AGC liaison committee then Acting SCS Administrator Kenneth E. Grant said in a March 18, 1968, letter to the national AGC office: We are most pleased to participate with you in these discussions of topics of general interest. We feel that much good and much better understanding of our mutual problems has developed from these meetings. We are particularly pleased that similar liaison committees with our State offices have been established with many of your chapters. We hope that eventually such a relationship can be developed throughout the country. You can be assured of our continued interest and cooperation in this matter. We feel that contractors are a vital and necessary part of the conservation team and that it is fitting and proper for us to continue to work on our mutual problems on the basis which has been established through the good efforts of the joint committee. GENERAL STATEMENT We appreciate this opportunity to testify in favor of S. 2276, amending Public Law 566, the Watershed Protection and Flood Prevention Act. The objective of this testimony is to indicate the need for congressional passage of S. 2276 which will allow the Soil Conservation Service to perform directly all contract administration services including preparation of bid invitations at the option and request of local sponsoring organizations. The policy to favor an amendment to the Watershed Protection and Flood Prevention Act, as S. 2276 provides, was approved by motion during our legislative committee meeting at the AGC Annual Convention in March 1967. This action was subsequently ratified by the association's board of directors. This legislation would not take authority or control from local organizations, which it should not, but would permit them to request this contract administration service as needed. Since this amendment is voluntary, it would not affect those State and local organizations that have adequate and qualified staffs to administer Public Law 566 contracts. RESOLUTION BY THE NATIONAL ASSOCIATION OF SOIL AND WATER The National Association of Soil and Water Conservation Districts passed the following resolution during its 21st annual convention in February 1967, which favors this amending legislation: RESOLUTION No. 16 WATERSHED CONTRACTING The National Association of Soil and Water Conservation Districts states its firm opinion that the absolute requirement of P. L. 566 for the local sponsoring organization to provide all services of contract administration results in serious inconvenience, delays, inefficiency, and wastes of public resources. In some instances, compliance with this cumbersome requirement places undue burden and legal risks upon organizations which are not equipped with trained personnel and financial resources to handle this work, and progress in the watershed construction program is impeded seriously. On the basis of this experience, the National Association of Soil and Water Conservation Districts goes on record as favoring the passage of an amendment to P.L. 566 which would allow the Soil Conservation Service to render directly all services-in preparation of invitations to bid and contract administration--at the option and requests of the local sponsoring organization. EFFICIENT CONTRACT ADMINISTRATION Passage of S. 2276 would promote efficient contract administration. Many local authorities that administer Public Law 566 contracts are not adequately staffed to perform contract administration services efficiently since they are not equipped with trained personnel for this purpose. These conditions create costly delays and inequitable procedures. Should the Soil Conservation Service be allowed to administer this program on a voluntary basis, then the provisions of Standard Form 23-A, General Provisions of the Federal Construction Contract, would become operative. The disputes clause of Standard Form 23-A affords the contractor an opportunity to appeal a contracting officer's decision directly to the head of an agency through Boards of Contract Appeals. Appeals of this nature are not available under Public Law 566 contracts. The only resource now available is to a local court. Retainage of funds earned by a contractor are set forth in Standard Form 23-A in a stated percentage to be withheld and the conditions affecting retained amounts. Under Public Law 566 contracts, such retainage varies according to the laws and policies of the State where the work is performed. Some require retention of moneys for a considerable time after completion and acceptance of the work even when the contractor has furnished a performance and payment bond. Recent improvements to Standard Form 23-A allowing an equitable adjustment for unreasonable delays occasioned by contract modifications would also become operative under contract administration by the Soil Conservation Service. CONCLUSION Passage of S. 2276 will therefore advance the cause of conservation construction by improved contract administration, encouragement of increased open competitive bidding and less overhead expenses for the contractor, the local authority, and the Soil Conservation Service. The public will benefit by ultimate reductions in costs as more work will be performed for each dollar spent. Thank you for the opportunity to present our views and to urge approval of this beneficial legislation. The CHAIRMAN. Thank you, Mr. Walsh. Are there questions of Mr. Walsh; anybody have any questions? Mr. Zwach? Mr. ZWACH. Thank you, Mr. Chairman. Mr. Walsh, you represent the Association of General Contractors. I would assume that one of the reasons this has been in the main in local hands is that this program has always been wonderfully quite nonpolitical and we have proceeded on that basis. Your group has no fear that this procedure would in any way endanger the program by opening it up if contracts can be let by the governmental agency this would open up the avenue of politics? Mr. WALSH. No, sir. Mr. ZWACH. In awarding contracts? Mr. WALSH. No, sir. Mr. ZWACH. You know in State levels we are familiar over the years with the skullduggery in this area. I would hate to see politics get into these contract lettings. You are convinced as a contractor, representing contractors, that this will not be the case? Mr. WALSH. I am. Yes, sir. I can say that I know from my own State's conditions, and you know much more, better than I do the rest of the country, but in our State when they form a drainage district they are small, some of them. Mr. ZWACH. It is a nonpartisan effort? Mr. WALSH. Five landowners, farmers, ranchers form a committee and one of them is the chairman and he becomes the contracting officer. As Mr. Williams testified, this may be the only contract they will ever handle in their lives. They never know anything about the administration of these. Mr. ZWACH. I am aware of this. You are concerned and your group is satisfied that this will not open this avenue? Mr. WALSH. Yes, sir. Right now the Soil Conservation Service has to do it all. That man is just a figurehead. He is a contractor to contract jobs that I have had, take the papers out in the country to get them signed, estimates, change orders, and then bring them back. If you mail them to them, they won't even mail them back to you. They are not interested in getting involved in the paper work. We are satisfied, and I am sure the local people are, because they depend entirely on the Soil Conservation Service to do all of the detail work. Just over the river in Louisiana they have a well-established department of public works, the State has, that does all this type work. They will continue to handle everything because they have a well-established engineering staff that does this. Mr. ZWACH. Your association is satisfied this will not develop? Mr. WALSH. Yes, sir. Mr. ZWACH. They are not afraid of that? Mr. WALSH. Yes, sir. Mr. ZWACH. Thank you. The CHAIRMAN. Any other questions of Mr. Walsh? Mr. MILLER. I notice one area where you speak of form 23-A and where it states: Recent improvements to standard form 23-A allowing an equitable adjustment for unreasonable delays occasioned by contract modification would also become operative under contract administration by the Soil Conservation Service. Can you tell us what we are talking about in the delays and how you would be helped by this form 23-A? Mr. WALSH. Let Mr. Giampaoli speak to that. He has more experience with that, if you don't mind. Mr. GIAMPAOLI. Congressman Miller, as of February 1 of this year there were new changes, different site conditions, and suspension of work clauses applied to the general provisions of the Federal construction contract. Prior to that time, a modification issued by the contracting officer under a Federal construction contract, the equitable adjustment involved that part of the work which was in fact changed by the change order. If that change order affected work which was not a part of the actual change order and a delay was incurred, the equitable adjustment did not involve this. This was by a Supreme Court decision some years ago which evolved, became called the Rice doctrine. We called this equitable adjustment for the unreasonable delays occasioned by changes, impact costs, or consequential costs. Now with the changes in that new version of these clauses, this is allowable. Mr. MILLER. Is it possible for the local people to use the standard form 23-A as well as the Federal Government to use that same form? Mr. GIAMPAOLI. I would hope that standard form 43, which would be used in Public Law 566 contracts, where the local authority is the contracting officer, would seek to incorporate these changes. Mr. MILLER. Thank you. The CHAIRMAN. Any further questions? (No response.) The CHAIRMAN. If there are no further questions, I want to dismiss this witness and say we are very much obliged to you, Mr. Walsh. Mr. WALSH. Thank you. The CHAIRMAN. That completes our list of witnesses. Is there anyone else who wants to make a statement in connection with this legislation? If not Mr. ZWACH. Mr. Chairman? The CHAIRMAN. Yes. Mr. ZWACH. So far we have had no requests for anybody to appear in opposition to this bill? The CHAIRMAN. We have not. If there is anybody who wants to appear in opposition, we will be glad to hear him. Mr. STUBBLEFIELD. At this point? The CHAIRMAN. Right now. I don't hear anybody who wants to appear. Therefore, the committee will take this matter under advisement. We are very much obliged to you gentlemen who attended. (Whereupon, the committee proceeded to other business.) |