Mr. KYLE. Could I answer the other two questions he asked me before he asks any more?

The CHAIRMAN. Yes.

Mr. KYLE. He asked two more questions.

He said: "Does Turner Co. do much of their own work?"

On the bus terminal, which Turner performed for the Port of New York Authority, they did all their own concrete work, they did all their own brick work, they did all their own excavation.

They did not do the general excavation, but the interior excavation after the job was started.

And the only work they let out on that job were the mechanical trades.

With respect to Fuller, they have never performed a contract for the Port of New York Authority, sir, to my knowledge.

Mr. BLITZ. I do want to say, because surely Mr. Kyle would recognize that Fuller is a substantial construction company, not only in New York, but throughout the entire country

Mr. KYLE. I think they are outstanding, sir.

Mr. BLITZ. I would like to make a list of the things that Mr. Kyle says he does and does not.

For example, he has no prequalifications, but, yet, it is not uncommon for the port authority to have bids on a construction and have a "select list."

They do prequalify in some manner. I would like to ask him another question.

The CHAIRMAN. What is meant by a "select list"?

Mr. BLITZ. In other words, they select the contractors whom they invite to bid.

No other general contractors are invited to bid.

Mr. TOBIN. Typically where you have a contract that has special considerations and requirements of time or quality or difficulty, in that connection, typically, such a contract was the second deck of the George Washington Bridge, and particularly the big electrical contract for that, where we selected a list of competent electrical contractors, and have that list that we are sure of, bid-they bid, and Fishback & Moore, of which you are a director, sir, was awarded the contract.

Mr. BLITZ. May I finish my statement?

The CHAIRMAN. Did I have anything to do with that, sir?
Mr. TOBIN. No.

The CHAIRMAN. I only became a director of that company recently. Mr. BLITZ. If this is a particular type of job that requires a special know-how, and a completion date, and the hangar was not, because it was not a select list, and there is nothing peculiar or particular about a hangar than any other building structure.

A contractor who does building construction, as a rule, can do any type of building structure except roads or bridges or any unique type. This is not a unique type. If it were, I presume, according to Mr. Tobin, they would have a select list.

I would like to ask another question.

Mr. RODINO. Mr. Chairman, why do we not have him submit one question at a time.

Mr. BLITZ. I would like to make a series of questions.

How many times was the first bidder passed over in the last 25 building construction projects?

Mr. HOLTZMAN. Are you able to answer that?

Mr. KYLE. I cannot answer that, sir, without referring. We have had, since I have been chief engineer of the port authority, in excess of 1,500 construction contracts, totaling $550 million.

It is very, very difficult to concentrate on maybe a half a dozen

contracts.

Mr. HOLTZMAN. Would you be able to get that information?

Mr. KYLE. That information is available, sir. As a matter of fact, Mr. Holtzman, you have that information in the files.

Mr. TOBIN. On all of those contracts, the contract was awarded to the low bidder, except, I think, in 2 or 2.5 percent of the cases.

Mr. KYLE. My assistant tells me there were a total of 15 contracts in the 1,500 I talked of, in which the award was not made to the lowest bidder.

Mr. BLITZ. It is also true that before we put a superintendent on the job, we submit the name and the qualifications to the port authority.

Should the port authority not particularly like a superintendent for his being incompetent, they would reject him, and we would have to submit another name, another superintendent that would be satisfactory to the port authority.

And if Mr. Kyle had objection to the superintendent that we suggested, he can surely have told us, like he told me other subcontractors that would be objectionable to the port authority.

As far as the ability to perform, the port authority asked us to furnish a bid bond.

The purpose of a bid bond is to show the ability of the contractor to submit a payment and performance bond. If the port authority so elects to protect itself by getting such a bond, they can avail themselves to that procedure. If they do not, they save the premium, and they feel, I am sure, what bid bonds they want a payment and performance bond, and what they do not.

Now, certainly if there is any question about the ability to perform financially, he can secure himself with the bid bond.

In addition to that, I just do not want Mr. Kyle to be too benevolent and tell the committee how utterly fair they are and lean over backward, because it is public knowledge in the building industry that they do not. I was asked by some of the trades people if I would make an issue on this hangar No. 17, and I assure you, Mr. Chairman, there are not too many contractors who would take this position, and come forth as I have come forth.

As a matter of fact, the Heating, Piping & Ventilating Association of the employers have passed a resolution requesting that the port authority prequalify these men, and not have them incur expenses for estimating their work, only to be rejected.

So it is quite common knowledge-and if Mr. Kyle does not recall the handful of contractors that he did not accept as low bidder, and reduces that to a percentage, let us take a percentage of the total dollars expended, and how much extra did the port authority pay between the low bidder and the second bidder.

Mr. TOBIN. You mean on the 15 contracts out of 15,000?

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Mr. BLITZ. I do not know how many. I never took count. You people know, not I.

Mr. KYLE. Well, there is an-there are an awful lot of questions here.

I think maybe it gets to be a kind of a wrestling match. I hope the committee will bear with me.

I have just gotten the notes from my files on the discussions withof Mr. Blitz' qualifications, and I have refreshed my memory. And it is not even as good as I said.

The CHAIRMAN. I cannot hear you, Mr. Kyle.

Mr. KYLE. All right, sir, I will speak up.

The first organization that we asked for was the firm known as Wally K. Harrison, who Mr. Blitz had personally given as a reference. He said that the company does not do a good job, and that the president of the company was a most difficult man to get along with

The CHAIRMAN. What are you reading now?

Mr. KYLE. This is the record of my-I had my records pulled as to the meeting with Mr. Blitz. I am just reading extracts from it. Mr. HOLTZMAN. Are you going to read personal references about Mr. Blitz?

The CHAIRMAN. Is this an internal memorandum of the port authority?

Mr. KYLE. I am trying to refresh my memory

The CHAIRMAN. Is this an internal memorandum of the port authority?

Mr. KYLE. I am just refreshing my memory as to what happened,

that is all.

The CHAIRMAN. Is this a self-serving declaration as to the character or qualification of an individual?

Mr. KYLE. No, sir. This is just trying to refresh my memory as to the investigation I made of Mr. Blitz.

Mr. TOBIN. This is what Mr. Kyle told the commissioners when he recommended that this low bid be rejected.

Mr. GOLDSTEIN. Besides, Mr. Chairman, I just point out that Mr. Blitz is testifying about the plumbing and something other association, and what they were saying.

The CHAIRMAN. I did not know what it was. Go ahead.

Mr. KYLE. On that project, it was very difficult to deal with Mr. Blitz on claims and extras.

On another reference that we made, they said that the walls built by the Blitz Co. had bulged and gone out of plumb, and that Mr. Blitz refused to replace the wall until moneys were withheld on his contract, at which time they finally reluctantly came in and fixed the damaged walls.

They also had very great difficulty with payments to Mr. Blitz, and pressures for payments on claims, and such like.

It is a pattern that made me recommend to the commissioners that we just should not be dealing with this company, sir.

Mr. HOLTZMAN. You do not find that pattern, the identical pattern with every contractor with whom you have ever dealt?

Mr. KYLE. No, sir; I have found that the contractors in the New York area, in the main, are very upright, honest people, and we have

very little troubles with them. We have had troubles on some of our jobs.

Mr. HOLTZMAN. You are not suggesting Mr. Blitz is not upright now, are you? We are talking about difficulty on extras; that is not unique in the building business, is it?

Mr. KYLE. We have not had much trouble with that, Mr. Holtzman. Mr. HOLTZMAN. I am asking you, Mr. Kyle, is that unique in the building business?

Would you let him respond, Miss Skehan, please?

Miss SKEHAN. Yes, sir.

Mr. HOLTZMAN. Is there anything unusual about that-even in a one-family home, do you not have a problem with a builder on extras? Mr. KYLE. Yes, Mr. Holtzman, you have problems with extras. Mr. HOLTZMAN. So there is nothing sinister or evil about that? Mr. KYLE. There is nothing sinister or evil, sir. But in trying to manage a large building contract, it is much easier to deal with contractors that you do not have this problem with.

And of the contractors we have dealt with in the last 13 years, I would say there is no more than 10 percent of them that we have had real extra troubles with.

The CHAIRMAN. Is there anything else you want to say, Mr. Kyle? Mr. KYLE. No, sir.

The CHAIRMAN. Anything else you want to say, Mr. Blitz?

Mr. BLITZ. Yes, I do want to, Your Honor, because this is certainly a reflection on me, and I am not at all surprised that Mr. Kyle took this approach.

I do say, although he is an engineer, his terminology is of a layman-bulging walls.

There are no masonry walls bulging in the project he is referring to. These walls leaked; they did not bulge. And these walls did leak because of a deficiency, not in workmanship, or craftsmanship, which I do not care to go into right now.

But since he did bring up the one objection to it, I do have to answer. In relationship to the extras, I wonder what percentage of contracts awarded for the basic contract price are there extras on the port authority structures.

Mr. KYLE. I cannot tell that without researching the files.

Mr. HOLTZMAN. Would it be 30 percent, or 40 percent?

Mr. KYLE. Actually, sir, our extras—and I did run a rundown on this for the commissioners about a year ago at that point-were running about 1.75 percent.

The CHAIRMAN. Anything else, Mr. Blitz?

Mr. BLITZ. No, that is about all.

The CHAIRMAN. Thank you very much, Mr. Blitz and Mr. Kyle. Unless there is something else you want to say, we will terminate this part of the hearing.

(The documents previously referred to follow :)