Executives of companies that provide support service for government computers and business machines are unhappy with the Labor Department's recently enforced regulations setting a wage floor for their workers involved in government contracts.
Already, two firms have turned down service contracts in retaliation against the regulation.
Charging an "overzealous interpretation" of a 1976 amended Service Contract Act, the Computer and Business Equipment Manufacturers Association is seeking "statutory relief" for its 39-member organization.
The association, which represents firms such as IBM and Xerox, maintains that its employes, particurlarly technicians and programmers, already are "well-rewarded" under the existing industry merit pay system.
But Donald Elisburg, assistant secretary of the Employment Standards Administration, said that the organization is "making a lot out of a relatively routine process" of contracting with the government. He maintains that the Labor Department simply is enforcing the law.
The conflict is over a 1965 act gauranteeing federal wage protection, and is intended mainly for blue collar workers on federal service contracts.
The act was amended in 1976 to cover all federally contracted workers except executive, administrative and professional workers.
As a result, any contract for services greater than $2,500 has to contain a wage determination that sets forth the wage rate and fringe benefits found prevailing in each locality.
Last summer, the Government Services Administration and the computer association appealed for an exemption, but the attorney general turned down the request.
According to Vico Henriques, president of the association, the act "is unnecessary for our industry and is not in the public or government interest."
He claims that the act is inflationary, would boost industry administrative and production costs and prevents uniform wage standards throughout the industry.
Already firms, including Digital Equipment Corp., have turned down government contracts because of the regulation and IBM is considering a similar move.
Bill Schmick, representing Hewlett-Packard Co., said several solicitations for service contracts have been turned down by his company, including a $70,000 contract with the Department of Defense.
"Why apply a cure when there is no disease?" asked Bill Porter of Control Data Corp.
According to Henriques, about 10 percent of the business handled by these companies -- which produce sales of more than $40 billion -- is under government contracts.
The aerospace and electrical industries also have expressed concern over the impact of the act, which Henriques maintains is another effort by the government to regulate business.
The association earlier asked for an exemption from the act with the support of Rep. Jack Brooks (D-Texas). However now it is seeking an amendment to the law and has held discussions with Rep. Frank Thompson Jr. (1d-n.j.), chairman of the House subcommittee on labor-management relations and Sen. Harrison Williams Jr. (D-n.j.), chairman of the Labor and Human Resources Committee.