage of the fact that the U.S. Department of Labor does not have 
sufficient oversight capabilities to enforce the requirements made on 
the Navy under the Services Contracting Act.
  In fact, under the provisions of the Services Contracting Act, the 
Navy is required to request the U.S. Department of Labor to conduct a 
wage determination by filing a notice with the U.S. DOL for such a 
survey, and I believe that the U.S. Navy has violated this requirement 
and thus created an environment whereby wage busting could occur.
  Let me just summarize here. What has happened on Guam has happened in 
other communities, perhaps unbeknownst to those communities, and will 
continue to happen, and that is if the Navy is allowed to compute their 
own prevailing wages apart from the actual wages in that community, 
they will continue to not only pay the people less than they would have 
under

[[Page H1989]]

the civil service, they will continue to pay them less than even the 
prevailing wages in that community.
  This has happened on Guam, and it is ironic that if one was a foreign 
worker coming to Guam, and this disincentive that is created under the 
Guam prevailing wage one would be getting more money today than they 
would under this Navy-induced contract with Raytheon. It is an outrage.
  I call again upon the Department of the Navy and the Pentagon to halt 
this contract, to call for an Inspector General investigation, and I 
call for a congressional hearing on this matter.

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