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95–487 PDF 2004

S. HRG. 108–627 

APPALACHIAN COUNCIL AND 

WORKING FOR AMERICA INSTITUTE 

HEARING 

BEFORE A

SUBCOMMITTEE OF THE 

COMMITTEE ON APPROPRIATIONS 

UNITED STATES SENATE 

ONE HUNDRED EIGHTH CONGRESS 

SECOND SESSION 

SPECIAL HEARING 

JULY 22, 2004—WASHINGTON, DC 

Printed for the use of the Committee on Appropriations 

( 

Available via the World Wide Web: http://www.access.gpo.gov/congress/senate 
(II) 

COMMITTEE ON APPROPRIATIONS 

TED STEVENS, Alaska, Chairman 

THAD COCHRAN, Mississippi 

ARLEN SPECTER, Pennsylvania 

PETE V. DOMENICI, New Mexico 

CHRISTOPHER S. BOND, Missouri 

MITCH MCCONNELL, Kentucky 

CONRAD BURNS, Montana 

RICHARD C. SHELBY, Alabama 

JUDD GREGG, New Hampshire 

ROBERT F. BENNETT, Utah 

BEN NIGHTHORSE CAMPBELL, Colorado 

LARRY CRAIG, Idaho 

KAY BAILEY HUTCHISON, Texas 

MIKE DEWINE, Ohio 

SAM BROWNBACK, Kansas 

ROBERT C. BYRD, West Virginia 

DANIEL K. INOUYE, Hawaii 

ERNEST F. HOLLINGS, South Carolina 

PATRICK J. LEAHY, Vermont 

TOM HARKIN, Iowa 

BARBARA A. MIKULSKI, Maryland 

HARRY REID, Nevada 

HERB KOHL, Wisconsin 

PATTY MURRAY, Washington 

BYRON L. DORGAN, North Dakota 

DIANNE FEINSTEIN, California 

RICHARD J. DURBIN, Illinois 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

JAMES W. MORHARD, Staff Director 

LISA SUTHERLAND, Deputy Staff Director 

TERRENCE E. SAUVAIN, Minority Staff Director 

SUBCOMMITTEE ON DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND

EDUCATION, AND RELATED AGENCIES

ARLEN SPECTER, Pennsylvania, Chairman 

THAD COCHRAN, Mississippi 

JUDD GREGG, New Hampshire 

LARRY CRAIG, Idaho 

KAY BAILEY HUTCHISON, Texas 

TED STEVENS, Alaska 

MIKE DEWINE, Ohio 

RICHARD C. SHELBY, Alabama 

TOM HARKIN, Iowa 

ERNEST F. HOLLINGS, South Carolina 

DANIEL K. INOUYE, Hawaii 

HARRY REID, Nevada 

HERB KOHL, Wisconsin 

PATTY MURRAY, Washington 

MARY L. LANDRIEU, Louisiana 

ROBERT C. BYRD, West Virginia (Ex officio) 

Professional Staff 

BETTILOU TAYLOR

JIM SOURWINE

MARK LAISCH

SUDIP SHRIKANT PARIKH

CANDICE ROGERS

ELLEN MURRAY (Minority) 

ERIK FATEMI (Minority) 

ADRIENNE HALLETT (Minority) 

Administrative Support 

CAROLE GEAGLEY
(III) 

C O N T E N T S 

Page 

Opening statement of Senator Arlen Specter ........................................................ 1 

Statement of Hon. Thomas Dowd, Deputy Assistant Secretary of Labor, Employment and Training Administration, Department of Labor ........................ 3 

Prepared statement .......................................................................................... 6 

Statement of Hon. Bobby Baker, mayor, Batesville, MS ...................................... 31 

Prepared statement .......................................................................................... 32 

Statement of Jim Bowen, president, West Virginia AFL–CIO ............................ 32 

Prepared statement .......................................................................................... 34 

Statement of Gary Darlington, executive director, Appalachian Council ........... 35 

Prepared statement .......................................................................................... 37 

Statement of William M. George, president, Pennsylvania AFL–CIO ................ 38 

Prepared statement .......................................................................................... 40 

Summary statement of Nancy Mills ...................................................................... 43 

Statement of Herbert Mabry, chairman emeritus, Appalachian Council ........... 44 

Prepared statement .......................................................................................... 46 

Summary statement of William Burga .................................................................. 47 

Prepared statement of Senator Robert C. Byrd .................................................... 50 

Questions submitted by Senator Robert C. Byrd .................................................. 53 

(1) 

APPALACHIAN COUNCIL AND WORKING FOR 

AMERICA INSTITUTE 

THURSDAY, JULY 22, 2004 

U.S. SENATE, SUBCOMMITTEE ON LABOR, HEALTH AND HUMAN

SERVICES, AND EDUCATION, AND RELATED AGENCIES, COMMITTEE ON APPROPRIATIONS, Washington, DC. 

The subcommittee met at 9:36 a.m., in room SD–192, Dirksen 

Senate Office Building, Hon. Arlen Specter (chairman) presiding. 

Present: Senator Specter. 

OPENING STATEMENT OF SENATOR ARLEN SPECTER

Senator SPECTER. Good morning, ladies and gentlemen. The Appropriations Subcommittee on Labor, Health and Human Services, 

and Education will now proceed. 

The hearing this morning is on the Appalachian Council and 

Working for America Institute. 

The AFL–CIO Appalachian Council has, for nearly 40 years, contracted with the Department of Labor to provide services for Job 

Corps students. Its current contract expired on April 30th of this 

year. At the time of the termination, the annual budget of 

$3,900,000 was allocated $1,700,000 for vocational training, and 

$2,200,000 for career transitional service support to help Job Corps 

students acquire jobs. 

There is very considerable interest by this subcommittee and the 

Appropriations Committee generally and, for that matter, the entire Congress on these Job Corps centers, but especially because 

one Job Corps center is in Pittsburgh, another is in Charleston, 

West Virginia, and I know that Senator Byrd, the ranking member 

of the full committee, is very concerned about that. There is another Job Corps center in Batesville, Mississippi. 

I would note that Senator Cochran is both a member of this subcommittee and with Senator Stevens rotating off on term limits 

from the chairmanship of the committee, Senator Cochran is in line 

to be chairman of the committee next year. 

I know of the work of the Job Corps center in Pittsburgh personally, having visited it on many occasions. I recollect going there 

with Senator Heinz in the early 1980’s shortly after I was elected 

to the Senate and noting how important that work was. 

When you talk about Job Corps, obviously we are talking about 

some of the neediest of individuals who are not in the college ranks 

or the Ph.D. or the professional ranks, but are looking for jobs. In 

a sputtering economy, I think we are on the way back, but we still 
2 

have problems, frankly especially in southwestern Pennsylvania in 

our State. There are some pockets where there are major, major 

problems. 

I would be less than candid if I did not say that I was concerned 

about the activities of the Department of Labor here. As soon as 

I found out about the matter, I wrote to Secretary of Labor Chao 

on March 3. We will have a copy of this letter put in the record. 

[The letter follows:] 

U.S. SENATE, 

Washington, DC, March 3, 2004. 

Hon. ELAINE CHAO, 

Secretary, U.S. Department of Labor, 200 Constitution Avenue, NW, Washington, 

DC. 

DEAR MADAME SECRETARY: I am writing to you concerning your Department’s recent decision to not award a new contract to the Appalachian Council-AFL/CIO, following the expiration of the current contract (E–7056–9–00–82–30). 

The Appalachian Council is a nationally recognized provider of education and 

training services, and has served the employment needs of our Nation for nearly 40 

years. This outstanding organization provides training for youth at three vocational 

training sites—including the Pittsburgh Job Corps Center—as well as enhanced job 

development and other placement services for Job Corps graduates throughout the 

United States. 

I am troubled by the adverse impact discontinuation of this contract will have on 

our ability to effectively train Job Corps students, and accordingly, strongly urge 

you to renew the contract with the Appalachian Council. 

Thank you for your personal attention to this matter. 

My best. 

Sincerely, 

ARLEN SPECTER. 

Senator SPECTER. I put a personal note on it to her noting it is 

a very good program and very important to me. I received a reply 

from Ms. Emily DeRocco, Assistant Secretary of Labor for Employment and Training, informing me that the contract would expire on 

April 30, just 2 days later, and would not be renewed. I think that 

this subcommittee and the chairman are entitled to a little more 

consideration than that. 

I wrote to Secretary Chao again on March 31 of this year, and 

I will put a copy of that letter in the record. I will also put a copy 

of the letter from Secretary DeRocco dated April 28 into the record 

and a copy of my letter to Secretary Chao dated March 31 in support of the application of the AFL–CIO Working for America Institute to continue its work for the program year July 1, 2004 through 

June 30, 2005, and I have not yet received a reply. 

[The letters follow:] 

U.S. SENATE, 

Washington, DC, March 31, 2004. 

Hon. ELAINE CHAO, 

Secretary, U.S. Department of Labor, 200 Constitution Avenue, NW, Washington, 

DC. 

DEAR MADAME SECRETARY: Last spring I wrote to you on behalf of the AFL–CIO 

Working for America Institute. At that time, the Institute was awaiting a decision 

on a grant proposal to continue their work in establishing labor-management partnerships in key industry sectors and to provide training and technical assistance to 

labor representatives who serve on state and local Workforce Investment Boards 

(WIBs). 

While I was disappointed that the Institute’s sectoral work was not funded—especially as it included a manufacturing partnership in southwest Pennsylvania—I was 

appreciative of the Department’s decision to continue to fund the Institute’s program 

of support for WIB Labor Representatives. As you noted in your July 2003 announcement of the grant, organized labor is a statutory stakeholder in the public 
3 

workforce investment system and their input is important to the effective functioning of the system at the state and local level. I know that to be the case in Pennsylvania, and the labor representatives of our state value the training and technical 

assistance provided by the Institute. 

I understand that the scope of work for the current grant focused heavily on the 

role of labor representatives and other union workforce practitioners in implementing the expected changes in the Workforce Investment Act (WIA). Action on 

that legislation has not been completed, as the House-Senate conference has yet to 

be scheduled. Nevertheless, there is a great deal of agreement on many changes to 

the WIA system, and upcoming training sessions scheduled by the Institute will go 

a long way toward preparing labor representatives to play an active role in system 

improvements. I expect a large contingent of labor representatives from Pennsylvania will participate in the East Coast training session in New York City in May. 

I also understand that the Institute has submitted a proposal to continue their 

work in Program Year 2004. I wanted to let you know of my strong support for that 

proposal and I trust that you share the recognition that the job you have entrusted 

to the Institute requires a continuation grant so that they can be active participants 

in the implementation of WIA statutory changes even if the reauthorization period 

extends into the next program year. 

Thank you for your support of the fine work being done by the Working for America Institute and your continued support for American workers. 

Sincerely, 

ARLEN SPECTER. 

U.S. DEPARTMENT OF LABOR, 

ASSISTANT SECRETARY FOR EMPLOYMENT AND TRAINING, 

Washington, DC, April 28, 2004. 

Hon. ARLEN SPECTER, 

U.S. Senate, Washington, DC. 

DEAR SENATOR SPECTER: Thank you for your letter on behalf of the Appalachian 

Council-AFL/CIO, regarding the expiration of the national contract effective April 

30, 2004. 

The circumstances which make it necessary to refrain from renewal of this contract are unfortunate. Despite ongoing remediation efforts by the Department of Labor’s Employment and Training Administration, the delivery of services by the Appalachian Council has increasingly failed to meet the standard necessary to address 

the needs of those entrusted to the Job Corps program. An increasing number of 

youth assigned to the Appalachian Council for services have not been adequately 

trained or placed in jobs related to their training at sustainable wages. 

Please be assured that measures have been undertaken to prevent interruption 

of services to students. Arrangements are being made for the provision of vocational 

training and job placement services at the Job Corps center. 

If you have any questions, please don’t hesitate to call me at (202) 693–2700. 

Sincerely, 

EMILY STOVER DEROCCO. 

Senator SPECTER. It is, candidly again, a little hard for this subcommittee to take the lead on funding the Department of Labor 

when the chairman of the subcommittee writes and does not get 

any response. That is just not the way the committee works within 

our branches of Government. 

STATEMENT OF HON. THOMAS DOWD, DEPUTY ASSISTANT SECRETARY OF LABOR, EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR 

ACCOMPANIED BY RICHARD TRIGG, SAN FRANCISCO REGIONAL ADMINISTRATOR, EMPLOYMENT AND TRAINING ADMINISTRATION, 

DEPARTMENT OF LABOR 

Senator SPECTER. With that brief introduction, we will turn now 

to our first witness, Deputy Assistant Secretary for Employment 

and Training, Mr. Thomas M. Dowd. Prior to Mr. Dowd’s obtaining 

this position, he served as Director of Business Relations and Regional Administration for the Employment and Training Adminis-
4 

tration in Philadelphia and had previously been a Peace Corps volunteer. He is a graduate of the University of New Mexico, and he 

will be accompanied by Mr. Richard Trigg, the ETA Regional Administrator in San Francisco and former National Director of Job 

Corps. 

Welcome, Mr. Dowd. Our committee practice is to have a 5- 

minute opening statement. All formal statements will be made a 

part of the record, and that will leave us the maximum time for 

questions and answers. Please proceed. 

Mr. DOWD. Mr. Chairman and members of the subcommittee, I 

have worked with the Department of Labor for 10 years and served 

as the Deputy Assistant Secretary of the Employment and Training 

Administration for the last 18 months. 

I am pleased to have the opportunity to testify regarding the Department of Labor’s past contract with the Appalachian Council to 

provide vocational training, job placement, and career transition 

services to Job Corps students and graduates. I would also like to 

discuss briefly the Department’s past grants with the Working for 

America Institute which I will do at the end of my remarks. 

APPALACHIAN COUNCIL

The Appalachian Council’s contract was one of nine sole-source 

national vocational training contracts with unions, union-affiliated 

entities, and a national business organization. We refer to them as 

National Training Contractors, or NTCs. 

Senator SPECTER. Mr. Dowd, Senator Thurmond was renowned 

for one of his comments to witnesses. He would always say, pull 

the machine a little closer. You are out of range of that. You have 

got it turned on all right. Even a little closer yet, Mr. Dowd. 

Mr. DOWD. Thank you, sir. 

Sole-source contracts are awarded without competitive bidding 

and are rare, making up approximately 4 percent of the Job Corps’ 

operating budget. The overwhelming majority of Job Corps contracts are competitively bid through the solicitation and procurement process. The NTCs must meet the stringent requirements of 

the Federal Acquisition Regulations, or FAR, including the requirements that the services provided are available from only one responsible source and that the services result in positive outcomes 

and performance. 

The NTC contracts have always been for 1 year with 4 option 

years. During 2003 and early 2004, as the NTC contractors were 

completing their fourth option year, the Department reviewed all 

NTC contracts to determine whether each contract still met the 

FAR sole-source procurement requirements and determined that 

the Appalachian Council contract no longer met the requirements. 

The contract with the Appalachian Council had two distinct components: (1) placement and career transition services; and (2) training for students in a variety of trades at the three Job Corps centers. 

The Workforce Investment Act, WIA, of 1998 and its implementing regulations require that continued services, including 

transition support and workplace counseling, be provided to all Job 

Corps students for 12 months following their graduation from the 

program. To meet this much broader post-training requirement, the 
5 

Job Corps began contracting for career transition services through 

the competitive procurement process. 

Prior to WIA, the Appalachian Council was the sole provider of 

career transition services to Job Corps graduates. Currently, however, Job Corps has 87 contracts for career transition services with 

approximately 150 providers throughout the Nation providing those 

services. Therefore, the Council is no longer the only responsible 

source for career transition services and does not meet the FAR 

standards for sole-source procurement. However, the Appalachian 

Council is encouraged to compete, along with the other providers, 

to offer career transition services to Job Corps graduates. 

With respect to the training portion of the Appalachian Council’s 

contract, the Council’s performance was overall unsatisfactory and 

consequently did not justify renewal. ETA closely monitors the performance of each training contractor. When performance levels are 

inadequate, we establish a 1-year probationary period during which 

we require the NTC to develop and implement a Program Improvement Plan. If meaningful performance improvement does not occur, 

the program is closed or training slots are reduced. 

With regard to Appalachian Council’s training programs, poor 

performance became evident in the last contract period, which 

began November 1, 1998. Over the past 4 years, 23 percent of the 

Appalachian Council’s 22 vocational training programs were closed 

due to continued poor performance, as compared to approximately 

10 percent of all other NTC programs. 

By June 30, 2003, the Appalachian Council’s last full operating 

year, they reported the lowest performance outcomes of all NTCs 

and center-operated vocational programs for the following major 

performance indicators: vocational program completers, placements, initial average hourly wage, and average hourly wage when 

placed in a job that is related to training. 

We required the Council to develop a Program Improvement Plan 

to eliminate the identified weaknesses in the program in order to 

make it an effective training provider for Job Corps students. We 

determined that continuation of the poorly performing Appalachian 

Council contract is not in the best interest of Job Corps students. 

At the Department of Labor, we believe that effectively managed 

programs result in better performance and that those programs 

that do not work must be strengthened or terminated. Even where 

we have had a long-term contractual relationship with service providers, if the activities are not producing results needed for the Nation’s young people, the Government has an obligation to terminate 

ineffective contracts. 

WORKING FOR AMERICA INSTITUTE

With regard to the Working for America Institute, ETA awarded 

a $1 million grant to the organization for program year 2003 to 

continue providing training and technical assistance to labor representatives on State and local workforce investment boards. On 

March 5, 2004, ETA received an unsolicited proposal from the 

Working for America Institute seeking financial support to continue such activities. 

We believe strongly that grants previously awarded to community-based organizations, business, and government associations, 
6 

and other organizations such as Working for America Institute, 

that focused on developing organizational relationships to promote 

workforce development are not the best use of limited resources at 

this time. 

To help clarify our funding priorities, we have met with numerous representatives from nonprofit organizations and associations, 

including the Working for America Institute leaders, seeking 

grants through sole-source procurement. While the capacity-building grants have ended, these organizations are welcome to submit 

proposals that demonstrate employment and reemployment of 

workers as a primary focus. We are looking for unique approaches 

to serving targeted groups such as low income individuals or youth 

offenders or projects that improve the skills of workers in high 

growth industries. 

PREPARED STATEMENT

Mr. Chairman, this concludes my opening statement. Again, I appreciate this opportunity to appear before you on behalf of the Department of Labor’s Employment and Training Administration. I 

am prepared to respond to any questions that you and your colleagues may have. 

[The statement follows:] 

PREPARED STATEMENT OF HON. THOMAS M. DOWD

Mr. Chairman, and members of the Subcommittee, I am pleased to have the opportunity to testify regarding the Department of Labor’s past contract with the Appalachian Council to provide vocational training, job placement and career transition services to Job Corps students and graduates. I would also like to discuss briefly the Department’s past grants with the Working for America Institute, which I 

will do at the end of my remarks. 

Job Corps was created in 1964 to provide job training and placement services to 

economically disadvantaged youth ages 16–24. Most of the 70,000 youth enrolled in 

the program annually are served in the 118 residential centers and 2 non-residential programs, the majority of which are operated through competitively-procured 

contracts. The typical Job Corps student is a high school dropout who reads just 

above the 7th grade level, belongs to a minority group and has never held a fulltime job. Job Corps consistently achieves good results for these youth and helps 

them embark on meaningful, sustainable careers. 

The Appalachian Council’s contract was one of nine ‘‘sole-source’’ national vocational training contracts with unions, union-affiliated entities, and a national business organization—we refer to them as the National Training Contractors (NTCs). 

‘‘Sole-source’’ contracts are awarded without competitive bidding and are rare—making up only a very small percentage of Job Corps contracting (approximately four 

percent of the Job Corps operating budget). The overwhelming majority of Job Corps 

contracts are competitively bid through the solicitation procurement process. The 

NTCs must meet the stringent requirements of the Federal Acquisition Regulations 

(FAR), including the requirements that the services provided are available from only 

one responsible source, and that the services result in positive outcomes and performance. Job Corps declined to renew the Appalachian Council’s contract both because the Council no longer qualified as a ‘‘sole-source’’ and because its performance 

was unsatisfactory, particularly regarding average hourly wages for graduates. For 

example, at the close of Program Year 2002, the Council’s last full operating year, 

average hourly wages for Appalachian Council graduates at initial job placement 

were $7.71, compared to $8.84 for all NTCs (including the Appalachian Council). 

The NTC contracts have always been for one year with four option years. During 

2003 and early 2004, as the NTC contractors were completing their fourth option 

year for the contract period November 1998 to January 2004, the Department reviewed all NTC contracts to determine whether each contract still met the FAR solesource procurement requirements. This review resulted in a determination that the 

Appalachian Council contract no longer met the sole-source contract requirements. 
7 

The contract with the Appalachian Council had two distinct components: (1) placement and career transition services through its Industrial Work Experience Program, and (2) training for students in a variety of trades at three Job Corps centers. 

After careful review, we concluded that the Council was no longer the only responsible source because the passage of the Workforce Investment Act of 1998 (WIA) resulted in expanded career transition services and a concomitant increase in the 

number of contractors able to offer such services. 

With the passage of WIA, the Job Corps changed its approach to investments in 

post-program continued services. This change strengthened the program’s emphasis 

on achieving long-term labor market attachment and good wages for Job Corp graduates. 

Specifically, section 148(d) of WIA and its implementing regulations require that 

continued services, including transition support and workplace counseling, be provided to all Job Corps students for 12 months following their graduation from the 

program. To meet this much broader post-training requirement, the Job Corps 

began contracting for career transition services such as these through the competitive procurement process. 

Prior to the passage of WIA, the Appalachian Council was the sole provider of career transition services to Job Corps graduates through its Industrial Work Experience Program. Job Corps’ previous contracts with the Council, therefore, were appropriately sole-sourced to the Council because it was the only responsible source 

for those services. Currently, however, Job Corps has 87 career transition service 

contracts, providing services at over 100 sites. 

The expansion of career transition services in the past 3 years to all graduating 

Job Corps students caused the large increase in the number of career transition 

service contractors. Because of this, the Council is no longer the only responsible 

source for career transition services and, therefore, does not meet the FAR standards for sole-source procurement. However, the Appalachian Council is encouraged 

to compete, along with the other providers, to offer career transition services to Job 

Corps graduates. 

With respect to the training portion of the Appalachian Council’s contract, the 

Council’s performance was unsatisfactory and, consequently, did not justify renewal. 

The Office of Job Corps closely monitors each of the National Training Contractors 

to ensure that the contractor’s performance actually results in meaningful employment outcomes for our graduates, such as job placement, retention, and earnings 

growth. Of course, not all programs perform at the same level, and when performance levels are inadequate, we establish a one-year probationary period during 

which we require the NTC to develop and implement a Program Improvement Plan. 

If meaningful performance improvement does not result, the program is closed or 

training slots are reduced until the contract can be terminated. All NTC programs 

are subject to the same rigorous review and corrective action system. With regard 

to the Appalachian Council’s training programs, poor performance became evident 

early in the last contract period, which began November 1, 1998, for the following 

performance indicators: Average Hourly Wage at Initial Placement; Job Training 

Match (JTM); and JTM Average Hourly Wage. As a result of this poor performance, 

we required the Council to develop a Program Improvement Plan to eliminate the 

identified weaknesses in the program in order to make it an effective training provider for Job Corps students. 

Over the past four years, 23 percent of the Appalachian Council’s 22 vocational 

training programs were closed due to continued poor performance, as compared to 

approximately 10 percent of all other NTC programs. This reduced total contract 

slots by 114 from 542. By June 30, 2003, the Appalachian Council’s last full operating year, they reported the lowest performance outcomes of all NTCs and centeroperated vocational programs for the following major performance indicators: vocational program completers; placements; initial average hourly wage; and average 

hourly wage when placed in job-related training. The Appalachian Council also had 

the lowest weekly earnings at 6 months, $352, and 12 months, $359, following initial placement, as compared to $383 and $393, respectively, for all other NTC programs. The Appalachian Council did not improve performance after implementation 

of their Program Improvement Plan. 

In the end, we arrived at our decision to not renew the Appalachian Council’s contract because the Council no longer meets the FAR requirements for a sole-source 

award given the proliferation of available career transition service contractors. In 

addition, we determined that the continuation of their poorly performing training 

contract is not in the best interest of the at-risk youth that the Job Corps serves. 

At the Department of Labor, we believe that effective program strategies and activities should be continued, and those that do not work must be strengthened or 

terminated. Even where we have had long-term contractual relationships with serv-
8 

ice providers, if the activities are not producing the results needed for the Nation’s 

young people, the government has an obligation to terminate ineffective training 

contracts, such as we did in this instance with the Appalachian Council. 

With regard to the Working for America Institute, the Employment and Training 

Administration awarded a $1 million sole-source grant to the organization for Program Year 2003 to continue providing training and technical assistance to labor representatives on state and local workforce investment boards. On March 5, 2004, 

ETA received an unsolicited proposal from the Working for America Institute seeking financial support to continue its program of training and technical assistance 

for labor representatives on local workforce boards. 

We reviewed the proposal and determined that this type of general capacity building no longer coincides with the Department’s priorities to award discretionary 

grants that support initiatives focused on training workers in the skills necessary 

to ensure their employment or reemployment. This distinction is particularly important now that WIA is in its fifth year of implementation. 

We believe strongly that grants previously awarded to community-based organizations, business and government associations, as well as entities such as the Working 

for America Institute, that focused on developing organizational ‘‘relationships’’ to 

promote workforce development, are not the best use of limited resources at this 

time. 

To help clarify our funding priorities, we have met with numerous representatives 

from non-profit organizations and associations, including the Working for America 

Institute leaders, seeking grants through sole-source procurement. While the ‘‘relationship’’ grants have ended, ETA has advised each organization that they are welcome to submit proposals that demonstrate employment and reemployment of workers as a primary focus. We have also shared that we are looking for unique approaches to serving targeted groups (e.g., low income, youth offenders, dislocated 

workers, etc.) or as part of a high growth project that improves skills of workers 

in a high growth industry such as health services, construction, and biotechnology. 

Additionally, we want to see measurable outcomes and results included in each proposal specifically, and at a minimum, outcomes relating to participants’ entered employment, job retention and wage gains. 

In a meeting with representatives from the Working for America Institute in January 2004, we indicated that future funding would be considered in the context of 

a high growth or targeted group project. The Working for America Institute representatives were given information and encouraged to both respond to future competitive grant opportunities and to submit a concept paper in the high growth area 

if they felt they had a viable project design. 

Mr. Chairman, this concludes my testimony. Again, I appreciate this opportunity 

to appear before you on behalf of the Department of Labor’s Employment and Training Administration. I am prepared to respond to any questions that you may have. 

CORRESPONDENCE WITH THE DEPARTMENT OF LABOR

Senator SPECTER. Mr. Dowd, are you in a position to tell this 

subcommittee why I did not receive or the subcommittee, acting 

through me as its chairman, did not receive an answer to my letter 

of March 3 until April 28, just 2 days before the contract was to 

expire? 

Mr. DOWD. No, I am not, but I will absolutely look into it as soon 

as I return to the office. 

Senator SPECTER. Would you repeat that answer, please? 

Mr. DOWD. No, I am not prepared because I do not know the 

facts, but I will check it immediately upon returning to the office 

to find out what is the status of the response. 

Senator SPECTER. Well, the facts are that I wrote on March 3 

and received an answer on April 28 and the contract was due to 

expire on April 30. Those are the facts. Why did I not get a timely 

response? 

Mr. DOWD. As I said, Senator, I do not know but I will absolutely 

check to see where the response is in the Department to make sure 

that we get an answer back to you and why we did not respond—— 
9 

Senator SPECTER. Well, did you check your file on this matter before coming to testify here today? 

Mr. DOWD. I checked to see the letters that did get sent up here 

and I did not find any record on the response that you indicated 

that we did not make to you. 

Senator SPECTER. Are you in a position to tell me why my letter 

of March 31 to Secretary Chao concerning the AFL–CIO Working 

for America Institute has not yet been answered? 

Mr. DOWD. I will also check on that letter to see what the status 

of that one is as well. 

Senator SPECTER. Mr. Dowd, how can this subcommittee make 

recommendations for a multi-billion dollar budget when we do not 

have any lines of communication with your Department? 

Mr. DOWD. I agree that we need to better communicate back to 

you and respond to your requests, and I will check and see what 

the status is. 

WAGE RATES AND GEOGRAPHICAL WAGE DIFFERENTIALS

Senator SPECTER. In your written statement, you have cited that 

the Appalachian Council’s contract was unsatisfactory, particularly 

regarding hourly wages for graduates and you cite the Appalachian 

Council’s graduates at initial job placement at $7.71 compared to 

$8.84 for all NTCs. What was the compensation level after the initial job placement? 

Mr. DOWD. Richard, do you have that number there? 

Senator SPECTER. Initial job placement, of course, is a snapshot 

at the start, but what happened later? 

While they are searching for that, Mr. Dowd, perhaps you can 

answer this question. Where were the other Job Corps centers located? 

I know Mr. Trigg, according to the information here, is from San 

Francisco where you have a very substantially higher compensation 

level than you do in the Appalachian Regional Commission. When 

you trace the Appalachian Regional Commission through the south 

and into western Pennsylvania, you come to very, very tough economic places. So there would be an expectation that when you are 

looking at Mississippi, when you are looking at Alabama, looking 

at Kentucky, looking at southwestern Pennsylvania, you would 

have a lower compensation level. Has that been taken into account? 

Mr. DOWD. Yes, I believe that is correct. The actual average 

weekly earnings are averaged out over all of the programs operated 

by the Appalachian Council. I think, Mr. Trigg, you have those figures there now. 

Senator SPECTER. Well, when you say NTCs, what does NTC 

stand for? 

Mr. DOWD. Well, that is all the National Training Contractors. 

Senator SPECTER. National Training Contractors. 

Mr. DOWD. Yes. 

Senator SPECTER. Some of those are located in San Francisco? 

Mr. TRIGG. Yes, sir. 

Senator SPECTER. How does the wage level in San Francisco compare to the hill country of West Virginia? Have you been to West 

Virginia, Mr. Trigg? 
10 

Mr. TRIGG. Yes, sir, I have. 

Senator SPECTER. Well, then you are in a position to answer the 

question. 

Mr. TRIGG. Senator, the wages—— 

Senator SPECTER. I am going to ask you more questions because 

I can hear you. It is a bad thing to be able to be heard. You get 

more questions, Mr. Trigg. Go ahead. 

Mr. TRIGG. The wages that are set aside for all National Training 

Contractors, as well as all of the center-operated programs, are developed on a geographically-based model. So marketing conditions 

in various regions are taken into consideration when we establish 

the baseline models. 

The expectation for our National Training Contractors is that 

they perform at a higher level than our center-based operators because of their sole-source nature. 

Senator SPECTER. They perform at a higher level because of why? 

Mr. TRIGG. Because this is a sole-source contract and they have 

a special niche or special opportunities for placement for these 

youth, the expectation, when we provide a sole-source contract, is 

that they will perform at a higher level than everyone else. 

Senator SPECTER. Well, why is that? What unique opportunities 

do they have for placement? And how can they circumvent the critical problem? If you are in a depressed area, you have lower compensation than when you are in San Francisco. You do not have 

to be rocket scientist to know how much higher prices are in San 

Francisco and how much more people are paid there than they are 

in the Appalachian Regional Commission if you take some of the 

towns in the South, extending up through western Pennsylvania. 

So is that not a factor that has not really been taken into consideration here? 

Mr. TRIGG. Well, Senator, I believe that the factor has been 

taken into consideration. What we compare is not only the Appalachian Council’s performance, but we compare the performance of 

all other NTC operations in those same geographic areas, as well 

as the performance of center-based programs in those geographic 

areas. 

Senator SPECTER. Well, but your statistics here are the Council at $7.71 compared to $8.84. That is not an enormous differential 

to start with, but the other National Training Contractors are obviously in areas which have higher wages. Is that not true? 

Mr. TRIGG. That is true, sir. 

Senator SPECTER. Well, I do not consider that to be a solid reason 

for drawing a conclusion that the Appalachian Council is no longer 

qualified because its performance was unsatisfactory, particularly 

regarding average hourly wage for graduates in light of the major, 

major discrepancies in the areas covered. 

Farther on in your statement, Mr. Dowd, you talk about the Appalachian Council had the lowest weekly earnings at 6 months, 

$352, and 12 months. $352 compared to $383 again is not a major 

discrepancy in my opinion. Do you think it is, Mr. Dowd? 

Mr. DOWD. If I could, Mr. Chairman—— 

Senator SPECTER. Let me supplement the question. Do you think 

it is especially in light of the difference in economic levels of the 

Appalachian Commission compared to other more lucrative areas? 
11 

Mr. DOWD. If I could, Mr. Chairman. We have vocational training 

programs offered to the Job Corps students all across the country 

and they are offered by the center operators who competitively bid 

to run the Job Corps centers at the 118 centers. Those center operators offer vocational training programs. Now, that is the center 

operators. 

On the other side, we had nine, we now have eight National 

Training Contractors. The national training contractors have been 

given their contracts on a sole-source basis. They did not have to 

competitively bid them. There is a distinction to be made there. 

Second, I want to share with you that of all of the NTC contractors we have had, the Appalachian Council has consistently been 

the lowest performing contractor of all nine. It has consistently 

been—— 

APPALACHIAN COUNCIL PLACEMENT RATE

Senator SPECTER. Well, be specific, Mr. Dowd. In what respect? 

Are you aware of the fact that the Appalachian Council placed 87 

percent of its graduates, according to the Labor Department’s own 

data, which is above the 85 percent performance goal established 

by the Department? 

Mr. DOWD. Yes. I will be specific. But on that particular statistic, 

I would want to make sure that that is speaking to placement in 

any job versus placement in actual jobs they were trained for. 

Senator SPECTER. Well, my question to you is were you aware of 

that fact. 

Mr. DOWD. Yes. We do have those facts. 

Senator SPECTER. My question to you is were you aware of that 

fact, not that you do have those facts. Were you aware of that fact? 

Mr. DOWD. Yes. 

Senator SPECTER. Why was it not in your statement? Why not 

give a full picture to the subcommittee of the achievements of the 

Appalachian Council so we can evaluate it, as well as the statistics 

which you think are derogatory? 

Mr. DOWD. Well, if I might, sir. On that particular fact, many of 

the contractors who provide vocational training—there are two factors that are important to put forward. At the very minimum, we 

would expect that National Training Contractors would be able to 

place students who graduate in a job. But obviously, that is not 

good enough. We do not want just any job, even if it is 87 percent. 

We want a job that is specifically related to the training they receive. 

Senator SPECTER. Do you have facts at your disposal which undercut the fact that the Appalachian Council exceeded the goal? Do 

you have facts at your disposal that those jobs were inferior jobs? 

Mr. DOWD. We have facts that would show that their placements 

for initial average wages are at least $1 less than all other contractors who place students. That includes the National Training Contractors as well—— 

Senator SPECTER. We have already dealt with the conclusion that 

it is not comparable if you deal with, say, San Francisco compared 

to West Virginia. Would you not agree that if you are comparing 

San Francisco’s starting salaries with West Virginia, they are not 
12 

even apples and oranges? They are acorns and watermelons. Would 

you not agree with that? 

Mr. DOWD. Well, I would agree that if we tried to compare wages 

from West Virginia to California, there is a discrepancy, but I do 

not believe that is what we do. What we do is take the average of 

all the wages of all the operators that are placing people across the 

country to try to regularize—— 

Senator SPECTER. Well, do you have any region which is in as 

tough a financial shape as the Appalachian Regional Commission? 

Mr. DOWD. Well, I can think of a few Indian reservations where 

we have got a couple of Job Corps centers, but it is one of the 

toughest economic—— 

Senator SPECTER. You would agree that the Appalachian Commission is one of the toughest. May the record show Mr. Trigg is 

nodding in the affirmative. Right, Mr. Trigg? 

Mr. TRIGG. Yes. The Appalachian area is a very difficult area. 

PITTSBURGH JOB CORPS CENTER

Senator SPECTER. Well, gentlemen, I do not find your case very 

strong condemning what the Appalachian Council has done. 

What is happening to the Job Corps center in Pittsburgh since 

April 30 with this contract not being let? 

Mr. DOWD. The services at the Pittsburgh center are continuing 

to be provided in the vocational programs that were previously operated by the Appalachian Council. I want to be clear that—— 

Senator SPECTER. Who is doing that? 

Mr. DOWD. The center operator. And that kind of goes back to 

my point a moment ago that—— 

Senator SPECTER. Are there other facets of what they are doing 

besides what you just enumerated? What did you say is continuing 

to be provided? 

Mr. DOWD. The same training program that was previously provided by the Appalachian Council is being managed and operated 

by the center operator in Pittsburgh, so that the program itself has 

not stopped. Students are continuing to be trained. 

Senator SPECTER. Were those folks operating it for the Appalachian Council? 

Mr. DOWD. No. The center operator is the contractor who is running the center. 

Senator SPECTER. So there was a change made on May 1? 

Mr. DOWD. No. 

Senator SPECTER. What happened after April 30 when you terminated the contract of the Appalachian Council? 

Mr. DOWD. All the centers are operated by center operators that 

are not National Training Contractors. The National Training Contractors also provide vocational programs at a number of Job Corps 

centers. I want to draw the distinction here. All of the center operators operate vocational training programs. 

Senator SPECTER. Well, what was the Appalachian Council doing 

with respect to Pittsburgh prior to April 30? 

Mr. DOWD. They were offering a variety of programs: food service, health occupation, carpentry. 

Senator SPECTER. And what has happened to those programs 

after May 1? 
13 

Mr. DOWD. Right. The center operator, the contractor who runs 

the Job Corps center, that runs the dormitory, runs the food service, operates the entire center, and operates some of their own vocational training programs, picked up these programs and are continuing to offer them to the students. 

Senator SPECTER. Are they doing a better job than the Appalachian Council did? Have they increased initial job placement? 

Mr. DOWD. We believe that the center-operated programs in 

Pittsburgh have certainly been comparable and better than the programs that were offered by the National Training Contractor, Appalachian Council. 

Senator SPECTER. Well, aside from what you believe, which is 

conclusory, have they gotten initial job placement at a higher figure than the Appalachian Council? 

Mr. DOWD. I believe that is correct for the programs that they 

have operated. It is a little early to say with regard to the programs they just picked up. 

Senator SPECTER. You believe it is correct? I pause when I hear 

comments about ‘‘I believe.’’ What I am interested in is what you 

know based on facts. Do you know based on facts? 

Mr. DOWD. The other vocational programs at the Pittsburgh center are better in their performance than the Appalachian Council 

in the Pittsburgh center. The difference is about $8.69 versus $8.16 

per placement. 

Senator SPECTER. And what period of time is that for? 

Mr. DOWD. The past program year, which would have been July 

2003 to June of this year. 

Senator SPECTER. And what is that figure again? 

Mr. DOWD. $8.69 versus $8.16. 

Senator SPECTER. $8.69? 

Mr. DOWD. Yes. 

Senator SPECTER. Compared to $8.68? 

Mr. DOWD. $8.16. 

Senator SPECTER. $8.16? Is that a sufficient differential to oust 

a long-term contractor? 

Mr. DOWD. Well, I would say that there are circumstances where 

the Appalachian Council’s performance with some programs was 

average. It was not any better or worse than most contractors for 

those particular programs. But in totality their overall performance 

as a contractor for all their programs, as I indicated before, was the 

lowest-performing contractor in the Nation for all National Training Contractors—— 

Senator SPECTER. Would you provide this subcommittee with 

backup statistics on that, specifying what the contractors were 

other places, contrasted here? 

Mr. DOWD. Yes. 

[The information follows:] 

APPALACHIAN COUNCIL AND WORKING FOR AMERICA INSTITUTE

BACKGROUND

Job Corps’ contract with the Appalachian Council was one of nine sole-source contracts administered through the national office of Job Corps. Typically, contracts for 

center operations are procured through Job Corps regional offices; the regional offices have primary oversight over the centers. Most vocational training is provided 

by the center operator as a part of the overall operation of the center. The National 
14 

Training Contractors (NTCs) are an exception to this rule. NTCs typically have an 

expertise and network in one particular occupation such as painting, carpentry, or 

masonry, and provide specialized training in that field at as many as 30 or 40 different Job Corps centers. 

APPALACHIAN COUNCIL CONTRACT

The contract with the Appalachian Council consisted of two tasks: (1) provision 

of career transition services, and (2) provision of vocational training. The following 

performance statistics relate solely to the vocational training programs. The vocational training programs provided by the Appalachian Council were not focused on 

one area of expertise, as is the case for all other NTCs. The Appalachian Council 

provided training in nine different occupations, and the training was provided at 

only three Job Corps centers: Pittsburgh, PA; Batesville, MS and Charleston, WV. 

PERFORMANCE

In the last few program years, Appalachian Council’s performance was so poor 

that many of the vocational training programs were closed. In fact, all programs at 

the Pittsburgh Job Corps Center were scheduled to be closed. 

The following charts reflect the Appalachian Council’s most significant performance deficiencies in the past six program years. The Program Year (PY) begins on 

July 1 and ends on June 30 of the following calendar year. 

The following information indicates the Appalachian Council’s sustained poor performance in the areas of initial and long-term earnings at the centers where they 

had vocational training programs compared to other NTCs programs and center-operated programs at the same three centers. Performance results were particularly 

disappointing when compared to all other NTCs and center-operated programs nationally. 

Note: All the ‘‘a’’ charts are based on the national, overall performance data for 

each program year listed, comparing the Appalachian Council to all other NTCs and 

center-operated programs. These are comparisons of national performance for all 

NTCs that include both high and low wage areas. 

All the ‘‘b’’ charts are based on the performance data for Calendar Year (CY) 2003 

comparing the Appalachian Council performance to the NTCs and center-operated 

programs at the same three centers. CY 2003 data was used as it best reflects the 

Appalachian Council programs’ performance in its last full 12-month cycle before 

the contract ended in February 2004. 

1. INITIAL AVERAGE HOURLY WAGE

Definition 

The sum of the hourly wage of vocational completers initially placed in jobs or 

the military All vocational completers initially placed in jobs or the military 
15 

Performance Trend 

Chart 1a shows the Appalachian Council’s deficiency, nationally, in attaining initial average hourly wages as compared to all other NTCs and Center-Operated Programs from PY 1998 through PY 2003. When comparing Appalachian Council’s initial average hourly wages with the NTCs, the result is a difference well over $200 

a month. In addition, when comparing the Appalachian Council’s initial average 

hourly wage to the center-operated programs, the results were consistently below, 

except in PY 1999 when the two are equal. For Job Corps graduates who typically 

earn between $350 and $400 a week, this can be the difference in a graduate’s ability to pay for adequate housing or transportation. 
16 

Chart 1b, based on CY 2003 data, shows a similar pattern for the initial placement average hourly wage measure. The Appalachian Council’s initial placement 

average hourly wage was below the other NTCs and the center-operated programs 

at both Charleston and Pittsburgh. The only exception is at Batesville where the 

Appalachian Council’s completers out-earned those from the center-operated programs. Please note that the Appalachian Council is the only NTC at Batesville. 

2. JOB-TRAINING-MATCH (JTM) AVERAGE HOURLY WAGE (INITIAL)

Definition 

The sum of the hourly wage of vocational completers in training-related employment or the military. All vocational completers who were initially placed in jobs or 

the military. 
17 

Performance Trend 

Chart 2a shows that the Appalachian Council’s Job-Training-Match (JTM) wage 

was outperformed by all NTCs in every program year from 1998–2003. In addition, 

the Appalachian Council’s performance trailed the center-operated programs for 

most of the past six program years. 

The differences between the Appalachian Council and all other NTCs in this outcome measure ranges from $1.78 to $2.47 per hour. These hourly differences translate into $71 and $99 in a 40-hour work week, respectively. These differences represent a significant reduction in earnings for Job Corps graduates who earn between 

$350 and $400 a week. 
18 

Chart 2b illustrates a similar picture of the Appalachian Council’s JTM average 

hourly wage in CY 2003. While the wage difference between the Appalachian Council and the NTCs at the Charleston center is less than a dollar, the differential at 

the Pittsburgh center is significant. The wage difference between the Appalachian 

Council and the NTCs at the Pittsburgh center is $4.52 per hour which represents 

a $181 per week difference in total wages for Job Corps graduates. 

3. 6-MONTH AVERAGE WEEKLY EARNINGS (LONG-TERM)

Definition 

The sum of weekly earnings of vocational completers who report working at 6 

months following placement in a job that meets the Job Corps definition of placements. All vocational completers initially placed who complete the 6-month followup survey and report that they are working in a job/military that meets the Job 

Corps definition of placement 
19 

Performance Trend 

Chart 3a shows the Appalachian Council trailing all other NTCs in the 6-month 

average weekly earnings outcome measure from PY 2001 to PY 2003. Earnings fluctuated between $352 and $354, representing a deficiency of $44 per week to $59 per 

week when compared to all other NTCs. 
20 

Chart 3b demonstrates that the Appalachian Council’s performance outcomes for 

6-month average weekly earnings measure trailed the other NTCs by $56 per week 

at Charleston and by $297 per week at Pittsburgh. 

4. 12-MONTH AVERAGE WEEKLY EARNINGS (LONG-TERM)

Definition 

The sum of weekly earnings of vocational completers who report working at 12 

months following placement in a job that meets the Job Corps definition of placement. All vocational completers initially placed who complete the 12-month followup survey and report they are working in a job or the military that meets Job Corps 

definition of placement. 

Performance Trend 

Chart 4a shows that, nationally, the Appalachian Council consistently trailed all 

other NTCs in the 12-month average weekly earnings measure from PY 2001-PY 

2003. Differences ranged from $44 per week to $79 per week. The Appalachian 

Council’s performance in this measure was even lower than that of the center-operated programs in PY 2001, though the earnings increased slightly in PY 2002 and 

PY 2003. 
21 

Chart 4b provides a comparison of the 12-month average weekly earnings by center. Although the performance results show that the Appalachian Council outperformed the NTCs and center-operated programs at the Charleston and Batesville 

centers, the data shows a significant difference of $295 per week between the Appalachian Council and the other NTCs at the Pittsburgh center. 

5. VOCATIONAL COMPLETION RATE

Definition 

Number of terminees who complete a vocational training program before separating from Job Corps. All students assigned to a vocational program. 
22 

Performance Trend 

Chart 5a shows that the Appalachian Council’s overall vocational completion rate 

nationally topped all other NTCs and center-operated programs from PY 1998-PY 

2000. However, beginning in PY 2001, the Appalachian Council’s vocational completion rate had a consecutive three-year decline, while all other NTCs and center-operated programs improved their overall completion rates. 
23 

Chart 5b shows that the Appalachian Council’s completion rates in CY 2003 were 

significantly below the other NTCs and the center-operated programs at the 

Charleston and Pittsburgh center. It is important to note that the Construction 

Technology and Health Occupations programs at Pittsburgh had such low completion rates in PY 2001 and PY 2002 that both programs were reduced in size as a 

result (not reflected in the chart). At the Batesville center, where there are no other 

NTC programs, the Appalachian Council’s completion rate was slightly higher than 

that of the center-operated programs. 

6. INITIAL PLACEMENT RATE

Definition 

The number of vocational completers who are initially placed in a job, an education program, the military, or a job/school combination, or who transfer to an approved Advanced Training program at another center. All vocational completers 

whose initial placement records are due or received or who transfer to an approved 

Advanced Training program at another center. 

Performance Trend 

Chart 6a indicates that the Appalachian Council’s initial placement rate nationally was sporadic when compared with all other NTCs and center-operated programs during the six-year period of PY 1998-PY 2003. Even though the Appalachian 

Council had a unique advantage of having its own career transition services provider, the IWEP, the initial placement rates were below all other NTCs and centeroperated programs in PY 1998, PY 1999, PY 2002 and CY 2003. 
24 

Chart 6b shows that in CY 2003, the Appalachian Council’s initial placement rate 

was much lower than that of the other NTC programs as well as the center-operated 

programs at both Charleston and Pittsburgh. At Batesville, the Appalachian Council’s initial placement rate is almost the same as that of the center-operated programs. 

7. JOB-TRAINING-MATCH (JTM) PLACEMENT RATE

Definition 

The number of vocational completers initially placed in training-related jobs or 

the military. All vocational completers who were initially placed in jobs or the military. 
25 

Performance Trend 

Chart 7a shows that the Appalachian Council’s Job Training Match placement 

rate was satisfactory in PY 1998 at 78 percent. The rate declined in subsequent 

years to a low of 60 percent in both PY 2001 and PY 2002. The rate slightly increased to 68 percent in PY 2003. Despite the increase in PY 2003, the Appalachian 

Council trailed all other NTCs in every program year except PY 2000 for this measurement. 
26 

Chart 7b shows a breakdown of the Appalachian Council’s improved Job Training 

Match placement rate in CY 2003 at the three centers. Although the Appalachian 

Council’s performance was satisfactory at the Charleston and Pittsburgh centers, 

they trailed the center-operated programs at the Batesville center in CY 2003. 

8. 6-MONTH PLACEMENT RATE

Definition 

The number of vocational completers who are in a job/military or school that meet 

the Job Corps definition of placement at 6 months after initial placement. All vocational completers initially placed who complete the 6-month follow-up survey. 

Performance Trend 

Chart 8a shows that, nationally, the Appalachian Council’s 6-month placement 

rate fluctuated from PY 2001 to PY 2003. Although the Appalachian Council’s 6- 

month placement rate trailed that of all other NTCs and center-operated programs 

in PY 2001 and PY 2002, their performance for this measure topped both in PY 

2003. 
27 

Chart 8b shows that the Appalachian Council surpassed the NTCs and center-operated programs at the Charleston center; outpaced the NTC at the Pittsburgh center but trailed the center-operated programs in both Pittsburgh and Batesville. 

9. 12-MONTH PLACEMENT RATE

Definition 

The number of vocational completers who are in a job/military or school that 

meets the Job Corps definition of placement at 12 months after initial placement. 

All vocational completers initially placed who complete the 12-month follow-up survey. 
28 

Performance Trend 

Chart 9a shows that the Appalachian Council’s 12-month placement rate was 

below the NTCs and center-operated programs in both PY 2001 and PY 2002. The 

rate increased slightly surpassed the NTCs and center-operated programs in PY 

2003. 

Chart 9b shows the Appalachian Council’s uneven achievement in this measurement at the three centers in CY 2003. Although Appalachian Council performed well 
29 

at the Charleston center (with only one trade), it performed unsatisfactorily at the 

Pittsburgh center when compared to the NTCs and center-operated programs. Appalachian Council’s performance at the Batesville center was just slightly better than 

the center-operated programs. 

10. APPALACHIAN COUNCIL’S VOCATIONAL TRAINING PROGRAM PERFORMANCE

Chart 10 lists the number of Appalachian Council programs performing below or 

above Job Corps’ national or regional standards in each program year. 

CHART SYNOPSIS

—The majority of the Appalachian Council’s vocational training programs performed below standard in all five past program years (PY 1998-PY 2002). 

—The Appalachian Council operated with the vast majority of its programs performing well below the JTM average wage standards, nationwide, from PY 

2000-PY 2002. 

—From PY 2001-PY 2003, the Appalachian Council had approximately 50 percent 

of its programs performing below the 6-month average weekly earnings standard each program year. 

—The Appalachian Council had at least 44 percent of its programs performing 

below the 12-month average weekly earnings standard in each program year 

from PY 2001-PY 2003. 

—From PY 1998-PY 2002, the Appalachian Council had an increasing percentage 

of programs that performed below the national standards for vocational completion in each program year. 

—The chart portrays a similar pattern in terms of the number of Appalachian 

Council programs performing below each program year’s standards for initial 

placement. In PY 1998, it had 11 programs below standard. It ended in PY 2002 

with 10 below standard. 

—The Appalachian Council consistently had the vast majority of its programs performing below standard in the Job-Training-Match measure from PY 1998 

through PY 2002. 

—The Appalachian Council had the vast majority of its programs performing 

below the 6-month placement standards in PY 2001 and PY 2002. 

—In PY 2001 and PY 2002 the Appalachian Council had most of its programs performing under the 12-month placement standards nationwide. 

Senator SPECTER. Well, to repeat, I think on the basis of what 

your written statement has, you certainly have not made that case 

out, Mr. Dowd, Mr. Trigg. 
30 

I would appreciate it if you would respond to the questions about 

communications with this Department and see if you can get that 

to us before the end of the day, signed by the Secretary, please. 

Thank you very much, gentlemen. 

[The information follows:] 

U.S. DEPARTMENT OF LABOR, ASSISTANT SECRETARY

FOR CONGRESSIONAL AND INTERGOVERNMENTAL AFFAIRS, 

Washington, DC, July 22, 2004. 

Hon. ARLEN SPECTER, 

Chairman, Subcommittee on Labor, HHS-Education, Appropriations, U.S. Senate, 

Washington, DC. 

DEAR MR. CHAIRMAN: Thank you for your letter to Secretary Elaine L. Chao expressing support for the AFL–CIO’s unsolicited proposal submitted by the Working 

for America Institute to the Department of Labor’s Employment & Training Administration (ETA). In order to meet the deadline you established during this morning’s 

hearing, I am responding on the Secretary’s behalf. I apologize for the delay in responding to your concerns. 

As you know, upon the passage of the Workforce Investment Act in 1998, ETA 

funded several ‘‘relationship grants’’ to national organizations for the purpose of 

helping their state and local members gear up to participate in the new workforce 

system. Organizations that received such grants included the National Council of 

La Raza, National Puerto Rican Forum, National Urban League, OIC of America, 

SER Jobs for Progress, Inc., National Governor’s Association, National Association 

of Counties, National Conference of State Legislatures, US Council of Mayors, National Conference of Black Mayors, a joint project of the U.S. Chamber of Commerce 

and National Association of Manufacturers, and the National Alliance of Business. 

ETA stopped funding these ‘‘relationship grants’’ at the end of Program Year 

2002, except for the AFL–CIO’s Working for America Institute, which was awarded 

$1 million for an additional year, Program Year 2003, which ended on June 30, 

2004. 

However, now that the Workforce Investment Act is in its fifth year of implementation, we strongly believe that it is more important to complete the transition from 

capacity building to actual training programs. We believe we should focus limited 

financial resources on programs that deliver actual training services to workers 

rather than to pour additional funds into organizational infrastructure. After four 

years, the AFL–CIO should have developed sufficient ability to participate effectively in the WIA system. 

On January 5 of this year, the senior leadership of the Employment and Training 

Administration met with representatives of the AFL–CIO to advise them that the 

‘‘relationship grant’’ would be ending and to explore other possible funding opportunities. ETA indicated that any proposal focused on providing actual training opportunities for workers would be considered for funding. In fact, there were a number 

of phone calls and e-mails following up on this meeting. Moreover, as a result, we 

assume, of our invitation to submit training proposals, the Working for America Institute submitted a concept paper for a project on limited English proficiency services that remains under consideration. As a matter of fact, the Department of Labor 

has funded a number of training programs proposed by labor unions. These include 

AFL–CIO affiliates such as the Service Employees International Union, Hotel Employees and Restaurant Employees International Union, International Association of 

Machinists, Fraternal Order of Police, United Auto Workers, and the International 

Brotherhood of Electrical Workers, to name just a few. 

Nevertheless, on March 5, 2004, ETA received an unsolicited proposal from the 

Working for America Institute seeking financial support to continue its program of 

training and technical assistance for labor representatives on local workforce boards. 

The Department has rejected this proposal. It is difficult to make the case that 

the AFL–CIO should receive yet a fifth year of funding for organizational purposes 

when the other national organizations were able to achieve their goals in three. Additionally, given that there are so many workers seeking training or retraining opportunities, we believe ETA’s emphasis is rightly placed on promoting employment 

or reemployment projects having measurable outcomes. 

We appreciate your interest, and, again, I regret the delay in responding. 

Sincerely, 

KRISTINE A. IVERSON. 
31 

Senator SPECTER. We turn now to panel two, Mayor Bobby 

Baker, Mr. Jim Bowen, Mr. Gary Darlington, Mr. William M. 

George, accompanied by Ms. Nancy Mills; Mr. Herbert M. Mabry, 

accompanied by Mr. William A. Burga. We have you listed here in 

alphabetical order because of the prominence of the various witnesses. 

We turn now to Mayor Baker, Mayor of Batesville, Mississippi, 

since 1976, a member of the Board of Directors and Executive Committee of the Mississippi Municipal Association. He attended 

Northwest Junior College and the University of Mississippi. Welcome, Mayor Baker, and we look forward to your testimony. 

STATEMENT OF HON. BOBBY BAKER, MAYOR, BATESVILLE, MS 

Mr. BAKER. Thank you, Mr. Chairman. I appreciate the opportunity of speaking before the subcommittee. Thank you, Senator 

Specter. 

I would like to speak on behalf of the Appalachian Council and 

its contract with the Department of Labor. My name is Bobby 

Baker and I have been the Mayor since 1976. I was the Mayor 

when Job Corps came to our city and when the Appalachian Council and the contractor came to our city in 1981. 

I will limit my remarks today to my personal knowledge of the 

Appalachian Council as it relates to the Council’s operations in 

Batesville. 

I am aware that the Council’s training programs have in the past 

5 years been responsible for any positive recognition that the 

Batesville Job Corps has received. In a publication titled Trends in 

Job Corps Program Outcomes PY98–PY02, dated October 2003, 

and released by Richard Trigg, National Director of Job Corps in 

November 2003, the Batesville Job Corps was recognized as a consistently high performing center in the following three areas: graduate placement, 1 out of 5 cited on the national; placement rate of 

vocational completers only, 1 out of 6 cited nationally; and former 

enrollee placement, 1 out of 9. The Council was responsible for 

training and placing approximately 70 percent of all the students 

from the Batesville center. 

The Appalachian Council was a good partner not only in Batesville but in the surrounding communities as well. The Council 

viewed community service projects as an important tool in preparing their students for the workplace—100 hours of community 

service was an expectation of all students. Students were involved 

in worthwhile projects such as Habitat for Humanity, Grenada Elderly Apartments, Quitman and Panola County Rehab Housing 

Project, and the local food bank. The involvement provided students the opportunity to interact with the local community in a 

positive manner. 

Other types of community activities included job shadowing, 

adopt-a-highway, and career day. The Council has always recognized that students’ involvement in community activities is an integral part of preparing for the workplace. 

The Batesville Boys and Girls Club benefitted from the efforts of 

the Council-trained students as the hardhat trades work on 

projects to improve and enhance the club. 
32 

I am also aware that the Council students have written hundreds 

of letters to our troops and have sent care packages to them. 

PREPARED STATEMENT

It seems to me that the continuation of the Council’s involvement 

in Job Corps in general and at the Batesville, Mississippi Job 

Corps Center in particular makes good sense both from the view 

of the government and also the students that the Council serves. 

Again, Mr. Chairman, thank you for allowing me to be here, and 

I will accept any questions that I may be able to answer. 

[The statement follows:] 

PREPARED STATEMENT OF BOBBY BAKER

Chairman Specter, Senator Harkin, Senator Byrd and members of the Subcommittee, thank you for this opportunity to testify on behalf of the Appalachian 

Council and its contract with the Department of Labor. My name is Bobby Baker 

and I am and have been the the mayor of the city of Batesville, Mississippi for the 

past three decades. 

Mr. Chairman, I will limit my remarks today to my personal knowledge of the 

Appalachian Council as it relates to the Councils’ operations in Batesville. 

I am aware that Councils vocational training programs have in the last five years 

been responsible for any positive recognition that the Batesville Job Corps Center 

(BJCC) has received. In a publication titled Trends in Job Corps Program Outcomes 

PY98-PY02 dated October 2003 and released by Richard Trigg, National Director of 

the Job Corps in November of 2003, the BJCC was recognized as a ‘‘Consistently 

High Performing Center’’ in the following three important measurements: Graduate 

Placement Rate (1 of 5 cited nationally), Placement Rate of Vocational Completers 

Only (1 0f 6 cited nationally) and Former Enrollee Placement Rate (1 of 9 cited nationally). The Council was responsible for training and placing approximately 70 

percent of all Batesville students. 

—The Appalachian Council was a good partner, not only in Batesville but in the 

surrounding communities as well. 

The Council viewed community service projects as an important tool in preparing 

their students for the workplace. One hundred hours of community service was an 

expectation for all students. Students were involved in worthwhile projects such as 

Habitat for Humanity, Grenada Elderly Apartments, Quitman and Panola County 

Rehab Housing Project, and the local Food Bank. This involvement provided students the opportunity to interact with the local community in a positive manner. 

Other types of community activities included Job Shadowing, Adopt-a-Highway 

and Career Day. The Council has always realized that student involvement in community activities is an integral part of preparing for the workplace. 

The Batesville Boy’s and Girl’s Club benefited from the efforts of Council trained 

students as the hardhat trades work on projects to improve and enhance the Club. 

I am also aware the Council students have written hundreds of letters to U.S. 

troops in the Middle East, and have also forwarded ‘‘care packages’’ of items that 

the troops (e.g., razors, stationary, hard candy, and music cassettes). 

It seems to me that the continuation of the Council’s involvement in Job Corps 

in general and at the Batesville Job Corps Center makes good sense, both from the 

view of government but for the students the Council serves as well. 

I thank you, again, Mr. Chairman, for the opportunity to testify, and I look forward to answering your questions. 

STATEMENT OF JIM BOWEN, PRESIDENT, WEST VIRGINIA AFL–CIO 

Senator SPECTER. Well, thank you very much, Mayor Baker. 

We turn now to Mr. Jim Bowen, president of the West Virginia 

AFL–CIO and a member of the Board of Directors of the Wheeling 

Pittsburgh Steel Corporation. Mr. Bowen has been with the West 

Virginia AFL–CIO since 1965 and was inducted into the West Virginia Labor Hall of Fame in 1993. 

Thank you for joining us, Mr. Bowen, and we look forward to 

your testimony. 
33 

Mr. BOWEN. Thank you, Chairman Specter, and I want to thank 

you for this opportunity to testify on behalf of the Appalachian 

Council and its sole-source contract with the Department of Labor. 

The AFL–CIO Appalachian Council, Incorporated is a nonprofit 

organization pledged to aid disadvantaged persons and to encourage the realization of their full economic and cultural potential 

through a wide range of human resource development programs. 

The Council began as an outgrowth of a meeting of the Appalachian Trade Union Conference held in Charleston, West Virginia 

in October of 1964. The 12 chief officers of the State AFL–CIO organizations in the area of greater Appalachia, including Alabama, 

Georgia, Kentucky, Maryland-DC, Mississippi, North Carolina, 

Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, and West 

Virginia, joined together to form a nonprofit corporation to work toward unearthing and understanding the employment and training 

of the region, to develop plans for their solutions, and to stimulate 

and undertake specific projects or action programs for their resolve 

and/or elimination. Our mission then and today was to help people 

become productive and self-sufficient members of our society. 

The Appalachian Council’s national programs have been in continuous operation since 1974 through a series of sole-source, cost 

reimbursement contracts with the Department of Labor’s Employment and Training Administration and the National Office of Job 

Corps. The programs are evolving continuously in response to the 

various needs of the entities within the Job Corps community and 

those changes mandated by the United States Congress, the administration, and the Job Corps Federal managers. 

The Appalachian Council has to question whether our sole-source 

contract has been unfairly targeted, given the fact that this Labor 

Department, which seems to have a problem with labor unions, 

also revoked its national contract with the AFL–CIO Working for 

America Institute. 

The Working for America Institute is a nonprofit organization 

founded by the AFL–CIO to help unions and labor-management 

partnerships connect to the pubic workforce system. 

For the past 5 years, the National Office of Job Corps, as well 

as Region II, Philadelphia, officials, has been proactive in their efforts to make it difficult for our staff to do their jobs. They often 

ignored our pleas for help, and they were very quick to judge and 

offer only criticism, thus fostering low morale and dissension. As 

we review the events that have occurred, we see a pattern of behavior from the National Office of Job Corps that substantiates our 

belief that there was, since the beginning of this current contract, 

November 1998, a plan in place to intentionally impede the Council’s capability to be successful. 

The programs are now being taken over by big corporations and 

they then subcontract out, with very little accountability on performance and placements. 

As an example of our actions in West Virginia, I wish to cite the 

Charleston automotive repair program located in Charleston, West 

Virginia at the Charleston Job Corps Center that has been operating since November of 2000. The program had performed up to 

all center expectations. During PY 2001 and PY 2002, the center’s 

vocational manager rated it as the best program on center. One of 
34 

the strengths of the program was the large number of students 

that entered the military service of our country, and as a result of 

the efforts of our instructors, those students that enlisted in the 

military were encouraged to pursue military occupations related to 

their trade. From its first day of operation, this program exceeded 

all of Job Corps’ accountability measures. 

I will conclude my testimony by offering the following five points, 

sir. 

Number one, the Council has a long and successful history of 

dedicated and committed service to Job Corps. We have managed 

our contractual responsibilities and have interfaced with Government representatives in a straightforward and honest way. 

Number two, the National Office of Job Corps did everything in 

its power to make it difficult for us to fulfill our contractual obligations and to maintain our uniqueness. 

Number three, we have never been provided an explanation of 

the decision not to renew our contract although the Council requested such explanation. 

Number four, we have never been informed by the NOJC that 

our sole-source status has been changed. 

PREPARED STATEMENT

And finally, number five, the actual performance for our training 

programs based on Job Corps established criteria during the most 

recent program year, PY 2003, compares favorably with other national training contractors for the same period and in most categories exceeds the national average. And, Mr. Chairman, I would 

refer you to the record. There is a chart in that record that will 

show you that on seven categories, we are either equal to or exceed 

the other providers. 

Again, let me thank you, Mr. Chairman, for the opportunity to 

testify here today. 

[The statement follows:] 

PREPARED STATEMENT OF JIM BOWEN

Chairman Specter, Senator Byrd and members of the Subcommittee, thank you 

for this opportunity to testify on behalf of the Appalachian Council and its solesource contract with the Department of Labor. 

The AFL–CIO Appalachian Council, Inc. is a nonprofit organization pledged to aid 

disadvantaged persons and to encourage the realization of their full economic and 

cultural potential through a wide range of human resource development programs. 

The Council began as an outgrowth of a meeting of the Appalachian Trade Union 

Conference held in Charleston, West Virginia in October 1964. The twelve chief executive officers of the State AFL–CIO organizations in the area of greater Appalachia (Alabama, Georgia, Kentucky, Maryland-DC, Mississippi, North Carolina, 

Ohio, Pennsylvania, South Carolina, Tennessee, Virginia and West Virginia) joined 

together to form a nonprofit corporation to work toward unearthing and understanding the employment and training of the region, develop plans for their solution, and to stimulate or undertake specific projects or action programs for their resolve and/or elimination. Our mission is to help people become productive and selfsufficient members of society. 

The Appalachian Council’s National Programs has been in continuous operation 

since 1974 through a series of sole-source, cost reimbursement contracts with the 

Department of Labor’s Employment and Training Administration and the National 

Office of Job Corps. The programs are evolving continuously in response to the various needs of the entities within the Job Corps community and those changes mandated by the U.S. Congress, the Administration, and Job Corps Federal Managers. 

The Appalachian Council has to question whether our sole-source contract has 

been unfairly targeted, given the fact that this Labor Department, which seems to 
35 

have a problem with labor unions, also revoked its national contract with the AFL– 

CIO Working for America Institute. 

The Working for America Institute is a non-profit organization founded by the 

AFL–CIO to help unions and labor-management partnerships connect to the public 

workforce system. 

For the past five years, the National Office of Job Corps as well as Region II 

(Philadelphia) officials has been proactive in their efforts to make it difficult for our 

staff to do their jobs. They often ignored our pleas for help, were quick to judgment 

and offered only criticism, thus fostering low morale and dissension. As we review 

the events that have occurred, we see a pattern of behavior from the National Office 

of Job Corps that substantiates our belief that there was, since the beginning of this 

contract (Nov 98), a plan in place to intentionally impede the Council’s capability 

to be successful. 

The programs are being taken over by big corporations and then subcontracted 

out with very little accountability on performance and placements. 

As an example of our actions in West Virginia, I wish to cite the Charleston Automobile Repair program located in Charleston, West Virginia at the Charleston Job 

Corps Center that has been operating since November of 2000. The program had 

performed up to all Center expectations. During PY 2001 and PY 2002 the Center’s 

Vocational Manager rated it as the best program on Center. One of the strengths 

of the program was the large numbers of students that entered military service. As 

a result of the efforts of our instructor, those students that enlisted into the military 

were encouraged to pursue military occupations related to their trade. From its first 

day of operation this program exceeded all of Job Corps’ accountability measures. 

I will conclude my testimony by offering the following five (5) points: 

1. The Council has a long and successful history of dedicated and committed service to Jobs Corps. We have managed our contractual responsibilities and have interfaced with government representatives in a straightforward and honest way. 

2. The National office of Job Corps did everything in its power to make it difficult 

for us to fulfill our contractual obligations and to maintain our uniqueness. 

3. We have never been provided an explanation of the decision not to renew our 

contract although the Council requested such an explanation. 

4. We have never been informed by the NOJC that our sole-source status had 

been changed. 

5. The actual performance for our training programs based on Job Corps established criteria during the most recent Program Year (PY 2003) compares favorably 

with other National Training Contractors for the same period and in most categories 

exceeds the National Average. 

I thank you again, Mr. Chairman, Senator Byrd and the members of the SubCommittee for the opportunity to testify today. 

STATEMENT OF GARY DARLINGTON, EXECUTIVE DIRECTOR, APPALACHIAN COUNCIL 

Senator SPECTER. Thank you very much, Mr. Bowen. 

We now turn to Mr. Gary Darlington, executive director of AFL– 

CIO Appalachian Council. Prior to his current position, he was a 

public school administrator and the Regional Director of the Pennsylvania Higher Education Assistance Agency. Mr. Darlington 

holds a bachelor’s degree from Slippery Rock and a Master’s Degree 

from Westminster College. 

Thank you for joining us, Mr. Darlington, and the floor is yours. 

Mr. DARLINGTON. Thank you, Chairman Specter and members of 

the subcommittee. Thank you for this opportunity to testify on behalf of the Appalachian Council and its sole-source contract with 

the Department of Labor. 

Given that our contract with the Labor Department was canceled 

with only 60 days’ notice and our organization, after 35-plus years 

of service to Job Corps, was never provided an opportunity to defend our record of performance, we are especially grateful to you, 

Mr. Chairman, for this opportunity to respond to the Deputy Assistant Secretary regarding this matter. 
36 

With your permission, Mr. Chairman, I hope to submit a more 

extensive statement for the record and focus my remarks today on 

three points. 

The Appalachian Council has a strong record of success. Despite 

being forced to operate without adequate resources and equipment, 

as well as the upheaval of the national Job Corps program caused 

by the implementation of the Workforce Investment Act in 2000, 

the Appalachian Council can still point to a strong performance 

record. 

Not only can our job training programs boast generally of placement rates that exceed the national averages, it can be said that 

several of our training programs individually were recognized as 

the best in their specific location. Furthermore, the transitional 

services we provided Job Corps students through our industrial 

work experience program, IWEP, have garnered the praise of every 

other national training contractor that has a sole-source contract 

with Job Corps, as well as Government-operated centers, Department of Agriculture. Both the NTC’s and the U.S. Department of 

Agriculture Forest Service have written to the national Job Corps 

directors to say that the loss of our program would have a negative 

impact on the entire Job Corps community. 

The Labor Department has treated the Appalachian Council in 

a disparate and unfair way. The ETA waited many months before 

notifying the Appalachian Council that our contract would not be 

renewed, thus providing our organization no opportunity to defend 

itself or to make changes to our programs to accommodate the 

Labor Department’s concerns. Further, by waiting until late February 2004, February 26, to notify our organization, just 60 days 

before our contract expired, the Labor Department made it difficult, if not impossible, for our organization to seek the assistance 

of the Congress in reviewing the fairness of the Labor Department’s decision. 

Point number three, the complexity of the competitive bidding 

process makes it difficult for a nonprofit organization like the Appalachian Council to compete on a level playing field. While the department asserts that we can compete in the future for this work, 

we cannot do so on a level playing field. Our greatest asset, our 

knowledge of Appalachia, our 35-plus years of commitment to these 

programs, and the maturity and experience of our staff are not 

given significant consideration in the current competitive procurement process, and because of our size, we are absent the resources 

to contend with the unlimited finances of the mega for-profit corporations. Further, not knowing when in the future a contract will 

be let, we cannot say if our organization will survive long enough 

to compete. 

PREPARED STATEMENT

Mr. Chairman, the Appalachian Council was created to serve the 

unique needs of the Appalachian region. We understand Appalachia. We understand the needs of workers. With over 30 years of 

broad experience and with established long-term relationships with 

unions and employers in the Appalachian region and other regions 

of the Nation, we can offer services that no other contractor can 

provide. Historically our organization has operated successfully as 
37 

a one-of-a-kind labor-related entity within the Job Corps system. It 

is imperative that the subcommittee understands that while another contractor may be able to offer cheaper services, they cannot 

compare to our unique ability to both understand and to service the 

special needs of Job Corps. 

I thank you again, Mr. Chairman, for the opportunity to testify, 

and I look forward to answering your questions. 

[The statement follows:] 

PREPARED STATEMENT OF GARY DARLINGTON

Chairman Specter, Senator Harkin, Senator Byrd and members of the Subcommittee, thank you for this opportunity to testify on behalf of the Appalachian 

Council and its sole-source contract with the Department of Labor. 

Given that our contract with the Labor Department was cancelled with only sixty 

days notice, and our organization after thirty-five plus years of service to Job Corps, 

was never provided an opportunity to defend our record of performance, we are especially grateful to you, Mr. Chairman, for this opportunity to respond to the Deputy Assistant Secretary regarding this matter. 

With your permission, Mr. Chairman, I hope to submit a more extensive statement for the record, and focus my remarks today on three points. 

—The Appalachian Council has a strong record of success. 

Despite being forced to operate without adequate resources and equipment, as 

well as the upheaval in the national Job Corps program caused by the implementation of the Workforce Investment Act in 2000, the Appalachian Council can still 

point to a strong performance record. 

Not only can our job training programs boast generally of placement rates that 

exceed the national averages, it can be said that several of our training programs 

individually were recognized as the best in their specific location. Furthermore, the 

transitional services we provided Job Corps students through our Industrial Work 

Experience Program (IWEP) have garnered the praise of every other National Training Contractor (NTC) that has a sole-source contract with Job Corps as well as government operated centers (Agriculture). Both the NTCs and the USDA Forest Service have written to the National Job Corps Directors to say that the loss of our program would have a negative impact on the entire Job Corps community. 

—The Labor Department has treated the Appalachian Council in a disparate and 

unfair way. 

We have only recently learned that in April 2003, the Employment and Training 

Administration (ETA) recommended to the Department of Labor’s Policy Review 

Board that the Appalachian Council’s contract be renewed as a sole-source contract. 

Again in September we were included in the ETA intent to renew our contract. Apparently, only after the Policy Review Board questioned that request did the ETA 

decide to revoke the sole-source status of our contract. To this day we have not been 

told directly by DOL that this was the case. 

The ETA waited many months before notifying the Appalachian Council that our 

contract would not be renewed, thus providing our organization no opportunity to 

defend itself or to make changes to our programs to accommodate the Labor Department’s concerns. Further, by waiting until late-February 2004 (Feb. 26) to notify our 

organization, just sixty (60) days before our contract expired, the Labor Department 

made it difficult, if not impossible, for our organization to seek the assistance of the 

Congress in reviewing the fairness of the Labor Department’s decision. 

—The complexity of the competitive bidding process makes it difficult for a nonprofit organization like the Appalachian Council to compete on a level playing 

field. 

While the Labor Department asserts that we can compete in the future for this 

work, we cannot do so on a level playing field. Our greatest assets—our knowledge 

of Appalachia, our thirty-five plus years of commitment to these programs, and the 

maturity and experience of our staff are not given significant consideration in the 

current competitive procurement process and because of our size, we are absent the 

resources to contend with the unlimited finances of the mega for profit contractors. 

Further, not knowing when in the future a contract will be let, we cannot say if 

our organization will survive long enough to compete. 

Mr. Chairman, the Appalachian Council was created to serve the unique needs 

of the Appalachian region. We understand Appalachia. We understand the needs of 

workers. With over thirty years of broad experience and with established long-term 

relationships with unions and employers in the Appalachian region and other re-
38 

gions of the nation, we can offer services that no other contractor can provide. Historically, our organization has operated successfully as a one of a kind Labor related 

entity within the Job Corps system. It is imperative that the Subcommittee understands that while another contractor may be able to offer cheaper services, they cannot compare to our unique ability to both understand and to service the special 

needs of Job Corps. 

I thank you, again, Mr. Chairman, for the opportunity to testify, and I look forward to answering your questions. 

STATEMENT OF WILLIAM M. GEORGE, PRESIDENT, PENNSYLVANIA 

AFL–CIO 

ACCOMPANIED BY NANCY MILLS, EXECUTIVE DIRECTOR, WORKING 

FOR AMERICA INSTITUTE 

Senator SPECTER. Thank you very much, Mr. Darlington. 

Our next witness is Mr. William M. George, president of the 

Pennsylvania AFL–CIO and chairman of the AFL–CIO Appalachian Council. Prior to his current position, he was the secretarytreasurer of the United Steel Workers Legislative Council of Pennsylvania. Mr. George attended Penn State and the AFL–CIO Institute. For the record, I would comment that I have known Mr. 

George for many years and have found him to be a very, very reliable leader of his labor movement and a public-spirited citizen. 

He is accompanied by Ms. Nancy Mills, who is the Executive Director of the AFL–CIO Working for America Institute. Prior to her 

current position, she served as Assistant Director of the AFL–CIO 

Corporate Affairs Department. She is a graduate of Antioch College. She is here to assist in responding to questions. 

Thank you for joining us, Mr. George, and we look forward to 

your testimony. 

Mr. GEORGE. Thank you, Senator. It is always been a great interest to be in the house of the Senator from Pennsylvania and to be 

part of an organization that has this opportunity. We all want to 

thank you and your staff and the cooperation that you have given 

us in these findings that we are trying to achieve, as you and I 

have talked many times about, enhancing the quality of life of 

many Pennsylvanians and those citizens that live in the Appalachian Council. I want to thank you again on behalf of all of us. 

Given that, absent written justification, our contract with the 

Labor Department was canceled with only a 60-day notice, and our 

organization, after 35-plus years of service to Job Corps, was never 

provided an opportunity to defend our record of performance, we 

are especially grateful to you, Mr. Chairman, for this opportunity 

to respond to the Deputy Assistant Secretary regarding this matter. 

Just before I get into some other statement—you all have copies 

of this—I just want to make a quick remark that people have to 

understand the mission objective of the Appalachian Council was 

generated by the U.S. Senate and the House of Representatives 

through the Secretary of Labor during the 1960’s that created this 

sole term, the famous term, ‘‘war on poverty.’’ This all came out of 

the ideas of many, many testimonies, how do we correct the war 

on poverty? And you needed an organization and institution that 

knew Appalachia, knew about where people lived and how we can 

go out and recruit those uneducated individuals and do something 

in States that a lot of people were not paying a lot of attention to 
39 

in a lot of counties in western Pennsylvania and a lot of counties 

in West Virginia. 

So I mean, there seems to be in this whole thing, as I look into 

this program, a thing about competition, pennies here, pennies 

there, and nobody really looks at the general mission and objective 

of the war on poverty, enhancing the quality of life. 

If in fact, Mr. Chairman, the people that we have dealt with with 

our sites and our institutions and the people we have provided over 

the years—we are proud to sit here today. And I want the Department of Labor to understand whether we continue or not, you will 

never take our dignity. You will never take it away from us what 

the AFL–CIO Appalachian Council has done for thousands and 

thousands and thousands of students in enhancing their lives and 

their quality of life. That has to be in the back of everybody’s mind 

at this particular hearing today. 

So I just wanted to get that off my chest before I get into a couple general statements. And I will try and take a minute or 2 off 

of my general statement. 

For the past several years, the national office of Job Corps, as 

well as Region II officials in Philadelphia, has been proactive in 

their efforts to make it difficult for our staff in that region to do 

their jobs. They often ignored Council staff pleas for help, were 

quick to judgment and offered only criticism, thus fostering low morale and dissension. As we review the events that have occurred, 

we see a pattern of behavior from the national office of Job Corps 

that substantiates our belief that there was, since the beginning of 

this contract, which is November 1998, a plan in place to intentionally impede the Council’s capability to be successful. 

Council-operated training programs in Pittsburgh functioned 

without needed equipment for the full 5 years of the contract purportedly due to the lack of funds. While we begged for new equipment for our programs, the region had no difficulty in finding 

equipment monies for the Pittsburgh Job Corps Center. It is kind 

of funny how this takes place. They kick us out. Now suddenly the 

money appears, et cetera. 

In February 2002, a strong performing program, transportation, 

was cut in half for alleged poor performance, although it had recently at that time received an award from the center for outstanding performance, and immediately the material handling component of the program was coopted by the center operator. The center not only maintained the program with regional office approval, 

as was earlier testified by the Department of Labor. The success 

of it was because they hired our people. They hired our instructors 

once they eliminated them, and then they went and found the 

funds to buy a full complement of new equipment. 

Can somebody tell me? Does this sound like there is a little bit 

of conspiracy here or something? 

Late in February 2003, we were instructed to terminate our entire center-based management and administrative staff in both 

Pittsburgh, as well as Batesville, as you have heard from the previous testimony of the Mayor, by March 31, 2003. These cuts effectively eliminated our occupational exploration program and our 

ability to provide enhanced job development and post-placement 

follow-up with our students. 
40 

Immediately following the program cuts, discussions took place 

with the national office regarding the future of the programs in 

light of the cuts. These discussions were positive. We were offered 

assurance that we did have a future and that there would be other 

opportunities for the Council within Job Corps. 

At the end of that very same day, we were informed that we 

were to close out our transportation program at Pittsburgh and 

that the instructor should wrap up his business by the end of 

March 2003. No reason for the closure was provided. Talk about a 

morale-buster. You got it. Through this particular incident and others like it, the students the real victims. It was not so many of us. 

The real victims were the students as, more often than not, decisions were not made for their benefit. 

Not only can our job training programs boast generally of placement rates that exceed the national average—and by the way, they 

mentioned some numbers. In our general statement to you this 

morning, Mr. Chairman, there is quite a number of pages with our 

facts and figures that came from the Department of Labor over the 

years about performance, about graduations, about awards that the 

Appalachian Council has received over the years. 

Furthermore, the transitional services we provided Job Corps 

students through our industrial work experience program, which is 

called the workforce investment boards, have garnered the praise 

of every national training contractor that has a sole-source contract 

with Job Corps, as well as Government-operated centers. Both the 

NTC’s and the USDA Forest Service have written to the national 

Job Corps directors to say that the loss of our program would have 

a negative impact on the entire Job Corps community. 

Mr. Chairman, I would also question whether our sole-source 

contract has been unfairly targeted, given the fact that this Labor 

Department, which seems to have a serious problem with labor 

unions, also revoked the national contract with the AFL–CIO 

Working for America Institute after 35 years of service, which 

many of those programs, this Senator from Pennsylvania was very 

proud to be supportive of. 

As it was with the Appalachian Council, I can only wonder 

whether there is some concerted effort at the Department of Labor 

to terminate all partnerships with labor unions and the organizations established to connect labor unions and the Department of 

Labor. 

PREPARED STATEMENT

It is from this point on where we would like to make some comments in reference to the national AFL–CIO program, and Mr. 

Senator, we would ask that Nancy Mills be given a minute or 2 either at this time or at the conclusion of the testimony here, to just 

kind of form what has happened with the national AFL–CIO’s 

Working for America Institute. 

[The statement follows:] 

PREPARED STATEMENT OF WILLIAM M. GEORGE

Chairman Specter, Senator Harkin, Senator Byrd and members of the Subcommittee, thank you for this opportunity to testify on behalf of the Appalachian 

Council and its contract with the Department of Labor. 
41 

Given that, absent written justification, our contract with the Labor Department 

was cancelled with only sixty days notice, and our organization after thirty-five plus 

years of service to Job Corps, was never provided an opportunity to defend our 

record of performance, we are especially grateful to you, Mr. Chairman, for this opportunity to respond to the Deputy Assistant Secretary regarding this matter. 

For the past several years the National Office of Job Corps as well as Region II 

(Philadelphia) officials have been proactive in their efforts to make it difficult for 

our staff in that Region to do their jobs. They often ignored Council staff pleas for 

help, were quick to judgment and offered only criticism, thus fostering low morale 

and dissension. As we review the events that have occurred, we see a pattern of 

behavior from the National Office of Job Corps that substantiates our belief that 

there was, since the beginning of this contract (Nov 98), a plan in place to intentionally impede the Council’s capability to be successful 

Council operated training programs in Pittsburgh functioned without needed 

equipment for the full five years of the contract purportedly due to lack of funds. 

While we begged for new equipment for our programs the Region had no difficulty 

in finding equipment monies for the Pittsburgh Job Corp Center (PJCC). In February 2002, a strong performing program, Transportation, was cut in half for poor 

performance (although it had recently received an award from the Center for outstanding performance) and immediately the Material Handling component of the 

program was co-opted by the Center operator. The Center not only maintained the 

program with Regional Office approval, it hired our instructor and found the funds 

to buy a full compliment of new equipment. 

Late in February 2003 we were instructed to terminate our entire center based 

management and administrative staff in both Pittsburgh as well as Batesville by 

March 31, 2003. These cuts effectively eliminated our Occupational Exploration Program and our ability to provide enhanced job development and post-placement follow-up with our students. 

Immediately following the program cuts discussions took place with the National 

Office regarding the future of the programs in light of the cuts. Those discussions 

were positive. We were offered assurances that we did have a future and that there 

would be other opportunities for the Council within Job Corps. At the end of that 

very same day we were informed that we were to close our Transportation program 

at Pittsburgh and that the instructor should wrap up his business by the end of 

March 2003. No reasons for the closure were provided. Talk about a morale buster. 

Through this particular incident and others like it, the students were the real victims, as more often than not decisions were not made for their benefit. 

Not only can our job training programs boast generally of placement rates that 

exceed the national averages, it can be said that several of our training programs 

individually were recognized as the best in the respective Center and/or Region. 

Furthermore, the transitional services we provided Job Corps students through our 

Industrial Work Experience Program (IWEP) have garnered the praise of every 

other National Training Contractor (NTC) that has a sole-source contract with Job 

Corps as well as government operated centers (Agriculture). Both the NTCs and the 

USDA Forest Service have written to the National Job Corps Directors to say that 

the loss of our program would have a negative impact on the entire Job Corps community. 

Mr. Chairman, I would also question whether our sole-source contract has been 

unfairly targeted, given the fact that this Labor Department, which seems to have 

a serious problem with labor unions, also revoked its national contract with the 

AFL–CIO Working for America Institute after some thirty five years of service. 

As it was with the Council, I can only wonder whether there is some concerted 

effort at the Department of Labor to terminate all partnerships with labor unions 

and the organizations established to connect labor unions to DOL programs. In another action, one totally at the Secretary’s discretion, we learned in June that the 

Department’s Employment and Training Administration (ETA) had decided not to 

renew a grant given to the AFL–CIO Working for America Institute. This decision 

would terminate over 35 years of continuous support for the Institute—through 

Democratic and Republican administrations alike—to assure a voice for workers in 

the public workforce system. 

Senator Specter, I know that you are aware of the work done by the Institute, 

and its predecessor organization (HRDI). You have seen the work they do in supporting both joint labor management high road training partnerships, in helping 

programs that serve dislocated workers and in training the legislatively called for 

labor representatives who serve on the country’s Workforce Investment Boards. 

Pennsylvania was proud to co-host the 2002 Working for America National Conference and we were proud that you agreed to serve as a keynote speaker at that 

conference. 
42 

Other federal agencies—the Department of Commerce, the Small Business Administration, and others—spend millions of dollars providing assistance to the nation’s employers in connecting with federal government programs. The fact that the 

Department of Labor is choosing not to maintain an investment in connecting labor 

to the programs it is charged with administering is out of line with this government 

practice. 

These cuts have led to even greater investments in the Institute by the AFL–CIO 

itself (the Institute is a non-partisan 501(3) (3) non-profit organization) and by foundations but some of its historic objectives are most appropriately funded through the 

Department of Labor. 

Over the last three years, the Institute has already seen two of its programs defunded. The first of these cuts was to their work assisting unions in providing dislocated worker services—a cut made at a time of record dislocation in our economy. 

That cut was followed by the termination of their program to help establish labormanagement partnerships in key industry sectors—a program which had been helping unions and employers in the Southwest corner of our state join with their counterparts in Ohio and West Virginia to address the needs of manufacturing critical 

to the Ohio River Valley. 

The remaining grant from DOL supported a program of training and technical assistance to the network of more than 1,300 labor representatives who serve on the 

nation’s state and local Workforce Investment Boards (WIBs). It is this work that 

the Department has know decided it will no longer support. Pennsylvania had participated vigorously in this program and if the decision is not reversed, the labor 

representatives serving as the voice of workers in the public workforce system will 

no longer have the assistance of the Institute in helping them become more effective 

members of their boards. 

I applaud the work that you have done to support labor as the statutory voice 

of all workers in the public workforce system, and I hope that those efforts will result in a reversal of the unprecedented decision by the Department to terminate its 

funding of the Institute. 

We believe that there is substantial evidence Mr. Chairman for continuation of 

both of these valuable programs and we ask for your support in ensuring a continued role for both the Working for America Institute and the Appalachian Council 

with the Department of Labor. 

I thank you, again, Mr. Chairman, for the opportunity to testify, and I look forward to answering your questions. 

Senator SPECTER. Mr. George, we would be pleased to hear that 

now. 

Mr. GEORGE. It is my pleasure to introduce to you now Nancy 

Mills who is the Director and part of the program that was part 

of the HRDI that was shifted over to this new program which has 

been really, really held by many Governors and their departments 

of labor. 

My relationship is because in our State, Governor, it was because 

of your efforts. If you remember, when they created the workforce 

investment boards, there was a question whether these local communities and counties and regions that create these boards should 

have a right to have labor unions or labor representatives. It was 

because of your efforts and others that we inserted that the boards 

should have a makeup of labor voices mandated by law. And so this 

institution was very, very generous in providing to us, Working for 

America Institute, the AFL–CIO, and educating our members. I am 

proud to say, Senator, you have in the State of Pennsylvania, because of the AFL–CIO program, qualified people sitting on workforce investment boards there more than any other State in America. 

So it is my pleasure to introduce to you Nancy Mills. 

Senator SPECTER. Ms. Mills, thank you for joining us and you 

may proceed. 
43 

SUMMARY STATEMENT OF NANCY MILLS

Ms. MILLS. Thank you so much, Mr. Chairman, and thank you, 

President George, for your willingness to share the podium here 

this morning. 

As I said, thank you so much for your invitation to testify before 

you this morning about the Department of Labor’s decision not to 

renew its grant with the AFL–CIO Working for America Institute. 

You have already heard some, and I know you will hear some 

more, about the Department’s decision not to renew the grant with 

the Appalachian Council, but in another action, one totally at the 

Secretary’s individual discretion, the Institute learned in June that 

the Department’s Employment and Training Administration had 

decided not to renew a grant given to the AFL–CIO Working for 

America Institute. This decision would terminate over 35 years of 

continuous support for the Institute, through Democratic and Republican administrations alike, to assure a voice for workers in the 

public workforce development system. 

Senator Specter, I know that you are aware of the work done by 

the Institute and its predecessor organization, HRDI. You have 

seen the work we do in supporting both joint labor management 

high road training programs like the 1199 health care training program in Philadelphia, in helping programs that serve dislocated 

workers, and in training the legislatively called-for labor representatives who serve on the country’s workforce investment boards. The 

Pennsylvania AFL–CIO and the Philadelphia Central Labor Council co-hosted our 2002 national conference and we were very 

pleased that you agreed to serve as the keynote speaker at that 

conference. 

Other Federal agencies, the Department of Commerce, the Small 

Business Administration, and others, spend millions of dollars providing assistance to the Nation’s employers to connect with Federal 

Government programs. The fact that the Department of Labor is 

choosing not to maintain an investment in connecting labor to the 

programs it is charged with administering is simply out of line 

with this and established Government practice. 

These cuts by the Department have led to even greater investments in the institute by the AFL–CIO and by foundations. The institute, by the way, is a nonpartisan 501(c)(3) nonprofit organization, but some of its historic objectives are most appropriately funded by the U.S. Department of Labor. 

Over the last 3 years, the Institute has already seen two of our 

DOL supported programs defunded. The first of these cuts was to 

our work assisting unions in providing dislocated worker services, 

a cut made at a time of record dislocation in our economy. 

That cut was followed by the termination of our program to help 

establish labor-management partnerships in key industry sectors, 

like the regional skills alliances that you were so instrumental in 

promoting, a program which had been helping unions and employers in the southwest corner of Pennsylvania join with the counterparts in Ohio and West Virginia to address the needs of manufacturing critical to the Ohio River Valley. We had to terminate that 

program as a result of the cut in DOL funding. 
44 

The one remaining grant from the Department of Labor supported a program of training and technical assistance to the network of more than 1,300 labor representatives who serve on the 

Nation’s State and local workforce investment boards. It is this 

work that the Department has now decided it will no longer support. Pennsylvania and many other States had participated vigorously in this program and if the decision is not reversed, the labor 

representatives serving as the voice of workers in the public workforce system will no longer have the assistance of the Institute in 

helping them become more effective members of their boards. 

I applaud the work that you have done to support labor as the 

statutory voice of all workers in the public workforce system, and 

I hope that those efforts will result in a reversal of the unprecedented decision by the Department to terminate its funding of the 

Institute. 

Thank you again for this opportunity to speak. 

STATEMENT OF HERBERT MABRY, CHAIRMAN EMERITUS, APPALACHIAN COUNCIL 

ACCOMPANIED BY WILLIAM BURGA, PRESIDENT, OHIO AFL–CIO 

Senator SPECTER. Thank you, Ms. Mills, for your testimony. 

Our next witness is Mr. Herbert Mabry, Chairman Emeritus of 

the Appalachian Council and president emeritus of the Georgia 

AFL–CIO. He began his union career in 1950 as a member of the 

Carpenters Local 225 in Atlanta. Mr. Mabry is accompanied by Mr. 

William Burga, president of the Ohio AFL–CIO. Prior to his current position, Mr. Burga was subdistrict director of the United 

Steel Workers of America in Canton. 

Thank you for joining us, gentlemen, and we look forward to your 

testimony, Mr. Mabry. 

Mr. MABRY. Thank you very much. My name is Herb Mabry and 

I am past president of the Georgia AFL–CIO for 30 years and a 

member of the Appalachian Council Board practically from the inception of it and have been involved in the programs. 

It was in 1977 that the Council’s highly successful national program IWEP, the industrial work experience program, was developed based on an early assessment of weaknesses in the Job Corps 

program. Recognizing that students could be successful through the 

course of their training program yet fail in their first few months 

on the job became the basis of the new program. 

Mr. Chairman, I would like to also inject in there, at that time, 

I was serving on the Board of Directors of the Martin Luther King 

Center for Social Change, and as such, I went to them and explained what we were trying to do and enlisted their help with our 

program because back then, it was not very popular to see. And my 

testimony will show you that for a white man to be escorting young 

men and women that were coming into Atlanta into certain areas 

of our city, to try to place them in meaningful employment. 

But it was in that year that the concept of the national support 

network for students was first considered and thus resulted in a 

meeting between the Council and representatives of the Department of Labor. The meeting took place in Jekyll Island, Georgia, 

and as a board member of the Council, I became part of and was 

integral to those discussions that we had. 
45 

As a result of that meeting, the concept and need of Job Corps 

offering enhanced and individualized, one-on-one support to students, particularly with those students trained by other national 

training contractors, became a reality. Over the years, home-based, 

24/7, hands-on staff developed good-paying, sustainable jobs, recruited students to fill those jobs, found housing and affordable 

transportation, and served as mentors and/or surrogate parents for 

the 90-day period. Everyone connected with the program, including 

board members lent a helping hand. 

I can recall after going through this. I was talking to Mr. Darlington. I can recall on a Saturday morning when the students 

were sent into Atlanta where we could find them housing. We had 

housing for them. And I can recall them coming into Atlanta on 

Saturday morning, and I would get up and take my pickup truck 

and I would go to the Greyhound bus station in Atlanta and pick 

those students up. And we would have cars to follow with the students. We would load it down with their belongings. Everything 

those young men and women owned was there coming with them. 

And a little humor: we looked like the Clampetts going down the 

road when we left that bus station with all of their baggage put 

on the truck. 

Mr. MABRY. But we found homes for them and we took them 

there and put them in. 

This service became recognized throughout Job Corps and today 

experienced staffers in Job Corps now refer to this type of post center support as the traditional IWEP. Everyone was talking about 

the role that IWEP had played in finding places for them and what 

they were referring to. 

Job Corps is to this day, trying to emulate IWEP’s role. However, 

the effort to mirror IWEP’s style of transition services has proven 

difficult for them. This is true for several reasons. CTS providers, 

like other entities, are limited by their historical paradigms as to 

what the work really is. Additionally, CTS staff folks are heavily 

burdened by issues of accountability and regulations and have little 

time for the direct, hands-on, 24/7 support the IWEP staff provided, 

nor can they establish the depth of relationships that IWEP had 

developed over many years with the unions, employers, as well as 

city and State governments. 

Mr. Chairman, just like every other group of people, those young 

men and women would come into the city and occasionally we 

would have one to get in trouble driving or whatever. It might be 

drinking and driving, whatever. I went to the courthouse and represented those people. I am not an attorney but I represented them 

with the judges. I served as chairman of the Fulton County Personnel Board. They all knew me, what I did for a living. And I 

would go represent those young men and women and get them to 

where they could go back to work the next day. And we were very 

successful and able to do that. 

Mr. Chairman, I can personally attest to the quality of the service that was provided out of the Atlanta region, and I had personal 

relationships with many of those folks over the years. And the 

dedication and commitment to the students they served was undeniable. 
46 

PREPARED STATEMENT

Furthermore, I am aware that in January 2003, the Atlanta Regional Director made a surprise visit to the office in Decatur, Georgia at the behest of the national office of Job Corps and met with 

the staff. Later he announced at a regional meeting—and this is 

very, very important, Mr. Chairman. He announced at a regional 

meeting that the Council had the best CTS operation he had ever 

seen, and he praised the staff he met with and forwarded a very 

positive report to the national office. This is a strong statement, 

Mr. Chairman, to continue this valuable program and to continue 

a role for the Council in Job Corps. 

Mr. Chairman, I thank you for the opportunity of being here 

today. 

[The statement follows:] 

PREPARED STATEMENT OF HERBERT MABRY

Chairman Specter, Senator Harkin, Senator Byrd and members of the Subcommittee, thank you for this opportunity to testify on behalf of the Appalachian 

Council and its contract with the Department of Labor. 

It was in 1977 that the Council’s highly successful national program, IWEP (Industrial Work Experience Program), was developed based on early assessments of 

weaknesses in the Job Corps program. Recognizing that students could be successful 

throughout the course of their training program yet fail in their first few months 

on a job became the basis for the new program. 

It was in that year the concept of a national support network for students was 

first considered and thus resulted in a meeting between the Council and representatives of the Department of Labor. That meeting took place in Jekyll Island, Georgia 

and, as a Board member of the Council, I became part of and was integral to those 

discussions. 

As a result of that meeting the concept and need of Job Corps offering enhanced 

and individualized one on one transitional support to students particularly with 

those students trained by the other National Training Contractors became a reality. 

Over the years, home based 24/7 hands-on staff developed good paying sustainable 

jobs, recruited students to fill those jobs, found housing and affordable transportation and served as mentors and/or surrogate parents for a ninety day period. Everyone connected with the program including Council Board members lent a helping 

hand. I can recall on more than one occasion moving students’ possessions on a Saturday morning in my pick-up truck. 

This service became recognized throughout Job Corps and today experienced staffers in Job Corps now refer to this type of post center support as the traditional 

IWEP role. 

Job Corps is, to this day, trying to emulate IWEP’s role. However, the effort to 

mirror IWEP’s style of transition services is proving difficult. This is true for several 

reasons. CTS providers like other entities are limited by their historical paradigms 

as to what the work really is. Additionally, CTS staff folks are heavily burdened by 

issues of accountability and regulation and have little time for the direct, hands on, 

24/7 support that IWEP staff provided nor can they establish the depth of relationships that IWEP had developed over many years with unions, employers as well as 

city and state governments. 

Mr. Chairman, I can personally attest to the quality of the services that were provided out of the Atlanta Region. I had personal relationships with many of those 

folks over the years and the dedication and commitment to the students they served 

was undeniable. Furthermore I am aware that in January 2003 the Atlanta Regional Director made a surprise visit to our office in Decatur at the behest of the 

National Office of Job Corps and met with staff. Later he announced at a Regional 

meeting that the Council had the best CTS operation he had ever seen. He praised 

the staff he met with and forwarded a very positive report to the National Office. 

This is a strong testament Mr. Chairman for continuation of this valuable program and to the need to continue a role for the Council in Job Corps. 

I thank you, again, Mr. Chairman, for the opportunity to testify, and I look forward to answering your questions. 

Senator SPECTER. Thank you very much, Mr. Mabry. 
47 

Mr. Burga, would you care to supplement the comments in any 

way? 

SUMMARY STATEMENT OF WILLIAM BURGA

Mr. BURGA. Yes, Mr. Chairman, just briefly. 

I was hoping Senator DeWine would be here so I could talk with 

him. 

Mr. Chairman, there is clearly something going on at the Department of Labor in their denial of funding of both these organizations. We in Ohio are concerned in both respects. 

We also had an opportunity to talk with the Department of 

Labor about another problem as it relates to the AFL–CIO and 

labor unions, and that was the Labor-Management Reporting and 

Disclosure Act where they want to change the LM2 requirements. 

The evidence that you hear today and my sitting in the back of the 

room and listening, I think there is clear evidence that this Department of Labor is on a mission as regards the AFL–CIO in particular and any relationship that we might have or that might be 

held by other groups with the AFL–CIO. 

So I certainly respect the hearing that you are holding today and 

perhaps you can do your influence of having this Department of 

Labor reconsider these fundings because they are very much needed, as the record will show. 

Thank you very much. 

Senator SPECTER. Well, thank you, Mr. Burga. 

This is an especially busy day in the Senate because we are 

about to embark upon the August recess to give us an opportunity 

to attend the national conventions and also to come back to our 

home States and visit with our constituents. So it is a very busy 

day. 

But I will tell Senator DeWine what you said. I know he will be 

very concerned about it and will follow up. 

Mr. BURGA. Thank you. 

Senator SPECTER. Mr. George, let me begin the questioning with 

you. I would be interested in your amplifying the comment you 

made that funds were unavailable to improve the facilities when 

the Appalachian Council was running, for example, the Pittsburgh 

Job Corps, but when the shift was made, that additional funds 

were available. I would like to know a little more about that. 

Mr. GEORGE. It is a program that was originated and started by 

Appalachian Council and had been there for a couple of years. The 

specific generics of that I would like to have Gary just maybe make 

a comment how that was shifted and the reason given to us when 

they did it, which I understand was no reason. 

Mr. DARLINGTON. Senator, the transportation training program 

was a dual component program consisting basically of training students to have commercial driver’s licenses and also do material 

handling, which is warehousing work. The program with the Appalachian Council was functioning. It was probably the top functioning program in terms of statistics during that time. However, 

it was subsequently cut in half. The material handling part of the 

program was shifted to the center operator. 
48 

We had been asking for additional equipment to run that program. We could not get it. However, when we were no longer part 

of that material handling program, the equipment was available. 

Senator SPECTER. Thank you very much, Mr. Darlington. 

Mr. George, you made a comment which was pretty much the 

same as what Mr. Burga said, that there appears to be some direction by the Department of Labor against AFL–CIO. I would be very 

interested in both of you gentlemen amplifying what you have seen 

there and what you think may be the causes of it. 

Mr. GEORGE. Well, I mean, it is obvious—and I think maybe Jim 

Bowen may have a comment too—at least from my State of Pennsylvania in the last 3 years—at least for the last 2 years. It has 

been 3 years. 2 years since I have felt it personally. It is not only 

the LM3 form reporting, which is a burdensome process on local 

unions, which are 2,600 local unions in the State of Pennsylvania. 

They report by government entities on a biannual year on their audits and their stuff that takes place to the Department of Labor 

under the NLRB and stuff that is taking place. It got streamlined. 

That was satisfied for many, many years during Republican and 

Democratic administrations with a lot of information that any malfeasance was in those reports where by investigation was easily 

picked up. 

The Department has decided to try to invoke—I guess it is on 

hold here or we are going see it—I do not know if it is going to 

go or not. But during the election, it seems it got quiet, but up 

until the spring, you and several other Senators was inquiring why 

was this being done to the point there would be 43 pages of reporting from the time that you would walk to the bathroom, to have 

to mention the cost of the toilet paper that was put into the men’s 

room, and a number of meaningless, meticulous time that would 

have to be spent. And an accounting firm had predicted that every 

local union with over 100 members would be required to have an 

accountant go over this tremendous amount of questioning that 

would take place that would have to be filled out. So that was one 

occasion that we have seen. 

The second occasion, of course, is what you have heard here, the 

two great institutions that has been here over 35 years just, at 

least in our opinion for no justifiable reasons, being wiped out. 

The other, Senator, is one that you were caught up in, as you 

and I were aware. Unfortunately, for the State of Pennsylvania, we 

were probably hit as hard as anybody with the unbalance of trade 

and the incoming of trade into the State of Pennsylvania. In the 

last 3 years, we have lost 200,000 jobs. Of course, a lot of that was 

giving training monies, TAA and TRA money that came out of the 

Department of Labor, because of the Department of Labor certifying industries that were impacted by trade automatically entitled 

people to be able to get those training monies. Unfortunately, because of no reason and everybody running around for the first 3 

months of 2001, we were delayed $20 million. A cost of over 250 

participants in the TRA and TAA program were immediately denied in any programs that could take place. So we had no initiative 

programs from January, February, March, and April of that year 

that people could get into the programs. 
49 

We have never had that since the inception in the 1980’s of TAA 

and TRA. It just makes you wonder, when you have those kind of 

things impacting you in your particular State, why was this taking 

place. It did not happen in any other State to my understanding. 

In fact, it is my understanding that four other States who had not 

used their money up in mid-year is when the Department of Labor 

went and took the money out of those States and put it into Pennsylvania. At least there is a letter out by the U.S. Department of 

Labor saying that they would allocate the money. 

You were very much involved in it because it was a tidal wave 

to all of the members of the general Congress here that their constituency were being denied continuing education programs. 

So that is some of the reasons why we feel that there seems to 

be a prejudice, an initiative by this Secretary of Labor to look at 

an institution that has been a standing institution in this Nation 

and has been part of the rebuilding of this country not only by 

labor unions, but in the community standing up in order to make 

greater training programs and enhancing the quality of life for all 

Americans. 

By the way, all of our institutions are nonprofit. There is no 

money-makers here. We do not have shareholders. We do not have 

stockholders like a couple of other people that play in these programs do. 

Mr. Burga? 

Senator SPECTER. Mr. Burga, would you care to respond? 

Mr. BURGA. I would just like to say a couple of things, Mr. Chairman. 

Two big elements that we see showing this problem is a lack of 

communication prior to their decision-making. I think the record 

shows it here and it shows it on the Appalachian Council and also 

the Working for America Institute. You would have to check with 

them, though, as to why they do the things they do. I cannot give 

you any factual reason. But talking with the AFL–CIO officers, 

they do not get notice about what the Department of Labor intends 

to do until after the Department of Labor decides to do it. Neither 

did the Appalachian Council. They do not even respond to you, Mr. 

Chairman, when you send them letters. I do not know why they 

are acting this way. But the record is clear the way they are acting, 

and it is not conducive for good relationships. It is not conducive 

for the American workers. So other than that, I cannot respond. 

Senator SPECTER. Thank you. 

Mr. MABRY. Mr. Chairman? 

Senator SPECTER. Mr. Mabry, let me give you a question and 

then you can make a comment. 

In evaluating these programs in Georgia—and I will come to 

Mayor Baker in Mississippi—the question comes to my mind as to 

whether there is not a very heavy participation by minorities looking for the job training, and then the issue of starting salary is 

likely to be lower than might be expected if you are not dealing 

with minorities in depressed areas. I would like you, Mr. Mabry, 

and then you, Mayor Baker, to comment on a couple of States in 

the deep South as to whether that in fact is not true. 

Mr. MABRY. Well, thank you, Mr. Chairman. It is true because 

the Appalachian Council is made up, as you well know, of North/ 
50 

South Carolina and then Georgia, Alabama, Mississippi, Tennessee, and they are right to work States. Then when we go in and 

try to place these young men and women in these places, the first 

reaction from the employer in a lot of cases is that we are sending 

in people to try to organize their employees. 

Senator SPECTER. So in a right to work State, it makes it even 

more difficult. 

Mr. MABRY. It makes it more difficult. 

Senator SPECTER. That is a phenomenon of some of the States, 

but not in others where these statistics would be. 

How about it, Mayor Baker? Do you find the same situation? 

Mr. BAKER. Senator, I am probably not qualified on that point to 

answer your question, sir. I will tell you, as I stated earlier, the 

Appalachian Council has been involved since this center in Batesville, Mississippi opened in 1981. From all we have ever been told 

by the Department of Labor and others was the Appalachian Council was doing a great job in training and placement. 

Senator SPECTER. Mr. Bowen, I was impressed by your testimony 

generally, but when you used the language of a plan to intentionally impede the Council’s capacity to be successful, I would like 

you to expand upon that, if you could. 

Mr. BOWEN. Yes, sir. As explained by my good friend, Bill 

George, and Bill Burga, some of the incidents that caused me to 

form that kind of an opinion, I think the testimony heard prior to 

our group providing testimony in respect to the inability and the 

failure to contact our people in respect to areas that may be deficient, even though I certainly question because, Senator, the chart 

I referred you to that is in the record is from the numbers from 

the Department of Labor, not our numbers. We did not create 

them. 

The incidents referred to by Brother George in respect to the 

LM3, in respect to our program, in respect to the AFL–CIO Institute for America—the workforce investment part is fantastic. In 

our State we are certainly minorities on those committees in number, but we are very strong because of the education that was provided for the labor members of WIA. And we are dramatically having major problems in the TAA arena because we do not have the 

funds for our training. 

And all this causes me to be very suspicious of the actions of the 

Department of Labor in this particular matter, and that is why I 

made that statement, sir. 

Senator SPECTER. Thank you, Mr. Bowen. 

Senator Byrd could not be here this morning. He sent word that 

his wife is ill, and that he asked that his statement be included in 

the record which will, without objection, be made a part of the 

record. 

[The statement follows:] 

PREPARED STATEMENT OF SENATOR ROBERT C. BYRD

Thank you, Mr. Chairman, for holding this hearing. I think it’s important that 

the Labor Department publicly explain its decision to cancel the Appalachian Council’s contract, and I doubt such an explanation would ever have been made had it 

not been for your interest in the matter. 
51 

The Labor Department notified the Appalachian Council on February 26, 2004, 

that its contract would terminate on April 30—giving the Appalachian Council only 

60 days notice. 

In reading that letter, I am reminded of life in the old coal company towns of 

Southern West Virginia, when the coal company owned everything, even the homes 

in which the miners lived. I remember the letters miners would receive terminating 

their employment. David Corbin’s book Life, Work, and Rebellion in the Coal Fields 

cites an excellent example of a coal company terminating a miner’s job. 

I quote from a letter dated November 26, 1923. It reads: ‘‘This is to notify you 

that we will not be in need of your services any longer after this date. You are further notified to surrender the possession of the house you now live in on or before 

January 1, 1924.’’ 

That’s how I read the Labor Department’s termination letter to the Appalachian 

Council. After thirty years of service, the Labor Department provides sixty days notice that the Appalachian Council’s services are no longer needed and orders them 

to vacate the premises. 

In March, I wrote a letter to the Labor Secretary asking her to reconsider her decision. I didn’t receive a response until April 28—two days before the Appalachian 

Council’s contract was set to expire, and even then it was a response that said nothing. 

Given the manner in which this contract was terminated—the lack of notice given 

to the Appalachian Council, the delay in responding to Senators’ inquiries until the 

last possible moment—it’s no wonder the Appalachian Council feels as though it has 

been unfairly targeted by the Labor Department. At the very least, the manner in 

which this contract was canceled was done in a way to keep the Congress at arms 

length, and that bothers this Senator a great deal. 

Thank you again, Mr. Chairman, for reminding the Labor Department that their 

decisions are not exempt from Congressional oversight. 

Senator SPECTER. He focuses on the importance of the hearing 

and calls for an explanation of the decision to cancel the Appalachian Council’s contract. He says, ‘‘I doubt such an explanation 

would ever have been made had it not been for your interest in the 

matter.’’ 

I want to include also a copy of Senator Byrd’s letter to Secretary 

Chao dated March 19, 2004. 

[The letter follows:] 

U.S. SENATE, 

COMMITTEE ON APPROPRIATIONS, 

Washington, DC, March 19, 2004. 

Hon. ELAINE L. CHAO, 

Secretary, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, 

DC. 

DEAR SECRETARY CHAO: I am concerned about the Labor Department’s recent decision to not renew or extend its sole source contract with the Appalachian CouncilAFL/CIO, following the expiration of its current contract on April 30, 2004. 

The Appalachian Council’s National Programs have been in continuous operation 

since 1974 and can boast of an impressive performance record. This unique program 

has served over 100,000 Job Corps students since 1974. I am particularly proud of 

the Appalachian Council’s Auto Mechanics program at the Charleston Job Corps 

Center that has been recognized as one of the top trades at that Center. Furthermore, the Appalachian Council’s Industrial Work Experience Program has received 

Job Corps’ highest ratings. 

For thirty years, the Labor Department has contracted with the Appalachian 

Council, and, for thirty years, the Appalachian Council has had an exemplary performance and accountability record. 

I strongly urge you to reconsider your decision to cancel the Appalachian Council’s 

contract, and I thank you in advance for your personal attention to this matter. 

With kind regards, I am 

Sincerely yours, 

ROBERT C. BYRD. 

Senator SPECTER. Ms. Mills, your testimony about the Working 

for America Institute I think is very important. As you noted, I 

keynoted that event and have attended many events. One was es-
52 

pecially prominent that I went to with Henry Nicholas in Philadelphia on District 1199(C) of the National Union of Hospital and 

Healthy Care Workers of AFSME, a very impressive program 

where 61 major health care employers placing graduates in higher 

skilled jobs in which there is great demand. 

There were a great many nurses there that day. I was especially 

struck by it because I chaired the Veterans Affairs Committee and 

the veterans hospitals, as our hospitals generally in America, have 

a very short supply of nurses, being required to work overtime to 

care for the elderly in very, very difficult circumstances. 

I note the headline in today’s business section of the Post about 

Chairman Greenspan saying that wages are down because people 

are not skilled. I speak frequently at high schools and develop the 

approach of the importance of developing skills and tell the young 

people there are great opportunities if you are skillful and analogize America to Noah Webster’s example. The world is like a pyramid. There is a lot of room at the top and it is very crowded at 

the bottom. I know, having had a large staff in the Philadelphia 

District Attorney’s Office and as a U.S. Senator, we are always 

searching for people with skills. 

So I am very much concerned about what is happening. We are 

going to be pursuing this matter. We are going to be putting the 

questions to the Department of Labor as to what is happening 

here. 

We are starting three votes right now at 11 o’clock. One of the 

difficulties of scheduling matters in the Senate is that the votes 

take precedence over everything else. No matter where you are, if 

you are meeting with the President and the bell rings for a vote, 

that is our principal occupation, is voting. 

But I think this has been a very informative session, and I am 

going to call upon Secretary Chao to review this decision. We have 

yet to fund the Department for next year, and there is always a 

certain amount of persuasion that comes from the purse strings on 

the Appropriations Committee. I chair this subcommittee. It is a 

very important subcommittee on capital assets where education 

and health are major capital assets and the workforce is a gigantic 

capital asset. 

As I noted earlier, Senator Stevens rotates off of this committee’s 

chairmanship at the end of this year. There are term limits. And 

Senator Cochran will then become chairman. I am going to tell him 

about your testimony, Mayor Baker. I know he would have wanted 

to have been here. And then I am in line to be chairman of the full 

committee thereafter, and the insights that I have had serving as 

the subcommittee chairman are very, very valuable. 

ADDITIONAL COMMITTEE QUESTIONS

Senator SPECTER. There will be some additional questions which 

will be submitted for your response in the record. 

[The following questions were not asked at the hearing, but were 

submitted to the Department for response subsequent to the hearing:] 
53 

QUESTIONS SUBMITTED BY SENATOR ROBERT C. BYRD

NOTICE OF CANCELLATION OF APPALACHIAN COUNCIL’S CONTRACT

Question. The Appalachian Council’s contract was canceled with only 60 days notice. How much notice is typically given before canceling a sole-source contract? 

Answer. There are no minimum requirements related to advance notice in the 

Federal Acquisition Regulations (FAR). The Appalachian Council was provided with 

written notification of the non-renewal action 64 days prior to the close of the contract on April 30, 2004. 

The Appalachian Council has had long-standing performance issues, and the organization was aware of the Department of Labor’s concerns with its performance. 

Under the circumstances, we believe that providing 60∂ days notice was appropriate. 

DATE OF DECISION TO CANCEL APPALACHIAN COUNCIL’S CONTRACT

Question. The letter alerting the Appalachian Council that its contract had been 

canceled was sent on February 26, 2004. When did the Employment and Training 

Administration make the decision to cancel the Appalachian Council’s contract? 

Answer. In the Fall of 2003, the Department of Labor extended the Appalachian 

Council contract from November 1 through December 31, while a decision regarding 

contract renewal was being made. The final decision was reached in January 2004, 

and the Council was notified via letter the following month. 

NOTIFICATION TO APPALACHIAN COUNCIL REGARDING SOLE-SOURCE STATUS

Question. According to the time line you provided my office, the sole-source status 

of the contract was being questioned as far back as June 2003. Why was the Appalachian Council not notified before February 26th that its sole-source status was in 

danger? 

Answer. A final decision was not reached until January 2004. However, the Appalachian Council experienced performance problems throughout the period of the contract, which began on 11/1/98 and ended on 4/30/04. For example, five vocational 

programs run by the Council were closed by the end of Program Year 2002. The 

closings, as well as other sanctions imposed on Council programs, were preceded by 

extensive discussions and/or correspondence between Council officials and Department of Labor National and Regional Office staff. 

CONCLUSION OF HEARING

Senator SPECTER. Thank you all very much for being here. That 

concludes our hearing. 

[Whereupon, at 11:02 a.m., Thursday, July 22, the hearing was 

concluded, and the subcommittee was recessed, to reconvene subject to the call of the Chair.] 

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