Here is his letter: To: Mr. Jack Frye From: David E. Pierce Subject: Construction contracts. MARCH 16, 1953. During the period 1947-52, I served as chief engineer of GAF and as chief engineer of GAW division. This was a staff position in which I correlated the work of the various engineering departments in the plants and the central research laboratory of the corporation. All major contracts for construction by outside contractors were made with my advice and approval. The actual signing of contracts was done in each case by an officer of the corporation after contracts had been worked out in detail by the plant engineering departments and had been checked and approved by the legal department of the corporation. When possible, selection of contractors was by competitive bids for lump sum, with or without escalation clauses on labor and materials. When this type of contract could not be made, a contractor was selected to do the work on the basis of fixed fee plus actual cost. In the latter case, I discussed possible contractors with Mr. George W. Burpee, former president of GAF and a consulting engineer of wide experience and high standing in the profession. Mr. Burpee suggested well-known firms and I recommended the firm which appeared to be best suited for the job on the basis of past performance, availability of personnel to proceed with the work, and a fee consistent with current practice. The final selection was made after careful check with outside sources and with approval of the executive committee and board of directors. In no case was any influence exerted on me by anyone within the corporation or outside of it to recommend any particular firm or individual to receive a contract for any reason other than for the best interest of the corporation. In the past few years, upon the advice of the legal department, performance bonds have been required from contractors, even on lump-sum bids. All contracts have been completed to the satisfaction of the plant engineering departments and in accordance with what I consider good engineering practice. Submitted herewith is a list of the major contracts (over $100,000) made during the period 1947-52. Brief comments are given on each job. The total capital cost of each project includes work done by GAF itself and by many small contractors so that it is usually much larger than the payments shown to major contractors. Attachment. MAJOR CONSTRUCTION CONTRACTS-1947-52 ANSCO DIVISION DAVID E. PIERCE. Authorization No. AFE B-2100-Capital cost, $5,171,000 Brick, steel, and concrete building No. 102 (3-story, part 5-story) for manufacture of film base and coated film (black and white and color). Contractors receiving over $100,000: 1. Merritt-Chapman & Scott Corp., $181,400 New York City Low bidder for lump sum contract. 2. Vincent J. Smith, Inc., $1,170,000 Binghampton, N. Y. Low bidder for lump sum contract. General construction and finishing of building. 3. August Arace & Sons, Inc., $890,300. Elizabeth, N. J. Low bidder for lump sum contract. Heating, ventilation and air conditioning of building. 4. Vanderlind Electric Corp., $207,200 Rochester, N. Y. Low bidder on lump sum contract. Electrical installations. 5. Ryan Plumbing & Heating Co., Inc., $210,200 Watertown, N. Y. Low bidder on lump sum contract. Process air conditioning. Authorization No. AFE B-2565-Capital cost, $413,000 One-story brick and reinforced concrete building No. H8 for warehouse, office, and processing laboratory at Union, N. J. Contractor: B. J. Lucarelli & Co., Inc., $309,900 Jersey City, N. J. Low bidder on lump sum contract. General construction and mechanical work. Authorization No. AFE 2949-Capital cost, $370,000 Brick and reinforced concrete building No. 104 (two stories and mezzanine) for manufacture of "dope" for film production. O'Connell, Inc., $101,000 Binghamton, N. Y. Low bidder on lump sum contract. General construction and finishing.. Contractor: F. W. GENERAL ANILINE WORKS DIVISION- -GRASSELLI, N. J., PLANT Authorization No. AFE G-88-Capital cost, $329,900 Salt water pumping station on Arthur Kill. Contractor: Frederick Snare Corp., $133,000 New York City Low bidder on lump sum contract. Piling and building construction. Authorization No. AFE G-209-Capital cost, $763,700 Pilot plant, two-story steel brick and reinforced concrete. Contractor: Wilhelms Construction Co., $202,200 Low bidder on lump sum contract with escalation clause. General construction and finishing. Authorization No. AFE G-328-Capital cost, $2,122,000 Brick manufacturing building extension of building No. 52, 3-story steel, brick and reinforced concrete, for production of vat colors. Contractor: United Engineers & Constructors, Inc., $493,000 New York City Fixed fee plus actual cost. Authorization No. AFE G-555, and G-704—Capital cost, $974,000 4-story extension of building No. 36, brick, steel, and reinforced concrete, for manufacture of detergents. Wells Co., Inc., $192,701 Jersey City, N. J. Only major contractor was: Deakman Low bidder on lump sum contract with escalation clause. General building construction. Authorization No. AFE G-757-Capital cost, $426,900 2-story extension of Welfare Building No. 101, brick and reinforced concrete. Contractor: Wilhelms Construction Co., $325,000 Elizabeth, N. J. Fixed fee plus actual cost. General building construction and finishing. GENERAL ANILINE WORKS DIVISION-RENSSELAER, N. Y., PLANT Authorization No. AFE R-6245-Capital cost, $1,212,500: Brick, steel, and concrete building No. 93 (2 stories, part 3 stories) for drying plant products. Contractor: F. H. McGraw & Co., $782,700. New York City. Fixed fee plus actual cost. General construction and finishing. Authorization No. AFE 4-6254-Capital cost, $2,897,600: 3-story (part 4-story) building No. 87, brick, steel and concrete, for manufacture of intermediates. Contractor: F. H. McGraw & Co., $1,333,100. New York City. Fixed fee plus actual cost. General construction and finishing. Authorization No. AFE R-6293-Capital cost, $1,073,800: Extension of boiler house and facilities, cinder block, steel, and concrete. Contractor: F. H. McGraw & Co., $177,550. New York City. Basis, cost plus. General construction and finishing. CENTRAL RESEARCH LABORATORY Authorization No. AFE E-605 and E-444—Capital cost, $385,600: Two Quonset-type metal buildings for use as high-pressure laboratory and preparations laboratory. Contractor: E. C. Machin, $312,900. Allentown, Pa. Low bidder for lump-sum contract. Senator DIRKSEN. I was going to ask one other question with relation to the size of your whole force: How many of those are office employees, or are they not included in these tabulations for your various plants. Your principal office is in New York? Mr. FRYE. Yes, sir. We have companywide figures in different categories to the staff. Senator DIRKSEN. If you do not have them, you can just submit the figure for the record. Mr. FRYE. You want the number of people who do office work versus production work, and so on? Senator DIRKSEN. Yes. Mr. FRYE. We will have to break that down for you, sir; we shall be glad to do that to give you the different categories. Senator DIRKSEN. Then I have one other question. Are any of your operations of such a nature that they require security checks in any of the plants? Mr. FRYE. Yes, sir. Senator DIRKSEN. I am thinking particularly of things that might be manufactured for Government account. Mr. FRYE. Yes, sir; we have quite a number of people that are checked for security and given security clearances. Of course, some of our technical people have to go into various security installations. Senator DIRKSEN. That matter, I suppose, is rather carefully taken care of? Mr. FRYE. I am confident that that is; yes, sir. I do not know of any difficulties or questions that we have had along that line that have not been satisfactorily handled. Mr. NAIRN. Does GAF or GDC own any property in Chicago, a building? Mr. FRYE. Yes. The Ansco division. Of course, the corporation owns the building in which the Ansco division operates. Mr. NAIRN. Is there located in this building a night club called the Chez Vous? Mr. FYRE. No. There is one called the Chez Paree. Mr. NAIRN. Have any attempts been made by the company to remove that club from the building? Mr. FRYE. I will try to quote from memory more or less as to what has happened in connection with that. There is nothing in recent years, or if it has been along that line in recent years that I know of. At least, when I first came with the company there was dissatisfaction on the part of the Ansco management with the operation of Chez Paree in the building. They wanted to get them out just on the general grounds that it was not good for the company to own a building with a night club in it. I think I heard something about that there had been gambling in there at one time in that building. As I understand it, the Chez Paree people operated there before and were installed there before the company ever bought the building. The Ansco division was dissatisfied with the rentals paid by Chez Paree. There had been several renewals of the lease since that time and I believe in each case we have substantially upped the rentals paid until, so far as I know, the division is satisfied with the situation now. They do not actually need the Chez Paree space so far as I am informed, and they have an entirely separate entrance from our operations, walls between the two parts of the building. Mr. NAIRN. Did this controversy arise during your presidency of General Aniline, the controversy over getting these people out of that building? Mr. FRYE. No: I do not think so. I think when I first came there I heard something about it, that there had been some controversy over it. Mr. NAIRN. Did anyone in the Office of Alien Property ever request you to allow the club to remain as a tenant? Mr. FRYE. I would say many people-apparently Chez Paree had a lot of friends. I had bankers, mayors, many people all over the country call me and urge me to be generous or go easy in my treatment of Chez Paree. All I did was raise their rent about 50 percent every time the lease expired. Mr. NAIRN. Did they ever call anybody in the Office of Alien Property in regard to this? Mr. FRYE. Yes; not asking me themselves, but telling me they had had a lot of pressure put on them, but I never had anyone in the Office of Alien Property ask me to do anything. Mr. NAIRN. Who was this individual that had the pressure put on him? Mr. FRYE. Mr. Bazelon, who was from Chicago, and naturally, he told me he had many people calling him and urging him to do something for Chez Paree. Senator DIRKSEN. They do pay their rent? Mr. FRYE. Yes, sir; they pay their rent. I don't know of any complaints about that. Senator HENNINGS. It is substantial, and you keep raising it? Mr. FRYE. Yes, sir. Senator HENNINGS. Has counsel any other suggestion as to what should be done with this space? Mr. NAIRN. Not at all. Mr. FRYE. The space actually is not very applicable to any other kind of business. It was built in there at large expense for this night club business, restaurant, bar, and so forth, and it would be terrifically costly to convert it to office space or laboratory space, warehouse space, or anything of that sort. Mr. NAIRN. In order to extricate myself from the situation, I might point out that we were told that the film which was stored in this building was of considerable value, that the management of the Ansco division felt that the fire hazard which had arisen by reason of the Chez Paree or the Chez Vous being in the building was considerable, and that in his considered opinion, they should have been 41389 0-54-pt. 1——40 removed, and that, as has been brought out here, I believe in the questions, Mr. Bazelon, who was then Director of the Office of Alien Property, through his Chicago connections, as you have indicated, may have had pressures brought to bear upon him to overrule the considered opinion of the corporation in this matter. That was my intention, to show that such pressures could be made to bear upon them, and apparently there were, in this situation. Senator DIRKSEN. Mr. Frye, in that connection, I should like to ask this question: In your regional offices over the country where you do have film storage, I presume you make special provision for that for purposes of not only safety, but they have to be kept in air-conditioned vaults! Mr. FRYE. Yes, sir; generally it is air-conditioned, and where there is any material that is inflammable, there is special fire-protection facilities built in or installed for the purpose of protecting that storage. I do not think actually there is much validity to what has been heard here, certainly not so far as the Office of Alien Property putting any pressure on me to do anything about it. Mr. Bazelon said he had had great pressure put on him by large numbers of people. As I say, I had lots of people, too, customers, bankers, I guess customers of Chez Paree and all kinds of people dropped me notes and said, "My old friend so-and-so, somebody in Chez Paree, asked me if I knew you and asked me if I would not try to get the rent lowered." Mr. HAYES. Is there anything of record of any board of directors action indicating that the board thought they should get that outfit out of the building there? Mr. FRYE. I am sure there is not, not so far as I know. Mr. Gibbons said in most cases the board approved renewals of the lease but there is no other information of that kind that I know of. Mr. HAYES. Is there any other facility for the building, so far as Ansco is concerned, other than storage of film, at all? Mr. FRYE. Oh, yes; we have offices and laboratories for processing film, and our whole Ansco operation in that building. The building faces on two streets. On one side is the Ansco entrance in front of the building. Clear around the other corner on the side street down at the opposite end is Chez Paree's entrance. They don't appear normally to be in the same building. Mr. HAYES. It is on the North Side, in Chicago? Mr. FRYE. Yes, sir. Senator DIRKSEN. The hearing will adjourn until March 31, and we hope to be in the caucus room, No. 318, unless all signs fail. (Whereupon, at 4: 10 p. m., the committee recessed until 10 a. m., Tuesday, March 31, 1953.) (The material previously referred to in the hearings is as follows:) |