Mr. VAN DUSEN. I don't mean to duck the question, Senator, but it calls for some creative thinking that I would prefer not to do in haste. Senator CRANSTON. Do you feel the National Institute of Building Sciences should develop model Federal codes?

Mr. VAN DUSEN. We believe that the national institute, as proposed, can serve a very useful purpose, and one of its purposes certainly would be the consideration of standards which could be accepted nationally. Whether they would promulgate it in the form of a model code, I think I would tend to leave up to them.

Senator CRANSTON. Thank you very much.

Senator Tower?

Senator TOWER. I would like to first note that Senator Brock was unavoidably detained out of Washington today or he would have been here for the hearings, and will be present for the remainder of the hearings. I would like to ask the consent of the Chair that Senator Brock be allowed to submit questions to the Secretary in writing to be answered and filed for the record.

Senator CRANSTON. Of course.

(The following information was received for the record:)

ANSWERS FROM THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TO QUESTIONS OF SENATOR BROCK

1. Question: Your suggested extension of section 502 (a) would cover "largescale experimentation on contiguous or nearly contiguous sites, even though HUD research funds were not directly involved." Is it your position that restrictive code and union work rules impede the use of new and improved products only in these type of programs and not in the other federally assisted or funded programs administered by the Secretary of HUD?

Answer: Restrictions impeding new technologies affect not only research programs and projects and large sites, but construction generally. However, it is our feeling that substantial progress can be made in encouraging widespread voluntary acceptance of new methods and techniques if there is sufficient opportunity to demonstrate their worth, safety and efficiency. This is one reason for concentrating on demonstration projects and situations. Further, by focusing on a limited number of projects, it is possible to avoid many of the administrative and procedural complexities of general legislation. Thus, it appeared to us that it would be possible to frame a limited extension of existing law that would represent a significant forward step in terms of its impact in encouraging greater use of new methods while still avoiding problems of broader legislation to which there seemed to be no easy answer.

2. Question: If your answer to question No. 1 is in the negative, please estimate how much code and union work rule restrictions add to the cost of the other federally assisted or funded programs administered by the Secretary of HUD.

Answer: Specific data on this point is unavailable.

3. Question: Do you believe existing law is adequate to cope with restrictive code and union work rule restraints on new or improved construction products? Answer: As I indicated in my testimony, the Department at one time suggested a proposal which would provide an additional legislative tool for eliminating certain kinds of restraints. This would be focused upon projects having demonstration characteristics or significance but would hopefully have a much broader indirect impact. Of course, the need for such legislation has to be viewed in light of the rate of progress now being made in securing public and private cooperation in support of new technologies. Such progress, as I also indicated in my testimony, has in fact been substantial, though naturally not as rapid as we might like.

4. Question: If existing law is inadequate, do you believe the labor agreements similar to the Tri-Trades Agreements can be the solution where the product manufacturer's plant already is organized by an industrial union?

Answer: The Tri-Trades Agreements themselves are based upon industrial practices. Consequently, there would be no particular problems with respect to a Tri-Trades Agreement in an industrial plant. In highly unionized areas, hous

ing systems producers with an industrial agreement have been known to contract the erection of their systems to union builders.

5. Question: Is it your experience that where a Tri-Trades Agreement has been signed by the union international that the locals of that union have respected it? If so, please list each agreement by company and union names where this has been the case.

Answer: We have no information which would indicate that where a TriTrades Agreement has been signed local unions have not respected it.

6. Question: Is it your experience (a) that the workers in the home manufacturers' plant have freely chosen organization by the unions who sign the Tri-Trade Agreements before execution of the agreements or (b) that the agreements were executed by the unions and the manufacturers first and then the plants were organized by those unions? Please list by company and union names of all such agreements and into which of the foregoing two categories each agreement falls.

Answer: The Department has no knowledge of "pre-hire" agreements being consummated with regard to housing systems producers. While we have maintained a neutral stance with regard to negotiations and agreements between manufacturers and unions, we have, nevertheless, counseled against the signing of prehire agreements.

7. Question: Several witnesses testified that certain building trades unions refused to handle or install products factory produced by members of other unions or, in fact, by members of the same union, without payment of a penalty. Is it your position that existing law is adequate to solve this problem? If not, do you believe legislation is needed?

Answer: To the extent this question may involve specific labor law issues not covered in our response to question 3, we would defer to the Department of Labor as to the adequacy of existing law.

8. Question: In your statement, you said, "Our suggestion was designed to strengthen our current efforts to encourage the use of new and improved building technology without imposing. on our Department . administrative burdens we. are not prepared to hnadle." While you might still have other objections to S. 3373, would the substitution of the National Institution of Building Sciences for the Secretary of HUD as the one who designates the nationally recognized standard setting and testing agencies in S. 3373 meet your objections that the bill requires administrative burdens that the Department is not prepared to undertake?

Answer: The administrative burdens would appear substantial whether a government or non-government agency were charged with the responsibility. In addition, use of the Institute in this role would not only fail to cure but add to or accentuate the other objections to which the question refers. Thus, the fact that the Institute is non-governmental would heighten delegation of powers problems. And giving the Institute the role of designating agencies within a mandatory system may hinder it in securing continuing voluntary cooperation from a broad range of industry and public groups, thus impeding acceptance of its building standards findings and making it more difficult to develop findings on a "consensus" basis.

9. Question: Do you believe there has been a change in the last five years in the productivity of construction workers on federally assisted housing programs administered by the Secretary of HUD? If so, please list the percentage change by year and the reasons for this change.

Answer: Data on labor productivity for HUD construction programs is not available. However, a study completed last year by the Bureau of Labor Statistics under a contract with HUD reported on the on-site labor requirements for the construction of single-family homes in 1969. The results were compared with the labor requirements for the same type of construction in 1962. The study found that the need for on-site labor man-hours declined over one-half of one percent each year per 100 square feet of housing built; the on-site labor need per 1,000 constant dollars of construction declined by an annual average of almost two percent. Previous studies by BLS on other types of construction confirm this same trend. There is no reason to believe that HUD construction programs would fare differently. This decline in on-site labor requirements can be attributed in part to the introduction of new construction tools and processes and new materials requiring less on-site labor input.

Senator TOWER. Mr. Secretary, would you describe the procedure created by your Department and by Labor for facilitating the issuance

of wage determinations, and would you tell us the greatest problem your personnel face in the area and regional offices in conducting the surveys, and is there any way your department can exert additional influence on the Department of Labor in securing more timely determinations?

Mr. VAN DUSEN. Senator, I am not sure I can give you as fully detailed a response as you might like, so I would ask the opportunity to supplement the answer I am about to give if you feel it necessary. In general, the relationship between our Department and the Department of Labor in this regard goes back to 1969 when the General Accounting Office report, which has been referred to in the record of these proceedings, was first made available in draft form. This brought to my attention the fact that, as the Davis-Bacon Act was being administered, we were paying too much in Federal subsidy costs for housing produced with our assistance.

The then Under Secretary Hodgson and I met to talk about how our department and his department could in a cooperative way improve the administration of the act.

Secretary Hodgson indicated that one of their real problems was that they did not have sufficient wage information with respect to residential construction and that their people, therefore, were making wage determinations based on what information was available. They recognized that it frequently might be too narrow a segment of the actual experience in the given market area to be as accurate as it should be.

So, we undertook to try to provide that information for them. That proved to be more difficult to accomplish than I would have originally thought. It seemed that many of the builders participating in the Department's programs were somewhat reluctant to provide such information unless we could assure confidentiality. And it was difficult to work our arrangements which made that reasonably possible and yet provided information which the Labor Department could regard as thoroughly authentic.

Nevertheless, we have worked out a form for gathering the information which seems to serve the purpose, and we have started to collect wage information which the Labor Department finds quite useful. We had staff constraints which made it difficult to perform that work as rapidly as we would like, and, of course, this is a function new to our field personnel and, therefore, they have required training and instruction and guidance in how to do it.

During the first year or so, there was a problem in that our people who were collecting the information were out in the field, while the Labor people who were making final determinations were here in Washington. The Labor Department has made some real progress in that regard by decentralizing its wage determination function to the 10 regional offices which are in locations common to our regional offices. This should help.

I do not claim, and I am sure Secretary Hodgson and Under Secretary Silberman would not claim, that we have achieved anything like really satisfactory administration of the act as it relates to housing at this point.

However, the progress has been considerable, and in some areas of the country we are beginning to see prevailing wage determinations

which are significantly lower than they had been under the prior method of administration of the act.

Senator TOWER. I am hopeful that still more progress can be made, because as late as last week I was getting complaints about the time involved in making these prevailing wage determinations. Of course, time is money to these people, and again this is another factor in the

cost.

Mr. VAN DUSEN. We are acutely aware of that. I think we are beginning to see some reduction in time, and we should be in a position to make some additions to our field staff in the near future which would be helpful in that regard.

Senator TOWER. Now, as you are well aware, for a period of about 6 weeks last year, President Nixon suspended the Davis-Bacon Act. I wonder if you could comment on the effects of that suspension on the cost of housing begun during that period of suspension. Are there any figures available in the Department indicating any reduced cost of housing begun during the suspension?

Mr. VAN DUSEN. Unfortunately, I think probably because the period of suspension was so short and because of the time lags in introducing new practices in the field, we don't have any data which I would regard as valuable or reliable to measure the impact of that suspension.

There are indications that the cost of housing was reduced somewhat in some situations during the period of that suspension. However, as I just indicated, because the period was so short and also because of the existence of, in many cases, State legislation which parallels the Federal legislation and which was not affected by the suspension, we just don't have data which I would regard as reliable. I had asked the question earlier and we have tried to come up with it. It just really isn't there.

Senator TOWER. Do you think you might be able to put somebody to work on that to see if you can make any kind of determination on that? I think it would be useful for us.

Mr. VAN DUSEN. I would be glad to check again, Senator.

Senator TOWER. All right.

Mr. VAN DUSEN. I am just afraid we are going to hit a dry hole. Senator TOWER. Thank you.

Now, when I introduced the legislation that we are considering here today, I said this: "Higher wages result in higher construction costs and therefore market rents for subsidized projects which are higher than the rents for comparable units of conventionally financed projects. Families who are able to pay rents at or near the market level are therefore dissuaded from living in assisted projects and the goal of achieving a greater income mix in those projects is undermined." I wonder if you would comment on that statement.

Mr. VAN DUSEN. There isn't any question, Senator, but that if the product of a Davis-Bacon determination is the payment of wages which are higher than those which should actually prevail, then, that wage factor, along with other factors which typically tend to cause federally assisted projects to cost more the paperwork and the processing time-will result in a development costing more than a conventionally produced unit with comparable or in some cases superior amenities.

In this situation then the only thing that makes that HUD-assisted unit competitive is the subsidy, and when families become ineligible for subsidy because their incomes have risen, they are going to move out. The loss of these tenants will defeat the objective of having the broadest possible income mix in the project, and it will also mean that the project is really dependent upon subsidy for its economic viability which we don't regard as desirable.

So, your statement in terms of the consequences is perfectly accurate and it is a source of concern to us.

Senator TOWER. I did have some additional questions, but my presence in the Armed Services Committee has just been urgently requested, and I will have to go, Mr. Chairman. I would like to submit my remaining questions to be answered in writing for the record. Senator CRANSTON. Certainly.

(The following was received for the record :)

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ANSWERS TO QUESTIONS OF SENATOR TOWER

1. Question: Short of my legislation which would strike the prevailing wage requirements from the Housing Acts, what legislative alternations would you suggest that might make the Davis-Bacon Act more receptive to equitable administration?

Answer: The Department of Housing and Urban Development defers to the Department of Labor as to possible legislative changes in the Davis-Bacon Act. 2. Question: On yesterday, Mr. Gregory Ahart from the General Accounting Office, noted that “re-surveys" are being conducted.

My constituents, those engaged in the construction of FHA and public-housing contact me concerning their inability to secure a first wage determination.

Have you sufficient personnel deployed in the area offices to conduct the original surveys... much less conduct “re-surveys?”

Answer: The Department does not have sufficient personnel to make original surveys with the desired promptness. Ironically, the same manpower shortages which delay original surveys make it necessary to conduct re-surveys. With unlimited manpower we could conduct a comprehensive survey of every com parable project in a given locality. Our limited manpower situation requires us to settle for less. Where the volume of construction is high, it is necessary to resort to sampling techniques. Unfortunately, too often in the past samples utilized were not representative and were required to be done over. Accordingly, recent instructions to the field staff stress the importance of including a representative cross section of projects in the sample. It is expected that this will reduce the number of re-surveys. Re-surveys cannot be eliminated entirely, however, because of the constantly changing nature of wage rates. Surveys completed more than a year ago must be considered obsolete.

3. Question: How far can a sponsor or builder of a 236 apartment proceed towards construction absent a wage scale from the Department of Labor?

At one point in time, I believe, HUD would allow a project to proceed to closing without the determination from Labor, with the express understanding by all parties involved in the project that the scale, once issued, would be incorporated into the contract. Is this practice still allowed?

Answer: Section 212 (a) of the National Housing Act requires the payment of not less than the prevailing wages, as determined by the Secretary of Labor "prior to the beginning of construction and after the date of the filing of the application for insurance."

It is true that some HUD field offices have, on occasion, allowed a project to proceed to initial closing and start of construction prior to receipt of the wage determination, with the express understanding by all parties involved in the project that the wage determination, when issued, would be incorporated into the contract. That procedure has been discouraged because of the risk involved. At the time of initial closing, HUD insures the first advance of mortgage proceeds. That advance includes substantial sums of money covering items which are of no value unless the project is built, for example, architectural fees and legal and organizational expense. If the wage determination, when received, con