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Now, they are leasing that out to private enterprise to run various types of businesses there, but only certain private enterprise is interested because they have a 24-hour recapture clause, because they want to keep that yard available in the event of another emergency, where we have to start building ships rapidly.
Now, don't you feel that is a type of Government activity that certainly is justified by the international scene as we see it today?
Mr. HAMILTON. Oh, yes. If you were asking if I should be critical of the 24-hour recapture clause, I certainly would not be. I don't think the American Municipal Association is in favor of the Government doing anything to endanger its national security.
Mr. CONDON. There you have an example of private enterprise in a free from ad valorem taxation because the Maritime Commission and the Government feels it is necessary to keep that yard in the event of a future grave emergency. I don't feel you can get away from that situation as long as it is necessary to keep that yard.
Mr. HAMILTON. I am not critical of that type of a situation, sir. I think that there is a distinction between that particular type of situation in Richmond and the type of situation covered by Mr. Hillelson's bill, principally about which I have been speaking this morning.
Mr. Condon. Now, one or two other questions: In the light of Mr. Osmers' bill, is there any reason why the Department of Defense, itself, cannot, because they are the biggest holder of these properties and the biggest doer of these activities, make the changes without creating this additional board and taking the authority away from Defense and putting it over in the Secretary of Commerce?
Mr. HAMILTON. No, sir; there is none, and if you will read my statement you will notice that we state here we are in favor of the principles embodied in the bill. We are not commenting on the specific sections of the bill.
Answering your question more directly, the Defense Department can correct this situation; but I have been present in many meetings where they have been so requested and to date I regret to say the Defense Department is not disposed to do so.
Mr. CONDON. Here is an illustration that is of concern to me: For example, let's take submarines. Submarines are made by the Electric Boat Co., a private-enterprise group. They are also made at the Portsmouth Navy Yard and the Mare Island_Navy Yard. Now, the Department of Defense and the Navy Department feel, for reasons of national security, they want to have both prepared, the navy yards, to make these submarines, and also to keep the Eléctric Boat Co. going. That is their decision as of now. I am just wondering about the wisdom of taking that decision-making power away from the Department of Navy and the Department of Defense, and putting it over, in effect, in the Secretary of Commerce.
Mr. OsmERS. Mr. Chairman, I am not trying to answer the question of the witness, but I have listened very carefully to what Mr. Condon has said, and I don't think that is particularly within the scope of these hearings, or within the scope of the bills that have been presented and that are under discussion, and that we can very well get into what should be the national-defense policy of the United States with respect to some of these things.
Certainly, take, for example, the manufacture of an atomic submarine: That is not a competitive activity with private enterprise in this country and, therefore, I don't think
Mr. CONDON. It is in a sense, Mr. Osmers, because
Mr. CONDON. That is private enterprise. The Electric Boat Co. is private enterprise.
Mr. OSMERS. That is probably because the Government can't do it itself; but the important thing is that is not a case that would come within any of these bills, whether they pass or not. That is a matter that comes within the national-defense policy of the United States, and that isn't a competitive business type activity.
If you go back to the thing Lincoln said and I wouldn't attempt to quote it exactly--if you stay within the sphere of Government doing those things the people cannot do for themselves-obviously no one would build an atomic submarine because no one would have use for it except the Government.
Mr. CONDON. I think the Navy yard in building private ships is competing with shipbuilding yards. So, if you carry that argument to the extreme, the Navy yard should go out of business.
Mr. Osmers. To some extent you are correct; that is correct.
Mr. HAMILTON. If I may answer the question directed to me by Congressman Condon, I think a distinction must be made in any consideration of this problem, a distinction between those activities of the Government which have a historical basis and those activities of the Government which have been carried on for many, many years as compared with the tremendous growth in new Government activities, which actually, to a large extent, have followed World War II rather than growing up during it and preceding it, and I certainly don't think, as an individual now, not speaking for the American Municipal Association or the city of Boston, you can close up or should close up the Boston Navy Yard completely.
Mr. McCORMACK. I hope not.
Mr. HAMILTON. I think that distinction must be made between those historical government functions and this steady growth of new governmental functions.
The CHAIRMAN. Very well. Thank you for coming in.
The CHAIRMAN. Arthur Smith, Jr., District of Columbia Trucking Association. If you will, identify yourself and then proceed in your own way.
STATEMENT OF ARTHUR CLARENDON SMITH, JR., SECOND VICEPRESIDENT, DISTRICT OF COLUMBIA TRUCKING ASSOCIACIATION
Mr. Smith. My name is Arthur Clarendon Smith, Jr., representing the District of Columbia Trucking Association, of which I am second vice-president. We represent over 200 firms locally who operate over 7,000 vehicles in this area.
Specifically, our complaint today comes from the movers division of this association in which we have 30 moving companies as members of the District of Columbia Trucking Association.
I am personally employed by Smith's Transfer & Storage Co. as vice president and general manager.
Our two complaints are with the Government competition we find from the General Services Administration, Moving Section, and the crating operation at the Cameron, Va., Quartermaster Depot in Alexandria, Va.
Let's take the first problem concerning General Services Administration and their Moving Section of that organization.
The CHAIRMAN. May I interrupt you just a moment?
Mr. Osmers, I wonder if you would take over because the Bender subcommittee has a meeting at 11:30.
If you will continue these hearings
Mr. SMITH. First, let me explain their function as I understand it. The Moving Section of General Services Administration is charged with the function of moving all Government offices in this area. We believe this could be done by the local moving companies in this city at a savings of public funds if let out on a competitive-bid basis.
Mr. Brownson. You wouldn't confine your observations to this city?
Mr. SMITH. No.
Mr. Brownson. You would let anybody have the opportunity to bid?
Mr. Smith. That is right.
Our reason for believing this is our observation of some of these moving operations where manpower is not used as economically as it would be by a private concern. Unfortunately, we have not been able to prove this to General Services Administration, and we have no way to compare their cost and ours. In fact, it is very difficult for us to find any facts from this organization as their figures are not open to public scrutiny from our investigation, and they are very difficult to find. We have found that they pay over a million dollars a year in wages alone and they employ approximately an average of 400 laborers. We know they are adequately supplied with vehicles of their own and they do hire some outside trucks from private contractors to supplement their fleet when very busy.
From the above figures, we then estimate that General Services Administration does well over $2 million worth of office moving in this area for which only few taxes are paid to the local or Federal Government where they hire a few trucks.
We know in our own moving business and from figures received from the survey of the National Furniture Warehousemen's Association that the main cost of local or intracity moving is 40 or 50 percent of the dollar cost the local mover receives and pays out in labor on local moving jobs. We can substantiate this with our own operation figures and the figures the National Furniture Warehousemen's Association has gathered from the whole moving industry.
Several years ago, during the latter part of the Jesse Larson administration of General Services Administration, we had a conference with his office regarding this problem and requested their cooperation
and open bids for this work. We received little, if any, cooperation as they definitely were not interested in our proposition because no bids were asked for until this year.
The first of this year, in February and March, there seems to have been a change in that feeling; yet, after competitive bidding in three particular instances, the low bidders were refused as being too high and the GSA was given this work.
I am referring to the invitation to bid No. 11BJ54-63 issued by the Veterans' Administration Supply Maintenance Division and bid No. 64 of that same office. I also am referring to the bid made for the Civil Service move on March 12, 1954, to move the Civil Service office from the Old Pension Building.
The successful bidders on these jobs were, respectively, the Jacobs Transfer Co. on bid No. 63 at $5,100, the Colonial Storage Co. on bid No. 64 at $4,160, and the Kane Transfer Co. at $19,785 for this last Civil Service move.
All of these bids were rendered in good faith but were not accepted as we were told the General Services Administration Moving Section was sure it could handle these office moves at a lower cost.
There were approximately six companies biddding on each of these invitations, and until this day we have had no accounting as to how successful or unsuccessful the General Services Administration was in completing this work at a lower cost.
There was one instance in one of these bids where the bidders were told that all file cabinets moved must be held in an upright position; yet, it was noticed that the General Services Administration did not follow their own instructions but moved these file cases in the most expeditious manner by turning them over on four-wheel dollies. It impressed us as being ironical that we sould be required to bid on one particular way of moving and then the General Services Administration was allowed to move these file cabinets in the usual manner which would naturally make our cost higher than usual for this large volume of filing cabinets.
The General Services Administration is well equipped with vehicles. From the count in the annual motor vehicles report of December 1953, they have a total of 232 trucks in this area from a 1-ton rating and above. Perhaps all of these are not used in moving; yet, this is the second largest fleet in this area, which is exceeded only by the Post Office Department, which has 380 trucks.
A recent step forward in our opinion which General Services Administration has made is that they have recently let a contract with a private firm, the Jacobs Transfer Co., to do their hauling for their new Franconia warehouse.
Mr. OSMERS (presiding). Where is that located?
Mr. Smith. That is the new warehouse out on Shirley Highway, right off Shirley Highway, a very large installation.
The first contract let was for a 3-month test period. The second contract, now running, is for 1 year's duration, which that firm was successful in securing as low bidder after lowering their first bid 3% cents per hundred pounds on the original trial run contract.
After this year's contract was let, the General Services Administration Public Relations Office let out a press release stating the fact that this new contract would save the taxpayers nearly $60,000 a year
by having private contractors do this hauling rather than the Government vehicles and labor.
It is estimated that the Jacobs Transfer Co. can save approximately 10 cents per hundred from the cost the General Services Administration had previously been hauling their own material.
We naturally congratulate the General Services Administration in this matter and hope that they will continue to let this business out on contract in future years for the benefit of the taxpayers.
This completes our first complaint, and I would like to stop here to answer any questions you might have regarding the competition we feel we are receiving from the General Services Administration Moving Section, the biggest office mover in the world.
Mr. OSMERS. I would like to ask one question there. Maybe other members will have other questions.
Do you feel, based on this experience that you have just outlined in your statement, that your industry would have been in a better position had the Government established somewhere within the executive department a place or a person or a board where you could have brought your facts and figures and complaints rather than to have to go to the head of the department that was conducting the activity?
Mr. Smith. Yes, sir, and particularly in this area, as disfranchised citizens, where we have no Congressmen to go to.
Mr. OSMERS. Are there any other questions at this point?
Mr. BROWNSON. I thought Smith operated out of Virginia. Don't they?
Mr. Smith. There are several Smith companies.
Mr. Brownson. Where would you draw a line in your moving activities?
I take it your complaints are specifically directed toward the moving of office equipment and that type of thing in the Washington area; is that correct?
Mr. Smith. Generally, that is all we are familiar with on the local
Mr. BROWNSON. Where would you recommend that a policy be set up to draw the line?
I mean it appears to be very obvious, to take one example, if they want a typewriter moved from one building to another, they would probably throw that in the back of a pickup truck, whereas that would not be the case with something else.
Where is a practical point to draw the line between an agency, itself, making the movement and where you would require the agency to get bids from local civilian moving firms?
Mr. Smith. I would feel it would be just like any other business. There are many businesses that move themselves because they have equipment and they can do it, but there are certain times when the job is a large enough job, of large enough magnitude, that they ask outside companies for bids.
Mr. Brownson. And that is the area you people are particularly interested in servicing; you recognize there are many movements which