requirement of a 404 permit for wetland work after contracts are let to the contractor. Any time that you work in the wetlands you are required to obtain this permit. Now once the contract is let, it takes anywhere from 4 months to 1 year to obtain this permit. I would think the procedure for turning around the approval of that permit could be reduced to a meeting just like we are having here with all the parties involved with input in that permit and sit down and say, "Mr. Contractor, what are you going to do?" and everybody hear what he is going to do and if nobody has an objection give him a permit and let him get about his business, because when you wait 2 years to do work you are impacted by inflation, by increases in your labor contracts, and many things that you can't even foresee.

I am sure Mr. Medic understands what happened with fuel prices not too long ago that impacted every cubic yard of dirt that we moved and that prices for fuel doubled and tripled in a very short time and if you were saddled with a contract of 3 years you dug down and you paid the money out of your pocket. There was no financial relief on this, and these are the kind of delays from permits that you experience and put you in that position.

Another one that is a little bit disturbing to me is when you have either duplicate or triplicate inspection on a project by three different agencies on the same matter. An example of this is if you were working for the Corps of Engineers in a Corps of Engineers contract and it was required that you borrow material from an open pit on a hillside near the job, the Corps of Engineers inspects you for safety under your contract, OSHA has responsibility, and MSHA then comes in and in the course of the same day you can be inspected on safety by three different Federal agencies, and I cannot list them but I am sure that the Corps and OSHA and MSHA all have different requirements for the same item. That needs to be really looked at and cleaned up.

And another item-the truth and negotiation limit of the $100,000 threshold established in 1962 on the Corps of Engineers contracts needs to be reviewed. The index has increased three to four times on cost in that time and we would suggest that that threshold be increased somewhere to $250,000-$300,000. This would eliminate audits for every modification to a contract that is just $1 over $100,000; it would eliminate audits and save considerable time and money for contractors and the Federal Government.

I guess in conclusion my experiences have been that many of the regulations that we deal with, although well-meaning, have become needless in our overall scheme and I would like to see them reviewed and I encourage what you are doing. I appreciate it, and again thank you for the opportunity of hearing me.

Senator DANFORTH. Thank you both very much. I think it is, as we approach this forthcoming legislation, it is important to try to dif ferentiate, just for the purpose of keeping our eye on the ball, differentiate between the policies that Government seeks to further on one hand and the methods used to further them on the other hand. I think we have got to assume for the purposes of this bill-and maybe somebody will challenge this either in committee or on the floor-but I think if we are going to get a bill passed you have to assume that the policies that were created in the Davis-Bacon Act or the policies re

lating to minority employment, the policies to encourage minority contractors, environmental regulations and so forth, that these policies are the policies of the Federal Government and will continue to be the policies of the Federal Government. Therefore, the issue is, can these results, these ends, be furthered in a way which is more practical than the methods which are used now and less onerous? Would you say that is a worthwhile undertaking for the Congress-to try to address the means as opposed to the ends?

Mr. MEDIC. I think you expressed it very well and that is what we are both saying is how is it administered and still have the same type of laws and regulations but all this extra paperwork involved in it discourages probably many contractors from bidding and it even probably hurts some of the smaller contractors, too, to keep up with all this extra paperwork, so I think you expressed it very well. Don't you, Joe?

Mr. KRISPIN. Yes, Mr. Chairman, the only way we can keep up with the volumes of paper that are required is by a computer and if you are looking for competitiveness on your Federal procurement, reduce the paperwork, because the one man and his wife who are trying to do business with the Federal Government will spend their entire waking day writing reports by hand that they cannot possibly do, so they hire more people and what happens when they do that? Then the cost of the paperclip goes up, you know, and so there has got to be a way of reducing that cost by minimizing the type of reporting that is meaningless.

We agree with the goals and the policies that have been set forth by our governmental bodies, but we disagree with the volumes of paper it takes that is probably being stored somewhere this very minute at a cost to you and I as taxpayers. For what reason? I guess we discussed that earlier; we don't know why they are being stored, but they are being stored and if they are ever looked at, so if those kinds of reports can be eliminated and reduced. The payroll report, I almost played "show and tell" and brought 1 week's payroll report in here and stacked it up for you, but I didn't feel that I could carry it.

Mr. MEDIC. I started to submit that, too, Joe, but decided against it. Mr. KRISPIN. The point is there is a lot of paper that I think can be eliminated and not deter from the goals or the things that we all wanted with respect to construction, sociological, economical.

Senator DANFORTH. Is enforcement possible without it? I mean supposing, for example, with respect to minority employment, is it possible to have enforcement unless there are records stating who you employ?

Mr. KRISPIN. The requirements of the employment of your employees we have those records; we have those and they can be reviewed in our office. The enforcement can be done without-you know if you got a bad actor and you know by the makeup of his work force that he is not doing the right thing. You have a contracting agency that has awarded him a contract and they have people on their payroll with expertise that can come in and look at your payrolls because they do it every week anyhow and they are looking for things like this. Mr. MEDIC. Excellent point, Joe.

Mr. KRISPIN. Why have paper when I already got to have it inhouse? If I have 17 Corps of Engineers contracts I would have to have 17 duplicate policy statements, 17. You know, why couldn't I post one in-house and say, "This is the way we operate, Mr. Federal Government, and you may inspect our records? You have the Freedom of Information Act, you know, you got it anyhow.

Mr. MEDIC. In addition, Joe, Senator, that we have the records, those particular agencies who are administering this job see the employees, I mean they see who are working on the job. My point is that if there is some question in their mind that the contractor isn't living up to meeting those minority goals, just come on in and look at those records and see what was done; this is what we are saying.

Mr. KRISPIN. As far as subcontracting, we find no problem with the subcontracting, because in most of our work we have to have approval of our subcontractors up front before we can use them, and certainly in that report, you know, it would be very simple, you know, that would add nothing to our problem. I just received the final rule on the amendment to the participation of minority business enterprises and I applaud the fact that it's eliminated some very questionable legal practices in the bidding of requiring absolute quotas on Federal contracts. You don't have to meet the goal now to be awarded a contract; however, there are about eight things that you must do as far as documentation that just add more work to and paper to something, you know. We can show affirmative action in subcontracting, we can show affirmative action in-house, and it is there to look at, but why report it on every contract that you do?

Senator DANFORTH. Just one final question. Can you estimate the cost of what you would call excessive requirements that are placed on you by government?

Mr. KRISPIN. I am afraid I can't even

Mr. MEDIC. I would make an estimate; it is nothing that we researched; we haven't even talked

Mr. KRISPIN. No.

Mr. MEDIC. And of course I am only talking about our company; I certainly can't talk for many contractors; but a good estimate based on the gross amount of the contract can be from 1, 12, 2 percent more to volume of the contract, and considering the contractor naturally. This is an estimate.

Mr. KRISPIN. We do considerable private, governmental, Corps of Engineers, State highway work; we are into just about any type of construction, Mr. Chairman, and we have found to keep up with the regulations that we practically have to hire one person to take care of payrolls. Now that is an annual cost that we can look at and say, “OK, maybe, sure maybe that person does other work," but the primary function is payroll. We have one person that tries to keep up and really it is a struggle, tries to keep up with all of EEO requirements and compliance reviews, one person. We can tell you probably those kinds of costs but maybe 25 years ago we wouldn't have had; we would have devoted considerably more time to the thing that we really love to do. My satisfaction, very frankly, is making beautiful things happen, like this building or the arch or the stadium and very seldom do I get to go out

and do the thing I love to do because of these volumes of paper that I am saddled with.

Senator DANFORTH. Gentlemen, thank you very much.

The next witnesses are all small business people. Mr. James F. Gilbert, president of Gilbert Brass & Aluminum Foundry Co.; Mr. Oliver Williams, general manager, Union Sarah Construction & Industrial Products; Mr. Harold Guller, chairman of the board, Essex Cryogenics Industries; and Mr. Sidney Guller, president, Essex Cryogenics.

Mr. Gilbert, would you like to start? We can move from the left to the right.

TESTIMONY OF JAMES F. GILBERT, PRESIDENT, GILBERT BRASS & ALUMINUM FOUNDRY CO.; OLIVER WILLIAMS, GENERAL MANAGER, UNION SARAH CONSTRUCTION & INDUSTRIAL PRODUCTS; HAROLD GULLER, CHAIRMAN OF THE BOARD, ESSEX CRYOGENICS INDUSTRIES; AND SIDNEY GULLER, PRESIDENT, ESSEX CRYOGENICS INDUSTRIES

Mr. GILBERT. As a representative of small business, we are also confronted with many of the types of instances which were discussed a few minutes ago, but they have only a marginal impact on our manufacturing costs in relationship to other costs related to the Federal Government. I brought an example because I think it will be a good illustration. This is a casting for the Corps of Engineers. It is a survey marker or bench mark. Its function is to be put in the ground. There is a wedge which sits under here. This spreads, concrete is poured over it, they stamp the location, and then grow weeds over it. It is just a bench mark for surveying. We are provided with a blueprint from the Government which specifies all of the characteristics that are to be incorporated here, dimensions, et cetera. But they have omitted the tolerances. You know it is 311⁄2-inch diameter, and if it is a sixty-fourth larger or smaller, it really doesn't make any difference from a functional standpoint. But by virtue of the tolerances being omitted, this creates many problems for us because we are married to a print which stipulates "perfect." This is the bid package which we recently received and declined to quote on because of our history with the job. [Printed on both sides just for this.]

Senator DANFORTH. You declined to quote?

Mr. GILBERT. We declined to quote, yes, sir. We have gotten burned on it so many times-I will explain. The Federal Government dictates to us how we are to make this part, what types of materials we are to use, the types of workmanship, et cetera. I would like to read just a couple of statements: "The sand molds shall be made of densely compacted fine uniformly graded quartz screen." That is bad foundry practice. And yet, if we are to quote on this and perform the contract according to those specifications, this is what we are required to do. Another statement here: "The surface of the mold in contact with the metal shall be coated or lined with suitable material or the use of a silica wash shall be provided, if determined necessary by the contractor officer." That puts him in a position of superior knowledge to us. He is not qualified to make that determination. The Government

is refusing to rely on the expertise of its suppliers, and it is dictating the techniques which take them out of the mainstream of technological improvements. Any techniques we come up with to improve quality, or reduce price, they are not allowed to take advantage of due to the specifications.

The packaging I think is-we are required to furnish special packaging. We have to have special dies made, special boxes, trays, and separators. These have to be stacked in a special orientation, like this: 25, put in a liner, drop another 25, 50 to a box. What they have done is maximized the cubic feet, or volume, that 50 of these pieces can take up. In doing so, it becomes more expensive to package, more expensive to pack and to inspect, and then when we put them on the truck we have such a configuration that we can get 8,000 pounds on a truck capable of carrying 40,000 pounds. The truck is locked up, there is no more room left; so you are running at 20-percent capacity. Any other problem that we confronted was in the specifications of the parts themselves. It specifies the impressions forming the lines, letters, and figures shall have clean sharp edges and be of uniform widths and depths. This is a subjective type of standard. In other words, in my industry, clean and sharp has a different meaning than in a stamping or die casting. So it is totally open to interpretation. One of these parts is acceptable and one isn't, I think, in view of the function of the part, which is to have a couple of numbers stamped in the location that that will really

Senator DANFORTH. Why is one not good enough?

Mr. GILBERT. Would you look at them?

Senator DANFORTH. Šure.

Mr. GILBERT [handed two objects to Senator Danforth]. Which one is not adequate to be put in the ground and have the numbers stamped on it and serve the function? I would like you to answer.

Senator DANFORTH. And just have weeds grow over them. I mean, these are just markers you find in a survey?

Mr. GILBERT. That's correct.

Senator DANFORTH. I have-they look identical to me.

Mr. GILBERT. Now obviously somewhere there has been an arbitrary distinction between what is acceptable and what isn't. As a manufacturer how much do I have to charge to cover myself, you know, to protect myself from throwing away functional parts?

Senator DANFORTH. So that is what you did with the one that you made that was not up to standard, you made it and it was rejected? Mr. GILBERT. Thousands.

Senator DANFORTH. Thousands of them?

Mr. GILBERT. Yes, sir.

Senator DANFORTH. Which one was it?

Mr. GILBERT. It would be on your right or, I'm sorry, left. You notice the cut in the slot where the saw cut through, it is shiny compared to the other?

Senator DANFORTH. Yes.

Mr. GILBERT. That is defective.

Senator DANFORTH. And somebody told you that?

Mr. GILBERT. The Government inspector. And the real tragedy of the whole thing is that he was doing his job. He was looking at the