B-158309, JAN. 21, 1966

B-158309: Jan 21, 1966

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TO ACME OF COLORADO: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 7. YOU SAY THAT SUCH AN AMENDMENT WOULD REQUIRE AN INCREASE IN COMPENSATION TO PERMIT YOU TO PAY THE INCREASED WAGES AND BENEFITS YOU WILL HAVE TO PAY TO COMPLY WITH THE ACT. THE PRINCIPAL PURPOSE OF WHICH IS TO FURNISH SERVICES IN THE UNITED STATES THROUGH THE USE OF SERVICE EMPLOYEES AND WHICH IS ENTERED INTO BY THE UNITED STATES OR THE DISTRICT OF COLUMBIA PURSUANT TO NEGOTIATIONS ENTERED INTO OR INVITATIONS FOR BIDS ISSUED ON OR AFTER JANUARY 20. IS REQUIRED TO CONTAIN PROVISIONS SPECIFYING THE MINIMUM MONETARY WAGES AND FRINGE BENEFITS TO BE PAID THE VARIOUS CLASSES OF SERVICE EMPLOYEES IN THE PERFORMANCE OF THE CONTRACT AS DETERMINED BY THE SECRETARY OF LABOR TO BE PREVAILING FOR SUCH EMPLOYEES IN THE LOCALITY.

B-158309, JAN. 21, 1966

TO ACME OF COLORADO:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 7, 1966, AND ENCLOSURE, REQUESTING THAT THE GENERAL ACCOUNTING OFFICE APPROVE THE AMENDMENT OF SEVERAL GOVERNMENT JANITORIAL SERVICE CONTRACTS HELD BY YOU TO INCLUDE THE PROVISIONS CONTAINED IN THE SERVICE CONTRACT ACT OF 1965, 79 STAT. 1034. YOU SAY THAT SUCH AN AMENDMENT WOULD REQUIRE AN INCREASE IN COMPENSATION TO PERMIT YOU TO PAY THE INCREASED WAGES AND BENEFITS YOU WILL HAVE TO PAY TO COMPLY WITH THE ACT.

UNDER THE SERVICE CONTRACT ACT OF 1965, EVERY CONTRACT IN EXCESS OF $2,500, WITH CERTAIN EXCEPTIONS NOT HERE RELEVANT, THE PRINCIPAL PURPOSE OF WHICH IS TO FURNISH SERVICES IN THE UNITED STATES THROUGH THE USE OF SERVICE EMPLOYEES AND WHICH IS ENTERED INTO BY THE UNITED STATES OR THE DISTRICT OF COLUMBIA PURSUANT TO NEGOTIATIONS ENTERED INTO OR INVITATIONS FOR BIDS ISSUED ON OR AFTER JANUARY 20, 1966, IS REQUIRED TO CONTAIN PROVISIONS SPECIFYING THE MINIMUM MONETARY WAGES AND FRINGE BENEFITS TO BE PAID THE VARIOUS CLASSES OF SERVICE EMPLOYEES IN THE PERFORMANCE OF THE CONTRACT AS DETERMINED BY THE SECRETARY OF LABOR TO BE PREVAILING FOR SUCH EMPLOYEES IN THE LOCALITY.

IN THE ENCLOSURE TO YOUR LETTER YOU EXPLAIN THE REASONS WHY YOU CONSIDER THIS TO BE A MATTER OF GREAT URGENCY AS FOLLOWS:

"OUR FIRM AND ITS AFFILIATES NOW EMPLOY OVER FOUR HUNDRED WORKERS ON JANITORIAL CONTRACTS WHICH WERE AWARDED BEFORE THE ACT BECAME EFFECTIVE. THESE WORKERS WILL BE EXTREMELY DISAPPOINTED TO LEARN THAT THEY WILL NOT BE COVERED BY THE PROVISIONS OF THIS ACT. IT WILL BE IMPOSSIBLE FOR US TO PAY THE ADDITIONAL WAGES AND FURNISH THE ADDED BENEFITS AT THE PRESENT CONTRACT PRICES. NONE OF OUR CONTRACTS WILL EXPIRE FOR SEVERAL MONTHS AFTER JANUARY 20, 1966, AND SOME ARE MULTI YEAR CONTRACTS AND CONTRACTS WITH RENEWAL CLAUSES. IF THESE CONTRACTS ARE NOT AMENDED TO PROVIDE FOR MONEY FOR THE ADDED BENEFITS FOR EMPLOYEES ON OUR PRESENT CONTRACTS, A SITUATION WILL RESULT WHEREBY OUR WORKERS ON OUR PRESENT CONTRACTS WILL NOT RECEIVE THE ADDED BENEFITS; AND YET, THE MOMENT WE ARE AWARDED ANY CONTRACT AFTER JANUARY 20, 1966, WE WILL HAVE EMPLOYEES WHO WILL BE RECEIVING A HIGHER RATE OF PAY AND RECEIVING ADDITIONAL BENEFITS EVEN THOUGH THEY ARE WORKING FOR THE SAME COMPANY AND DOING IDENTICAL WORK. THIS SIMPLY WILL NOT WORK. IT IS INEVITABLE THAT THERE WILL BE TREMENDOUS LABOR UNREST AND STRIKES, AND JANITORIAL WORK ON MOST GOVERNMENT CONTRACTS AWARDED BEFORE JANUARY 20, 1966, WILL LIKELY COME TO A COMPLETE HALT.'

YOU SAY YOU OWN FOUR SMALL JANITORIAL SERVICE COMPANIES AND LIST THE NAMES OF THE COMPANIES AND THE INFORMATION CONCERNING THE GOVERNMENT JANITORIAL CONTRACTS EACH HOLDS AS FOLLOWS:

TABLE

DATE OF

COMPANY CONTRACT NO. LOCATION EXPIRATION

------- ------------ -------- ---------- DANIELS ENTERPRISES,

INC. AF64/605/-4047 HICKAM AIR FORCE SUBJECT TO

BASE, HONOLULU, RENEWAL UNTIL

HAW. 6/30/67 DANIELS ENTERPRISES,

INC. GS-09B-0-120 GEN.SVC.ADMIN. 346 N. ELLSWORTH 100 MCALLISTER ST. SAN MATEO, CALIF. SAN FRAN., CALIF. INDEFINITE SAN FRANCISCO JANITORS, INC. DA -94142 346 N. ELLSWORTH AVI-3152 PRESIDIO OF SAN SAN MATEO, CALIF. FRANCISCO, CALIF. 11/30/66 SAN FRANCISCO JANITORS, INC. DA-04-142

AVI-2945 VANDENBERG AIR

FORCE BASE, CALIF. 6/30/66 ACME OF COLORADO

LOS ANGELES AIR 346 N. ELLSWORTH FORCE SYSTEMS SAN MATEO, CALIF.

AF-04-/693) COMMAND, L.A.,

344 CALIF.6/30/67 BLACK MOUNTAIN MAINT. CO. INC. 346 N. ELLSWORTH SAN MATEO, CALIF. DA 05-010-AV-2458 FT. CARSON,

COLO. SPRINGS,

COLO. 6/30/66 BLACK MOUNTAIN DA-45-016-AVI-2544 FT. LEWIS, MAINT. CO. INC. TACOMA,

WASHINGTON 3/31/66

DA-45-016-AVI-2729 FT. LEWIS,

TACOMA,

WASHINGTON DANIELS ENTERPRISES,

INC. SUBJECT TO 346 N. ELLSWORTH

RENEWAL SAN MATEO, CALIF. DA-94-600 PAC HONOLULU, HAWAII

UNTIL

5512 FT. SHAFTER 6/30/68

THIS OFFICE IS WITHOUT AUTHORITY TO EITHER AUTHORIZE OR DIRECT AN INCREASE IN A CONTRACT PRICE UNLESS THERE IS ALSO A COMPENSATING CONSIDERATION ACCRUING TO THE GOVERNMENT. IN VIEW THEREOF, WE MUST ADVISE THAT WE ARE NOT AWARE OF ANY BASIS UPON WHICH WE PROPERLY COULD AUTHORIZE OR DIRECT THE GOVERNMENT AGENCIES INVOLVED TO AMEND OR MODIFY THE LISTED JANITORIAL SERVICE CONTRACTS FOR THE REASONS AND IN THE MANNER YOU REQUEST. WHETHER THE AGENCIES WHICH HAVE AWARDED THESE CONTRACTS TO YOUR COMPANIES WOULD BE AUTHORIZED TO SO AMEND THE CONTRACTS UNDER APPROPRIATE CIRCUMSTANCES IS NOT PROPERLY BEFORE THIS OFFICE, AND WE THEREFORE EXPRESS NO OPINION THEREON. HOWEVER, COPIES OF THIS LETTER ARE BEING FORWARDED TO THE HEADS OF THOSE AGENCIES AND, IN THE EVENT YOU DESIRE FURTHER ADVICE IN THE MATTER, IT IS SUGGESTED YOU CONTACT SUCH AGENCIES.