What Price Security?

On the eve of his hairline Senate election victory last November. Pennsylvania's Republican Congressman Hugh Scott probably swung some votes in job-short Philadelphia by announcing that he had assurance from the White House that a big Government contract would go to Philadelphia's Baldwin-Lima-Hamilton Corp. Few outside Philadelphia paid much heed to the matter then. But last week, when the contract was formally announced, an international storm erupted over the order and the Administration's freer-trade policies.

The Office of Defense and Civilian Mobilization ruled that the U.S. must accept B.L.H.'s lowest domestic bid of $1,757,210 for two hydraulic turbines for the Greers Ferry Dam in Arkansas, chuck out the much lower bid of $1,450,700 by Britain's English Electric Co.. Ltd. Hearing the news, the British Foreign Office loudly protested, complained that it had obviously been "a waste of time" for English Electric to bid on the job in the first place. The British press joined in with an attack on U.S. trade policies.

More Jobs v. Less Cost. Senator Scott made no bones of the fact that he had kept the pressure on the Defense Department and the White House, arguing that B.L.H. should get the award because Philadelphia was then an area of "substantial unemployment." But under a 1954 Executive Order by President Eisenhower, even substantial unemployment is not a valid argument if a domestic company's bid is 12% or more above the lowest foreign bid. B.L.H.'s bid was 21% higher than English Electric's. ODCM Chief Leo Hoegh got around that by arguing that a contract award to B.L.H. was necessary for clear reasons of "national security." He said the U.S. needed to maintain and keep in good working order the huge machine tools, called "elephant tools," used to build the turbines.

To that, British Ambassador Sir Harold Caccia replied tartly that it was hard to believe that "the entire national security of the U.S. would be imperiled if two turbines were built by her ally, Britain." He implied that a $1,757,210 contract could not make or break a vital industry, especially since there are five U.S. manufacturers of hydraulic turbines. Moreover, U.S. manufacturers have won 21 of the 23 important Government hydraulic-turbine jobs since 1952. Still unsatisfied, they are lobbying hard to bar foreign manufacturers from bidding at all.

"I'll Take Credit." ODCM's decision also raised complaints in Congress. Wisconsin's Democratic Congressman Henry Reuss asked the White House why the Tennessee Valley Authority last November awarded a $2,637,000 contract for electric generators to Switzerland's Brown Boveri instead of to the low domestic bidder, suburban Milwaukee's Allis-Chalmers Mfg. Co. Louisiana Democrat T. Hale Boggs, chairman of the House reciprocal-trade-agreements subcommittee, promised a thorough investigation of the B.L.H. award. Asked Boggs: "Does this mean that we invoke the national-defense clause when an industry at home is having some difficulties, to bail 'em out?" But Pennsylvania's Scott stuck to his guns: "I got the contract. I talked with anybody who would listen to me. I'll take the credit or blame."

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